GCE EXAMINERS' REPORTS

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1 GCE EXAMINERS' REPORTS BUSINESS STUDIES (LEGACY) AS/Advanced SUMMER 2017

2 Grade boundary information for this subject is available on the WJEC public website at: Online Results Analysis WJEC provides information to examination centres via the WJEC secure website. This is restricted to centre staff only. Access is granted to centre staff by the Examinations Officer at the centre. Annual Statistical Report The annual Statistical Report (issued in the second half of the Autumn Term) gives overall outcomes of all examinations administered by WJEC. Unit Page Unit 1: The Business Framework 1 Unit 2: Business Functions 2 Unit 3: Business Decision-Making 3 Unit 4: Business Strategy and Practice 5

3 GCE BUSINESS STUDIES (LEGACY) Summer 2017 Advanced Subsidiary/Advanced UNIT 1: THE BUSINESS FRAMEWORK There were a very small number of candidates taking this final legacy re-sit examination, so the report is given in this context. Overall, candidates were able to demonstrate knowledge and, in most cases, apply it to the case study. Q.1 (a) Knowledge of the qualities of an entrepreneur was demonstrated by candidates, though breadth would have assured higher marks. Q.1 (b) Correct examples were given from the case study, though imprecise terminology hindered some candidates in gaining the mark for understanding. Q.1 (c) The definitions given by most candidates lacked clarity. Q.1 (d) Most candidates concentrated on a small number of economies of scale such as purchasing, but were able to give examples of it in action. Q.2 (a) The question was well answered using examples from the case study as required. Candidates showed the ability to explain and distinguish. Q.2 (b) Few candidates demonstrated sufficient evaluation to reach level 3 and there was a lack of application to the case study. Some candidates repeated their answer from 2 (a). Q.3 (a) Most candidates were able to show knowledge and understanding. Q.3 (b) Mainly level 2 answers were given, with candidates able to analyse why a business plan contributes to success, but few fully evaluated by also giving points against the view. Q.4 This question was generally well answered, with candidates who took advantage of the examples of working patterns given in the case study scoring higher marks. Only one candidate showed knowledge of hot desking! Some answers used the term home working as a generic one and gave general plus and minus points based on this. 1

4 GCE BUSINESS STUDIES (LEGACY) Summer 2017 Advanced Subsidiary/Advanced UNIT 2: BUSINESS FUNCTIONS There were a very small number of candidates taking this final legacy re-sit examination, so the report is given in this context. Q.1 (a) Most candidates showed awareness of the need for research and development in the mobile phone industry. Q.1 (b) Most candidates gave definitions which were lacking in precision, but showed knowledge in their brief outline of the 4Ps of the marketing mix. Q.1 (c) This question was generally well answered with appropriate application to the mobile phone industry and examples given from their own experience. Q.1 (d) Candidates were able to offer detailed explanations of the importance of branding for the mobile phone industry in many cases. Q.2 (a) Most candidates achieved full marks for the calculation. Q.2 (b) Some sensible proposals for improving cash flow were given, but higher marks could have been obtained with closer reference to the case study, rather than generic answers on cash flow improvement. Q.2 (c) Answers were mainly at Level 2,with basic evaluation, lacking comments on drawbacks. Q.2 (d) Most candidates gave correct definitions and demonstrated understanding. Q.2 (e) A very well answered question with reference to a variety of motivational theorists that were applied and evaluated in context. Q.3 (a) Many imprecise definitions were given although methods of measurement were understood. Q.3 (b) Some detailed explanations of a variety of labour productivity methods were given to reach level 3. 2

