Business Studies (AS/Advanced)
Business Studies (GCSE)
Statistical Information
GCE (AS/Advanced)
This booklet contains summary details for each unit: number entered; maximum mark
available; mean mark achieved; grade ranges. N.B. These refer to 'raw marks' used in the
initial assessment, rather than to the uniform marks reported when results are issued.
The Examiners' Report may refer in general terms to statistical outcomes. Statistical
information on candidates' performances in all examination components (whether internally
or externally assessed) is provided when results are issued. As well as the marks achieved
by individual candidates, the following information can be obtained from these printouts:
For each component: the maximum mark, aggregation factor, mean mark and standard
deviation of marks obtained by all candidates entered for the examination.
For the subject or option: the total entry and the lowest mark needed for the award of each
Annual Statistical Report
Other information on a centre basis is provided when results are issued. The annual
Statistical Report (issued in the second half of the Autumn Term) gives overall outcomes of
all examinations administered by WJEC.
General Certificate of Education 2007
Advanced Subsidiary/Advanced
Principal Examiners:
Mr. D. Evans, B.Sc. (Econ.), Head of Business Studies, Howell's
School Cardiff.
Mrs. M. Williams, B.A., Head of Business Studies, Ysgol Gyfun
Morgan Llwyd.
Unit Statistics
The following statistics include all candidates entered for the unit, whether or not they
'cashed in' for an AS award. The attention of centres is drawn to the fact that the statistics
listed should be viewed strictly within the context of this paper and that differences will
undoubtedly occur between one year and the next and also between subjects in the same
Max Mark
Mean Mark
Grade Ranges
N.B. The marks given above are raw marks and not uniform marks.
General Comments
All three papers were accessible and some very pleasing scripts were submitted by able
candidates. However, many candidates did not adopt sound examination technique. In
particular, they did not use the data provided to help them formulate their answers, nor did
they read the questions carefully, (e.g. many wrote about the Eurozone and not the
European Union as was required in BS1. This poor technique is in part reflected in the lower
mean marks for all three papers. Greater emphasis on examination technique will help
some candidates.
The consensus of opinion amongst the examiners who marked the AS papers was that the
quality of written communication was poor. Some scripts were almost illegible and there
seems to be an increased tendency to start sentences without a capital letter. Sentence
construction was often poor and candidates were unable to develop their responses in a
clear, logical manner. Spelling was often weak and even words given in the data were not
copied correctly!
Most candidates were able to identify one or two areas of legislation that
would have an impact upon Wetherspoons. Weaker candidates were unable
to develop their responses to show the impact. Nonetheless, some excellent
responses were submitted which clearly explained the impact of the
legislation identified. A wide range of relevant legislation was displayed
relating to health and safety, employee rights and weights and measures.
Poor technique was evident in many scripts as candidates failed to apply the
information given in the scenario, particularly the quantitative data. Better
candidates used the data provided to structure their answers but all too often
the responses lapsed into the "anecdotal" with very little business studies
evident. Level III candidates placed emphasis upon both long-term and
short-term issues that confronted the company and related them to both costs
and revenue.
Some impressive, concise responses were submitted by candidates who
clearly understood the concept of ethical behaviour. In addition they went on
to demonstrate their ability to evaluate, suggesting reasons why
Wetherspoons actions may have been undertaken for commercial, rather
than ethical reasons. Quite a number of candidates failed to offer any
evaluation and many were very repetitious. Very few candidates were able to
offer a clear definition of ethics in relation to business decision-making.
Those candidates who had revised the topic found it relatively easy to pick up
all four marks by identifying four characteristics of a workers' co-operative.
However, it was clear that a significant number of candidates had no idea at
all what a workers' co-operative was and failed to achieve any marks.
This question revolved around the evaluation of the decision to change from
being a private limited company to a PLC. Yet again a lot of irrelevant
material was presented and many candidates did not start to score until half
way through their responses. On the whole, however, the knowledge of this
area of the specification was generally good and the majority of candidates
progressed into Level II and attempted some evaluation. Level III was
achieved by those who placed the emphasis on the "change" and clearly
evaluated the benefits and drawbacks of being floated on the stock market.
Top answers included good use of terminology such as economies of scale
and divorce of ownership and control.
As with Q.2(a) a significant number of candidates had no idea of the meaning
of value added. Many responses were very poorly communicated and did not
relate their explanation to the production process as required. Better
candidates clearly understood the difference between the cost of raw
materials and the selling price and applied this to Cateram's production
Top responses contained a number of well developed reasons for the decline
in the secondary sector and made good use of examples, as required. Many
candidates, however, wasted much of their time with irrelevant explanations
about the primary and tertiary sectors. The view that the secondary sector
has declined because the tertiary sector has grown was commonplace as
was the view that people "don't like working in factories". Far too many
superficial and repetitive responses were written to what is a straightforward
area of the specification. It was, however, pleasing to see the example of
Burberry's relocation to China being used by some candidates, but many
offered few, if any, examples.
