Explain four business objectives Tokumbo could set for SA.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2022). The mark or mark type is shown in brackets.

1. Award 1 mark for each relevant objective (max 4).
2. Award a maximum of 1 additional mark for each explanation of the business objective in context.
3. Relevant business objectives might include:
4. • Profit – so Tokumbo will have the funds to pay for the development of his website
5. • Increase sales / number of customers – so revenue from safari tours increases
6. • Return on investment for the owner - so Tokumbo can gain a return on his investment in SA as he is a sole trader
7. • Growth / expansion of the business – so that the business can take advantage of the growth in the number of young people camping
8. • Market share – increased publicity and awareness for tourists visiting the country
9. • Survival – as SA is a new business and has only been operating for 2 years
10. • Provide services to the community
11. • Providing good customer service
12. • Reducing environmental impact
13. For example: Tokumbo will want to make a profit (1) as he has invested his own money into the sole trader business (app).
14. Application might include: safari holidays; increase in tourists from other countries; high income tourists; luxury safari holidays; 5 employees; only been operating for 2 years; sole trader; game reserve; camping / tent; wild animals; 4 safari guides; 4 safari vehicles; accommodation in local / luxury hotels; fuel.
15. Level 3: Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of the opportunities and threats. Well-justified conclusion. Candidates discussing the opportunities and threats in detail, in context and with a well-justified conclusion including why the alternative was rejected should be rewarded with the top marks in the band.
16. Level 2: Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of the opportunities or threats. Judgement with some justification / some evaluation of choice made. Candidates discussing the opportunities and threats in detail and applying them to the case should be rewarded with the top marks in the band.
17. Level 1: Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss opportunities and threats with little / no explanation. Simple judgement with limited justification / limited evaluation of choice made. Candidates outlining the opportunities and threats in context should be rewarded with the top marks in the band.
18. Relevant points might include:
19. Opportunities
20. • Websites can be used to promote SA and its holidays worldwide – reaches potential customers from other countries – cheaper than many other forms of promotion
21. • Bookings can be taken directly by SA over the internet - this means that intermediaries such as holiday companies are not required – SA profit margins are therefore not shared as it doesn't pay them a fee
22. • Tourists may be encouraged to purchase more additional services when booking SA holidays - easier to link through to other services
23. • It is easier for SA to book hotel rooms for guests - quicker and cheaper than other communication methods such as phone calls
24. • Easier to change prices if necessary than having to republish holiday brochures – reprints are expensive, and this makes it cheaper
25. Threats
26. • High levels of competition from many other safari businesses in country X and other countries that may also have websites – makes it harder to be the business tourists choose to book from
27. • Website design may not be clear if Tokumbo does not know how to do this – are likely to be incurred for paying an expert to set up the site and maintenance costs of up-dating the safari holiday site
28. • There is still no face-to-face contact with customers
29. • Customers may not be familiar with new businesses – less likely to buy if business not known
30. Conclusion: Justification might include:
31. • E-commerce will provide more opportunities than threats as the target customers of SA are tourists from other countries and having a website is an easy way to promote SA safari holidays to these customers rather than using intermediaries that may sell holidays from several other holiday businesses. There are many competitors but as long as SA can keep attracting customers using the internet then revenue will increase, and the threats are less of a concern
32. • E-commerce will provide more threats than opportunities as many competitors will also have websites and sell their safari holidays through online bookings. There is no guarantee that people searching for a holiday will find SA's website and they could easily find competitors' websites instead and hence not be aware of SA at all. Therefore, there is reduced revenue