Cambridge International AS & A Level

BUSINESS 9609/42
Paper 4 Business Strategy February/March 2023

1 hour 15 minutes

You must answer on the enclosed answer booklet.

* 8 8 4 0 2 3 1 0 2 7 *

You will need: Answer booklet (enclosed)

INSTRUCTIONS
● Answer all questions.
● Follow the instructions on the front cover of the answer booklet. If you need additional answer paper,
ask the invigilator for a continuation booklet.

INFORMATION
● The total mark for this paper is 40.
● The number of marks for each question or part question is shown in brackets [ ].

This document has 4 pages.

DC (CJ) 314959
© UCLES 2023 [Turn over
 2
B2B
-

service
Support 2U (S2U)
T ↑
S2U provides information technology (IT) support to small businesses based in country Z. Its customers
use IT, but they are not big enough to be able to afford their own IT support.

S2U was set up by Kareem, who is an IT engineer. When Kareem started the business he employed
three engineers. Now S2U employs over 50 engineers and has customers throughout country Z.

S2U’s services include:

-

2
• the creation and maintenance of business websites
• 24-hour telephone and internet support to report and fix IT problems
• remote and on-site installation of software.

Timeline of S2U

S2U is set up by Kareem as a private limited company.

2016 S2U quickly gains five customers through word-of-mouth promotion.

2017 Kareem produces a marketing plan for S2U (see Appendix 1).

Kareem becomes a well-known IT consultant on television (see Appendix 2).

2018
S2U reaches full capacity. Kareem plans rapid expansion.

2018–2021 S2U continues to expand as the brand becomes more well-known (see Appendix 3).

2021 S2U is converted to a public limited company.

Kareem leaves S2U to pursue a career in television.

2022 Ruhi, the Marketing Director, is promoted to Chief Executive Officer (CEO).
Sales growth starts to slow.

Developing a new business strategy

Ruhi was concerned about S2U’s recent sales performance. She asked an external management
consultancy to analyse the market. The consultancy produced a Porter’s five forces analysis (see
Appendix 4).

Ruhi is now developing a new business strategy to enable S2U to grow in the future.

© UCLES 2023 9609/42/F/M/23

 3

Appendix 1: Summary of Kareem’s 2017 marketing plan for S2U S-CCeSS

Objective – to grow the number of businesses using S2U’s services. -> increase salest
Resources – limited marketing budget, but one IT engineer has skills in designing online marketing.

Secondary research – 94% of businesses use IT systems, but only 57% of businesses have
specialist IT support.

Primary research – survey of businesses to identify why they do not currently use S2U’s services:

• have own IT support employees

• S2U is unknown, would prefer a more established brand SUCC2S3
• S2U’s prices are too high -

Planned marketing mix:

Product – 24-hour, 7-day-a-week, telephone and internet IT support services WSP

Price – dynamic pricing method

Promotion – sales promotion, direct promotion, digital promotion

Place – services offered direct to small businesses

Appendix 2: An extract from a 2018 S2U press release

Kareem is the ‘new face’ of daytime television as he becomes the IT expert on Channel 17’s morning
program. Kareem, Managing Director of Support 2U, will bring his expertise in solving IT problems onto
your television screens every week.

Appendix 3: Data about S2U between 2018 and 2021

2018 2021
Revenue $11m $100m 89mA
Profit margin 6% 2% 4%.t
Market share in country Z 5% 28%
IT engineers employed 20 50
Customer satisfaction 98% 72%
↓

© UCLES 2023 9609/42/F/M/23 [Turn over

 4

Appendix 4: Porter’s five forces analysis of the IT support industry

produced by the management consultancy for S2U

Bargaining power of suppliers

• Software suppliers have

monopoly power
• Hardware is a very
competitive market

Threat of new entrants

• Few barriers to entry

Threat of substitutes
• Price is more important
Intensity of
than brand loyalty to • Many substitutes
competitive
most customers
rivalry • Little differentiation
• S2U is market leader in between services
country Z
• Many international
competitors

Bargaining power of buyers

• Well-informed customers
• Highly price sensitive
• Growing market size

Answer both questions.