A not insignificant number of students wrote almost entirely about the
Eurozone and exchange rates and touched none of the points on the mark
scheme. Here, more than any other section on the paper, the use of
terminology was weak. Vague references were made to "foreigners" and
"abroad" with no clear distinction being made between EU and non-EU
countries. It was a common misconception that all European countries are in
the EU and that all use the euro as their currency. The lack of precise
knowledge was alarming and students are clearly not keeping up to date with
changes in the European Union. On many occasions relevant points were
made but were poorly developed, resulting in confused analysis and
Most candidates demonstrated knowledge of the stages of the product life
cycle and made an attempt at describing the relationship between cashflow
and sales. Whilst the negative cashflow was often well explained the other
stages were not (e.g. the discounting that may occur in the decline phase).
Some excellent responses were written and the question discriminated well
across the cohort.
Level III candidates were able to apply their knowledge of the Boston Matrix
to the organisation's portfolio and some very sophisticated responses were
submitted. However, knowledge of the Boston Matrix seemed superficial in
many cases and non-existent in a few. A diagram well drawn may have
enhanced some explanations. The connection between market share and
growth was not always fully appreciated, and the link between different
categories of products was frequently ignored, e.g. cash cows, funding
problem, children/rising stars.
These weaknesses then limited the
subsequent analysis. Lack of application to Bisto capped some promising
answers at 6 marks. Over emphasis on Gravy Granules as a cash cow (which
was given in the question) restricted analysis of the rest of the portfolio.
There were many long answers to this question but few good discursive
points were developed. Most candidates made the point that Bisto has many
new products in its range and needs to promote those. Many candidates
focused on the brand loyalty argument and did not really use the evidence
presented, for example Table 1, to quantify their discussion. Too many
candidates see this type of question as an opportunity to give their opinion
and do not seem to appreciate the debate that is necessary. Better
candidates offered a balanced argument and clearly demonstrated an
understanding of the important role played by "promotion" in a business with
a wide product portfolio.
Most candidates were able to score one mark for reference to the
interest payments on loans but only a few gained the two marks for
another advantage. Ambiguous answers were frequent, as was the
of precise knowledge.
This question was generally well-nswered by most candidates and
there was some pleasing descriptions of a variety of external sources
of finance. A few wrote about internal sources e.g. sale of assets and
some included a bank loan which was excluded by the wording of the
question. Both of these errors were regrettable and highlight the need
for more thorough reading of the question.
It is pleasing to report that the majority of candidate did well on this question
and full marks was not uncommon. Those candidates who did make a
mistake early on got their subsequent calculations correct and benefited from
the "own figure rule" (OFR). There are still some candidates who do not
attempt questions with figures in them and simply move on to the next
question. Thankfully, on this occasion, these were few and far between.
Some excellent responses were written at the top of Level III. Candidate
went systematically through the proposals and offered a well argued
judgement on the possible impact of each of the Managing Director's
proposed changes. Short-term and long-term issues were analysed and a
breadth of knowledge was demonstrated. Many candidates rightly quantified
the gain in net profits but did not go on to say how these gains might lead to
increased efficiency and competitiveness.
Weaker candidates exhibited poor technique and failed to use the data
provided to their advantage. An inability to communicate clearly was evident
but this might have been because some candidates were rushing to complete
the paper.
This paper was well received by the candidates with nearly all making a reasonable attempt
at answering all the questions.
All candidates had at least a vague knowledge of what the term redundancy
implied but to attain the marks it was necessary to be specific e.g. some
candidates simply wrote about ‘letting employees go' in their attempt to
explain redundancy rather than outlining the precise meaning of redundancy.
All candidates were aware of discrimination, but generally marks were lost
because of poor technique. 'Explain' questions require the candidates to
outline the terms/points and then to expand on their answer either by giving
examples or further details. In this question candidates were required to
specify two examples. Some candidates gave a definition and one example
others gave anecdotes but no definition.
The answers to this question were very vague. Candidates wrote such things
as 'part-time work is cheaper for Carys' but they did not develop this point to
explain why
With reference to Herzberg's theory, consider the view that workers in the
hotel industry can be difficult to motivate.
Those who had learnt their work answered this question particularly well.
There were a few who made the classic mistake of writing about McGregor's
theory and some who obviously did not know Herzberg's theory agreed with
the statement and then explained why workers were difficult to motivate using
Maslow's theory. Vagueness was a problem here too with statements such as
'hotels are nice places to work'. Many took hygiene factors to mean only
basic cleanliness.
Candidates often achieved four marks but many also scored zero. Those
candidates who remembered that they were sitting the Operations
Management unit answered well but far too many candidates discussed
market research.
Candidates made a reasonable attempt at this question with most getting out
of Level I but not enough candidates were able to discuss the spreading of
the fixed costs. However, they did understand the term full capacity and were
able to suggest some advantages and disadvantages.
This question proved popular with candidates with the majority getting into at
least Level II. They were well prepared with the knowledge of the impact of
technology and the differentiation occurred with those who applied their
answer to Optimeyes Ltd.
General Certificate of Education 2007
Advanced Subsidiary/Advanced
Chief Examiner:
Mr. M. Culliford, B.Sc. (Econ.), M.A. Lecturer in Business Studies,
Brithin College.
