Feb/March 2019

Anna and James have set up a business partnership. They run an ice cream shop on the main street in Capital city. The shop employs 3 part-time workers and provides high quality ice cream to a niche market. Anna and James collect feedback by getting customers to complete questionnaires. Customers dislike the long queues and poor customer service. Anna believes these issues are caused by the shop always being busy. James has suggested relocating to a larger shop in a different area of Capital city.

Market research

GXC makes car components in country X from imported raw materials. During this year, GXC has bought new machinery. As a result, 100 employees have been made redundant, which is 30% of the workforce. Several stakeholder groups are unhappy with this decision. GXC operates flow production and gains from economies of scale. It exports the components to car manufacturers in country Y. Country X’s currency has recently appreciated, and GXC’s Managing Director is concerned about this.

Costs, scale of production and break-even analysis

Sachin's company makes cricket bats for the mass market. Every two weeks he places an advert in a national newspaper. Since the business began two years ago, demand for the cricket bats has risen quickly. His 30 employees now make 3 million cricket bats a year. Table 1 gives a summary of the costs and selling price. Sachin is struggling to run the business alone. A friend has advised him to delegate some responsibilities, such as marketing and production decisions, to employees.

Costs, scale of production and break-even analysis

DGC is a public limited company. It has built a reputation for selling branded clothes and shoes of high quality to women. As a multinational business, it owns shops in 10 countries. In each shop, there is only a short chain of command between the shop manager and the sales employees. DGC plans to expand into country Z for the first time. It has already completed some secondary market research and discovered that country Z has cultural and social trends that differ from those in its current markets. The Managing Director believes DGC ought to open the shops in country Z as a franchise. By contrast, the Finance Director believes DGC should purchase its own shops by using an appropriate source of finance.

Business and the international economy

Identify and explain two ways a business plan could help Peter as he expands his business.

Motivating employees

Identify and explain two ways in which the results from the questions in Appendix 1 could influence Peter’s decisions about the new service.

Costs, scale of production and break-even analysis

Identify and explain two sales promotion methods Peter could use for the new service.

Marketing mix

Identify and explain how the following four changes could influence the success of the new business. The economic cycle in country Z moves from boom into recession. Government in country Z lowers income tax. New legal controls so all packaging for takeaways must be able to be recycled. New legal controls that all menus must contain full information on the ingredients used.

Business finance