AS 91867 annotated exemplars

This annotated exemplar is intended for teacher use only. Annotated exemplars are extracts of student evidence, with commentary, that explain key parts of a standard. These help teachers make assessment judgements at the grade boundaries.

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For Excellence, the student needs to demonstrate comprehensive understanding of a primary industry business structure that best meets the strategic needs of a business.

This involves evaluating a primary industry business structure that best meets the strategic needs of a business. The evaluation needs to include consideration of the long and short-term implications of the selected business structure.

The student evaluated two business structures, a co-operative (1) and a limited liability company (2).

The student has considered short-term impacts or implications if Fonterra became a LLC structure: loss of support and suppliers, possible loss of domestic consumers, sales and profit (3). The student has explained possible backlash from farmers affecting several brands, loss of research and product development, and loss of income, as longer-term impacts or implications (4).

A co-operative business structure has been justified in terms of costs and benefits, and best meeting the strategic goals of Fonterra and dairy farmers (5).

For a more secure Excellence, the student should also consider the size and scope of the business, demonstrating further comprehensive understanding of LLCs (6). It is important to distinguish between a public company that could have 10,500 farmer shareholders and financial accountability to the shareholders and a private company. A private company would not be an appropriate alternative structure for Fonterra.

For Merit, the student needs to demonstrate in-depth understanding of a primary industry business structure that best meets the strategic needs of a business.

This involves giving a thorough explanation of a primary industry business structure that best meets the strategic needs of a business. A thorough explanation needs to include a recommendation and justification of the most relevant business structure.

The student has thoroughly explained two business structures, a co-operative and a limited liability company (1).

The student has recommended and justified a co-operative business structure as best meeting the strategic needs of Fonterra and dairy farmers (2).

The student has considered some short-term effects or implications of a co-operative for farmers: technical and expert support, improved quality and quantity of milk, farmers not having to compete with each other, and gaining the best price on the global market (3). This is evidence that approaches Excellence.

To reach Excellence, the student needs to evaluate the best business structure for Fonterra in terms of costs and benefits. For example, they could discuss distribution of profit in the two structures. Additionally, explanation of the long-term effects or implications of the recommended structure is needed to demonstrate a comprehensive understanding.

For Merit, the student needs to demonstrate in-depth understanding of a primary industry business structure that best meets the strategic needs of a business.

This involves giving a thorough explanation of a primary industry business structure that best meets the strategic needs of a business. To be considered thorough, an explanation needs to include a recommendation and justification of the most relevant business structure.

The student evaluated two business structures, a limited liability company (LLC) and a co-operative business structure.

The student has recommended a co-operative business structure as best meeting the strategic needs of Fonterra and dairy farmers (1).

The student has justified this recommendation by explaining the possible differences in pay-outs, financing set-up costs and equipment, milk production, quality assurance, availability of technical expertise, and strategic goals (2).

The student has started to explain some short and long-term impacts or implications like potential threats or competition from other LLCs, loss of mutual benefit, and possible problems with the amount of milk that would be picked up from farmers (3).

For a more secure Merit, the student could provide further explanation of the comparative characteristics of the two business structures. For example, the student should explain that, like a limited liability company, a co-operative is a legal entity separate from its shareholders, and that both structures offer shareholders limited liability for business debts (4).

Additionally, a key distinction between co-operatives and companies is tax on profit obligations, it is expected that the student would accurately explain the difference as part of a thorough explanation (5).

For Achieved, the student needs to demonstrate understanding of a primary industry business structure that best meets the strategic needs of a business.

This involves explaining a primary industry business structure that best meets the strategic needs of a business. The explanation needs to include comparison with another business structure and the impact of both structures on the business.

The student has compared two business structures for Fonterra, a limited liability company and a co-operative business structure.

The strategic goals of Fonterra as a co-operative structure have been explained as a point of difference (1).

Some characteristics of a limited liability company and co-operative business structure have been explained, demonstrating some misunderstanding about the distinctions between the two structures (2).

Some advantages and disadvantages or impacts of Fonterra becoming a limited liability structure have been compared with the current co-operative structure (3).

The student has recommended a co-operative business structure as best meeting the strategic needs of Fonterra, and dairy farmers, and partially justified why it is the most relevant business structure (4).

To reach Merit, the student needs to thoroughly explain the characteristics of the existing, and an alternative, business structure for Fonterra. For example, it is expected that dividends, limited liability and the decision-making process for both structures would be accurately explained.

For Achieved, the student needs to demonstrate understanding of a primary industry business structure that best meets the strategic needs of a business.

This involves explaining a primary industry business structure that best meets the strategic needs of a business. The explanation needs to include comparison with another business structure and the impact of both structures on the business.

The student has compared two business structures for Fonterra, a limited liability company and a co-operative business structure.

The history of Fonterra and strategic needs of Fonterra as a co-operative structure have been explained as a point of difference (1).

Some characteristics of a limited liability company and co-operative business structure have been briefly explained (2).

Some impacts of Fonterra becoming a limited liability company structure are compared with the current co-operative structure, but with some inaccuracy (3).

For a more secure Achieved, the student needs to provide further evidence of an accurate understanding of the characteristics of a limited liability company business structure. For example, the student could recognise that if Fonterra were restructured as a public company, its decisions would not be made by one person, and that governance of a public company is by an elected board of directors.

Additionally, a key difference between a co-operative and a company is tax on profits. It is expected that this would be discussed as part of demonstrating understanding of both business structures.

For Achieved, the student needs to demonstrate understanding of a primary industry business structure that best meets the strategic needs of a business.

This involves explaining a primary industry business structure that best meets the strategic needs of a business. The explanation needs to include comparison with another business structure and the impact of both structures on the business.

Some characteristics of a co-operative (1) and limited liability company business structure (2) have been briefly explained.

The student has explained why the co-operative structure is best for Fonterra (2).

To reach Achieved, the student needs to demonstrate further accurate understanding of the key differences between a co-operative and a public company business structure, such as decision-making, governance, risks and liability.