Principal Examiner:
Mr. S. George B.A., Head of Business Studies, Cathays High
Unit Statistics
The following statistics include all candidates entered for the unit, whether or not they
'cashed in' for an AS award. The attention of centres is drawn to the fact that the statistics
listed should be viewed strictly within the context of this paper and that differences will
undoubtedly occur between one year and the next and also between subjects in the same
Max Mark
Mean Mark
Grade Ranges
N.B. The marks given above are raw marks and not uniform marks.
It is pleasing to see that the number of candidates entered for this paper continues to rise
and that the standard of work produced by the majority of candidates is of a high standard.
The paper provides plenty of choice for candidates and as a result most found something
that they could answer. Some even attempted more questions than required, which is not a
strategy that we would recommend! Although standards of written English and Welsh were
no worse than usual the standard of handwriting is a cause for concern.
This question asked candidates to explain the difference between the public
and private sectors of the economy. Whilst most were able to do this a
sizeable minority mixed up the public sector with public limited companies.
This question required candidates to evaluate the view that the provision of
goods and services should always be left to the private sector. Unfortunately,
those who made the mistake referred to above carried this on into part (b) of
the question. However, the better candidates made a persuasive case for the
provision of some goods and services to be left to the private sector whereas
for others, e.g., merit goods and public goods, it was important that the state
should intervene.
This question asked candidates to explain the factors that are likely to
determine the demand for petrol. A number of candidates confused supply
and demand, although to be fair, when they related this to panic buying as a
result of anticipated shortages, this was acceptable. The better candidates
discussed such issues as growing affluence and the availability or otherwise
of complements and substitutes, including such things as battery cars and
This question asked candidates if oligopolies, such as oil companies, always
operate against the interest of consumers. This question evinced some wellbalanced answers which argued that some aspects of oligopoly, e.g.,
possible collusion, sticky prices, etc. might operate against the interests of
consumers. On the other hand the existence of government watchdogs and
the advantages of large scale R & D producing new and interesting products
meant that customers did not always suffer.
This question required candidates to explain how a large chain store, such as
Marks and Spencer, might use the Ansoff Matrix. Many candidates simply
stated the theory of the Ansoff Matrix, not all of them correctly. However, the
better answers were those that included examples of market penetration,
diversification which had or could have been used by a chain store.
This question asked candidates to evaluate the view that marketing tools,
such as the Ansoff Matrix, are of limited use in practice. Despite the fact that
this was a popular question there was considerable variation in the standard
of candidates' answers. The better answers not only evaluated the usefulness
or otherwise of the Ansoff Matrix but also considered other marketing tools
such as the Boston Matrix and the product life cycle. They realised that whilst
they had their limitations all of these techniques had the potential to give
businesses useful insights into their product portfolio and the challenges that
face them in different markets.
This question asked candidates to explain, with appropriate examples, the
pricing strategies that can be used by a business when launching a new
product. This was also a popular question and, on the whole, was well
answered. The better candidates considered a range of pricing strategies
including skimming and penetration pricing, although some of the weaker
answers were confused as to which was which.
This question required candidates to discuss the statement that price is the
least important element of the marketing mix. The better candidates realised
that for most businesses all of the elements of the marketing mix are
important, including price. These better answers were illustrated with
appropriate examples. They also qualified their answers and stated that for
some businesses some elements of the marketing mix might be more
important than others, e.g. for goods that were impulse purchases, eyecatching packaging and the correct location might be more important than the
price of the product.
This question asked candidates to outline the concept of contribution and
explain how it might help a clothing manufacturer to decide whether or not it
should accept an order. Whilst most students were able to define contribution
correctly as selling price minus variable cost, several were not clear as to how
this concept might be used in practice. In general, if the variable cost
exceeds the selling price, an order should not be accepted. It is only in
exceptional cases, e.g., if it is essential to keep a production unit together for
a short period of time until some profitable orders are secured, or in order to
secure further orders from key customers, that negative contribution can be
This question required candidates to discuss the view that for most practical
purposes break-even analysis is of little use to decision makers in business.
This was clearly an Aunt Sally type question, i.e., one which is clearly not
entirely true. There are indeed many limitations to break-even analysis,
which the better candidates clearly explained, but in certain circumstances it
can be very useful for a business to calculate the numbers of sales that it
requires before making a profit.
This question asked candidates to outline the payback method of investment
appraisal and explain its advantages and disadvantages.
For those
candidates who attempted this question it proved to be one in which they
could achieve high marks. Payback is a relatively simple concept to explain.
The only difficulty that some candidates had was in giving a valid example.
This question required candidates to evaluate the view that qualitative factors
are more important than quantitative factors when carrying out investment
appraisal. Once again there was a need for candidates to present balanced
arguments since both sets of factors are important in different ways.
Quantitative factors often give the impression of being objective but they are
not always reliable and may well be affected by qualitative factors, such as
the actions of competitors, changes in the state of the economy or resistance
to change by the workforce.
