Cambridge International AS & A Level

BUSINESS 9609/43
Paper 4 Business Strategy October/November 2023
MARK SCHEME
Maximum Mark: Please Specify

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 October/November 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level
components.

This document consists of 20 printed pages.

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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 descriptors 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.

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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.

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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).

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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.

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Subject Specific Marking Principles for point-based marking

2 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:
• 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.
• DO credit alternative answers/examples which are not in the mark scheme if they are correct.
• DO credit answers where candidates give more than one correct answer where extended writing is required rather than short/list-type answers.
• DO NOT credit answers simply for using a key term unless that is all that is required. (Check for evidence it is clearly understood and used
correctly.)
• DO NOT credit answers which are obviously self-contradicting or trying to cover all possibilities. For questions that require n reasons, e.g.
State two reasons…, mark only the first two answers given, not any two that are correct out of a longer list.
• DO NOT give further credit for what is effectively repetition of a correct point already credited or to ‘mirror’ statements. For example, a
response that includes: ‘A business owner would benefit from limited liability as it would protect their personal possessions.’ and ‘If a business
owner did not have limited liability they could lose everything.’, cannot both be rewarded in answer to one question.
• DO NOT require spellings to be correct, it is not part of the test. However, spellings of business terms must allow for clear and unambiguous
separation from other syllabus terms with which they may be confused, e.g. offshore/outsource or effective/efficient.

5 Presentation of mark scheme:

• Questions are in bold text.
• Possible responses are in normal text in a bulleted list.
• Marks are rewarded based on the table provided for each question.
• Possible responses are listed under the appropriate Assessment Objective.
• Slashes (/) separate alternative ways of making the same point.
• Content in the answer column in brackets is for examiner information/context to clarify the marking but is not required to earn the mark.

6 Annotation:
• Every response must have a minimum of one annotation.
• For point marking, ticks can be used to indicate correct answers and crosses can be used to indicate wrong answers.
• For questions where only AO1 and AO2 are rewarded, there is a direct relationship between ticks and marks.
• For levels of response marking, the first time level 1 is achieved, L1 is annotated on the response. If/when level 2 is achieved, L2 should be
used, etc.
• Other annotations will be used by examiners as agreed during standardisation, and the meaning will be understood by all examiners who mark
that paper.

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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.

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Question Answer Marks

1 Evaluate the extent to which RT’s operations strategy has supported the success of the business from 2015 to 20
2023.

Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation
understanding 2 marks 8 marks 7 marks
3 marks

3 7–8 marks 6–7 marks

Developed analysis Effective evaluation
of the overall A developed judgement/conclusion
strategy that identifies is made in the business context that
connections between draws together developed evaluative
causes, impacts comments which balance some key
and/or consequences. arguments in the business context.

2 2–3 marks 2 marks 4–6 marks 3–5 marks

Developed Developed Developed analysis Developed evaluation
knowledge of relevant application of of individual • A developed
key term(s) and/or relevant point(s) to the strategic element(s) judgement/conclusion is made.
factor(s) is used to business context. that identifies • Developed evaluative comments
answer the question. connections between which balance some key
causes, impacts arguments.
and/or consequences.

1 1 mark 1 mark 1–3 marks 1–2 marks

Limited knowledge of Limited application Limited analysis that Limited evaluation
relevant key term(s) of relevant point(s) to identifies connections • A judgement/conclusion is made
and/or factor(s) is the business context. between causes, with limited supporting
used to answer the impacts and/or comment/evidence.
question. consequences. An attempt is made to balance the
arguments.

0 0 marks 0 marks 0 marks 0 marks

No creditable No creditable No creditable No creditable response.
response. response. response.

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Question Answer Marks

1 Indicative content:

AO1 Knowledge and understanding

No other AO2, AO3 or AO4 marks can be awarded without AO1.

Knowledge (max 3 marks) can be awarded for any relevant business knowledge about Operations Strategy:
• Capital intensive and labour intensive operations.
• Operations methods: job, batch, flow, mass customisation.
• Buffer inventory – holding inventory just in case.
• Supply Chain Management – the takeover allowed control of the supply chain.
• Lean production – aims to cut down waste during production, including inventory holding costs.
• Lean production methods – Kaizen, quality circles, simultaneous engineering, cell production, JIT manufacturing and
waste management.
• JIT – components and other supplies arrive just as they are needed on the production line.
• Kaizen – continuous improvement.
• Capacity utilisation and outsourcing.
• Information Technology (IT) and Artificial Intelligence (AI).
• Process innovation: changing current processes or adopting new ways of producing products or delivering services.
• Enterprise Resource Planning (ERP) integrates orders, materials, labour and distribution to minimise cost, reduce
inventory levels and waste.
• Critical Path Analysis (CPA) ensures all activities are taken in correct sequential order to meet deadlines and speed up
project.
• Economies of scale – when output increases average costs fall.

