Cambridge A Level Business (for first examination in 2016) 9609 — 2024 Feb/March Paper 4 · Variant 2

This document has 4 pages. Any blank pages are indicated. [Turn over * 9 9 3 1 3 8 9 8 7 1 * Cambridge International AS & A Level BUSINESS 9609/42 Paper 4 Business Strategy February/March 2024 1 hour 15 minutes You must answer on the enclosed answer booklet. 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 40. ● The number of marks for each question or part question is shown in brackets [ ]. DC (DE) 335452 © UCLES 2024

2 9609/42/F/M/24 © UCLES 2024 Clothing Company (CC) CC is a public limited company. It operates its own branded clothing retail stores only in the US. CC has been a popular choice with both customers and investors. Revenue and profit were consistently high until 2008. CC used to have only four main seasonal ranges: spring, summer, autumn and winter. As digital marketing and fast fashion became more popular, CC struggled to meet the changing needs of its customer base. Originally, clothing was sourced from manufacturers, based in low-income countries, which used flow production. Timeline of CC 2009–2010 Competition from online only retailers reduce CC’s market share. 2010–2011 CC sets out new marketing objectives (see Appendix 1). CC invests in digital marketing and increases the number of sales promotions. 2012 CC ends its relationship with existing clothing manufacturers and begins using fast fashion specialist clothing manufacturers. These local clothing manufacturers are able to supply limited order quantities in the short lead times CC requires. CC adapts its marketing mix and begins to sell online (see Appendix 2). 2013 Customer feedback refers to poor quality and design innovation (see Appendix 3). Poor planning of introducing online selling results in disappointing sales. 2014–2015 Revenue from the largest city centre stores decreases. Profit continues to decrease. Dividend payments are reduced and share price decreases (see Appendix 4). 2016 Sulwar Singh is appointed Marketing Director. He has extensive experience of online sales and marketing of premium products. Sulwar introduces viral marketing campaigns and social media influencers are paid to promote the brand. 2017–2019 CC continues to lose market share. Inventories reach record high levels. The marketing objectives set in 2010 are not achieved. 2020 Sulwar loses the confidence of the board and is replaced by John Dee as Marketing Director. John is set an objective to restore CC’s brand reputation. 2021–2023 John insists on new quality control procedures. The share price remains low, but stable. Developing an operations strategy for survival and growth The directors of CC are concerned that the business may fail. They believe it needs a new and distinctive operations strategy to reduce costs and increase efficiency.

3 9609/42/F/M/24 © UCLES 2024 Appendix 1: CC’s marketing objectives in 2010 • To increase sales volume by 20% by 2019. • To revise CC’s pricing strategy. • To expand CC’s customer base. Appendix 2: Changes to CC’s marketing mix in 2012 Old marketing mix New marketing mix • Seasonal clothing • Main target segment: 30–50 year olds • Branded with CC logo • Competitive pricing • Limited range of products • Distributed through CC shops • Quick response to fashion changes (fast fashion) • Main target segment: 13–30 year olds • Branded with CC logo • Dynamic pricing • Large range of products • Distributed through CC shops and CC website Appendix 3: Examples of customer feedback in 2013 ‘CC clothing used to be good quality. My new jumper fell apart in its first wash!’ ‘I don’t know what counts as fashion these days, but I don’t like it.’ ‘There’s always something new every time I visit the website.’ ‘I was going to buy a shirt in a CC shop, then I found it much cheaper on the website.’ Appendix 4: Financial data: 2008–2020 2008 2012 2016 2020 Revenue ($m) 100 70 60 75 Profit ($m) 10 3.5 3 1 Dividend per share ($) 2 0.75 0.5 0.25 Share price ($) 7 4 3.5 3 1 Evaluate the effectiveness of CC’s marketing strategy between 2010 and 2020. [20] 2 Advise CC on an operations strategy to enable its future survival and growth. [20]

4 9609/42/F/M/24 © UCLES 2024 Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cambridgeinternational.org after the live examination series. Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge. BLANK PAGE

This document consists of 13 printed pages. © Cambridge University Press & Assessment 2024 [Turn over Cambridge International AS & A Level BUSINESS 9609/42 Paper 4 Business Strategy February/March 2024 MARK SCHEME Maximum Mark: 40 Published This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for Teachers. Cambridge International will not enter into discussions about these mark schemes. Cambridge International is publishing the mark schemes for the February/March 2024 series for most Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level components.

