FE is a public limited company based in country Z, where the primary sector accounts for 40% of all employees. Farm produce from country Z is sold to many other countries. FE manufactures a range of farm equipment such as tractors and machinery. It sells its products to large farms. Farmers have remained loyal despite the availability of lower-cost farm equipment. FE's current market share in country Z is 8%. However, the market for farm equipment in country Z is growing and FE forecasts an increase in its market share, as shown in Table 1.1. Table 1.1 The market for farm equipment in country Z Year | 2023 (m) | 2024 (forecast) (m) ---|---|--- Market size | 285 | 310 FE's revenue | 22.8 | 29.45 Chuzi, FE's Managing Director, would like to develop new types of farm equipment. Chuzi recently appointed Lin, an intrapreneur tasked with developing new products. FE's employees would like to join a trade union as they have low morale. They believe that management do not consider the welfare of the workforce. The employees feel that they have a poor work-life balance. FE does not offer any training and development opportunities. The management style is autocratic. BL, a multinational farm equipment manufacturer, has recently located a factory close to FE. The management at FE is concerned about the impact of this on its human resource management (HRM).

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2024). The mark or mark type is shown in brackets.

1. [1] Any feature of the primary sector ✓ including: • extraction/collection of natural resources/raw materials • sell raw materials to the secondary sector • a primary sector industry such as farming, fishing, mining Accept all valid responses.
2. [1] Knowledge of one relevant point is used to answer the question.
3. [2] Developed application of one relevant point to a business context.
4. Indicative content A01 Knowledge and understanding Knowledge of intrapreneur [K], may include: • manager who leads a team • develop ideas/technologies/applications/ways of doing business • creative/innovative Note: without K cannot award any marks. AO2 Application Explanation of intrapreneur [APP] may include: • employee within a business • product development • to help improve the company/profits • to help meet the demand of consumers • creates a competitive advantage
5. Context applied to intrapreneur [APP] including: • risks stay with the business • takes on an entrepreneurial role within a business • has the characteristics (of) an entrepreneur • specific examples from FE, such as Lin developing new products • specific examples from BL, such as location of the factory
6. [3] Correct answer 1.5% (accept 1.5)
7. [1] Total revenue x proportion of revenue
8. [1] Total Revenue 2023 $10 million forecast to increase by 10% = $10 million + $1 million = $11 million
9. [1] Product C = 15% proportion of revenue = $11 million/100 × 15 = $1.65 million
10. FE's forecast market share 2024 = 29.45 / 310 × 100 (1) = 9.5% (1)
11. FE's market share 2023 = 8% (given in the case study so no mark for this figure)
12. 9.5% - 8% = 1.5% (3)
13. [2] Formula: Market share/total market × 100 OR revenue/market revenue × 100 AND Correct figures identified 29.45 / 310 OR Inverted 310 / 29.45 × 100 (1 mark for implied formula)= 1052.6 (OFR mark) OR Show working for inverted formula (1) and then use this as 1052.6 – 8 = 1044.6 (OFR) To award two marks, there must be • Two ✓ and a X OR • One ✓ , one ✓ and one OFR
14. [1] One of the following: Formula Market share/total market × 100 OR Revenue/market revenue × 100 OR Correct figures identified 29.45 / 310 OR Inverted 310/29.45 To award one mark, there must be: • One ✓ and two X
15. [1] Knowledge of one relevant point is used to answer the question.
16. [2] Developed application of one relevant point to a business context.
17. Indicative content A01 Knowledge and understanding Knowledge of one benefit of product development [K]. Responses may include: • keep up with trends • stay competitive • to enter new markets • increase market share • increase sales • increase revenue/profit • improve the quality of products • increase customer satisfaction/loyalty • widen customer base • increases the range of products AO2 Application Explanation of a benefit of product development [APP], including: • innovative product may increase demand • more accurately meet consumer demand • may attract new customers
18. Context applied to a benefit to FE of product development [APP] including: • market for farm equipment is increasing • major competitor entered the market • intrapreneur and project team investment • developing new machinery • sells to large farms • market size increased due to product development/use of answer to Q1(b)(i) (OFR) Accept all valid responses.
