Quality (AQA A Level Business): Exam Questions

Exam code: 7132

8 mins3 questions
1
1 mark

Statement 1: ‘A business might improve the quality of its product in order to make its demand more price inelastic.’

Statement 2: ‘A business might improve the quality of its product in order to achieve a competitive advantage.’

Read statements 1 and 2 and select the correct option from the following:

  • Statement 1 is true. Statement 2 is true.

  • Statement 1 is true. Statement 2 is false.

  • Statement 1 is false. Statement 2 is true.

  • Statement 1 is false. Statement 2 is false.

2
1 mark

A business decides to make increasing profits its main objective.

Is it inevitable that this business will need to improve its quality to achieve this objective? Justify your view.

3
6 marks

Case Study

Chillax Ltd

Chillax Ltd runs six luxury health spas in southern England. Health spas offer health and beauty treatments such as steam baths, exercise and massage. Chillax Ltd’s customers expect high levels of service.

The business focuses on quality. It emphasises the importance of getting the customer experience right. It feels this is more about how employees interact with customers than the facilities in each health spa. The quality of customer experience is monitored through frequent customer surveys using the Chillax App. The business regularly has positive reviews online.

Chillax Ltd invests heavily in training, consults regularly and provides frequent feedback to staff. It feels that its high level of employee engagement has many benefits and ultimately ensures happy customers.

Chillax Ltd is unusual in the Health and Beauty sector in that many businesses in that sector have very high rates of labour turnover averaging over 30%.

Table 2 Selected employee data for Chillax Ltd for 2020 (31 December 2020)

Number of employees on 1 January 2020

180

Employees leaving during the year

24

Employees staying all year

162

Analyse how Chillax Ltd benefits from its focus on quality.