Mark Scheme

Extra assessment material for

first teaching September 2017

International GCSE in Business (4BS1/01)

Paper 1: Investigating small businesses

Question Answer Mark
Number
1(a) (i) AO1 1 mark

C Enterprise
(1)
Question Answer Mark
Number
1(a) (ii) AO1 1 mark

A Car manufacturer
(1)
Question Answer Mark
Number
1(a) (iii) AO1 1 mark

D Seasonal
(1)
Question Answer Mark
Number
1(a) (iv) AO1 1 mark

B Rising average total costs

(1)
Question Answer Mark
Number
1(a) (v) AO2 1 mark

D Maturity
(1)
Question Answer Mark
Number
1(a) (vi) AO2 1 mark

B 27.1%
(1)

Question Answer Mark

Number
1(b) AO1 1 mark

Award 1 mark for a correct definition of job production.

Producing goods individually where one product is finished

before the next one is started (1). (1)

Question Answer Mark

Number
1(c) AO1 1 mark

Award 1 mark for a correct definition of market segment.

A group of customers with similar characteristics (1). (1)

Question Answer Mark
Number
1(d) AO2 1 mark

Award 1 mark for a factor in the context of the business.

Close to potential customers who want hair done (1).

Close to residential areas where skilled beauticians may live (1).

Accept any other appropriate response. (1)

Question Answer Additional guidance Mark

number
1(e) AO2 2 marks Award 1 mark for correctly
substituting numbers into
(50/2 000) x 100 (1) formula.

Award full marks for correct

Answer: 2.5% (1) numerical answer without
working. (2)

Question Answer Mark

number
1(f) AO1 3 marks

Award 1 mark for the identification of an advantage, plus 2

further marks for explaining why this will be advantageous to a
business, for a maximum of 3 marks.

This will mean the business can keep total costs as low as
possible (1), because e-tailers do not need to have large
premises for customers to visit (1). As a result, the business
has the potential to achieve higher profit margins (1).

NB Answers that list more than one advantage with no

explanation will get a maximum of 1 mark.

Accept any other appropriate response. (3)

Question Indicative content
number
1(g) AO2 (3 marks)/AO3 (3 marks)

AO2
• Beauty By Edge can promote its hair products on a wider scale by
using e-newsletters.
• Beauty By Edge can gain lower total costs as a result of promoting
its manicures using its website.

AO3
• This will increase market size, allowing to Beauty By Edge to
increase its global sales of hair extensions and other beauty products
and therefore generate higher revenue.
• This is because publishing information and offers of beauty
treatments online is cheaper than advertising in beauty magazines
and publications. As a result of this Beauty By Edge will enjoy a
higher profit margin.

Level Mark Descriptor

0 No rewardable material.
Level 1 1–2 • Limited application of knowledge and understanding of
business concepts and issues to the business context (AO2).
• Attempts to deconstruct business information and/or issues,
finding limited connections between points (AO3).
Level 2 3–4 • Sound application of knowledge and understanding of
business concepts and issues to the business context
although there may be some inconsistencies (AO2).
• Deconstructs business information and/or issues, finding
interconnected points with chains of reasoning, although
there may be some logical inconsistencies (AO3).
Level 3 5–6 • Detailed application of knowledge and understanding of
business concepts and issues to the business context
throughout (AO2).
• Deconstructs business information and/or issues, finding
detailed interconnected points with logical chains of
reasoning (AO3).
Question Answer Mark
Number
2(a) AO2 1 mark

Award 1 mark for a valid reason in the context of the business.

Questionnaires about treatments (1).

Focus groups to discuss new hair products (1).

Accept any other appropriate response.

(1)

Question Answer Mark

Number
2(b) AO2 1 mark

Award 1 mark for a valid benefit in the context of the business.

To inform customers of new beauty treatments (1).

To gather market research information on its products, such as
hair extensions (1).

