CAIE A-Level Business 3.1.3 Markets and Market Share

Practise calculating and interpreting market share or growth and analysing how consumer, industrial, local or international markets and product orientation shape decisions.

[Maximum number: 3]

MX Bikes (MXB)

MXB is a successful public limited company with many stakeholders. It has been trading for 15 years. It makes a range of bicycles and is currently the market leader for mountain bikes in country J. MXB's high-quality mountain bikes are sold at a high price to high-income leisure users. They are sold in a limited number of specialist bicycle shops.

Fig. 2.1 Annual revenue of mountain bike manufacturers in country J for 2022

To grow the business and improve the sustainability of operations, MXB expanded its product portfolio by launching a range of electric scooters. This is a new and expanding market in country J, targeting the urban youth market.

MXB's business objectives are reviewed regularly by Rani, the Managing Director.
Rani is concerned that MXB's sales of mountain bikes have declined by 12% over the past

Refer to Fig. 2.1. Calculate MXB's market share of the mountain bike market in country J .

Refer to Fig. 2.1. Calculate MXB's market share of the mountain bike market in country J.
$\begin{aligned} & \text { Formula to calculate market share in words }=\frac{\text { Sales revenue for MBX }}{\text { Total sales revenue for the market }} \times 100(1) & \text { OR } \end{aligned}$

Formula to calculate market share in numbers $=\frac{\$ 265(000)}{£ 1203(000)} \times 100(1)$

1 mark for calculating the sales revenue for the total market

Total sales revenue for the market =265+85+178+230+185+95+115+50

= $1 203 (000)

Market share $=(265 / 1203) \times 100$
= 22.028\% or 22.03\% or 22\%

2(b)(i)

Exemplar and annotations

Marks

Rationale

3 marks

Working and \% do not matter.

Must be three to denote the three marks.

Correct rounding must be applied.

2 marks

To award two marks, there must be

- Two and a

OR

Both of the following:
- Correct formula
- Correct calculation of total market sales revenue
(1203)
OR
An incorrect answer with one mistake allowing OFR
for final stage.
0.22 (has not completed final stage to multiply by 100)
A correct answer from an inverted formula (453.96-
OFR)
A correct answer with incorrect rounding (ie 22.02)

1 mark

One of the following:

To award one mark, there must be:

- Correct formula

- One and two

- Correct calculation of total market sales revenue (1203)

To award zero marks, there must be

- One

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3.1.3—Markets question 1