This question asked candidates to explain, with examples, McGregor's theory
of management and motivation. The majority of candidates were able to give
a reasonable explanation of McGregor's Theory X and Theory Y and the
better answers related these theories to the types of manager that might be
expected to conform to them. For example, a manager who took a theory X
view of his workers might be working in an industry that employed many
unskilled workers who needed to be trained to carry out specific tasks exactly
as the company wanted. They would neither be expected or required to use
their initiative.
This question required candidates to discuss the statement that, "In reality
managers do not conform to McGregor's stereotypes: different approaches
are appropriate for different situations." This question brought forth some
very good answers from a number of candidates. On balance the statement
was probably true, wise managers will be aware that they are dealing with
people and really need to understand what motivates each individual.
Colloquially one might say that he or she knows how they tick and will,
therefore, use different approaches to different people and situations.
This question asked candidates to explain the benefits for an IT company of
recruiting externally, rather than internally, when appointing a new marketing
manager. The better candidates explained a number of advantages and
disadvantages of recruiting externally, including experience, contacts,
knowledge and a fresh approach on the one hand, against expense, the need
for familiarisation with the business and its culture, and resentment from other
This question required candidates to discuss the statement that "People are a
business's most important resource but not all leadership styles practised by
UK managers reflect this." Once again there were many interesting answers
to this question. The better candidates tended to explain the different types
of leadership style and then relate them to the issue as to whether or not
employees are their most important resource. It was generally felt that
autocratic leaders valued their workers less than democratic ones. It was
also pointed out that in some industries, especially when dealing directly with
the public, an enthusiastic and capable workforce will give a business a
competitive edge and so the managers in those industries are likely to
develop a more democratic approach. However, it could be argued that even
autocratic, paternalistic and bureaucratic leaders think that human resources
are important and it is just for this reason that they think that they need to be
This question asked candidates to explain, with the aid of a diagram, the
technique of critical path analysis. This was not a very popular question and
the majority of diagrams that were given contained errors. If candidates wish
to attempt this type of question they should make sure that they are able to
do so accurately.
This question required candidates to discuss the statement that, "In practice
critical path analysis is of limited use to decision-makers." The better
answers to this question explained the limitations of CPA but were also able
to argue that for many large projects, especially when aided by a computer
programme, CPA could be a useful way of organising a set of complex
activities in order to save time and money.
This question asked candidates to explain, with examples, how new
technology is used in tertiary industries. Unfortunately, a few candidates did
not understand what tertiary industries were. Others gave limited examples
often restricted to retailing or education. The better candidates gave a wide
range of relevant examples.
This question required candidates to discuss the statement that, "For many
businesses introducing new technology creates as many problems as it
solves." Some candidates limited their answers to IT whilst others took a
broader view. The better candidates discussed both the benefits and
drawbacks of introducing new technology. They realised that there were cost
implications, that it was important to get the right technology, that workers
had to be trained and some may have to be made redundant or redeployed
and that there were often teething problems. However, they also realised that
whilst introducing new technology creates problems it also solves many and
for most businesses it is unavoidable if they wish to remain competitive.
This paper is an alternative to coursework, and it attempts to present candidates with the
opportunity to show their decision-making skills. They had to choose the way forward for a
business with three possible options to consider.
The overall performance on this paper was very similar to last year.
approximately 60% of the candidates.
It is sat by
This year's paper was based on a loss-making business involved in coal mining which was
looking to use its property portfolio. The business had recently re-written the aims in its
corporate plan to emphasise its commitment to:
corporate social responsibility;
returning to profitability as soon as possible;
diversifying its operations.
With the new corporate plan very much in mind, there were three options considered for the
first part of the property portfolio to be re-developed – a site called New Mill.
Option One – joint venture with a waste disposal business to set up a recycling plant
This option would eventually become profitable, but there were many strong feelings against
the proposed development in the local community. the other business involved in the joint
venture also had some unfavourable recent public relations to deal with.
Option two – sell the plot of land to a house builder
This option would mean a one-off payment and profit within two years. The house builder
had a good reputation for quality (at a price!) and would build a range of homes which would
appeal to young families. However, the house builder itself was in financial trouble and had
recently completed another development behind schedule.
Option three – re-develop the site as a retail park
With two clients ready to move in, this option would mean that a regular rental income would
be received (the actual amount would depend on the 'take-up- of the units on the site. The
possibility of European Union grants to help the transformation of the site was also a factor.
One of the clients would be a supermarket (which would improve the area's shopping
facilities, but may mean job losses elsewhere in smaller shops) and a 5-a-side football
centre which could contribute to more opportunities for young people.
As is generally the case with this paper, there was no one correct answer. The majority of
candidate did, however, go for option three as it appeared to meet all three aspects of the
corporate plan. Worryingly, some candidates did not try to measure each of the options
against the corporate plan.
The effective use of the numerical data available was varied. There were opportunities to
demonstrate investment appraisal and gearing, which would have contributed significantly to
the strength of the arguments employed. Some candidates requested more financial data to
use but then disappointingly failed to indicate what data they required or how it would be of
use to them in evaluating the three options.
