SBG makes a range of products including specialist paints. It has 6 factories and 700 employees. All SBG's employees are encouraged to be involved in decision-making. SBG's products are exported to 16 countries using wholesalers as its main channel of distribution. The Managing Director said: 'Our objectives are to grow and make a profit.' He also recognises that all business activity creates externalities for SBG's stakeholder groups.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2021). The mark or mark type is shown in brackets.

1. [2] Third party effects arising from production or consumption of goods and services for which no appropriate compensation is paid
2. [2] Advantages or disadvantages that fall on third parties that are not directly involved in the production process
3. [2] The effect of business activities on unrelated parties
4. [1] effect on third party or society
5. [2] Any person or group with a (direct) interest in the performance/activities of a business
6. [1] An individual or group which has an interest in a business
7. [1] Someone affected by what a business does
8. [1] Anybody inside or outside the business who cares about its operations
9. [1] Source of finance [k] as its objective is to grow [app]
10. [1] To ensure survival of the business / avoid closure [K] protecting jobs of its 700 employees [app]
11. [1] Measure/indicator of success of the business [k] in each of the 16 countries [app]
12. [1] Measures the performance of managers [k] in the paint business [app]
13. [1] Reward for risk-taking [k]
14. [1] Decide whether to continue making or selling a product [k]
15. [1] Attract investors [k]
16. [1] Delegation [k] as workers in the 6 factories [app] will make the decisions themselves [an]
17. [1] Democratic leadership [k] encourages employees to offer ideas [an] about developing new products [app]
18. [1] Encourage team working / kaizen [k] for its 700 employees [app]
19. [1] Meet with employees/surveys [k]
20. [1] Transport costs to the retailer is paid for by the wholesaler [k]
21. [1] so reduces costs to manufacturer [an]
22. [1] Can help sell goods to a larger market [k]
23. [1] leading to higher revenue [an]
24. [1] Wholesalers buy in large quantities [k]
25. [1] reducing distribution costs [an]
26. [1] Wholesalers will advertise and promote products [k]
27. [1] Another middleman will take some of the profit [k]
28. [1] Producer loses some control over the marketing [k]
29. [1] Selling direct to customers [k]
30. [1] ensures more control over the marketing mix [an]
31. [1] Using a retailer [k]
32. [1] Wholesalers will pay slightly lower prices [k] which will reduce the businesses profit margin. [an]
33. [1] By selling direct to customers [k] this will give the firm more control over marketing. [an]
34. [1] Selling directly to customers maybe the best way to protect its brand image. [eval]
35. [1] For a large business image is likely to have a big impact on in their sales. [eval]