AO2 Application
Application (max 2 marks) can be awarded for applying knowledge of operations strategy, to RT between 2015 and
2023:
• Between 2015–18 lean production techniques used to increase productivity and efficiency.
• 2019 purchase of farms secured supply chain for the business making it one of the top five producers in the country.
• 2021 purchase of new factory sees increase in capacity by 66%.
• Also increase in capital intensive production with more technically advanced cotton processing machinery purchased.
• RT uses CPA to help plan the purchase and machinery upgrade.

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Question Answer Marks

1 • 2022 purchase further increases scale of the business.

• External growth through backwards vertical integration in 2019.
• Supply interruptions from late deliveries of cotton.
• $1.5 m spent on machines through share issue.
• RT can supply its own factories with cotton.
• Organic growth in 2021.
• External growth through a takeover in 2022.
• Increasing Profit margin.

AO3 Analysis
Analysis of the impact of the operation strategy on a business ( and and ) including:
• Lean production techniques may have had the desired impact as reports of efficiency and productivity have suggested
improvements, but could there be other factors at play – training of staff, better suppliers?
• Lean production puts a lot of pressure on staff to identify and make improvements which could lower morale and thus
retention rates if they felt under pressure.
• Profit margins have increased, and this could have enabled them to retain profits for the purchase of the cotton farms in
2019.
• The purchase of the farms is a form of diversification – they do not currently run farms and therefore there could be
issues with understanding how to efficiently run the farm and integrate in RT business model.
• The increase in scale and capacity by 66% may not be needed if they do not have the customers to buy the fabrics
they produce.
• Critical Path Analysis would have helped identify critical tasks to ensure the new factory and machinery were ready on
time so as to not cost more than it needed to.
• RT is highly geared and this could mean they have overstretched themselves in their recent expansion of operations
and have few opportunities left to invest in other functional areas in the future.

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Question Answer Marks

1 Exemplars and annotations for AO3 (assuming relevant AO1 has been awarded):
No credit (no analysis
L1 (limited analysis) L2 (developed L3 (developed analysis
on RT)
analysis) of strategy)

TQM requires all TQM requires all workers’ TQM requires all workers’ TQM requires all workers’
workers’ involvement involvement throughout the involvement throughout the involvement throughout the
throughout the production process. This production process. This can production process. This can
production process. This can motivate employees. It motivate employees. It motivate employees. It
can motivate employees. reduces poor reviews so reduces poor reviews so reduces poor reviews so
customer loyalty. customer loyalty. This will customer loyalty. This will lead
lead to less cost of refunds. to less cost of refunds.
However, TQM requires
training which will lead to
higher costs and lower profits.

JIT where raw materials JIT where raw materials are JIT where raw materials are JIT where raw materials are
are shipped as they are shipped as they are shipped as they are needed. shipped as they are needed.
needed. needed. This leads to This leads to reduced holding This leads to reduced holding
reduced holding costs and costs and the increased profit costs and the increased profit
the increased profit margins. This will attract margins. This will attract
margins. investors allowing future investors allowing future
growth. growth. However, it is reliant
on the arrival of materials, if it
is late it will reduce output
hence less profits.

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Question Answer Marks

1 AO4 Evaluation

Evaluation ( and and ) including:

Evaluation will depend on what points have been made about whether the operations strategy has supported the success
or not.
• The use of lean production techniques will have supported the growth of the business as it would have allowed them to
become more efficient – ultimately helping them save money for future growth. However, it has taken three years to
implement the lean production techniques which seems like a long time, was there resistance from the staff which has
meant the benefits from increased profit margins could have been bigger if this had happened faster?
• Has JIT had all the benefits they planned? There have been ‘supply interruptions in cotton’ which is out of their control
and would disrupt any JIT delivery plans they have had.
• Has Kaizen (continuous improvement) been sustained and used across all sites by 2023? As RT has increased in size
have they been able to implement this across the bigger sites? Have acquired businesses been open to changes in
operational practices to get the efficiency in their businesses?
• The mergers/takeovers have helped RT secure their supply and expand operationally but did RT have problems with
cotton supply – did they need to take over the farms? Most fabric stays in the country so there is not as much market
growth or as many opportunities for them, would they have been better marketing their fabric lines and increasing
custom that way?
• The investment in the new premises in 2021 has helped them update and grow but if capacity has increased by 66%,
have they got the customers to utilise this capacity? Have they got too big too quickly? Will this lead to diseconomies of
scale?
• Have any of the growth opportunities led to economies of scale and the cost savings they bring? Profits have fallen and
gearing has increased so is the business benefitting from being this size?
• Financially speaking the purchase of the new premises in 2021 and the competitor in 2022 have put a strain on the
business. Gearing increased although it is now starting to come down, profits fell, although return on capital is now
starting to recover. Does the business now need to consolidate until the ratios have improved? How do shareholders
feel about this at the moment? Will they want to pursue further operational strategies that put pressure on the finances?
• An overall judgement on whether the operational strategy has supported the success of the business will be needed.