5 GCE BUSINESS STUDIES (LEGACY) Summer 2017 Advanced Subsidiary/Advanced UNIT 3: BUSINESS DECISION-MAKING General comments The case study has been a feature of this specification and has been well received. This year s case study was based on SuperGroup and it was pleasing to see that the vast majority of candidates attempted all of the questions. In general, the standard of their responses was satisfactory but due to this being the final sitting of this paper, the number of candidates entered was low. As the candidates are re-sit candidates, this possibly explains the reason for the standard being satisfactory rather than good or excellent. Question-specific comments 1. This asked candidates to explain the strengths and weaknesses of the Superdry brand. This question was well received with most candidates making good use of information in the case study. However, a small number of candidates analysed the strengths and weaknesses of the company generally rather than focusing on the strengths and weaknesses of the brand itself. These candidates naturally discussed the brand as a strength of the company and were therefore able to access the marks but were not able to access the higher marks. Better answers referred to strengths such as instant recognition, customer loyalty, premium prices and global sales and weaknesses such as lack of advertising, fashions changing rapidly and offending some Chinese customers. 2. A number of candidates failed to recognise the significance of Julian Dunkerton and James Holder s contribution to the success of SuperGroup. Candidates focussed instead on other factors which had contributed to the success of SuperGroup. As a result, this question was generally poorly answered. Candidates were credited for these other factors to an extent but the better answers showed understanding of Julian Dunkerton and James Holder s significance to the success of SuperGroup. Not one of the candidates referred to their traits as leaders or their leadership style as a contribution towards their success. 3. By now most candidates are familiar with the six financial ratios outlined in the specification: gross and net profit margins, ROCE, current ratio, acid test and gearing. In many cases there were a few minor errors, particularly regarding rounding and forgetting to express the liquidity ratios as ratios. Although, as stated, most candidates could complete the calculations, not all of them were clear as to the significance of their results. Some candidates believed that a net profit margin of just over 10% was low, although there was nothing to compare this with and, in reality, may be quite good for this type of business. Most felt that ROCE of just over 15% was satisfactory, however little comparison was made with current bank interest rates. The liquidity ratios were well above the ideals of 1.5-2:1 and 1:1, but only a small number of candidates pointed out that this liquidity could be utilised more effectively. The company was low-geared but only a small number of candidates pointed out that this might mean that the company was being over-prudent and that opportunities for expansion were being missed. 3

6 4. This question asked candidates to consider the impact of macroeconomic factors on SuperGroup plc. A large number of candidates were strongly influenced in their answers by the macroeconomic factors which were stated in the question which were inflation, interest rates, exchange rates and the business cycle. As a result, only a very small number of candidates referred to taxation as a macroeconomic factor. Candidates generally illustrated a good understanding of the macroeconomic factors but their discussion on exchange rates were often slightly confused. The more comprehensive answers looked at the impact of each macroeconomic factor and clearly evaluated its effect on SuperGroup plc. 5. This required candidates to evaluate SuperGroup s plans to expand the business. The better answers to this question considered a wide range of advantages and disadvantages. The former included the potential for increased revenue and profits; use of multi-channel approach to sales with the development of e-marketing responding to consumer trends; integrating its stock control to allow new ranges to get to customers quickly and the benefit of economies of scale. The latter included potential problems arising from, among other things, rejection by consumers due to: lack of market research; differences in taste and possibly custom and failure to understand the local culture, with reference to China in particular; cash-flow problems as a result of expanding too quickly; risk; lack of experience and possible diseconomies of scale. In general, the better answers were well-structured and well-balanced. There was clear evidence of planning, good use of paragraphs with each paragraph containing one point that was fully developed. There were introductions to questions, outlining briefly what was going to be said and a conclusion, briefly summing up the main arguments. The better answers were invariably neatly presented and clearly legible. 4

