Official June 2024 AQA A-LEVEL BUSINESS 7132/2 Paper 2 Business 2 Merged Question Paper + Mark Scheme Ace your Mocks!!! *JUN247132201* IB/G/Jun24/G4004/E6 7132/2 For Examiner’s Use Question Mark 1.1 1.2 1.3 1.4 2.1 2.2 2.3 3.1 3.2 3.3 TOTAL Tuesday 21 May 2024 Morning Time allowed: 2 hours Materials For this paper you must have: • a calculator. Instructions • Use black ink or black ball-point pen. • Fill in the boxes at the top of this page. • Answer all questions. • You must answer the questions in the spaces provided. Do not write outside the box around each page or on blank pages. • If you need extra space for your answer(s), use the lined pages at the end of this book. Write the question number against your answer(s). • Do all rough work in this answer book. Cross through any work you do not want to be marked. Information • The marks for questions are shown in brackets. • The maximum mark for this paper is 100. Please write clearly in block capitals. Centre number Candidate number Surname Forename(s) Candidate signature I declare this is my own work. A-level BUSINESS Paper 2 Business 2 2 *02* IB/G/Jun24/7132/2 Do not write outside the Answer all questions in the spaces provided. box 0 1 Read the information below and then answer the questions that follow. Biggs Ltd Biggs Ltd operates in the snack food market, selling crisps, nuts and other savoury products. Potatoes are a key ingredient in its snacks. The price of potatoes has risen by 35% over the last two years. The company is one of six firms who dominate a market that has been growing strongly for ten years. The market growth is largely due to the development of new snacks designed for children. However, Biggs Ltd’s market share has been falling since 2019. Biggs Ltd plans to launch a completely new range of products in 2024. It will promote this by sponsoring a major televised sporting competition which has children and families as its audience. Appendix A Extract from Biggs Ltd’s recent financial statements 2023 £000s 2022 £000s Revenue 47 569 46 994 Gross profit 22 289 22 820 Operating profit 4 650 4 701 Payables 5 056 5 221 Appendix B Labour productivity for Biggs Ltd and the snack food industry average (shown as an index number, base year = 2017) Year Biggs Ltd Industry average 2020 104.2 104.3 2023 100.3 105.9 3 *03* Turn over ► IB/G/Jun24/7132/2 Do not write outside the Appendix C Marketing expenditure as a percentage of revenue, 2020–2024* box * 2024 based on Biggs Ltd’s forecast. Appendix D Results of market research conducted with families on Biggs Ltd’s new product range and the promotional campaign Survey question Average survey score by age group 6 to 16 years 17 to 35 years 36 years and over I will definitely try the new products when they are available. 9.9 7.2 1.8 The promotional campaign improves my view of Biggs Ltd’s brand. 8.3 6.3 8.0 I frequently consume snack foods at sports events. 8.9 6.9 2.7 Scale: 10 = strongly agree, 5 = neither agree nor disagree, 0 = strongly disagree Source: Data from 27 interviews with families, conducted by Biggs Ltd in 2021. 4 *04* IB/G/Jun24/7132/2 Do not write outside the Appendix E Percentage of snack products bought and consumed by different box age groups Results from a recent survey of 3000 respondents conducted by an independent market research firm. 5 *05* Turn over ► IB/G/Jun24/7132/2 Do not write outside the box 0 1 . 1 Using Appendix A, calculate Biggs Ltd’s payables days ratio for 2023. [4 marks] 0 1 . 2 Using the information provided, explain one reason why Biggs Ltd’s gross profit margin for 2023 fell to 46.9%. [3 marks] Question 1 continues on the next page 4 3 6 *06* IB/G/Jun24/7132/2 Do not write outside the box 0 1 . 3 Analyse how the changes in Biggs Ltd’s labour productivity, shown in Appendix B, may cause its market share to fall. [9 marks] Extra space 9 7 *07* Turn over ► IB/G/Jun24/7132/2 Do not write outside the box 0 1 . 4 In 2024, Biggs Ltd became the sponsor of a major televised sporting competition that attracts a wide range of ages and is popular with families. With reference to the information provided, evaluate whether Biggs Ltd’s decision to promote its new product range in this way is a good idea. [16 marks] 8 *08* IB/G/Jun24/7132/2 Do not write outside the box Extra space 16 9 *09* Turn over ► IB/G/Jun24/7132/2 Do not write outside the Turn over for the next question box DO NOT WRITE ON THIS PAGE ANSWER IN THE SPACES PROVIDED 10 *10* IB/G/Jun24/7132/2 Do not write outside the box 0 2 Read the information below and then answer the questions that follow. Soundcheck plc Soundcheck plc offers a streaming service enabling users in more than 160 countries to play a variety of content, such as music and podcasts, on electronic devices. The company initially offered its services free to consumers and earned revenue from advertisers. An additional, paid service was introduced in 2022. Paying subscribers benefit from better quality audio, no adverts, and playlists made by celebrities. Exclusive podcast content also provides paying subscribers with an enhanced experience which justifies a paid subscription model. Since its launch in 2006, Soundcheck plc has grown to become the market leader. It now employs nearly 4000 staff globally. A stock market flotation has funded huge investment in building a high-quality technology platform, strong brand and a skilled workforce. However, Soundcheck plc has not regularly made an operating profit. Its costs have been rising significantly in recent years and in 2023 it lost £26 million as a global economic slowdown began. In 2023, Soundcheck plc reached an agreement with trade unions about pay rates and ways of working. The agreement guaranteed starting salaries of at least £36 000 to many staff. This is significantly higher than the industry average. However, there is a global shortage of skilled software engineers and marketing staff so labour turnover rates remain high. In addition to competition for staff, new competitors are attracted to the growing market, including large rivals who are well established in other streaming markets. Other new entrants have also targeted the ‘free’ sector of the market. Some of these rivals have a competitive advantage because they own the rights to music or other content and so have lower costs than Soundcheck plc.