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 2 of 13 Generic Marking Principles These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the specific content of the mark scheme or generic level descriptions for a question. Each question paper and mark scheme will also comply with these marking principles. GENERIC MARKING PRINCIPLE 1: Marks must be awarded in line with: • the specific content of the mark scheme or the generic level descriptors for the question • the specific skills defined in the mark scheme or in the generic level descriptors for the question • the standard of response required by a candidate as exemplified by the standardisation scripts. GENERIC MARKING PRINCIPLE 2: Marks awarded are always whole marks (not half marks, or other fractions). GENERIC MARKING PRINCIPLE 3: Marks must be awarded positively: • marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond the scope of the syllabus and mark scheme, referring to your Team Leader as appropriate • marks are awarded when candidates clearly demonstrate what they know and can do • marks are not deducted for errors • marks are not deducted for omissions • answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the question as indicated by the mark scheme. The meaning, however, should be unambiguous. GENERIC MARKING PRINCIPLE 4: Rules must be applied consistently, e.g. in situations where candidates have not followed instructions or in the application of generic level descriptors.

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 3 of 13 GENERIC MARKING PRINCIPLE 5: Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may be limited according to the quality of the candidate responses seen). GENERIC MARKING PRINCIPLE 6: Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or grade descriptors in mind.

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 4 of 13 Social Science-Specific Marking Principles (for point-based marking) 1 Components using point-based marking: • Point marking is often used to reward knowledge, understanding and application of skills. We give credit where the candidate’s answer shows relevant knowledge, understanding and application of skills in answering the question. We do not give credit where the answer shows confusion. From this it follows that we: a DO credit answers which are worded differently from the mark scheme if they clearly convey the same meaning (unless the mark scheme requires a specific term) b DO credit alternative answers/examples which are not written in the mark scheme if they are correct c DO credit answers where candidates give more than one correct answer in one prompt/numbered/scaffolded space where extended writing is required rather than list-type answers. For example, questions that require n reasons (e.g. State two reasons …). d DO NOT credit answers simply for using a ‘key term’ unless that is all that is required. (Check for evidence it is understood and not used wrongly.) e DO NOT credit answers which are obviously self-contradicting or trying to cover all possibilities f DO NOT give further credit for what is effectively repetition of a correct point already credited unless the language itself is being tested. This applies equally to ‘mirror statements’ (i.e. polluted/not polluted). g DO NOT require spellings to be correct, unless this is part of the test. However spellings of syllabus terms must allow for clear and unambiguous separation from other syllabus terms with which they may be confused (e.g. Corrasion/Corrosion) 2 Presentation of mark scheme: • Slashes (/) or the word ‘or’ separate alternative ways of making the same point. • Semi colons (;) bullet points (•) or figures in brackets (1) separate different points. • Content in the answer column in brackets is for examiner information/context to clarify the marking but is not required to earn the mark (except Accounting syllabuses where they indicate negative numbers).

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 5 of 13 3 Calculation questions: • The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark for each answer • If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown. • Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent stages. • Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any exceptions to this general principle will be noted. 4 Annotation: • For point marking, ticks can be used to indicate correct answers and crosses can be used to indicate wrong answers. There is no direct relationship between ticks and marks. Ticks have no defined meaning for levels of response marking. • For levels of response marking, the level awarded should be annotated on the script. • Other annotations will be used by examiners as agreed during standardisation, and the meaning will be understood by all examiners who marked that paper.