Candidates should answer in report format and whilst there is no set template they ought to
give the piece of work a title, a date, the name of the person to whom the report is being
sent and the name of the sender. Most candidates provide an introduction and a conclusion
and intersperse these with sub-headings. Without the use of some report format it is not
possible to access the highest marks as outlined in criterion 2 of the assessment criteria.
This year there were still a considerable number of centres that entered their candidates for
the coursework option. Perhaps the most popular single coursework title was, “Setting up a
Business”. The quality of students’ work varied between little better than GCSE work to
something that was almost professional. One problem was that it was not uncommon to look
at a piece of coursework and not know what type of business was being proposed. If this
type of project is chosen it is essential that serious thought is given to exactly what is to be
sold, how it is to be marketed, where it is to be located, etc. The student should really feel
that they are in the process of setting up that kind of business and communicate their
enthusiasm for it in their report.
Despite the popularity of “Setting up a Business” the more interesting pieces of work were
invariably based on real businesses and their problems. Some centres seem to have
greater opportunities to develop relationships with local businesses than others. However,
the business can be something as simple as a farm that is looking to diversify or a hotel that
is looking to attract new visitors. Very large businesses do not usually make good subjects
for study since it is difficult to talk to decision-takers in these organisations.
The better projects are also quite widely focussed. Those that look at one functional area,
for example recruitment and retention tend not to give sufficient scope for all of the
assessment criteria. Particular attention needs to be paid to the financial implications of any
recommendations that are made in the project.
It is often quite frustrating to find that students complete their projects just at the point where
they are discovering interesting problems. This should really be the starting point rather
than the conclusion. Students should be encouraged to ask lots of questions and think
about solutions to problems before they start writing their project. An early start to
coursework is always a good idea, since it is not uncommon to encounter problems and
consequently run out of time. Little and often is probably the best approach rather than trying
to cram everything into the last few weeks.
Presentation is an important part of any piece of coursework. The project should be
securely bound in a plastic folder (not a ring binder) and plastic wallets should be used
sparingly if not at all. Large quantities of handouts from banks, etc, or printouts from the
internet are not required and those that are included should be explained and housed in an
appendix. Candidates should try to be consistent in their use of fonts and not use some of
the more exotic types of chart when showing the results of questionnaires.
Whilst secondary research should be undertaken, over reliance on the internet and
particularly sites such as Wikepedia should not be encouraged. The information taken from
the internet needs to be referenced, commented on and evaluated. Candidates should
explain how and why is it useful and/or relevant.
Primary research is essential but this should ideally consist of more than just a questionnaire
and an interview with a manager or employee. Research regarding types of product to be
sold, the cost of advertising, the relative costs of buying or renting premises, etc are the
types of issues that need to be investigated.
Some centres are still taking a slightly rose-tinted spectacle approach when it comes to
assessing their candidates’ coursework. Whilst it is only natural to want to reward effort and
hard work, the assessment criteria are focussed on knowledge, application, analysis and
evaluation and it is these qualities that must form the basis of the assessment. A beautifully
presented piece of work which is descriptive rather than analytical does not warrant an A
grade, i.e., a mark of around 80% plus. Coursework marks should generally reflect the
overall quality of the student’s work rather than the amount of time or effort that they put into
it, although these factors will of course affect the final outcome.
Teachers should be congratulated on their dedication and hard work in supervising students’
coursework, which is never an easy process and one, which can be extremely frustrating at
times. The rewards come in the form of some excellent learning outcomes by many
students who will have gained some invaluable experience from doing their projects and
from the guidance that they have received along the way.
This year’s paper was based on a case study of the popular chain of coffee shops Caffè
Nero. The chain has experienced rapid growth with the number of outlets increasing from
around 60 in 2001 to 260 by the end of 2005. This expansion had been achieved by a
combination of acquisition and organic growth.
The first question that candidates were asked was to explain how Caffè Nero’s
marketing mix contributes to its success. Candidates were not expected to have any
prior knowledge of Caffè Nero or its market as such. They were simply required to
remember the theory of the marketing mix, specifically the four Ps, product, price,
promotion and place and apply them to this business. There was plenty of
information in the passage about the company’s products. Caffè Nero are not simply
selling coffee, they are selling an experience that enhances the customer’s lifestyle.
The passage records that they sell their coffee at a premium price but that customers
are willing to pay this. Although little is written in the passage about promotion it is
clear that the company promote their image of a continental style café, which at the
time of the report allowed smoking (subsequently banned by law). Some candidates
were also aware of the fact that Caffè Nero runs a sort of loyalty scheme. The
location of the outlets is also important, mostly based in city centres sometimes close
to their competitors such as Starbucks.
This question asked candidates to discuss the view that franchising would have been
a more appropriate method of expansion for Caffè Nero. There were many
interesting and well-balanced answers to this question. Many candidates felt that on
the one hand franchising would have allowed the store to grow rapidly and would
have been a relatively cheap method of growth. It would also have given Caffè Nero
a guaranteed income from royalty payments. Franchisees would also have an
incentive to make their businesses successful. On the other hand it was felt that the
loss of control that franchising implied would be detrimental to a business that relied
on its image for its position in the market.
