Skills Exercises

Application (AO2)

Cambridge International AS & A Level

Business 9609
For examination from 2023

Version 1
 In order to help us develop the highest quality resources, we are undertaking a continuous programme
of review; not only to measure the success of our resources but also to highlight areas for
improvement and to identify new development needs.

We invite you to complete our survey by visiting the website below. Your comments on the quality and
relevance of our resources are very important to us.

www.surveymonkey.co.uk/r/GL6ZNJB

Would you like to become a Cambridge consultant and help us develop support materials?

Please follow the link below to register your interest.

www.cambridgeinternational.org/cambridge-for/teachers/teacherconsultants/

Copyright © UCLES 2021

Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge
Assessment is the brand name of the University of Cambridge Local Examinations Syndicate (UCLES),
which itself is a department of the University of Cambridge.

UCLES retains the copyright on all its publications. Registered Centres are permitted to copy material from
this booklet for their own internal use. However, we cannot give permission to Centres to photocopy any
material that is acknowledged to a third party, even for internal use within a Centre.
Contents
Introduction.................................................................................................................................... 4
Application (AO2) ........................................................................................................................... 5
Exercise 1: Using business contexts .............................................................................................. 5
Exercise 2: Using data contexts................................................................................................... 12
Exercise 3: Using case study contexts.......................................................................................... 20
Skills Exercises

Introduction
Cambridge International AS & A Level Business attracts a variety of learners from many different
backgrounds. For some learners Business is a new subject and an opportunity to explore an area of study
that interests them, while developing a set of transferable skills. Other learners have previously studied
Business and are looking to continue developing their knowledge of the subject. Either way, the study of
Business allows learners to experience the diverse and dynamic world within which businesses exist and
gain the knowledge needed to understand how businesses operate within real contexts, analyse alternative
courses of action and develop the ability to make justified recommendations.

Skills and why they are important?

Skills are the key to success. The performance of candidates in Cambridge International AS & A Level
Business exams have shown a range of areas where improvement would be helpful. These areas of
improvement tend to centre around the assessment objectives (AOs) of the course and we have addressed
these four AOs in three Skills Exercises booklets.

• Knowledge and understanding (AO1)

• Application (AO2)
• Analysis (AO3) and Evaluation (AO4)
The skills exercises in these booklets make use of examination questions and data and include activities and
worksheets to help skills development and incorporate suggested teaching approaches, such as group work,
discussion, structured support and writing in sequence. They do not attempt to cover all possible aspects of
the examinations, only those problem areas which have presented consistently over time.

How will these skills be developed?

The Skills Exercises booklets aim to help learners develop skills in:
• using knowledge and numerical data to answer examination questions
• using the context given in the examination to make answers relevant
• developing skills of analysis – including understanding analysis, spotting analysis and developing
analysis skills
• building evaluation skills – including making judgements, what the judgement depends upon and
early evaluation in a response.
The skills exercises provide suggestions so you can have confidence that the materials you prepare and use
in the classroom are building skills and resilience in your learners. This document should be used alongside
the other teaching and learning resources provided on the School Support Hub at:
www.cambridgeinternational.org/support

4
 Skills Exercises

Application (AO2)
Paper 1 – Business Concepts 1
For Paper 1 – Business Concepts 1, learners apply their answers to given business contexts without any
extra data or a case study. These contexts are ones that learners are likely to be familiar with and may have
encountered during their study. The ability to apply knowledge and understanding to these business contexts
is essential to be able to access Application (AO2) marks and to produce good quality analysis and
evaluation.

Exercise 1: Using business contexts

Activity 1: Business contexts
Learners need to understand that different business contexts require different responses.

Give learners a business context. Worksheet 1: Business contexts can be used or replaced with other
contexts.

For each context learners decide if the statements are true or false.

Whether a statement is true or false might depend on other information. Where this is the case, discuss as a
class how both options could be correct.

5
Skills Exercises

Worksheet 1: Business contexts

For each general context, decide if the statement is true or false.

a)

Context: A private limited company True? False?

The business has shareholders

The business has unlimited liability

The business can take a partner as a source of

finance
The business can sell shares on the stock
exchange

The business must publish accounts

b)

Context: A bank True? False?

The business sells a tangible product

The business is in the tertiary sector

The business must be in the public sector

The business can only operate online

The business can only sell shares to family and

friends

c)

Context: A large multinational manufacturing

True? False?
business

The business has capital in more than one country

The business is in the primary sector

The business can only sell industrial products

(B2B)

The business must be capital intensive

The business is likely to be a company

6
 Skills Exercises

Worksheet 1 answers:
a)

Context: A private limited company True? False?