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 6 of 13 Guidance on using levels-based marking Marking of work should be positive, rewarding achievement where possible, but clearly differentiating across the whole range of marks, where appropriate. The examiner should look at the work and then make a judgement about which level statement is the best fit. In practice, work does not always match one level statement precisely so a judgement may need to be made between two or more level statements. Once a best-fit level statement has been identified, use the following guidance to decide on a specific mark: • If the candidate’s work convincingly meets the level statement, award the highest mark. • If the candidate’s work adequately meets the level statement, award the most appropriate mark in the middle of the range. • If the candidate’s work just meets the level statement, award the lowest mark. • L1, L2 etc. must be clearly annotated on the response at the point where the level is achieved. Assessment objectives AO1 Knowledge and understanding Demonstrate knowledge and understanding of business concepts, terms and theories. AO2 Application Apply knowledge and understanding of business concepts, terms and theories to problems and issues in a variety of familiar and unfamiliar business situations and contexts. AO3 Analysis Analyse business problems, issues and situations by: • using appropriate methods and techniques to make sense of qualitative and quantitative business information • searching for causes, impact and consequences • distinguishing between factual evidence and opinion or value judgement • drawing valid inferences and making valid generalisations. AO4 Evaluation Evaluate evidence in order to make reasoned judgements, present substantiated conclusions and, where appropriate, make recommendations for action and implementation.

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 7 of 13 Question Answer Marks 1 Evaluate the effectiveness of CC’s marketing strategy between 2010 and 2020. Level AO1 Knowledge and understanding 3 marks AO2 Application 2 marks AO3 Analysis 8 marks AO4 Evaluation 7 marks Description Description Description Description 3 7–8 marks Developed analysis of the overall strategy that identifies connections between causes, impacts and/or consequences. 6–7 marks Effective evaluation A developed judgement/conclusion is made in the business context that draws together developed evaluative comments which balance some key arguments in the business context. 2 2–3 marks Developed knowledge of relevant key term(s) and/or factor(s) is used to answer the question. 2 marks Developed application of relevant point(s) to the business context. 4–6 marks Developed analysis of individual strategic element(s) that identifies connections between causes, impacts and/or consequences. 3–5 marks Developed evaluation • A developed judgement/conclusion is made. • Developed evaluative comments which balance some key arguments. 1 1 mark Limited knowledge of relevant key term(s) and/or factor(s) is used to answer the question. 1 mark Limited application of relevant point(s) to the business context. 1–3 marks Limited analysis that identifies connections between causes, impacts and/or consequences. 1–2 marks Limited evaluation • A judgement/conclusion is made with limited supporting comment/evidence. • An attempt is made to balance the arguments. 0 0 marks No creditable response. 0 marks No creditable response. 0 marks No creditable response. 0 marks No creditable response. 20

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 8 of 13 Question Answer Marks 1 Indicative content: AO1 Knowledge and understanding Knowledge (max 1 mark) can be awarded for any relevant business knowledge about marketing, including: • Marketing objectives • Demand and supply • Markets (consumer, industrial, local, national and international) • Mass and niche marketing • Market segmentation • Customer relationship marketing • Market research (primary and secondary) and sampling • The marketing mix (product, price, place, promotion) • Elasticity (price, income and promotional) • Product development, including R&D • Sales forecasting • The need for the marketing strategy to be consistent with the business, the product and the market • The need for, and development of, a coordinated marketing strategy • The development of marketing strategies that are focused towards achieving specific marketing objectives • The changing role of Information Technology (IT) and Artificial Intelligence (AI) in marketing • The contents of a marketing plan: objectives, resources, research, marketing mix • The benefits and limitations of marketing planning Award for any explanation of relevant business knowledge, up to a max of 2 marks. Marketing strategy is when a business plans to meet their marketing objectives . Marketing objectives may include sales maximisation and increasing market share . 1 K for identification and 1 DEV for a point of explanation Promotion is the communication from the business to the customer . It includes advertising, sales and direct promotion . The aim of promotion is often to increase awareness of a product . 1 K for identification and 2 DEVs for two points of explanation