Accept all valid responses.

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Question Answer Marks

1 Exemplars and annotations for AO4 (assuming relevant AO1 has been awarded):

No credit (no
L1 (limited supporting L2 (developed supporting L3 (developed supporting
supporting
evidence) evidence) evidence with context)
evidence)

We could We could conclude that the We could conclude that the We could conclude that the
conclude that operations strategy using lean operations strategy using lean operations strategy using lean
the operations production has supported the production has supported the production has supported the
strategy using success of RT with the success of RT with the success of RT with the
lean implementation of JIT and implementation of JIT and implementation of JIT and
production has Kaizen it ensures quality and Kaizen it ensures quality and Kaizen it ensures quality and
supported the production efficiency. production efficiency. This production efficiency. This
success of RT. means the business can meet means the business can meet
the demand and there are no the demand and there are no
delays. delays. RT was able to increase
production capacity by 66%.

The use of The use of lean production The use of lean production The use of lean production
lean techniques will have supported techniques will have supported techniques will have supported
production the success of the business as it the success of the business as it the success of the business as it
techniques will would have allowed them to would have allowed them to would have allowed them to
have become more efficient. become more efficient – become more efficient –
supported the ultimately helping them save ultimately helping them save
success of the money for future growth of RT. money for future growth.
business. However, it has taken three
years to implement the lean
production techniques which
seems like a long time, was
there resistance from the staff
which has meant the benefits
from increased profit margins
could have been bigger if this
had happened faster?

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Question Answer Marks

2 Advise Carlos on which approaches RT should use to develop a business strategy to achieve ‘profit through 20
diversification’.

Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation
understanding 2 marks 8 marks 7 marks
3 marks

3 7–8 marks 6–7 marks

Developed analysis Effective evaluation
of the overall A developed judgement/conclusion
strategy that identifies is made in the business context that
connections between draws together developed evaluative
causes, impacts comments which balance some key
and/or consequences. arguments in the business context.

2 2–3 marks 2 marks 4–6 marks 3–5 marks

Developed Developed Developed analysis Developed evaluation
knowledge of relevant application of of individual • A developed
key term(s) and/or relevant point(s) to the strategic element(s) judgement/conclusion is made.
factor(s) is used to business context. that identifies • Developed evaluative comments
answer the question. connections between which balance some key
causes, impacts arguments.
and/or consequences.

1 1 mark 1 mark 1–3 marks 1–2 marks

Limited knowledge of Limited application Limited analysis that Limited evaluation
relevant key term(s) of relevant point(s) to identifies connections • A judgement/conclusion is made
and/or factor(s) is the business context. between causes, with limited supporting
used to answer the impacts and/or comment/evidence.
question. consequences. An attempt is made to balance the
arguments.

0 0 marks 0 marks 0 marks 0 marks

No creditable No creditable No creditable No creditable response.
response. response. response.

