CAIE A-Level Business 1.4 Business objectives Question Bank

Practise explaining business objectives, SMART targets and ethical influences, then evaluating how objectives shape decisions.

[Maximum number: 1]

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.

Table 2.1 FD financial data 2023

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.

Identify one objective of a private sector business.

[Maximum number: 8]

Direct News (DN)

Shila and Lucy own and manage DN, an online publishing business. DN produces a daily online local newspaper called QNews. Readers pay a subscription to access QNews. DN's mission statement is: 'to be a daily community newspaper for local people, about local people'.

DN recently tested a monthly online magazine aimed at the 18-30 age group called QLine. DN's plan is to stop publishing QNews and produce only QLine. Secondary market research suggests QLine will be popular with national businesses wanting to promote their products.

Shila is aware that revenue from online newspapers is decreasing. However, she has found national market research data about online monthly magazines (see Table 2.1).

Table 2.1 National revenue for online monthly magazines

Shila thinks that before the business decides to produce QLine, more market research data will be needed. Shila and Lucy will have to decide on new objectives for DN.

To ensure a quality product that meets customer expectations, Lucy thinks it is important to have careful management of the supply chain, from content creation to customer delivery.

Analyse two reasons why Shila and Lucy will have to change DN's objectives.

Figure for Answer to Question 1.4 Business objectives question 2 — CAIE A-Level Business AS

Indicative content

AO1 Knowledge and understanding - Knowledge of two reasons (max $2{ }^{\boxtimes} \mathrm{s}$ ), may include:

- Market conditions

- Importance of objectives

- Relationship between mission statement, aims, objectives and strategy

- SMART objectives

- How change influences objectives

- Relationship of objectives to budget planning

2(c)

No further marks can be gained without knowledge and understanding.

AO2 Application - Application of knowledge of a reason for DN to change its objectives (max $2{ }^{\text {№ }} \mathrm{s}$ ), including:

Max one ${ }^{\mathrm{App}}$ for application for the first reason and another ${ }^{\mathrm{Ap} \#}$ for application for the second reason

- Employees concerned about the change.

- Mission statement change

- National revenue data

- Not all employees have the right skills

- Change from daily news reporting to magazine aimed at a young age group

- Impact on local community

AO3 Analysis

Limited analysis - candidate shows one link in the chain of analysis.

Developed analysis - candidate shows two or more links in the chain of analysis or a two-sided analysis.

- Change essential for competition and survival - otherwise firms may make losses / go out of business.

- Communicates the direction of the firm to employees - important as a change impacts employees working practices.

- Will need to change objectives if want growth - as market conditions change.

- Costs of change v benefits

Accept all valid responses.

Exemplars and annotations

All question bank results loaded

CAIE A-Level Business 1.4 Business objectives Question Bank

Exam points

Covered syllabus points

Covered syllabus points

1.4 Business objectives question 1

1.4 Business objectives question 2