This question required candidates to analyse the possible human resource problems
resulting from Caffè Nero’s rapid expansion. This was generally well answered with
candidates considering the problems of recruitment, retention and training, as well as
the difficulties of controlling large numbers of new staff. It may be that in order to
attract sufficient numbers of good calibre staff that higher wages would need to be
offered. There may also have been an issue regarding the motivation of both new
and existing staff.
This question asked candidates to analyse and evaluate Caffè Nero’s financial
situation. The case study included extracts from the business’s trading and profit
and loss account and its balance sheet for the year ended May 2005. Candidates
were expected to use a range of ratios in order to analyse the accounts. Those
candidates that attempted to analyse the accounts without using ratios were unlikely
to have achieved very high marks. However, in order to achieve high marks it was
necessary to interpret the ratios as well as calculating them correctly. Many students
could have improved their mark on this question had they been able to do so.
The gross and net profit margins whilst possibly a bit low showed a marked
improvement on the previous year. RONA and ROCE also improved on the previous
year and appeared to be quite good. The liquidity ratios appeared to be low but as
this is basically a cash rich business these ratios are probably typical of the industry
and are not a cause for concern. The gearing ratio showed that the business had a
good balance between borrowed and invested funds. It should be noted that either
versions of ROCE and the gearing ratio are acceptable provided that they have been
calculated accurately.
The final question required candidates to consider the issues that Caffè Nero should
take into account when deciding whether or not to expand its operations overseas.
This was an issue which had been raised in the case study. There was considerable
variation in the quality of answers to this question. The better answers considered a
fairly wide range of relevant issues, including financial problems; differences in taste
and culture; language problems; problems relating to the legal framework of other
countries, particularly those outside the European Union. Questions arose as to
whether consumers in poorer countries would be able to afford premium priced
coffee. Others felt that genuine continental style cafés were available in many
European countries already so that an ersatz version from the UK was unlikely to be
successful. They also felt that in some countries competition from established
brands such as Starbucks would be intense, although this had not proved to be a
problem in the UK.
Overall students seemed to respond well to this year’s paper and had been well-prepared by
their teachers for the task.
General Certificate of Secondary Education 2007
Chief Examiner:
D. Salter, B.A., M.Ed., Head of Economics, Cowbridge
Comprehensive School.
Chief Coursework Moderator:
J. Price, B.Sc. (Econ.), Head of Economics and Business
Studies, Ysgol Gyfun Gðyr.
General Comments
Overall the questions were answered well with many excellent responses. These were
found where candidates demonstrated accurate subject knowledge and the ability to
analyse, evaluate and develop their answers appropriately using advanced business
terminology. The main reasons that candidates failed to gain marks were:
A lack of subject knowledge particularly of terms such as opportunity costs and
economies of scale.
Misinterpreting of what was required by the question. Use of words such as “Outline”
or “Explain” were often followed by a list of features rather than a development or
There were many excellent responses on both papers and few examples where candidates
did not attempt a response.
Quality of Written Communication
There were few illegible scripts and most of the candidates received 2 to 4 marks with a few
gaining 5 marks.
Paper 1 (G – C)
This paper gave very good access to pupils of all abilities. The weakest candidates were
able to gain some marks in most questions and the more able pupils were able to show their
understanding of knowledge of business in the more challenging questions - particularly in
questions 9 and 10.
Candidates need to consider the question more fully and need to be more familiar with the
definition of terms and the nature of ideas.
The factors of production seemed to be well understood by most candidates.
There was some confusion about examples of fixes costs but there were many
correct responses.
There were some very mixed answers with the main confusion surrounding whether
private limited companies are plc or just Ltd.
The vast majority of the candidates could select the appropriate occupation in the
primary sector.
There was some confusion surrounding the definitions suggesting a lack of
knowledge of these business terms by many candidates.
The question was really about the benefits of being a sole trader and this was
appreciated by most candidates. Some of the weaker candidates
concentrated on the size of the business.
There was a tendency for many candidates to mis-interpret the question.
They either wrote about the person specification or the qualities needed for
the job.
Equally too many candidates wrote about the Person Specification rather
than the necessary qualities.
There were some good responses here particularly when candidates were
able to explain the advantages and disadvantages of partnerships or sole
traders rather than just listing them. Applying these to Frank’s business also
produced good results.
This was well-answered by most candidates who had learned the product life
cycle or who had deduced the answer from the terms.
Most candidates correctly read the graph.
Again most candidates correctly read the graph but some tried to
suggest a more accurate result than was obvious from the scale of the
Most candidates were able to suggest one feature of the maturity stage of the
product life cycle and many were able to develop their ideas.
Very few candidates scored full marks here because they failed to understand
the meaning of the word ‘evaluate’ in the question stem. It was expected that
the marketing strategy chosen would have some disadvantages or drawbacks
as well as benefits.
Few candidates were able to accurately draw in the fixed cost in the correct
place on the graph perhaps because of a lack of understanding of the
relationship between fixed and total costs when the level of sales is zero.