1 Evaluate the success of S2U’s marketing strategy between 2016 and 2022. [20]

2 Advise Ruhi on whether Porter’s five forces analysis is the most useful approach when developing
S2U’s new business strategy. [20]

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© UCLES 2023 9609/42/F/M/23

1 Evaluate the success of S2U’s marketing strategy between 2016
and 2022. [20]

referto theareketig
A
marketing strategy
comprehensive plan
how the will
be allocated
objectives and resources

to achieve these objectives.

The
marketing mix mentioned 2017
in
marketing
plan had a lotto do with
the outcomes
illustrated in Appendix 3. S2Us productwhich is

differentiated Atself
↑

IT assistance services has

from other providers by a Unique Selling Pointof
24
day a week telephone and internet
hour, I
assistance. It can be concluded thatSIU has been
very successful in
providing a
good qualityproduct
increasing but itcan be
judging by the revenues,
assumed thatwith
the
increase scale of
in operations
between fallen
2018 and 2021, ShUs
qualityhas
as the
consumer satisfaction
is reduced from 98%
to 72%. (Afull of26%) This isa very concerning
statistic and can lead reduction
to a in
marketshare the
in future the
and result in
business its valuable marketleadership
spot.
loosing
S2U has chosen to
go DynamicPricing
with
as far as
pricing decision is comcerned.
the
DynamicPricing is when the
business cons
tartly
changes the prices according to differentustomers
and differentconditions. This
pricing method is
for
pretty appropriate a service based b2b
business like 325 which can
charge customers
according to size of
their needs scale.
and their
of evidentinthe
The success this
strategy is

increase in STUs sales from 2018 to 2021

which is over 805%.

SIU has used a combination

of lime
above the
and below the
line promotion as can
be seen

Appendix
in 1.
Usually this
isthe wisest
approach. It can be saidthatSCUS
promotion
strategy is successful as sales has
the

exponehall 9
reanalette
gatewit
-

has increased.
of these positive outcomes have
something
to as
with
Kareen'sappearances on TV because as soon
he disassociated with SLU, the sales
have started to fall as reported by Ruhi. So it
can be concluded thatsaw promotion policies
are fruitful until2021 with thefuture being
recertain.

As SIU is a B2B business. It logical

is thatthe
distribution channel is from producer to consumer.

Also as almostas physical

there is product involved
and
there
are
virtually no
deniery, storage,
handling costs. This probably has led to SGUS
profits increasing over time
as sales revence
the
increases. So in a
way placementdecision
the
 has also contributed to 32U's
marketingsuccess.
SIU has also
growing demand by
tackled the

employing more technicians. Although sales and

profits have increased. (Profits have increased from that
$ 0.66 million to $2 millisw) Itis
alarming the

Net-Profit fallen
margin
has
byof 4% 2021.
in

while this could be disconomies scale buti t is

because "incicasions
a
huge probability
t hatthis is
1
laboraxcosts. In this sense the
strategy has been unsuccesful
There are some factors which
indicate
t hat
ser's marketing strategy is notsuccessful. To
the
measure a
marketing stratergy's Success S

availibility ofmarketbudgetand the time frame

is vital. Withoutthe knowledge of exact budget
figures it difficultto know which
is the
company
has overspect underspect withouta time constrant
or

itis impossible to find outif projectwas

the
completed tim
&

in

After considering all variables and

the factors it
can

be evaluated thatS25's
marketing has indeed been

successful because ithas surpassed initial

Kareems
objective
of "to buyers (In other
of 1)
number
the
grow
words: to increase market share). S2U now
leads the
It
services
provider market in
country
2 a market
with
share of
28% in 2021. Howeverthe success of
S IU
terms of
in
marketing strategy has a huge
mark
question over it. Itis difficultto concluck
 thatSIV'ssuccess and growth because of
was a
good
marketing strategy or simply because Kareem became
decline
big
in showbizz
the
industry. The in sales
indicate rapid
thatthe
growth
was
highly dependent
Kareen celebritystatus and hat Kareem
-

on now

is
gone, S22'sfuture success is
of
in
question.
However in time
the period 2016 to 2022 it
the
can be said thatsaw has come a
long way in

market
It and credithas to be to the
some
given
but, itisessential for Ruhito
marketingthestrategy
for the of
adapt business
unavailibility Kareen

and make a new

marketing strategy for the period
over 2022. Ruhishould aim to
separate ser from
Kareens fame and make a
separate brand
identity.