19. [2] Knowledge of two relevant points is used to answer the question. (max 1 mark each)
20. [2] Application of two relevant points to a business context. (max 1 mark for each role)
21. [4] Developed analysis that identifies connections between causes, impacts and/or consequences of two points.
22. Indicative content A01 Knowledge and understanding Knowledge of two roles [K] (max 1 mark each – annotate one on the left and the other on the right) including: • creation of jobs/attract other foreign businesses • increased tax revenue • investment • encourage growth • contributes to economic development • increase exports/earn foreign currency AO2 Application Context applied to each role, [APP] (max 1 mark for each role) including: • current market share 8% • forecast to grow to 9.5% (OFR from 1bi) • accounts for 40% employment • FE is in secondary sector • farming produce sold to other countries • secures country Z's food supply • BL a multinational company investing in country Z • public limited company AO3 Analysis Limited analysis [AN] candidate shows one link in the chain of analysis. Developed analysis [DEV] candidate shows two or more links in the chain of analysis or a two-sided analysis. • farm equipment aids efficiency in farming • farming is an important sector in country Z • may expand and create more employment/reduce unemployment – increasing country's businesses revenue- • could increase investment • helps develop the secondary sector • success of FM may have attracted BL to locate and invest in country Z Note: Two-sided analysis could mean negative impacts considered such as effect on smaller businesses Accept all valid responses.
23. [2] Developed knowledge of relevant key term(s) and/or factor(s) is used to answer the question.
24. [1] Limited knowledge of relevant key term(s) and/or factor(s) is used to answer the question.
25. [2] Developed application of relevant point(s) to the business context.
26. [1] Limited application of relevant point(s) to the business context.
27. [2] Developed analysis that identifies connections between causes, impacts and/or consequences.
28. [1] Limited analysis that identifies connections between causes, impacts and/or consequences.
29. [5-6] Developed evaluation in context. • A developed judgement/conclusion is made in the business context. • Developed evaluative comments which balance some key arguments in the business context.
30. [3-4] Developed evaluation. • A developed judgement/conclusion is made. • Developed evaluative comments which balance some key arguments.
31. [1-2] Limited evaluation. • A judgement/conclusion is made with limited supporting comment/evidence. • An attempt is made to balance the arguments.
32. Indicative content A01 Knowledge and understanding Knowledge of the impact on HRM [K] (max 2 marks), including: • recruit employees • employees leave • increase in labour turnover • pressure on wages • better opportunities • higher welfare • training and development opportunities
33. AO2 Application Context applied to the impact on FE's HRM [APP] (max 2 marks), including: • low morale • poor work-life balance • employees feel management do not prioritise their welfare • autocratic management style • trade unions • no training and development opportunities at FE • BL larger company • multinational companies
34. AO3 Analysis Limited analysis [AN] – candidate shows one link in the chain of analysis. Developed analysis [DEV] – candidate shows two or more links in the chain of analysis. • a competitor will need local workers so could recruit from FE's workforce • workers may join a competitor if higher wages/better conditions • FE may find increased costs (recruitment, increased wages) • pressure on managers so that they listen to employees • could delay product development if need to recruit replacement employees • lose the skills of current employees who could easily transfer to a competitor
35. A04 Evaluation Limited evaluation [EVAL] unsupported judgement and/or a weak attempt at evaluative comment Developed evaluation [E] supported judgement and/or reasonable evaluative comment Developed evaluation in context [EE] supported judgement in context and/or reasonable evaluative comment in context. A judgement whether operations does contribute to added value. • a justified judgement • identifying that the impact will ultimately depend on a number of unknowns (e.g. unemployment in country Z, BL could transfer employees from other countries) • could attract workers from other regions of country Z • discussion of negative v positive impacts • working conditions may not be better in BL • wages may be lower • BL may not want workers who want to unionise • likely success of BL in country Z unknown – risk to stability of employment • how skilled are the employees – may not need highly skilled workers Accept all valid responses.