The business has shareholders X

The business has unlimited liability X

The business can take a partner as a source of

X
finance
The business can sell shares on the stock
X
exchange
X
A private limited company
The business must publish accounts must make their accounts
available but not necessarily
publish them.

b)

Context: A bank True? False?

The business sells a tangible product X

The business is in the tertiary sector X

X
The business must be in the public sector Some banks are owned by the
government, but most are not.

The business can only operate online X

The business can only sell shares to family and X

friends It depends on the ownership.

c)

Context: A large multinational manufacturing

True? False?
business

The business has capital in more than one country X

The business is in the primary sector X

The business can only sell industrial products

X
(B2B)

The business must be capital intensive X

X
The business is likely to be a company A large multinational is most
likely to be a company.

7
Skills Exercises

Activity 2: Different business contexts

The reason a general context is given, is so that a response can be specific and not generic. Learners need
to understand how different contexts can lead to different types of responses.

Give learners two general business contexts which have significant differences. The general contexts in
Worksheet 2: Different business contexts can be used or replaced with other general contexts.

Learners identify the differences between each of the contexts.

Have a discussion about the different contexts and how they can lead to different types of responses.

8
 Skills Exercises

Worksheet 2: Different business contexts

Identify and make a note of the differences between the two general business contexts.
a)

Differences

A small A
retailer of multinational
smartphones manufacturer
of
smartphones

b)

Differences

A farm A
growing fruit supermarket
and selling food
vegetables

c)

Differences

A successful A newspaper
social media publisher
business

9
Skills Exercises

Worksheet 2 answers may include:

a)

Differences

A small One is in the primary sector, the other is in the secondary sector. A
retailer of multinational
smartphones The retailer sells to customers / consumers (B2C), whereas the manufacturer
of
manufacturer is most likely to sell to other businesses (B2B).
smartphones
The retailer is small, possibly with only one or two branches, whereas
the manufacturer is larger with capital in more than one country.

The retailer is unlikely to sell products overseas, whereas the

manufacturer is very likely to sell in many countries.

b)

Differences

A farm A farm is in the primary sector whereas a supermarket is in the A

growing fruit supermarket
and tertiary sector. selling food
vegetables
A farm is likely to have fewer products to sell than a supermarket.

A supermarket can change their products in a relatively short

timescale as opposed to a supermarket which can be more flexible.

c)

Differences

A successful A social media business is the tertiary / quaternary sector whereas A newspaper
social media publisher
business the newspaper publisher is in the secondary / tertiary sector.

A social media business is based solely online whereas a newspaper

publisher is likely to have online and tangible products.

The social media business is successful whereas we do not know about

the newspaper publisher – it may be struggling as less people
purchase tangible newspapers today.

10
 Skills Exercises

Activity 3: Research contexts

The more exposure learners have to different general contexts, the more adaptable they are likely to be
when applying their Business knowledge and understanding in an examination.

Each learner researches a different general context. Any local, national or international business could be
used. Business contexts that are known to the learners are likely to provide the best examples. Learners
research the context and the specific nature of that context.

Learners present their findings to the rest of the group, including examples of real businesses that exist
within that context in your country.

11
Skills Exercises

Paper 2 – Business Concepts 2

For Paper 2 – Business Concepts 2, learners need to apply their answers to specific data about a business.
This data is given in the examination and is focussed on the questions given. The ability to apply knowledge
and understanding to this specific data is essential to access the marks for AO2 and produce good analysis
and evaluation.

Exercise 2: Using data contexts

Activity 1: Making appropriate choices
Learners should understand how a data context can make some choices appropriate for that business and
other choices inappropriate.

Give learners an outline / description of a business. The business outlines in Worksheet 3: Making
appropriate choices can be used or replaced with other businesses.

For each outline learners rank the choices based on which are the most appropriate and explain why.

12
 Skills Exercises

Worksheet 3: Making appropriate choices

1. Based on the outline of the business below, rank the options in terms of their appropriateness.

Quality Fencing

Quality Fencing is owned by Seojun.

Most of his customers own houses with gardens in city X.

Seojun is an entrepreneur who has an aim to be rich. He set up Quality Fencing recently using
all of his savings.