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Question Answer Marks

2 Indicative content

AO1 Knowledge and understanding

Knowledge (max 2 marks) can be awarded for any relevant business knowledge on approaches to develop business
strategy, including:
• Blue ocean strategy – the aim to combine product differentiation with low-cost to develop new markets and demand. It
is about finding uncontested markets to gain a competitive advantage. Comparison with red ocean strategy awardable.
• Scenario planning – managers consider the main risks and uncertainties and adopt different strategies for different
scenarios. Flexible approach.
• SWOT analysis – strengths, weaknesses, opportunities, threats. SWOT is very easy to construct so can be subjective.
• PEST analysis – focuses on the macro environment including political, economic, social and technological.
• Porter’s five forces – threats of substitutes, supplier power, threat of entry, buyer power, competitive rivalry.
• Core competence framework – core competencies lead to the development of core products. Core products are not
necessarily sold to final consumers. Instead, they are used to produce many end-user products.
• Ansoff matrix – market penetration, market development, diversification, product development. Different options open to
a marketing manager when considering new opportunities for sales growth. It includes thinking of the market in which
the business is going to operate and the product(s) it plans to sell. Business decides whether to remain in the existing
market or to enter new ones along with whether to sell existing products or develop new ones.
• Force field analysis – weighs up the potential advantages and disadvantages of a decision before a choice is made. It
gives managers an insight that will allow them to strengthen the forces supporting a decision and reduce the forces that
oppose it.
• Decision trees – considers all of the options open to a manager, the different possible outcomes resulting from these
options, the chances of these outcomes occurring, and the economic returns from these outcomes.

No further AO1, AO2, AO3 or AO4 without at least one K from the approaches above.

AO2 Application
Application (max 2 marks) can be awarded for applying knowledge of approaches, to RT:
• Carlos’ aims for the next 5 years.
• Growing global economy.
• PEST analysis he wants to produce.
• 2021 purchase of new factory sees increase in capacity by 66%.
• Also increase in capital intensive production with more technically advanced cotton processing machinery purchased.
• The increasing exports of Brazil increasing international competitiveness.

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Question Answer Marks

2 • Brazil is one of the largest producers of cotton.

• The increased publicity from the Brazil fabric industry magazine article.
• Any element of the case study.
• Any element of the appendices.

AO3 Analysis
Candidates are likely to focus on two or three approaches.
Analysis of the impact of usefulness of approaches to develop business strategy ( and and ) including:
• The usefulness of approaches to develop a strategy that brings ‘Profit though diversity’ for RT.
• PEST analysis will be useful to understand the external environment of each potential market. This could be especially
useful if RT is to become a global player in either or both the fabric market and the soya been market as they will now
have to consider the needs and restrictions of other countries.
• Blue ocean strategy may allow RT to break into the international market but even if you take this premise, that market is
going to be competitive globally once RT is in there. Blue Ocean strategy may be useful if RT want to redefine how they
operate in Brazil when finding new markets which may be possible given they are now one of the top 5 producers in the
country.
• Scenario planning could allow Carlos to explore different possibilities in the markets he wants to develop but two of
those – export fabric and soya bean production – are markets they currently do not operate in. How will they get data to
help construct different scenarios within those markets?
• SWOT analysis to understand the internal strengths and weaknesses of the business. Use the strengths to overcome
future threats and the opportunities to overcome present weaknesses. However, he may not have the data to
understand the opportunities and threats in those markets where RT is new.
• Porter’s five forces may help Carlos to develop an understanding of the forces in each potential market. It will require
an investment in market research to understand the competitive nature of each market. But given they supply their own
cotton how useful is the power of suppliers? Also the fact that they are one of top 5 producers implies they hold a lot of
power so would this be a useful model for RT to invest time and money in if it confirms what they know?
• Core competencies might work for the initial strategy of finding new markets and it will help them with exporting their
fabric but they have little experience in farming and even less in soya production and how many of the core
competencies of the business would help that strategy?
• Ansoff matrix may be the most useful to analyse the risk of any new strategy. Does this really help Carlos to develop a
strategy?

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Question Answer Marks

2 • Force field analysis could help Carlos to understand the constraining and driving forces in developing a new strategy.
This may help him to identify actions that need to be taken to reduce constraining forces. However, Carlos may not
have enough data and experience to do a force field analysis.
• Decision trees are unlikely to be helpful in developing a new strategy, but they could be used to help decide between
alternative strategies. Carlos may find it difficult to obtain the data on probabilities and economic outcomes to construct
a decision tree.

No credit (no
L1 (limited L2 (developed L3 (developed analysis of
analysis on RT)
analysis) analysis) strategy)

The strengths, The strengths, The strengths, weaknesses, The strengths, weaknesses,
weaknesses, weaknesses, opportunities, and threats can opportunities, and threats can
opportunities and opportunities, and threats help RT find a diversified help RT find a diversified
threats can help RT can help RT find a approach. The increased approach. The increased publicity
find a diversified diversified approach. The publicity from the Brazil fabric from the Brazil fabric industry
approach. The increased publicity from industry magazine article will magazine article will have an
increased publicity the Brazil fabric industry have an increased brand increased brand recognition. This
from the Brazil fabric magazine article will have recognition. This will increase will increase sales and establish
industry magazine an increased brand sales and establish itself with itself with new products. However,
article. recognition. new products. a high increase in labour turnover
may suggest employees do not
buy into the aim of profit through
diversification resulting in failure
to diversify.