There was a good response to the meaning of break-even and there were
very many accurate definitions.
Answers to (b) were reflected in the precise reading of the graph by most.
This question proved to be more problematic for those with little
understanding of how graphs are read or little knowledge about profit being
the difference between total revenue and total cost.
Most candidates scored very well in this question as the nature of market
research is well known and understood even by the weakest.
The last two questions were the same as questions 1 and 2 on Paper 2 and were
aimed at candidates expected to gain at least a C grade.
Most students gained full marks by calculating that the total wage bill was
£4,950 but a few gained just one mark as they had not fully read the question
so calculated the wages of one worker and did not multiply by 10, the number
of workers.
There were some good answers, but increasingly candidates began to
stumble on this question. As in previous years, candidates often described
methods of increasing sales revenue such as reduce or increase price,
advertise more, hold fund raising events, etc. rather than methods of raising
The concept of opportunity cost was lost on most. Some did gain a mark by
mentioning choice but the rest wrote about investment opportunities.
The responses to this question were very good, the majority of students
gaining full marks by demonstrating a clear understanding of the case in hand
and giving appropriate responses. They appreciated the urgency of the
communication. A few students failed to recognise the urgency of getting the
plans to the council and gave “letter” as their suggested means of
communication without stating first-class letter.
This question on the strengths and weaknesses of Fiona’s leadership style
was not well answered. Few candidates used the terminology of Fiona being
an autocratic leader and many candidates simply re-worded the stem to the
Generally marks were picked up well with candidates giving sensible and
reasoned advantages and disadvantages of being located at the retail park.
Many candidates did not read the question carefully and tended to continue to
write about why the retail park was a good location. The question required
answers to focus on the impact of the retail park on town centre businesses.
This question was very poorly answered. Very few had any knowledge of
economies of scale: this would seem to be an area of the Specification which
warrants more focus.
This was also badly answered mainly through mis-reading of the question.
Candidates were required to evaluate the effect of selling on the internet to
the business rather than on the consumer. Obviously there are links, but
sometimes candidates did not draw those links out fully.
Paper 2 (D – A*)
Most students got full marks by calculating that the total wage bill was £4,950
but a few gained just one mark as they had not fully read the question so
calculated the wages of one worker and did not multiply by 10, the number of
The majority of candidates understood that the question needed sources of
finance and the question was answered fully, giving the features or
advantages or disadvantages of each source. A small number of students
wrote about the company becoming a plc, which was an inappropriate
method for this particular type of business. A small number did not answer
the question fully and merely stated the sources of finance.
On the whole this question was answered very poorly as the students did not
know the meaning of the term opportunity cost. Many students appreciated
the idea that opportunity cost involved a choice but they could not develop
their answer further. A small number of students gained full marks with a
good explanation generally referring to the scenario.
There was a majority of correct responses to this question.
A few candidates provided excellent answers by explaining the advantages
and disadvantages of an autocratic leadership style. The majority of answers
were rather general, merely restating the case study or just stating
advantages and disadvantages.
This question was well-answered with most students giving an advantage and
disadvantage of locating on the retail park, where both parts of the question
were fully explained.
Not many students gained full marks for this question as it was not fully
understood. The majority of students gave the advantages of locating at the
retail park rather than answering the question about the effects of the retail
park on the town.
This was poorly answered by the majority of candidates who clearly did not
understand the idea of economies of scale. Many could write vaguely about
bulk buying but answers often did not go into the savings of costs let alone
the reductions in unit costs. Most of the best answers considered purchasing
economies, financial economies and marketing economies although some
also described technical and managerial economies.
Many well answered questions with good evaluation. Candidates give well
reasoned advantages and disadvantages of selling on-line. However, there
were a number of answers that were too vague and repetitive. Candidates
failed to develop their points or provided the advantages of internet shopping
to the customer as opposed to advantages of internet selling by the business.
Disappointing at this level as many candidates gave a suggestion but could
not explain it adequately. Also, some candidates gave one suggestion and
repeated the answer as the second advantage. There were some that gave
two suggestions with a full explanation but on the whole this question could
have been better answered.
This question had a varied response. Some candidates gave a full answer
but many were unsure of the pricing technique they were attempting to
explain or named a strategy and gave an incorrect explanation. Therefore,
marks were not gained as candidates were inconcise and unsure of the
pricing strategies. Also the question was related to a specific business which
is less likely to adopt “destroyer pricing” or “loss leaders”.
On the whole this part of the question was the least well-answered.
Many candidates wrote vaguely about the effects of a fall in interest
rates as cheaper borrowing or the gains from money saved by the
business. Some of the best answers discussed the effect of interest
rates on customers who gained increased spending power and
therefore the business enjoyed greater demand.
This was well-answered with many candidates receiving both marks.
This was also well-answered with some candidates considering the
consequences of the increased costs on the number of workers
Despite similar questions in the past, only a small number of candidates
gained marks: these candidates gave a well thought out evaluation of the
branding strategy used, clearly explaining the advantages and disadvantages
of Whitbread’s branding strategy. Many did not seem to fully understand the
branding strategy so they did not gain marks - their answers were often
simple or somewhat muddled and confused.
