CAIE A-Level Business 6.2.1 Developing Business Strategy

Please refer to the marking grid at the start of the mark scheme

Indicative content

Responses may include:

AO1 Knowledge and understanding

Knowledge (max 1 mark) can be awarded for any relevant business knowledge about business strategy and Ansoff's Matrix as well as the alternative strategies including:

- The meaning and purpose of business strategy

- The meaning and purpose of strategic management: analysis, choice and implementation

- Approaches to develop business strategy, including:

- blue ocean strategy

- scenario planning

- PEST analysis

- Porter's five forces

- core competence framework

- SWOT

- force field analysis

- decision trees.

Award DEV for any explanation of relevant business knowledge, up to a max of 2 marks.

2

AO2 Application

Application ${ }^{[m]( } 1$ mark) can be awarded for applying knowledge of Ansoff's matrix/business strategy, to KF.

Application ${ }^{\square=\square}$ (2 marks) can be awarded for applying knowledge of HR strategy, to KF between 2018 and 2023:

- Delivery market is shrinking back to pre-pandemic levels, limiting growth opportunities.

- Changes in legislation change the model of using zero-hours/gig-economy workers.

- Any element of the case study/appendices including:

- Small staff - one office manager, 15 kitchen support workers

- Use of full-time contracts and flexi-time contracts

- Objectives of growth and profit maximisation

- New delivery service - 45 riders hired, increasing to 75

- Use zero-hours contracts

- Use of tracking software for staff performance

- Tracks speed, efficiency of deliveries

- Unreasonable time targets

- Bad timing within the app

- Bonuses and performance judged unfairly

- Compliance with new legislation banning zero-hours contracts

- Staff moved to self employed and will operate as part of the gig economy

- Use of performance data to judge staff for restructure.

2

AO3 Analysis
Analysis of the usefulness of Ansoff's matrix to help KF develop a growth strategy ( A and and ${ }^{\mathrm{A} 2}$ ) including:
- The current market for deliveries is shrinking - will Ansoff lead them to discuss options that are not viable when other
options may need exploration?
- What is Liam and Samir's attitude to risk? - This may fuel which direction they choose to go in.
- Where will financing come from? - The business has rationalised recently so do they have the money to expand?
Candidates may offer alternative approaches:
- May want to use the blue ocean strategy to identify a market where they can dominate - as they did when they
originally set up the KF/delivery business.
- Scenario planning could help map what may happen with the current business model - to help identify where they
should move to.
- SWOT analysis may help identify strengths that can be transferred to a new project - whilst highlighting the problems
they may face in a different model to how they currently operate.
- PEST analysis could help understand the changing environment after the global pandemic - which has changed many
elements of this.
- Five forces would help understand the rivalry they face in a very crowded food/restaurant/takeaway market.
- Core competency framework would allow them to identify what they do well and could transfer to any growth option
chosen - especially if this is not an expansion of the current food delivery model.
- Force field analysis could help Liam to understand the constraining and driving forces in developing the new strategy -
This may help him to identify actions that need to be taken to reduce constraining forces.
- Decision trees could be used to help make a quantitative led decision between the different options for expansion - but
would need to have much more financial information to be worthwhile.

PUBLISHED

2

AO4 Evaluation

Evaluation will largely depend on the points raised in the analysis of the approaches needed to develop the new strategy other than Ansoff's Matrix.

Evaluation ( ${ }^{\mathrm{N} 1}$ and ${ }^{\mathrm{N} 2}$ and ${ }^{\mathrm{N} 3}$ ) including:

- Candidates must state that Ansoff's Matrix is/isn't sufficient or acknowledge that something else is better for first N1 mark.

- Each option requires much more data and research to understand the risk, financial constraints and success probabilities to help make the final decision.

- Should KF be using a combination of other methods - decision trees to help make the decision, core competency framework to identify strengths to transfer to new business etc.?

- How important is growth to the new strategy moving forward, do they need to consolidate after the pandemic and focus in on what they do best given new HR implications?

- Is the whole structure of their business model changing given changes to ZHC legislation - is this model even still viable?

- Advice to KF should make clear whether Ansoff's matrix is sufficient or whether it should be supported by other models, and if so which?

Accept all valid responses.