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 9 of 13 Question Answer Marks 1 AO2 Application Application (max 2 marks) can be awarded for applying knowledge of marketing/marketing strategy, to CC between 2010 and 2020: Award one for each application of knowledge to CC between 2010 and 2020. • CC operates its own branded clothing retail stores only in the US • CC has been a popular choice with both customers and investors • Revenue and profit were consistently high until 2008 • CC used to have only four main seasonal ranges: spring, summer, autumn and winter • CC struggled to meet the changing needs of its customer base • Competition from online only retailers reduce CC’s market share • New marketing objectives in 2010–11 (any data in Appendix 1) • CC invests in digital marketing and increases the number of sales promotions • CC adapts its marketing mix and begins to sell online • Revenue from the largest city centre stores decreases. Profit continues to decrease. Dividend payments are reduced and share price decreases • Sulwar Singh is appointed Marketing Director in 2016 • The marketing objectives set in 2010 are not achieved • John is set an objective to restore CC’s brand reputation • Any data from Appendix 1–4 AO3 Analysis Analysis is likely to be based on CC’s objectives in 2010 to increase sales volumes, customer base and pricing strategy (Appendix 1). Analysis of the impact of CC’s marketing strategy ( and and ) including: • Analysis of the objective: although specific about a measure of success (percentage growth) the time frame in which the objective is to be met is 9 years in the future. The objective is measurable but too vague. The objective is perhaps too easily achievable. • Investment into digital marketing and sales promotions – too many options to measure the effectiveness of each strategy. • Changes to the marketing mix – completely changes the brands values and identity – this could alienate existing customer base

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 10 of 13 Question Answer Marks 1 • Focus on digital marketing – low/zero cost promotion – however can be unpredictable and out of the businesses control • Customer feedback in 2013 highlights customer complaints – can this data be trusted? How was this survey completed– may lack the targeting necessary to give accurate and usable data • The pricing method chosen (dynamic pricing), may have led to a reduction in revenue – which could have led to the fall in profit • Although market share is lost and inventories are high, revenue has begun to increase which signifies that customers are increasing spend per visit • Profit decreased between 2008 and 2020 even as revenue increased – although profit was not the objective of CC, likely to be important, especially as the share price is reducing • Customer satisfaction has significantly decreased – CC has developed a reputation for poor quality products. AO4 Evaluation Evaluation ( and and ) including: Evaluation will largely depend on the points raised in the analysis. • A judgement over the success of the marketing strategy between 2010 and 2020 • Discussion over how the success of the marketing strategy can be judgement and what that judgement could depend upon; link to the marketing objective in 2010, other measures of success for a public limited company (profitability, profit, shareholder objectives, other stakeholder objectives, measures of size) • The extent to which the growth in revenue of CC between 2016 and 2020 was based on the marketing strategy or other external factors • The extent to which Sulwar’s experience in online marketing influenced the decisions and took the brand away from its original values • Other external influences on CC between 2010 and 2020 other than the marketing strategy (e.g. the state of the economy; economic growth) social factors (e.g. trends and fashions) • The extent to which CC updated and changed its marketing strategy between 2012 (the marketing mix) and 2020 Accept all valid responses.

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 11 of 13 Question Answer Marks 2 Advise CC on an operations strategy to enable its future survival and growth. Level AO1 Knowledge and understanding 3 marks AO2 Application 2 marks AO3 Analysis 8 marks AO4 Evaluation 7 marks Description Description Description Description 3 7–8 marks Developed analysis of the overall strategy that identifies connections between causes, impacts and/or consequences. 6–7 marks Effective evaluation A developed judgement/conclusion is made in the business context that draws together developed evaluative comments which balance some key arguments in the business context. 2 2–3 marks Developed knowledge of relevant key term(s) and/or factor(s) is used to answer the question. 2 marks Developed application of relevant point(s) to the business context. 4–6 marks Developed analysis of individual strategic element(s) that identifies connections between causes, impacts and/or consequences. 3–5 marks Developed evaluation • A developed judgement/conclusion is made. • Developed evaluative comments which balance some key arguments. 1 1 mark Limited knowledge of relevant key term(s) and/or factor(s) is used to answer the question. 1 mark Limited application of relevant point(s) to the business context. 1–3 marks Limited analysis that identifies connections between causes, impacts and/or consequences. 1–2 marks Limited evaluation • A judgement/conclusion is made with limited supporting comment/evidence. • An attempt is made to balance the arguments. 0 0 marks No creditable response. 0 marks No creditable response. 0 marks No creditable response. 0 marks No creditable response. 20

