NSW INDEPENDENT TRIALY EXAMS – 2008
BUSINESS STUDIES -PRELIMINARY
Marking Guidelines
Section I
B 2
1
11 C 12
C
A
3
13
A
C
4
14
D
D
C
C
5
15
6
16
A
A
7
17
A
B
8
18
B
D
9
19
C
D
Section II
21. (a)
Criteria
Identifies ONE personal quality, required by an entrepreneur, to help them succeed in
business. This can include motivation, experience or expectation.
(b)
Criteria
Outlines the role of ONE professional adviser. This can include solicitors, business
consultant, accountants, bank managers, management consultants.
Correctly identifies ONE professional adviser.
(c)
Criteria
Outlines TWO ways a business can achieve a competitive advantage over its competitors.
This can include quality, price, value or benefits.
Outlines ONE way a business can achieve a competitive advantage over its competitors.
22. (a)
Criteria
Identifies one contribution of small businesses to the Australian economy. This can
include employment, increasing economic activity, providing goods and services,
research and development, export sales.
(b)
Criteria
Outlines ONE factor that may cause business failure. This can include
undercapitalisation, poor planning, lack of information, staff difficulties, and lack of
management expertise.
Identifies ONE factor that may cause business failure.
(c)
Criteria
Explains how fluctuations in the economic cycle can impact on SMEs. Students make
reference to both increases and decreases in economic activity and the impact this has on
demand, income, consumer spending and ultimately sales within a business. During a
boom period this may result in:
 Higher levels of demand and therefore employment
 Inflation may increase
 Level of spending by consumer’s increases and this results in business increasing
production and sales. This will result in an increase in profits for the business.
Students go on to explain the opposite effects during a recession.
Students outline some characteristics in the economic cycle that may impact on SMEs but
offer little if any explanation. OR they explain the impact of only Booms or Recessions.
C
B
10
20
Marks
1
Marks
2
1
Marks
2
1
Marks
1
Marks
2
1
Marks
3-4
1-2
Business Studies Preliminary 2004 Marking Guidelines Page 1
23. (a)
Criteria
Students correctly distinguish between incorporated and unincorporated business
enterprise. Incorporated means that a business is officially registered as a company and is
subject to certain laws. The business has a separate legal entity to the owners (limited
liability). Unincorporated there is no legal difference between the owners and the
business itself (Unlimited liability).
Students correctly define one of the terms.
(b)
Criteria
Students identify TWO methods that can be used to classify types of business entities.
This can include legal structure, public/private, industry sector, size.
Students identify ONE method that can be used to classify types of business entities.
(c)
Criteria
Students discuss some of the advantages and disadvantages associated with a partnership.
Advantages include:
 Lower start up costs
 Less costly to operate than a company
 Share workload or responsibility
 No tax on business profits
 Minimal government intervention
Disadvantages include:
 Unlimited liability
 Possibility of disputes between partners
 Difficulty finding a suitable partner.
Students only discuss advantages or disadvantages associated with a partnership OR they
list the advantages and disadvantages with no discussion.
24.(a)
Criteria
Marks
2
1
Marks
2
1
Marks
3-4
1-2
Marks
Correctly calculates net profit as $3000
1
(b)
Criteria
Describes the purpose of the balance sheet for managers of a business. This can include:
to monitor debt and equity levels and compare a particular period to previous periods,
used to assess overall stability of business, used to monitor accounts receivable, assess
liquidity
Lists a reason why balance sheets may be used by managers.
(c)
Criteria
Distinguishes between debt and equity financing. Debt financing refers to finance which
is raised by borrowing funds from outside the business, usually a financial institution.
Interest is paid on funds borrowed. Equity finance refers to the funds provided by the
owners of a business. Shares in the business may be sold to new owners.
Students correctly define one of the terms.
Marks
2-3
1
Marks
3-4
1-2
Business Studies Preliminary 2004 Marking Guidelines Page 2
(d)
Criteria
Describes ONE advantage and ONE disadvantage of using debt finance over equity
finance.
Advantages may include:
 Debt financing is easier to arrange and generally can be done so on short notice.
 Debt holders do not have rights in the management of the business
 Need to pay debt may be an incentive for management to ensure adequate cash
flow.
Disadvantages may include:
 Increases gearing and the higher the debt the greater the risk of being liquidated if
the business fails to meet their repayments.
 Increase in debt may send a negative message to the shareholders of the business
and may reduce the value of the stock.
 Interest rate rises.
Only identifies the advantage and/or disadvantage with no description OR describes only
an advantage OR disadvantage.