Accept any other appropriate response. (1)

Question Answer Mark

number
2(c) AO1 3 marks

Award 1 mark for the identification of a reason, plus 2 further

marks for explaining this reason, for a maximum of 3 marks.

To pay for day-to-day running expenses (1), to ensure that the

businesses can pay suppliers and employees. (1). As a result,
the businesses can remain solvent (1).

NB Answers that list more than one reason with no explanation

will get a maximum of 1 mark.

Accept any other appropriate response. (3)

Question Answer Mark
number
2(d) AO1 3 marks

Award 1 mark for the identification of a threat, plus 2 further

marks for explaining why this will be a threat to a business, for a
maximum of 3 marks.

One threat is the greater risk of competition (1). Globalisation

means it is easier for businesses from other countries to
compete (1). As a result, sales may fall (1).

NB Answers that list more than one threat with no explanation

will get a maximum of 1 mark.

Accept any other appropriate response. (3)

Question Answer Mark

number
2(e) AO1 3 marks

Award 1 mark for the identification of an impact, plus 2 further

marks for explaining this impact on a business, for a maximum
of 3 marks.

This will mean the business will have higher labour costs (1),
therefore the business is likely to have to charge higher prices
(1). As a result, the business is likely to have lower revenue
(1).

NB Answers that list more than one impact with no explanation

will get a maximum of 1 mark.

Accept any other appropriate response. (3)

Question Indicative content
number
2(f) AO2 (3 marks)/AO3 (3 marks)/AO4 (3 marks)

AO2
• Option 1 - This involves staff working closely with existing, skilled
stylists.
• Option 2 - This involves new staff being trained outside of the salon
at an external college by tutors and other professionals.

AO3
• Option 1 - Workers can see first-hand the type of work to be done
and can work closely with existing skilled stylists,
• Option 2 - As a result it means that Cindy and other staff can
concentrate on customers in the salon, and not have to be
supervising new trainee staff. This will lead to more satisfied
customers as they feel they are the centre of attention.

AO4
• Option 1 - However, staff can be very needy in terms of the time of
other stylists in the salon. As the main priority for the business is
providing a high-quality service for customers, having unqualified
stylists may damage this reputation.
• Option 2 - However, this might mean that the new staff are not
trained in a realistic salon environment and therefore lack the skills
and standard expected by Cindy.

Level Mark Descriptor

0 No rewardable material.
Level 1 1–3 • Limited application of knowledge and understanding of
business concepts and issues to the business context (AO2).
• Attempts to deconstruct business information and/or issues,
finding limited connections between points (AO3).
• Makes a judgement, providing a simple justification based on
limited evaluation of business information and issues relevant
to the choice made (AO4).
Level 2 4-6 • Sound application of knowledge and understanding of
business concepts and issues to the business context
although there may be some inconsistencies (AO2).
• Deconstructs business information and/or issues, finding
interconnected points with chains of reasoning, although
there may be some logical inconsistencies (AO3).
• Makes a judgement, providing a justification based on sound
evaluation of business information and issues relevant to the
choice made (AO4).
Level 3 7-9 • Detailed application of knowledge and understanding of
business concepts and issues to the business context
throughout (AO2).
• Deconstructs business information and/or issues, finding
detailed interconnected points with logical chains of reasoning
(AO3).
• Makes a judgement, providing a clear justification based on a
thorough evaluation of business information and issues
relevant to the choice made (AO4).
Question Answer Mark
Number
3(a) AO1 1 mark

Award 1 mark for a written response or formula.

Cash inflow less cash outflow (1).

Total cash income after payments have been deducted (1).

(1)

Question Answer Mark

Number
3(b) AO2 2 marks

Award 1 mark for identifying one reason why a positive closing

balance may be important for a beauty salon, plus 1 further
mark for linking it to the context of the question.

This means that the salon will have cash available to be able to
pay make-up suppliers (1). Therefore, the salon will have less
risk of insolvency (1).

NB Do not accept reasons that would not be appropriate for the

context of a beauty salon.