7 GCE BUSINESS STUDIES (LEGACY) Summer 2017 Advanced Subsidiary/Advanced UNIT 4: BUSINESS STRATEGY AND PRACTICE General comments This will have been the last possible sitting of this paper. As the candidates were re-sit candidates, the number entered was very low. The main function of section A has been to test candidates understanding of quantitative methods such as decision trees, network diagrams and investment appraisal. This summer s paper looked at depreciation, marketing plans, decision tree analysis and budget variance analysis. Section B tested candidates essay writing skills as well as their ability to apply their knowledge synoptically. In general, the standard of their responses was satisfactory. As the candidates are re-sit candidates, this possibly explains the reason for the standard being satisfactory rather than good or excellent. Question-specific comments Section A Q.1 Candidates were given data about the value of an asset. In part (a), they were asked to calculate the annual depreciation per machine, using the straight-line method. It was gratifying to see that most candidates were able to do this successfully. However, forgetting to divide the total value of the sewing machines by the number of sewing machines was a common mistake by a number of candidates. Part (b) asked the candidates to explain why the company depreciates the value of its fixed assets. A number of candidates stated wear and tear and technological reasons for depreciating the value of fixed assets. The better answers suggested that if fixed assets were not depreciated, their value would be overstated in the accounts and that the balance sheet would not give a true value of the company which represented window dressing. Q.2 This question asked candidates to explain the nature and purpose of Sunny Solar Ltd s marketing plan. Although many candidates were able to briefly define a marketing plan, many had no clear idea of its content and application. As a result, a large number of candidates discussed advertising. Q.3 Candidates were given data regarding three potential decisions. In part (a), they were asked to construct a decision-tree diagram and to calculate the net return on each option. Most candidates were able to draw the diagram. However, the accuracy of the diagrams were problematic for a number of the candidates. They were not penalised for failing to include a square to represent the decision and a circle to represent the chance nodes. Calculating the net return accurately also proved problematic for a number of candidates. Several had not multiplied the probability with the estimated return or had forgotten to deduct the cost which would give the correct net return for each option. Part (b) asked which of these options should be chosen by Mr Nasif. The better answers referred to the fact that the probabilities are only estimates and that things may change. Own figure rule applied from part (a). 5

8 Q.4 Candidates were given data with budgeted Sales Revenue, Purchases, Wages and Overheads. The data also contained statements to calculate the actual Sales Revenue, Purchases, Wages and Overheads. In part (a), they were asked to calculate the variances, indicating in each case whether they were favourable or adverse. Most candidates were able to calculate the variances, accurately stating favourable or adverse. Part (b) asked candidates to discuss the usefulness of budget variance analysis to a business such as Tinseltown Toys. Whilst most candidates had a reasonable idea as to the nature of budget variance analysis, many answers were rather general in terms of controlling costs. Q.5 This asked candidates to discuss the likely impact of the industrial action on the various stakeholders affected by a dispute. Whilst most candidates, although not all, had a reasonable idea as to the nature of industrial action, many answers were rather general and were not sufficiently well-applied to First Great Western and the members of the Rail, Maritime and Transport union. Some candidates concentrated on the impact on a small number of stakeholders rather than from the point of view of most of the stakeholders in this dispute. Question-specific comments Section B This section consisted of three essay questions. Candidates were required to choose one of these. It was intended that all three essays should be of equal difficulty and that ideally candidates choices would be equally distributed between them. As it turned out, one question, question 6, was more popular than the other two. However, candidates also answered question 7 and 8. These essays are intended to be synoptic and to give candidates the opportunity to demonstrate the depth and breadth of their understanding of the subject. Despite the fact that not all questions were as popular as each other, the essays largely achieved their purpose of discovering the individual candidate s overall understanding of the subject. Q.6 This asked candidates to discuss the proposition that the best way to motivate workers is to pay them more money. Whilst it is gratifying to know that candidates are aware of both monetary and non-monetary methods of motivation, it would also be good to see them bringing forward various motivational theorists to justify these methods. Having said that, there were many good responses to this question with candidates giving examples of monetary and non-monetary methods of motivation. Q.7 This question asked candidates to assess the view that increased expenditure on technology will, more often than not, result in greater profits for a business. This question produced some very good answers. Many of the answers discussed different types of technology with well-balanced arguments both in favour of and against increased expenditure on technology. Due to the various examples of different types of technology seen as part of candidates responses, this lead to candidates achieving high level marks. Q.8 This question required candidates to examine the view that British businesses will be better off outside the European Union. On the whole, the answers to this question were of a good standard. Candidates had clearly been well-drilled in the whole issue of the European Union and Brexit was widely discussed. The better answers were well-balanced with a focus on the effects on businesses. Some of the weaker responses tended to focus more on the effects on citizens of the UK generally. 6

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