Cambridge International AS and A Level Business

Example exam-style papers

Paper 2 Data response
The time allocation for this paper is 90 minutes. All questions are compulsory and the paper presents questions
on two separate mini case studies. The total number of marks available is 60 split equally between the two data
responses.
A sample data response is shown below. This would form half of a full paper in the exam.

Silk Limited
Silk Limited (SL) is an independent manufacturer of skincare products including moisturisers, liquid hand soaps
and shampoos. SL has achieved substantial organic growth since it started trading in 2003 and now has the third
largest market share in Country X with sales of $100m in 2014. As it has expanded the CEO and founder, Cathie
Williams, has always emphasised the importance of SL’s corporate social responsibility. This concern is reflected
in SL’s aim to minimise the environmental impact of operations and its promise to donate 10% of retained profits
to the preservation of rainforests. Many of SL’s skincare products use extracts from rainforests; these are shipped
into Country X. Cathie is convinced that SL’s commitment to CSR has contributed to the success of the business
by differentiating its products from those of competitors. However, the Finance Director is less enthusiastic as,
with net profits of $8m in 2014, he is concerned about the amount that SL will have to donate to charity. The
Finance Director has warned Cathie that costs need to be controlled if the business is to increase profitability in
the future.
SL has won many awards for the quality of its skincare range and is known to be used by a number of famous
celebrities in Country X. Currently the range is primarily aimed at young women but market research suggests
that there is a market gap for shampoos targeted at professional men. After two years of development and
planning SL is about to launch a range of shampoos for the male market. SL has allocated a budget of $3m and has
set a marketing objective of sales of $6m in the first year.
In response to continued growth SL has reviewed its operations and has decided that it must build a new
factory in order to increase capacity. The Operations Director is currently considering two possible locations
in Country X and has a target of commencing production within the next nine months. SL’s existing factory
is highly automated and employs mostly unskilled workers. The new factory would use similar production
techniques and would also be home to a larger R&D facility. Consequently the small number of research scientists
from the existing site would need to relocate.
Data response questions
Answer all questions.
a i Define the term ‘organic growth’. [2]
ii Briefly explain the term ‘corporate social responsibility’. [3]
b i Calculate the net profit margin of SL in 2014. [2]
ii Briefly explain why cash flow might be a problem for SL in 2015. [4]
c Analyse the factors that could influence the choice of location for SL’s new factory. [8]
d Evaluate a suitable marketing mix that SL could use to launch their new shampoo range. [11]

© Cambridge University Press 2014 Cambridge International AS and A Level Business Example exam-style papers – Paper 2 2