Cambridge International AS & A Level

BUSINESS 9609/21
Paper 2 Business Concepts 2 May/June 2023

1 hour 30 minutes

You must answer on the enclosed answer booklet.

* 5 3 0 7 4 9 2 1 1 8 *

You will need: Answer booklet (enclosed)

INSTRUCTIONS
● Answer all questions.
● Follow the instructions on the front cover of the answer booklet. If you need additional answer paper,
ask the invigilator for a continuation booklet.

INFORMATION
● The total mark for this paper is 60.
● The number of marks for each question or part question is shown in brackets [ ].

This document has 4 pages. Any blank pages are indicated.

DC (CJ) 316255/2
© UCLES 2023 [Turn over
2

1 Great Resources (GR)

GR is a business partnership that creates educational resources. It sells direct to schools

and teachers via its own website.

Sanjay, Rukmal and Boris are entrepreneurial teachers who formed the GR partnership.
One year ago, they identified a gap in the market to supply interactive, digital resources.
GR’s website is subscription only. An online marketing campaign, which used penetration 5
pricing, attracted 250 subscribers in the first six months of operation. The start-up costs
were financed with a $5000 bank overdraft, which is GR’s only debt.

Reviews for GR’s products in teaching journals are positive but cash flow is poor. Many
customers have taken advantage of a recent sales promotion for one month’s free
membership and posted positive reviews. Unfortunately, few have then taken out a regular 10
subscription.

As revenue has not increased as much as the entrepreneurs had hoped, they must now
consider alternative promotion methods. They have researched possible promotion methods
and decided to advertise in an educational newspaper. The newspaper has a readership of
half a million people. 15

Expert Materials (EM) is a large national company that also advertises in the newspaper.
EM is GR’s closest competitor. The EM brand is well-known and trusted in the educational
resources market. Table 1.1 shows some marketing data.

Table 1.1 Marketing data

GR EM Total 20
market
Revenue ($000) 15 300 500
Number of customers 300 5000 7000
Annual advertising spend ($000) 7.5 45 60

(a) (i) Identify one barrier to entrepreneurship. [1]

(ii) Explain the term partnership. [3]

(b) (i) Refer to Table 1.1. Calculate GR’s market share by revenue. [3]

(ii) Explain one factor which may influence the supply of GR’s products. [3]

(c) Analyse one advantage and one disadvantage to GR of using a bank overdraft. [8]

(d) Evaluate whether price or promotion is the most important element of GR’s marketing mix.
[12]

© UCLES 2023 9609/21/M/J/23

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2 Delicious Cocoa (DC)

DC is a co-operative owned by cocoa farmers in country X. It has 500 workers. In 2022, DC

produced 2000 tonnes of raw cocoa beans. Productivity is expected to increase by 5% in
2023. Although DC is profitable, it has no retained earnings.

DC focuses on the triple bottom line as its main objective. The members of the co-operative
(farmers) are motivated within the current operation. 5

Zara, the Managing Director, has recently completed a workforce plan. She has identified
that young people do not want to work on DC’s farms. Their concerns are:

• lack of investment in training

• most of the work is manual
• lack of control over earnings. 10

Ranjit, the Operations Director, has identified an opportunity to create added value by
investing in a capital intensive factory.

The factory will process raw cocoa beans produced by DC’s farms into cocoa butter. Cocoa
butter is a premium product and attracts higher profit margins than raw cocoa beans. The
processing factory will require a significant capital investment (see Table 2.1). 15

Table 2.1 Data for the cocoa processing factory

$
Initial investment:
Land 100 000
Machinery 150 000 20
Training 15 000
Average variable costs per tonne 5 000
Average selling price per tonne 10 000

(a) (i) Identify one element of the triple bottom line. [1]

(ii) Explain the term added value. [3]

(b) (i) Refer to lines 1–2. Calculate DC’s expected labour productivity in 2023. [3]

(ii) Explain one reason why labour productivity is important to DC. [3]

(c) Analyse two ways DC can motivate young people to work on its farms. [8]

(d) Evaluate whether DC should grow its operations by opening its new cocoa processing factory.
[12]

© UCLES 2023 9609/21/M/J/23

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© UCLES 2023 9609/21/M/J/23