Accept any other appropriate response. (2)

Question Answer Mark

number
3(c) AO2 2 marks

Award up to 2 marks for linked points outlining the correct

answer.

The difference between cash inflow and total payments is the

highest (1) at 38 540 Dhs (1).

The difference between the closing and opening balance is the

highest (1) at 38 540 Dhs (1).

NB Do not accept answers that state salon A has the highest (2)
payments, as this does not give the net cash flow position.
Question Indicative content
number
3(d) AO2 (3 marks)/AO3 (3 marks)

AO2
• The salon will be able to assess the extent of its outgoings relative to
the cash inflow.
• Salon B will be able to see how much cash is available within the
business.

AO3
• This will enable the salon to decide whether it needs to seek cheaper
supplies for its beauty products, or to charge higher prices. Both
actions will help the salon to improve its net cash flow.
• Therefore, salon B will be able to make informed spending decisions
about new beauty supplies based on accurate information.

Level Mark Descriptor

0 No rewardable material.
Level 1 1–2 • Limited application of knowledge and understanding of
business concepts and issues to the business context (AO2).
• Attempts to deconstruct business information and/or issues,
finding limited connections between points (AO3).
Level 2 3–4 • Sound application of knowledge and understanding of
business concepts and issues to the business context
although there may be some inconsistencies (AO2).
• Deconstructs business information and/or issues, finding
interconnected points with chains of reasoning, although
there may be some logical inconsistencies (AO3).
Level 3 5–6 • Detailed application of knowledge and understanding of
business concepts and issues to the business context
throughout (AO2).
• Deconstructs business information and/or issues, finding
detailed interconnected points with logical chains of reasoning
(AO3).
Question Indicative content
number
3(e) AO2 (3 marks)/AO3 (3 marks)/AO4 (3 marks)

AO2
• Option 1 - By opening more salons will increase the opportunities for
customers who are looking for beauty treatments.
• Option 2 - Developing her own brand beauty products will enable
Beauty By Edge to capture market share from existing brands.

AO3
• Option 1 - Therefore, the business will generate greater revenue
which will increase cash inflow and, providing outflows do not
increase by a greater amount, will increase net cash flow.
• Option 2 - Therefore, sales revenue will increase and improve the
net cash flow position.

AO4
• Option 1 - However, although new salons will generate greater
revenue, they will incur large cash outflows associated with start-up
costs. This will lead to lower net cash flow.
• Option 2 - However, own brand beauty products may struggle to
become established in a market dominated by established beauty
brands. As a result the costs associated with the development of
new products may be greater than the revenue generated and net
cash flow may worsen.

Level Mark Descriptor

0 No rewardable material.
Level 1 1–3 • Limited application of knowledge and understanding of
business concepts and issues to the business context (AO2).
• Attempts to deconstruct business information and/or issues,
finding limited connections between points (AO3).
• Makes a judgement, providing a simple justification based on
limited evaluation of business information and issues relevant
to the choice made (AO4).
Level 2 4-6 • Sound application of knowledge and understanding of
business concepts and issues to the business context
although there may be some inconsistencies (AO2).
• Deconstructs business information and/or issues, finding
interconnected points with chains of reasoning, although
there may be some logical inconsistencies (AO3).
• Makes a judgement, providing a justification based on sound
evaluation of business information and issues relevant to the
choice made (AO4).
Level 3 7-9 • Detailed application of knowledge and understanding of
business concepts and issues to the business context
throughout (AO2).
• Deconstructs business information and/or issues, finding
detailed interconnected points with logical chains of reasoning
(AO3).
• Makes a judgement, providing a clear justification based on a
thorough evaluation of business information and issues
relevant to the choice made (AO4).
Question Answer Additional guidance Mark
number
4(a) AO2 2 marks Award 1 mark for correctly
substituting numbers into
Substitution into correct formula: formula.