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 12 of 13 Question Answer Marks 2 Indicative content AO1 Knowledge and understanding Knowledge (max 1 mark) can be awarded for any relevant business knowledge about operations, including: • The transformational process (inputs, outputs, added value, factors of production) • Efficiency, effectiveness, productivity and sustainability • Capital and labour intensity • Operations methods (job, batch, flow, mass customisation) • Inventory management (types of inventory, buffer, re-order level, lead time, supply chain management, JIT and JIC) • Capacity utilisation • Outsourcing • Location • Scale of operations (economies and diseconomies of scale) • Quality management (quality control, quality assurance, TQM, benchmarking) • The meaning and purpose of an operations strategy • The influence of human, marketing and finance resource availability on operations decisions • The changing role of Information Technology (IT) and Artificial Intelligence (AI) in operations management • The need for flexibility with regard to volume, delivery time and specification • Process innovation: changing current processes or adopting new ways of producing products or delivering services • The main features of an ERP programme • How ERP can improve a business’ efficiency in relation to: inventory control, costing and pricing, capacity utilisation, responses to change, workforce flexibility, management information • The aims and purposes of lean production (Kaizen, quality circles, simultaneous engineering, cell production, JIT manufacturing and waste management) • Operations planning (network diagrams, critical path analysis) Award for any explanation of relevant business knowledge, up to a max of 2 marks. AO2 Application Application (2 marks) can be awarded for applying knowledge of operations/operations strategy, to CC. Award one for each application of knowledge. • John Dee replaces Sulwar in 2020 • John insists on new quality control procedures

9609/42 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2024 © Cambridge University Press & Assessment 2024 Page 13 of 13 Question Answer Marks 2 • The share price remains low, but stable • A new and distinctive operations strategy to reduce costs and increase efficiency is needed • CC operates its own branded clothing retail stores only in the US • CC has been a popular choice with both customers and investors • CC used to have only four main seasonal ranges: spring, summer, autumn and winter • Competition from online only retailers has reduced CC’s market share • John is set an objective to restore CC’s brand reputation • Any relevant data from Appendix 1–4 AO3 Analysis Analysis of the impact of CC’s operations strategy ( and and ) including: • Human resources availability – are younger graduates able to understand the original target market – does their vision align with an original brand reputation and John’s strategy • Marketing availability – will marketing graduates be able to create an original but improved marketing strategy which does not create the same problems 2010–16 • Revenue has dropped by 25% since 2008 (and profit has dropped by 90%) – does CC have the available funds to invest in new marketing techniques/AI/IT • Methods of regaining lost customers using the operations function • Improving flexibility and innovation within operations; increase sales volume – to increase customer retention • The use of and ERP programme – cost/benefit analysis of this and the effects of this on CC • Introduction of lean production – cost benefit analysis of this and the effects of this on CC • Any other relevant operations methods AO4 Evaluation Evaluation ( and and ) including: • A judgement about an operations strategy for CC to enable CC’s survival and growth • Judgement may depend upon: market research findings, external influences in the US (PEST), internal and external influences on CC (SWOT), the reactions of potential competitors in the US, the extent of the investment to meet the new strategy • Weighing up of the relevant arguments for the different future strategies • The board of directors (and shareholders) level of risk that they would be willing to accept Accept all valid responses.