Seojun wants to gain more customers for Quality Fencing and needs to promote his business
in the local area.

a) Rank the following sources of finance, based on how appropriate they might be for Quality Fencing to
finance future promotion.
• Share capital
• Owners savings
• Bank loan
Choices Ranking Explanation

Most appropriate

Least appropriate

b) Rank the following above the line promotion methods, based on how appropriate they might be for Quality
Fencing to gain more customers.
• Television advertisement
• Social media promotion
• Direct mail

Choices Ranking Explanation

Most appropriate

Least appropriate

13
Skills Exercises

2. Based on the outline about the business below, rank the options in terms of their appropriateness.

Bob’s Furniture

Bob is a carpenter who is thinking of setting up his own business making furniture. In some
recent market research, he discovered the following:

- Potential customers want unique pieces of furniture

- Potential customers have high incomes.

a) Rank the following methods of production, based on how appropriate they might be for Bob’s Fencing to
produce furniture.
• Job production
• Batch production
• Flow production
Choices Ranking Explanation

Most appropriate

Least appropriate

b) Rank the following pricing methods, based on how appropriate they might be for Bob’s Fencing when
pricing furniture.
• Price skimming
• Cost-based pricing
• Price discrimination

Choices Ranking Explanation

Most appropriate

Least appropriate

14
 Skills Exercises

Worksheet 3 answers may include:

1. a)

Choices Ranking Explanation

Most appropriate Seojun does not have any savings, so it is most likely
Bank loan that he will need an external source of finance, such
as a bank loan.

A bank loan would be better as he has already used

Owners savings is savings, but as he is a sole trader he cannot use
share capital.

Share capital Seojun is a sole trader so share capital is impossible.

Least appropriate

b)

Choices Ranking Explanation

Most appropriate Seojun’s customers have houses with gardens, so he

Direct mail can send mail directly to these potential customers
that are local to QF.

Not as focussed on the local area as direct mail, but

Social media it is low-cost, so better than a television

advertisement.

The most expensive promotion method and not

Television
targeted on the local area, or Seojun’s target
advertisement
Least appropriate market.

15
Skills Exercises

2. a)

Choices Ranking Explanation

Most appropriate Job production would allow Bob to make unique
pieces of furniture which could be sold for a high
Job production price. This matches his market research that
customers want unique pieces and they have high
incomes.

Although the pieces of furniture would not be unique,

they could be part of small batches which may be
Batch production
somewhat unique and still sold for a higher price
than flow produced furniture.

Flow produced furniture is a competitive market and

Flow production does not match any of the research that Seojun has

Least appropriate found about his potential customers.

b)

Choices Ranking Explanation

Most appropriate Since each piece of furniture will be unique, cost-

based would allow Bob to price each piece based on
Cost-based
what each customer wants. He can use the mark-up
pricing
to keep a high profit margin based on the high-
income customers.

Price skimming would allow Bob to charge a high

Price skimming price to his high-income customers. However, as each
piece is unique it might be difficult to have one price.

Price discrimination is usually used when a business

Price has different market segments. Seojun only have one
discrimination high-income market segment, so it is unlikely to
Least appropriate attract these customers.

16
 Skills Exercises

Activity 2: Explain in context

Learners should understand how context is essential to make an answer specific to the given business.

Give learners a piece of data about a business. The outlines in Worksheet 4: Explain in context can be
used or replaced with another business.

For each question learners pick the best answer which would be most in context.

Learners then add another potential, contextual answer.

17
Skills Exercises

Worksheet 4: Explain in context

(Extract from 9609 Business 2023 Specimen Paper 2, Question 2)

1a) Based on the following question, identify the best answer.
Explain one payment method, other than time-based, that DC could use to pay its employees. [3]

One payment method could be using piece-rates. Piece-rates means that the workers will
Answer A get paid for each dress that they make. This is likely to motivate the workers to produce
more and make the business more revenue.

DC could pay the workers a salary. Since each dress is made to each customers’ needs, a
salary would mean that the highly skilled employees can concentrate on maintaining DC’s
Answer B
reputation for quality by doing the best job possible, as opposed to making many dresses
just to get paid more.

If the employees were paid using profit sharing, then they would be motivated to produce
Answer C
high quality products so that DC makes more profit, and their pay would be higher.

b) Write your own contextual answer.

2a) Based on the following question, identify the best answer.

Explain one advantage to DC of using job production. [3]

Job production is making one-off products that can be specific to each customer’s needs
Answer A
This means that DC can charge a high price and make a high profit margin.

Each dress can be unique which means that it can be sold for a high price and make DC
Answer B
more profit.

Every dress will be made to the specifications gained when the designer meets the
Answer C
customer, meaning that customers will be more satisfied and pay a higher price to DC.

b) Write your own contextual answer.

