Edexcel IAL Business 1.3.1.1c Competition & Markets

Indicative content guidance

Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Quantitative skills assessed:
QS9 Interpret, apply and analyse information in written, graphical and
numerical forms
Knowledge, Application, Analysis, Evaluation – indicative content
•
Competition is the rivalry among sellers trying to achieve goals such as
increasing profits, market share, and sales volume.
•
Competitors include Etihad Airways and Qatar Airways as well as low-
cost airlines, such as Norwegian Air Shuttle and
Singapore-based Scoot.
•
Emirates, Etihad and Qatar Airways have all increased the number of
passengers since 2006 so consumers benefit from more flight
destinations and a choice of carriers.
•
Competition also encourages businesses to improve the quality of
goods and services they sell – to attract more customers and expand
market share. Emirates offer good quality food and inflight
entertainment and have improved their first-class service.
•
When firms compete with each other consumers often get the best
possible prices. There is competition from Norwegian Air Shuttle and
Scoot, which are attracting customers with low priced fares. This may
lead to larger airlines reducing their prices in order to compete.
•
However, the low budget airlines are competing mainly on price. If
price of airline tickets becomes a key factor then the larger airlines
may also have to reduce prices. This may impact the quality of the
service provided in order to reduce costs of the business.
•
The increase in the number of airlines may cause congestion in and
around airports and long queuing times for services such as airport
security for all customers.
•
The costs associated with airlines are high. It may be that, in the long
term, smaller airlines such as Norwegian Air Shuttle find it difficult to
compete with larger airlines. The smaller airlines may be forced out of
the market leaving larger airlines the option of increasing prices.

Level

Descriptor

0
No rewardable material.
Level 1
1–2
Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2
3–5
Accurate knowledge and understanding.
Applied accurately to the business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced, and
unlikely to show the significance of competing arguments.
Level 3
6–8
Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, well contextualised, using quantitative and/or
qualitative information and shows an awareness of competing
arguments/factors.