Cambridge International AS & A Level

BUSINESS 9609/21
Paper 2 Business Concepts 2 Business Mock-4
May/June 2024

1 hour 30 minutes

You must answer on the enclosed answer booklet.

* 3 5 2 4 6 1 4 5 7 3 *

You will need: Answer booklet (enclosed)

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

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

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

DC (KS/SG) 333941/3
© UCLES 2024 [Turn over
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1 Samira’s Whiteboards (SW)

Samira left school at the age of 18 in country H. She had a small amount of savings and an
idea to create a flexible, removable and reusable whiteboard. Samira created a prototype
and received small orders from local retailers.

A local manufacturer batch produces stock when required. There is a two-week lead time
for a minimum order of 500 units. Samira started to sell her whiteboards on her website and 5
at trade shows. She has been trading for seven months. She has good cashflow but little
working capital as production costs are high.

Samira has heard that OS, a large business that sells office equipment, is planning to sell
their own version of Samira’s whiteboard. She is keen to increase production quickly to take
advantage of being first to market. However, Samira’s manufacturer cannot supply enough 10
product to meet the growth in potential demand for whiteboards.

Fig. 1.1 shows an inventory control chart for the first seven months of trade.

800

700

600

500

400

300 Reorder level

200

100 Minimum stock level

0
Jan

Feb

Mar

Apr

May

Jun

July

Fig. 1.1 SW Inventory control chart 2023

Lara, a venture capitalist with experience of manufacturing, has approached Samira about
making an investment. She would invest $100 000 to build a local mass production facility 15
for SW. The facility would have a maximum output of 50 000 units per month. Lara wants to
own 40% of the business.

(a) (i) Identify one traditional function of a manager. [1]

(ii) Explain the term working capital. [3]

(b) (i) Refer to Fig. 1.1. Calculate the total number of whiteboards sold between January and
July. [3]

(ii) Explain one cost for SW of holding inventory. [3]

(c) Analyse two barriers to entrepreneurship that Samira may have faced when starting up SW.
[8]

(d) Evaluate whether Samira should accept Lara's offer to invest venture capital. [12]
© UCLES 2024 9609/21/M/J/24
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2 Fizzy Drinks (FD)

FD is a private sector business that manufactures an international brand of carbonated

drinks. Its slogan was ‘A premium drink for premium customers’. The market for FD’s drinks
is very competitive, with 7 national and 12 international brands all competing in the same
market. Recently FD lost the title of market leader to TR, one of its largest competitors. TR is
a multinational public limited company. 5

Two years ago, FD produced primary market research on customer preferences in the
carbonated drink market. The report identified that FD still had a great brand name, high
brand awareness and customer loyalty.

The cost of raw materials has increased in recent years. To keep profit margins stable,
FD reduced the quality of ingredients instead of raising the selling price, and reduced its 10
marketing budget. Ted, Finance Director, used the evidence of high customer loyalty to
justify the decision.

The change in ingredients led to FD’s products tasting similar to their competitors. Customers
left feedback highlighting a ‘flavourless drink’, and demand fell rapidly. FD’s good brand
name and customer loyalty was lost. Currently FD is operating at 60% of maximum capacity. 15

Table 2.1 FD financial data 2023

Total fixed costs ($m) 15

Average variable cost per unit ($) 1
Average selling price per unit ($) 4
Maximum capacity (m) 100 20

Employee morale has dropped as a result of the negative feedback. Key employees have
left to work for FD’s competitors. The lack of experienced employees has led to a drop in the
productivity of the production process.

(a) (i) Identify one objective of a private sector business. [1]

(ii) Explain the term demand. [3]

(b) (i) Refer to Table 2.1. Calculate FD’s margin of safety in 2023. [3]

(ii) Explain one intangible attribute of FD’s products. [3]

(c) Analyse two possible impacts on FD of a fall in productivity. [8]

(d) Evaluate the usefulness to FD of market research methods to inform future marketing
decisions. [12]

© UCLES 2024 9609/21/M/J/24

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