25. (a)
Criteria
Students correctly outline how supply chain management is related to the value chain
within a business. The supply chain is the range of suppliers from which the business
purchases materials and resource. It is crucial that the supply chain is well coordinated to
ensure that the operations are on track and value is continually being added in production.
If the supply chain is irregular this will reduce the value chain and negatively impact on
the value chain within a business.
Lists some link between supply chain management and the value chain in the business.
(b)
Criteria
Students distinguish between rostering and scheduling. Rostering is a method of
coordinating human resources with the production process. Scheduling determines the
time that each task in a process will take and enables the best sequence to be identified.
Only correctly defines one of the terms.
(c)
Criteria
Students outline an inventory control system which may be implemented by business to
maximise efficiency and reduce costs. Students can describe either the Just In Time (JIT)
or the two-bin approach.
Students correctly identify an inventory control system but do not outline it.
(d)
Criteria
Students discuss TWO methods of quality control which can be adopted by management.
They can discuss either:
 Total Quality Management (TQM)
 Value-added Management (VAM)
 Kaizen- continuous improvement.
Students discuss ONE method of quality control OR they identify TWO methods but do
not discuss either.
Students only list one method of quality control.
Marks
3-4
1-2
Marks
2
1
Marks
2
1
Marks
2
1
Marks
3-4
2
1
Business Studies Preliminary 2004 Marking Guidelines Page 3
Section III
26.
Criteria
 Presents a sustained, logical and well-structured business report that
provides comprehensive assessment of the advantages and
disadvantages associated with the various establishment options
 Provides a comprehensive description of the legal considerations the
owners need to be aware of and comply with.
 Provides a thorough examination of the business planning process the
owners need to undertake to implement a solid business plan
 Provides a detailed discussion on the types of control the owners can
use to monitor and evaluate the business plan.
 Extensively uses relevant business terminology and concepts in
appropriate forms
 Presents a well-organised business report that provides a solid
assessment of the advantages and disadvantages associated with the
various establishment options
 Provides a sustained description of the legal considerations the
owners need to be aware of and comply with.
 Provides a detailed examination of the business planning process the
owners need to undertake to implement a solid business plan
 Provides a thorough discussion on the types of control the owners can
use to monitor and evaluate the business plan.
 Uses relevant business terminology and concepts in appropriate forms
 Presents a business report that provides some discussion on the
advantages and disadvantages associated with the various
establishment options
 Makes mention of some of the legal considerations the owners need
to be aware of and comply with
 Provides a some outline of the business planning process the owners
need to undertake to implement a solid business plan
 Satisfactorily uses relevant business terminology and concepts in
appropriate forms
 Presents a business report that provides some limited discussion on
the advantages and disadvantages associated with the various
establishment options
 Lists some of the legal considerations the owners need to be aware of
and comply with
 May make mention of the business planning process the owners need
to undertake to implement a solid business plan
 Uses basic business terminology and concepts in appropriate forms
 Identifies some options for establishment of a business
 Provides a limited outline of the business plan
 Does not write in an appropriate business format
Marks
17 – 20
13 - 16
9 - 12
5–8
1-4
Business Studies Preliminary 2004 Marking Guidelines Page 4
Answers may include:



An introduction by making mention of the scenario provided in the stimulus material.
Identifies the various establishment options which may be considered by Jacqueline and
Pierre.
These may include:
1. Establishing a new business
2. Buy an existing business
3. Buy a franchise.
Students need to outline some of the advantages and disadvantages associated with each
option. Some answers are outlined below:
Establishment Advantages
option
Establishing a
 Business owner has greater
new business
control over all the key
business decisions
 Start from scratch so no
poor history with staff,
suppliers or customers.
 Business may be worth
more in the future if
successful
 Personal satisfaction
 Greater scope for choice
Buy an
 A good business history
existing
increases likelihood of
business
success
 Established customer base
- instant income
 Stock may already be
acquired for sale
 Equipment available for
immediate use
Buy a
franchise





The franchisor often
provides training
The franchisee does not
need to have previous
business experience
The investment risk may be
lower
Well planned advertising
exists.
Immediate benefit from
franchisors goodwill
Disadvantages











Risk of failure as it is a new
business with no customer
base
Time is needed to develop a
customer base, employ staff
and develop lines of credit
from suppliers
If start up period is slow it
may not generate profits for a
long time.
Existing image and policies
may be difficult to change,
especially if the business has
a bad reputation.
Success of business may be
due to previous owner and
contacts may be lost when
previous owner leaves.