Most candidates did explain the term acquisition, although a few
candidates did not know what it meant, which is surprising for the
Higher Tier paper. Too many equated acquisition with merger.
This question was not well-answered with many candidates gaining no
marks. Although candidates could explain the term acquisition they
did not understand why companies bought other companies.
Most candidates gave the correct answer - multinational.
There was a mixed response to this question. Some excellent answers with
candidates giving a full explanation of a number of quality control techniques.
Weaker candidates just considered product improvement or market research.
This was a generally well answered question but some candidates did not
expand or explain fully.
The best candidates gave balanced, coherent arguments on the effects of
foreign owned businesses in the United Kingdom. There were a number of
inappropriate responses which did not answer the question. Here candidates’
arguments revolved around the pros and cons of immigration rather than
inward investment. A few candidates limited their response to trading within
the EU or wrote about the disadvantages of international trade such as
language barriers. Many candidates referred to the effect on British
businesses and the dangers of competition to business rather than the
disadvantages of inward investment.
This was poorly answered with candidates suggesting wages or the cost of
raw materials as business expenses.
Most candidates answered this part correctly and gained full marks.
Many candidates did not gain full marks for this question. They were able to
show that profits had increased but few developed comments explaining the
increase or using more sophisticated analysis.
Most candidates answered reasonably well although too many wrote about
profit in one form or another, even though the question specifically excluded
profit over time. Other incorrect responses which appeared frequently were
“break-even” or “cash flow forecast” which in themselves are not measures of
business success.
Most candidates answered this well with good explanations.
Few candidates gained full marks for this question. Many had an idea of the
legal requirements but the answers were not specific or well explained. The
legal responsibility to customers was in particular very poorly considered by
many who wrote about customer service rather than legal responsibility.
Also, examples given were unrelated to the case study and inappropriate.
The work produced by the best candidates from the vast majority of centres was of an
excellent standard.
The WJEC approved assignment, the Business Plan was by far the most popular
coursework task chosen by centres. A few centres submitted work on the labour market.
A number of issues need to be addressed regarding the submission of coursework to
moderators. Again I would urge centres to read the guidance notes given by the WJEC.
Centres need to be aware that the WJEC cannot accept any coursework that has not been
authenticated by the teacher and the pupil. Moderators received work from a greater number
of centres this year without a signature from either a teacher and/or pupil. The moderation
process cannot take place without authenticity of coursework. There must be two signatures
on the BS2 form. Failure to do this will result in candidates receiving either a zero or an
absent mark for that component. I suggest that centres complete all BS2 forms for all
candidates, before the sample is sent to the moderator, as it becomes somewhat more
difficult to obtain signatures from pupils whilst they are on study leave.
The coursework project should be presented in clearly labelled files, I suggest a document
wallet with centre name, centre number, candidate name and candidate number clearly
visible on the front cover. If centres are using recycled document wallets from previous
projects, they must remove all traces of former pupils' details. A number of coursework
projects were submitted where the candidate detail on the outer cover and those on the BS2
form did not coincide.
It’s always pleasing to see significant use of ICT throughout candidates' work, which in turn
shows good presentation skills of those candidates who made use of a number of the ICT
resources available to them, such as word processing, spreadsheets and desktop
publishing. There were a large number of candidates who produced work of a professional
Location, in general, is one aspect that seems to be done well. Candidates may make use
of a number of estate agencies to research and collect information on suitable premises.
More often than not this research is now done on-line. Candidates must evaluate the
information gathered to obtain the higher level marks. It is easier to gain marks for
evaluation if candidates choose 3 different premises and then compare and contrast aspects
of suitability before making a final choice.
A number of candidates gathered information only on domestic premises. I do question the
suitability of this and I would advise that candidates make more use of research in to
commercial premises.
I am aware that finding suitable commercial premises for rent or for sale in some rural
locations may be a problem. One possible option would be to locate premises further afield
or include a suitable premises which is not for rent/sale and estimate approximate costings.
There has been a large increase in the use of digital mapping into the coursework projects.
This I welcome. The are a number of providers which offer this service, and it gives
candidates the chance to analyse and evaluate the suitability of their chosen premises/
location in comparison to other outside factors such as local amenities which may have a
direct impact on their business.
Finally a few minor issues. Do not include more than two questionnaires in the coursework,
one blank and one completed to show evidence of market research is sufficient. A graph is
not required for every answer from the questionnaire, and they certainly do not need to be
A4 in size. Where pupils have been given a pro-forma cash flow forecast this needs to be
made clear to the moderator.
Final assessment of coursework left grade boundaries unchanged from last year, A= 54
marks, C= 37 marks and F=17 marks.
I would also like to take this opportunity to thank the moderating team for all of their hard
work, help and support throughout the moderation process.
Examiners Report Business Studies (June 2007)/JD
245 Western Avenue
Cardiff CF5 2YX
Tel No 029 2026 5000
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E-mail: [email protected]

general certificate of secondary education