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Question Answer Marks

2
No credit (no
L1 (limited L2 (developed L3 (developed analysis of
analysis on RT)
analysis) analysis) strategy)

SWOT analysis can SWOT analysis can help SWOT analysis can help RT SWOT analysis can help RT find
help RT find their RT find their strength to find their strength to achieve their strength to achieve their
strength to achieve achieve their goal. With their goal. With many goal. With many factories of
their goal. many factories of factories of production RT production RT can gain
production RT can gain can gain economies of scale economies of scale which will
economies of scale which which will reduce unit costs reduce unit costs allowing them to
will reduce unit costs. allowing them to save money save money for research to
for research to design new design new products for the fabric
products for the fabric market. However, potential threat
market. from existing competitors may
reduce profits and thus
diversification of RT.

Looking at PEST Looking at PEST Looking at PEST economic Looking at PEST economic
economic factors economic factors shows factors shows the increasing factors shows the increasing
shows the the increasing export of export of Brazil suggests export of Brazil suggests
increasing export of Brazil suggests increasing increasing international increasing international
Brazil suggests international competitiveness. RT will be competitiveness. RT will be able
increasing competitiveness. RT will able to diversify and risks can to diversify and risks can be
international be able to diversify and be shared. This will allow RT shared. This will allow RT to have
competitiveness. risks can be shared. to have an absolute an absolute advantage over
advantage over producers. producers. However, this also
means there can be intense
competition among domestic and
international markets reducing
sales and profits.

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Question Answer Marks

2 AO4 Evaluation
Evaluation ( and and ) including:
Evaluation will largely depend on the points raised in the analysis of the approaches needed to develop the new strategy.
• The unpredictability of the dynamic external environment – is RT more exposed if they start operating in global markets
for fabric and soya?
• PEST analysis is not going to help internally with a strategy, it will just evaluate the external environment which needs
addressing if they enter new markets but will not resolve any financial or operational issues the business has with a
new strategy.
• To what extent should Carlos try to plan for a new strategy with the resources that he has? New strategy will likely
include finding funds – is he overstretched after 8 years of growth? Ratios would imply they are only now starting to
recover after the last expansion.
• Many of the approaches rely heavily on the accuracy of forecast data – and 2 of those markets are unknowns.
• Advice to Carlos should make clear which approaches are likely to be most relevant and useful in this context.

Accept all valid responses.

Exemplars and annotations for AO4 (assuming relevant AO1 has been awarded):

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9609/43 Cambridge International AS & A Level – Mark Scheme October/November 2023
PUBLISHED
Question Answer Marks

2
No credit (no
L1 (limited L2 (developed supporting L3 (developed supporting
supporting
supporting evidence) evidence) evidence with context)
evidence)

Overall SWOT Overall SWOT analysis Overall SWOT analysis seems to Overall SWOT analysis seems to
analysis seems to seems to be the best be the best approach to develop be the best approach to develop
be the best approach to develop the the business strategy to achieve the business strategy to achieve
approach to business strategy to profit through diversification. This profit through diversification.
develop the achieve profit through is because SWOT will cover all However, the effectiveness of
business strategy diversification. This is areas that PEST will. However, SWOT needs to be considered as
to achieve profit because SWOT will the effectiveness of SWOT needs it is all qualitative values. This
through cover all areas that to be considered as it is all means that Carlos will make
diversification. PEST will. qualitative values. This means choices to diversify with
that Carlos will make choices to quantitative factors. Especially that
diversify with quantitative factors. RT’s financials such as ROCE has
dropped from 26% to 9%.

Overall I think RT Overall I think RT should Overall I think RT should use Overall I think RT should use
should use use several approaches several approaches to achieve several approaches to achieve
several to achieve profit through profit through diversification. RT profit through diversification. RT
approaches to diversification. RT should should use SWOT and PEST to should use SWOT and PEST to
achieve profit use SWOT and PEST to look at the external and internal look at the external and internal
through look at the external and environment and have a full environment and have a full
diversification internal environment and picture of the business. This will picture of the business. This will
have a full picture of the allow RT to look at their strengths allow RT to look at their strengths
business and find new ways to diversify and find new ways to diversify
which will increase sales and which will increase sales and
profits. profits. RT’s strength of control
over their supply chain by taking
over the farms allows no disruption
of supply which means they may
become more productive and
make new products allowing
exports to other countries to be
successful and profitable.

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