Alkin is a multinational company. It manufactures breakfast food products including many leading brands of cereal. Alkin plans to start selling in country Z, which is a fast-growing market. Alkin plans to form a joint venture with a local business, based in country Z. ‘Effective communication will be important to our success but I think there are many advantages in expanding this way' said Alkin's Managing Director. The Government of country Z is worried about the effect of multinational companies like Alkin on consumers.

Mark scheme

Marking points from the official mark scheme (May/June 2015). The mark or mark type is shown in brackets.

1. [2] Clear Understanding – a business with factories, production or service operations in more than one country OR a business with production or service operation in another country outside its normal area of operation
2. [1] Some Understanding - e.g. has businesses everywhere / works or operates in more than one country
3. Do not accept 'sells in more than one country' as could equally apply to exporter
4. Do not accept examples
5. [2] Clear Understanding: (unique) name, feature or design / logo or image of a product or business [1] that distinguishes it from other products or businesses [1]
6. [1] Some Understanding: e.g. something which makes a product 'stand out' [1]
7. Do not accept examples
8. [2 x 1] Knowledge – award 1 mark for each relevant reason
9. [2 x 1] Application - award 1 mark for each relevant explanation in context of this business
10. Relevant points might include: Avoid diseconomies of scale [k] as communication can be difficult in a multinational [app]
11. Everyone understands objectives [k] so no conflict in joint venture [app]
12. avoid language issues / misunderstandings [k] particularly when start selling in country Z [app]
13. Different cultures / management styles [k] so able to work with the local business [app]
14. Better / faster decision making [k] so able to quickly react to changing tastes / flavours [app]
15. Able to exchange ideas [k]
16. Better relations with suppliers [k]
17. Inform customers about its products [k] so that customers are interested in their food [app]
18. Note: Points can relate to either existing business or planned joint venture
19. Do not accept 'improves motivation' unless explains the impact on this business
20. Application marks may be awarded for appropriate use of the following: joint venture, country Z or countries, multinational company, breakfast cereals or food, expansion
21. [2 x 1] Knowledge – identification of relevant advantage [max 2]
22. [2 x 1] Application – award 1 mark for each relevant reference made to this business
23. [2 x 1] Analysis – award 1 mark for each relevant explanation
24. Relevant points might include: Access to new markets [k] increasing brand awareness [an] of its range of cereals [app]
25. Access to local expertise / ideas [k] e.g. cultural knowledge as tastes differ [app] so better able to meet customer requirements / ensure sales [an]
26. Wider range of contacts / better access to resources [k] so might be able to obtain cheaper ingredients [app]
27. Increased capital / share costs [k] so less risk [an]
28. Increased capacity [k] so can meet expected growth in demand [app] without affecting supply for other markets [an]
29. Way to avoid government restrictions [k] so able to maximise potential sales [an]
30. Less competition [k] as working with local business [app] so one less rival [an]
31. Economies of scale [k]
32. Build reputation [k]
33. Application marks may be awarded for appropriate use of the following: multinational company, breakfast cereals or food, fast-growing market, local business
34. [1] Knowledge award 1 mark for identification of relevant issue(s)
35. Must relate to consumers
36. [1] Application – award 1 mark if relevant reference made to this business
37. [2] Analysis – award up to 2 marks for relevant development of point(s)
38. [2] Evaluation – justified decision made as to whether the Government in country Z is right to be concerned about the effect of multinational companies such as Alkin on consumers
39. Candidate's final decision can be either for or against the statement
40. Relevant points might include: Access to international brands [k] so more consumer choice [an] so better able to find cereal that suits their individual needs [app]
41. Increased competition [k] as local businesses have to respond [an] so lower prices [an]
42. Fewer choices [k] so smaller producers forced out of business [an] so prices may increase [an]
43. Minimum standard [k] as goods same all over the world [an]
44. help meet customers demand [k] in fast growing market [app] as able to supply more [an]
45. Application marks may be awarded for appropriate use of the following: food, cereals, brands, fast growing market