(7 000 Dhs ÷ 35 000 Dhs) x 100 Award full marks for correct
(1) numerical answer without
working.
Answer: 20% (1) (2)

Question Indicative content

number
4(b) AO2 (3 marks)/AO3 (3 marks)

AO2
• Fringe benefits will help stylists to feel valued by Beauty By Edge.
• Beauty By Edge operates in a competitive market and fringe benefits
are an effective way to motivate employees who may be tempted by
rival salons.

AO3
• Therefore, they will feel obliged to work hard to develop relationships
with customers who may then pass on by word of mouth how good
the service at Beauty By Edge is. As a result the business may see an
increase in repeat purchase.
• This will allow Beauty By Edge to retain its stylists who may have
developed strong relationships with customers. This will lead to
greater repeat purchase by customers.

Level Mark Descriptor

0 No rewardable material.
Level 1 1–2 • Limited application of knowledge and understanding of
business concepts and issues to the business context (AO2).
• Attempts to deconstruct business information and/or issues,
finding limited connections between points (AO3).
Level 2 3–4 • Sound application of knowledge and understanding of
business concepts and issues to the business context
although there may be some inconsistencies (AO2).
• Deconstructs business information and/or issues, finding
interconnected points with chains of reasoning, although
there may be some logical inconsistencies (AO3).
Level 3 5–6 • Detailed application of knowledge and understanding of
business concepts and issues to the business context
throughout (AO2).
• Deconstructs business information and/or issues, finding
detailed interconnected points with logical chains of reasoning
(AO3).
Question Indicative content
number
4(c) AO1 (3 marks)/AO2 (3 marks)/AO3 (3 marks)/AO4 (3 marks)

AO1
• A flat organisation structure has a small chain of command and short
span of control.
• A flat organisation structure will help stylist to feel that they belong to
Beauty By Edge.

AO2
• This is shown in Figure 4 as lead stylists have close control over stylist in
their team.
• This is because they are closely linked to more senior stylists and line
managers.

AO3
• Therefore, standards of treatments can be maintained as all staff are
closely controlled and Cindy can ensure that all stylists are clear of what
is expected.
• Therefore, Beauty By Edge can generate staff loyalty which allows close
relationships to be built with customers who will want to trust the people
responsible for their beauty treatment.

AO4
• However, this may limit the scope for stylists to be creative. As the
beauty market is based on creativity and individuality, such a tight
organisation structure may be limiting for stylists who may choose to
find jobs in other salons.
• However, this might mean that more senior stylists have to spend
time supervising and overseeing other stylists, which might detract
from their role in helping to achieve high levels of customer
satisfaction.
Level Mark Descriptor
0 No rewardable material.
Level 1 1–4 • Demonstrates elements of knowledge and understanding of
business concepts and issues, with limited business
terminology used (AO1).
• Limited application of knowledge and understanding of
business concepts and issues to the business context (AO2).
• Attempts to deconstruct business information and/or issues,
finding limited connections between points (AO3).
• Draws a conclusion, supported by generic assertions from
limited evaluation of business information and issues (AO4).
Level 2 5-8 • Demonstrates mostly accurate knowledge and understanding of
business concepts and issues, including appropriate use of
business terminology in places (AO1).
• Sound application of knowledge and understanding of business
concepts and issues to the business context although there
may be some inconsistencies (AO2).
• Deconstructs business information and/or issues, finding
interconnected points with chains of reasoning, although there
may be some logical inconsistencies (AO3).
• Draws a conclusion based on sound evaluation of business
information and issues (AO4).
Level 3 9-12 • Demonstrates accurate knowledge and understanding of
business concepts and issues throughout, including appropriate
use of business terminology (AO1).
• Detailed application of knowledge and understanding of
business concepts and issues to the business context
throughout (AO2).
• Deconstructs business information and/or issues, finding
detailed interconnected points with logical chains of reasoning
(AO3).
• Draws a valid and well-reasoned conclusion based on a
thorough evaluation of business information and issues (AO4).