Difficult to assess the value
of goodwill so may cost more
Franchisor controls
operations
Profits must be shared with
the franchisor
The franchisor often charges
a service fee for advice
The franchisee is often
required to purchase stock
form the franchisor
Limited scope for expansion
Business Studies Preliminary 2004 Marking Guidelines Page 5

Students provide some description of the legal considerations the owners need to be aware of
and comply with. They may describe some of the following:
1. Registration of business name
2. Zoning
3. Health regulations
4. Trade practices
5. Patents
Students examine the business planning process the owners need to undertake to implement a solid
business plan. This includes an examination of some of the following:
1. The business planning process – SWOT, market analysis, target market
2. Vision, mission and goals- vision and mission statements, types of goals, allocation of goals to
functional areas
3. Forecasting – breakeven analysis, decision trees, budgets
4. Monitoring and evaluating the business plan
Students discuss the types of control the owners can use to monitor and evaluate the business plan.
This can include the following controls:
1. Sales controls
2. Market reports
3. Budgets
Using the controls to take corrective action.
Business Studies Preliminary 2004 Marking Guidelines Page 6
Mapping Grid
Q
Content
Developing a business plan- vision, mission and goals
Nature of business – importance of business goals
Nature of business – Business environment and its impact:
other institutional influences
Establishing a business - Taxation and on costs.
Key business functions – Marketing: overview of marketing
mix
Developing a business plan: planning process- budgets
Nature of business- business life cycle
Establishing a business – taxation and on-costs
Nature of business – Government : Regulatory bodies
Key business functions- accounting and finance
Nature of business: the business environment and its impact on
business
Key business functions- interdependence of business functions:
span of control
Establishing a business: Key considerations in setting up a
business: capital
Key business functions- coordinating business functions:
planning and controlling
Key Business functions: employment relations: maintenance
Developing a business plan: the business planning processSWOT
Nature of business- competitive situation
Key business function: marketing
Developing a business plan: forecasting-breakeven analysis
Developing a business plan: forecasting-breakeven analysis
Establishing a business - key personal features in establishing
a business.
Establishing a business –identifying business opportunities
Outcomes
P5.6
P2.1
P5.1
Band
3-4
2-3
2-3
P2.1, P5.1
P2.1, P5.1
3-4
2-4
P2.1, P4.2
P3.1
P2.1, P5.1
P1.1
P5.6
P5.3
3-4
3-5
3-5
3-5
4-6
3-5
P2.1, P5.1
3-4
P2.1, P5.1
3-5
P2.1, P5.1
4-6
P2.1
P2.1, P5.1
3-4
4-6
P1.2
P5.1
P5.1, P5.6
P5.1, P5.6
P2.1
3-5
4-5
4-6
4-6
2-3
P2.1, P5.1
2-4
P4.2
3-5
P1.1
2-3
P4.1, P5.3
3-5
P4.1, P5.3
4-6
P5.3
P1.2
2-3
3-5
23 (c)
24 (a)
24 (b)
24 (c)
Establishing a business - identifying the target market –
determining competitive advantage.
Nature of business – SMEs in Australia – contribution of small
business sector to the economy. .
Nature of business –SMEs in Australia – success and failure of
small business
Nature of business –. The business environment and its impact
on business – economic cycles.
Nature of Business - types of business entities
Nature of Business – types of business entities – classification
of business
Nature of Business - types of business entities – legal structure
Key business functions – balance sheets – net profit
Key business functions- key uses of financial statements
Establishing a business – capital: source and cost
P1.2, P5.3
P5.6
P2.1, P2.2, P5.1
P2.1, P5.1
3-5
4-5
3-5
3-5
24 (d)
Establishing a business – capital: debt/equity comparison
P2.1, P5.2
4-6
25 (a)
Key business functions – Operations supply chain management
P2.1, P2.2
2-3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21(a)
21(b)
21(c)
22 (a)
22 (b)
22 (c)
23 (a)
23 (b)
Business Studies Preliminary 2004 Marking Guidelines Page 7
25 (b)
Key business functions –operations: rostering and scheduling
P2.1, P5.3
2-4
25(c)
25(d)
Key business functions – operations : inventory control
Key business functions – operations: quality control
management
Establishing a business – Key considerations in setting up a
business: establishment options and legal considerations.
Developing a business plan – the business planning process,
monitoring and evaluation, types of control : sales, market
reports, budgets
P2.1, P2.2, P5.3
P2.1 P2.2, P5.3
3-5
3-6
P2.1, P2.3, P4.2,
P5.1, P5.3, P5.5
3-6
26
Business Studies Preliminary 2004 Marking Guidelines Page 8