B Bus Company plc operates in the private sector. It has recently been given the right to compete with the government-owned State Bus Company on bus routes in a major city.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2017). The mark or mark type is shown in brackets.

1. [1] Private limited company Partnership Sole trader/proprietor
2. [4] Businesses in the public sector are owned by the state/national government (1) while businesses in the private sector are owned by individuals or other private sector businesses (1) Profit is a major goal for a private sector business (1) while the welfare of its citizens is a major goal of a public sector business (1) The government provides all investment for public sector businesses (1) while there are many different sources of investment for private sector businesses, e.g. shares (1)
3. [4] Will be able to sell shares to the public (1) thus making it easier to raise finance (1) and it is easy to invest / buy and sell shares (1) through stock exchange (1) Shares are easily transferable (1), attracts investors to invest (1), a public limited company usually has many shareholders (1) from 2 to an unlimited number of shareholders (1) including employees (1) Limited liability (1) means that a shareholder can only lose the amount of his investment/not personal assets (1) making it attractive to invest in the company (1) Can take advantage of economies of scale (1), e.g. bulk buying / technical economies (1) It is a legal / separate entity / incorporated (1), separate from its directors/shareholders (1), can only be sued in its own name (1), has continuity of existence (1) even when the ownership of shares changes / shareholders die (1) Yes/generally it would be considered beneficial for any large business to be a public limited company (1), although there are problems, such as the expensive initial registration (1) and the closer scrutiny by the stock exchange authorities (1)
4. [6] Level 2 (4-6 marks) Has discussed the best way the State Bus Company should face competition and given reasoning Level 1 (1-3 marks) Has commented on the statement If a candidate has presented a one-sided argument, award 4 marks max. The State Bus Company has previously had a monopolistic situation but now must face competition from a private sector business This means that the competition will have marketing strategies and State Bus Company must also start marketing its services It could do this by advertising in the markets in which it operates. The advertising could be institutional promoting State Bus Company as a long established business owned ultimately by its customers, the tax-payers It could use sales promotion techniques, such as lower fares in off-peak times and season tickets for frequent travellers It must be aware of the competition and adjust its timetables to maximize its numbers of customers and hence its sales revenue
5. [3] Registered post / recorded delivery / special delivery (1): proof of posting (1) proof of delivery (1) tracking service online (1), better than post which has no proof of getting to destination (1) Ordinary post/letter post (1): can be sent first class / second class (1), cheaper than registered post (1) Express mail (1): fast (1), proof of delivery (1) Business reply/freepost (1): no need to pay for postage (1), has envelope included with business reply (1)
6. [2] If a driver has an accident (1) the driver could report it by phone to head office (1) If he is going to be late for a delivery (1) he could phone the customer to advise them (1) If his truck breaks down (1) the driver could phone for help/advice from head office / ask for another bus (1) In an emergency (1) there is no access to computer / needs immediate help (1) Needs clarification (1), e.g. for a job application (1)