← Applying business knowledge to a critical problem

The loop, twice per paper (every year)

Threat/opportunity → two solutions → how each works → justify which, with two reasons.

The exact shape of the marking schedule

  • (a)(i) Identify and explain a THREAT from the resource — the mechanism, and the measure it damages.
  • (a)(ii) Identify an OPPORTUNITY in the same situation — often the same change viewed the other way.
  • (b)(i) Identify and DESCRIBE two solutions — specific to this business.
  • (b)(ii) Explain how EACH addresses the problem, in its own paragraph.
  • (b)(iii) Justify with TWO distinct reasons which is more effective, using resource evidence.
  • Then parts (c) and (d) repeat the whole loop on a second problem.
Exam-style A new competitor enters, undercutting on price Two solutions, and which is more successful. SOLUTION 1 — loyalty programme: regular customers earn rewards, so switching costs them accumulated benefit; it protects the existing customer base cheaply and gives the business purchase data. SOLUTION 2 — differentiate on service and expertise: staff training and after-sales support give a reason to pay more; harder to copy, but slower and costlier to build. JUSTIFY (two reasons): differentiation is more successful because (1) it addresses WHY customers would leave rather than just rewarding them for staying, and (2) it cannot be copied by a competitor competing on price, whereas a loyalty scheme can be matched within weeks. ACKNOWLEDGE: it takes longer and costs more up front, so the loyalty programme may be needed as a short-term hold while it is built. ✓ Two solutions with mechanisms, two distinct reasons, resource evidence. The concession at the end is what pushes it to Excellence. ✕

One reason, twice

Two reasons must be genuinely different. "It is cheaper" and "it costs less" is one reason written twice, and it is marked as one. Aim for two different KINDS of reason — for example one about cost and one about how hard the response is to copy.

Two reasons — different KINDS, ready to pick from

  • Cost (cheaper to implement, or better long-term return)
  • Speed (faster to see results)
  • Difficulty to copy (harder for a rival to replicate)
  • Fit with the specific stakeholder or value named in the resource

Practice for this standard covers the whole topic — flashcards and quiz.