AQA
7131/2 AS Business Paper 2 May 2024
aq
, 7131/2 AS Business Paper 2
Business 2
Question Paper and
Mark Scheme
Merged
,AS
BUSINESS
Paper 2 Business 2
Insert
Source 1: Play Equipment Ltd
IB/G/Jun24/G4001/E7 7131/2
, 2
Play Equipment Ltd
Play Equipment Ltd (PE) is a UK-based manufacturer of playground equipment such as slides, 1
swings and climbing frames. PE Ltd makes and sells the equipment to business customers
such as theme parks, holiday parks and schools. PE Ltd uses a sales team to promote its
products to these business customers. PE Ltd has been running for 14 years. Until recently it
had high market share in this competitive market and was known for its excellent quality 5
equipment.
The operations manager believes that the raw materials supplier PE Ltd uses is to blame for its
recent loss of market share. PE Ltd has used the same supplier for the last 5 years. However,
in the last 18 months, there have been many faults reported with the raw materials. This has
resulted in complaints from some of the businesses that PE Ltd supplies. The operations 10
manager has returned the last shipment of raw materials used for the equipment, due to poor
quality. The costs of the raw materials have increased, and so have the storage costs. The
current supplier has not been able to offer just-in-time delivery. The operations manager thinks
PE Ltd needs to find a new supplier before the situation gets worse.
The marketing manager is worried about the brand image of PE Ltd. In the last 2 years, 15
PE Ltd has lost some of its brand loyalty. PE Ltd has faced tough competition from well-known
toy brands that operate with lower unit costs. The shareholders of PE Ltd have expressed a
desire to expand the markets in which the company sells. The shareholders want PE Ltd to
start targeting individual customers, such as families who are looking to put play equipment in
their homes and gardens. They have asked the managers of PE Ltd to undertake market 20
research into this potential market to gather relevant data. Many of the managers disagree with
this suggestion. Their intuition is to remain with the current market. However, the shareholders
have asked the managers to produce a decision tree to decide whether to target the new
market. If PE Ltd does decide to target individual customers directly this will significantly
increase the number of potential customers. The marketing manager will need to create a new 25
promotional mix. The finance manager would need a £50 000 loan to pay for the new
promotional mix.
PE Ltd uses a range of financial and non-financial methods of motivation. The employees
complete training every year to ensure they are aware of updates to machinery and processes.
PE Ltd offers all employees the opportunity to work in the different departments, and managers 30
use delegation to avoid employees becoming bored in their roles. The employees are paid
below the industry average wage, but they can earn bonuses for hitting monthly productivity
targets. Despite these incentives, labour turnover has increased from 10% to 35%. Employees
have left due to better wages and higher bonuses being offered by competitors. PE Ltd’s
employees have many skills which can be used in other industries and this makes them hard to 35
retain. It is difficult to recruit skilled employees due to lots of competition for workers in this
rapidly expanding market.
IB/G/G4001/7131/2/INS
7131/2 AS Business Paper 2 May 2024
aq
, 7131/2 AS Business Paper 2
Business 2
Question Paper and
Mark Scheme
Merged
,AS
BUSINESS
Paper 2 Business 2
Insert
Source 1: Play Equipment Ltd
IB/G/Jun24/G4001/E7 7131/2
, 2
Play Equipment Ltd
Play Equipment Ltd (PE) is a UK-based manufacturer of playground equipment such as slides, 1
swings and climbing frames. PE Ltd makes and sells the equipment to business customers
such as theme parks, holiday parks and schools. PE Ltd uses a sales team to promote its
products to these business customers. PE Ltd has been running for 14 years. Until recently it
had high market share in this competitive market and was known for its excellent quality 5
equipment.
The operations manager believes that the raw materials supplier PE Ltd uses is to blame for its
recent loss of market share. PE Ltd has used the same supplier for the last 5 years. However,
in the last 18 months, there have been many faults reported with the raw materials. This has
resulted in complaints from some of the businesses that PE Ltd supplies. The operations 10
manager has returned the last shipment of raw materials used for the equipment, due to poor
quality. The costs of the raw materials have increased, and so have the storage costs. The
current supplier has not been able to offer just-in-time delivery. The operations manager thinks
PE Ltd needs to find a new supplier before the situation gets worse.
The marketing manager is worried about the brand image of PE Ltd. In the last 2 years, 15
PE Ltd has lost some of its brand loyalty. PE Ltd has faced tough competition from well-known
toy brands that operate with lower unit costs. The shareholders of PE Ltd have expressed a
desire to expand the markets in which the company sells. The shareholders want PE Ltd to
start targeting individual customers, such as families who are looking to put play equipment in
their homes and gardens. They have asked the managers of PE Ltd to undertake market 20
research into this potential market to gather relevant data. Many of the managers disagree with
this suggestion. Their intuition is to remain with the current market. However, the shareholders
have asked the managers to produce a decision tree to decide whether to target the new
market. If PE Ltd does decide to target individual customers directly this will significantly
increase the number of potential customers. The marketing manager will need to create a new 25
promotional mix. The finance manager would need a £50 000 loan to pay for the new
promotional mix.
PE Ltd uses a range of financial and non-financial methods of motivation. The employees
complete training every year to ensure they are aware of updates to machinery and processes.
PE Ltd offers all employees the opportunity to work in the different departments, and managers 30
use delegation to avoid employees becoming bored in their roles. The employees are paid
below the industry average wage, but they can earn bonuses for hitting monthly productivity
targets. Despite these incentives, labour turnover has increased from 10% to 35%. Employees
have left due to better wages and higher bonuses being offered by competitors. PE Ltd’s
employees have many skills which can be used in other industries and this makes them hard to 35
retain. It is difficult to recruit skilled employees due to lots of competition for workers in this
rapidly expanding market.
IB/G/G4001/7131/2/INS