18
 Skills Exercises

Worksheet 4 answers may include:

1. The best answer is B

One payment method could be using piece-

Although this response names the product
rates. Piece-rates means that the workers
(dresses) this is not contextual enough.
will get paid for each dress that they make.
Answer A Apart from that word, the rest of the answer
This is likely to motivate the workers to
would be true about any business using
produce more and make the business more
piece-rates, so not applied to the context.
revenue.
DC could pay the workers a salary. Since
each dress is made to each customers’ This response uses specific elements from
needs, a salary would mean that the highly the data (dresses are made to customer
Answer B skilled employees can concentrate on needs; the workers are highly skilled and
maintaining DC’s reputation for quality by DC reputation) so it is clearly applied to the
doing the best job possible, as opposed to context and the best response.
making many dresses just to get paid more.
If the employees were paid using profit
sharing, then they would be motivated to Nothing in this response it specific to DC. It
Answer C produce high quality products so that DC is totally generic and therefore not applied
makes more profit, and their pay would be to the context.
higher.

2. The best answer is C

This response has good knowledge, but

Job production is making one-off products
nothing here is specific to DC. Any
that can be specific to each customer’s
Answer A business using job production can charge a
needs This means that DC can charge a
high price and make a high profit margin,
high price and make a high profit margin.
so this is not applied to the context.

Each dress can be unique which means This response is also true about any
Answer B that it can be sold for a high price and make business using job production, so not
DC more profit. applied to the context.

Every dress will be made to the

This response uses a specific piece of
specifications gained when the designer
context (customers meet with the
Answer C meets the customer, meaning that
designers) so it is applied to the context
customers will be more satisfied and pay a
and the best response.
higher price to DC.

19
Skills Exercises

Paper 3 – Business Decision-Making and Paper 4 – Business Strategy

For Paper 3 – Business Decision-Making and Paper 4 – Business Strategy, learners need to apply their
answers to a detailed case study. The case study needs to be read and understood before attempting the
questions. The ability to apply knowledge and understanding to these case studies is essential to access
AO2 marks and produce good analysis and evaluation.

Exercise 3: Using case study contexts

Activity 1: Understanding a case study
Learners should be able to quickly read and understand the most important points from a case study.

Give learners a case study. The case study from 9609 Business Specimen Paper 3 can be used with
Worksheet 5: Understanding a case study or replaced with another case study.

Give learners 10–15 minutes to read and understand the case study.

Learners put the case study away and answer the quiz.

20
 Skills Exercises

Worksheet 5: Understanding a case study

Read the 9609 Specimen Paper 3 Insert and complete the quiz by highlighting / circling the correct answer.

Quiz based on Devonice Ltd (DL)

Circle the appropriate answer.

Question A B C D

Private Public
What form of business ownership is
1 Sole trader Partnership limited limited
DL?
company company

What type of organisational structure

2 Decentralised Centralised Matrix Delayered
does DL use?

What is DL’s current capacity

3 70% 80% 90% 100%
utilisation?

Young Young
4 What market segment does DL target? Women Men
children adults

5 DL operates in which country? W X Y Z

Which of the following is not one of the Banning

Regulating
actions demanded by the pressure Restricting Introducing high
6 product
group to reduce sales of high sugar advertising a tax sugar ice
labelling
and fat foods? cream
It
It makes
It leads to the increases
Why is DL facing pressure to stop the ice It is too
7 loss of the sugar
using palm oil? cream too expensive
rainforests content of
smooth
ice cream

What is the total time estimated for the

8 16 17 18 19
production line project?

21
Skills Exercises

Worksheet 5 answers:

Question Answer

1 C

2 B

3 C

4 B

5 C

6 D

7 A

8 C

Activity 2: Highlighting relevant information

One of the most useful ways to get to know a case study is to use a highlighting pen to pick out the most
important aspects. This can be particularly useful when a learner needs to refer back to the case study and
pick out data to answer a question.

For this activity each learner should have access to three different colours of highlighting pen (coloured
pencils can also be used).

Give learners a case study. Specimen Paper 3 or Specimen Paper 4 can be used.

Learners read the entire case study as quickly as possible, so that they have a good idea of the basic
context of the business.

Give learners three questions from the question paper.

Each question should be assigned a different colour highlighter.

Learners highlight each part of the case study that refers to the appropriate question. By doing this, learners
should be able to quickly refer to that section of the case study when answering that question.

By practising this technique, learners can quickly and effectively highlight a case study before attempting to
answer the questions.

22
Cambridge Assessment International Education
The Triangle Building, Shaftesbury Road, Cambridge, CB2 8EA, United Kingdom
t: +44 1223 553554
e: info@cambridgeinternational.org www.cambridgeinternational.org

Copyright © UCLES June 2021