Selecting a Strategy (AQA A Level Business): Exam Questions

Source B: Draycote Soap Co

Draycote Soap Co Limited makes solid shampoo bars, conditioner bars and soaps by hand in a workshop near Rugby, Warwickshire. It was founded in 2016 by Hannah Okafor, who began making soap at her kitchen table; she remains its Managing Director and sole owner. The company employs 14 people. Its products contain no palm oil, are sold without any plastic packaging, and have an average customer rating of 4.8 out of 5 from more than 6 000 reviews.

The company sells through five channels:

• Its own website, where a shampoo bar costs £8.50.

• Amazon.

• About 240 independent shops, many of which specialise in reducing waste.

• Markets and fairs.

• TikTok Shop, since 2024/25, where people who post videos of its products earn a commission on each sale they generate.

All of its staff are paid at least the Real Living Wage, a voluntary rate set by the Living Wage Foundation which is higher than the legal minimum wage. Several large distribution warehouses close to the workshop also recruit local staff. Every product is packed in a card box which costs 11p, compared with about 4p for a plastic wrapper.

Supermarkets have begun to sell their own-label shampoo bars, priced from about £3. Lush, a much larger business with its own shops, has sold solid shampoo bars for many years. In 2026 a national supermarket chain offered Draycote Soap Co a three-year contract to make shampoo bars to be sold under the supermarket's own label.

Source: Draycote Soap Co

Appendix E: Draycote Soap Co selected data

Source: Draycote Soap Co

Appendix G: The supermarket's offer

Source: Draycote Soap Co

Assess whether accepting the supermarket's offer is likely to improve Draycote Soap Co's long-term profit.

Calculate the contribution Draycote Soap Co would earn each year from the contract to support your answer.

Source A: Mitie

Mitie Group plc was founded in 1987 and is listed on the London Stock Exchange. It is the UK's leading facilities management company, employing 84 000 colleagues who clean, guard, maintain and upgrade buildings for customers such as the Home Office, Transport for London, Asda and GSK.

Mitie's strategic plan for the three years to March 2027 aims to move it from facilities management, where UK market growth is about 2-3% a year, into higher-margin work: Facilities Transformation projects, such as building upgrades, data centres and decarbonisation; and Facilities Compliance, such as fire and security systems that buildings must have by law. In August 2025 it bought Marlowe, a compliance business, for about £350 million in cash and shares.

In the year to 31 March 2026 revenue rose by 10.5% to £5 619 million, including 5.3% organic growth. Costs were increased by higher employers' National Insurance contributions and the loss of two public sector contracts.

Mitie describes itself as "technology-led" and has launched a programme to "re-imagine and optimise" its internal workflows and customer services through agentic AI: AI systems that can carry out tasks with little human input. Its Chief Executive, Phil Bentley, intends to retire at the end of the strategic plan, once a successor is in place.

Source: Mitie Group plc, results for the 12 months to 31 March 2026

Appendix A: Mitie financial data

• Other items in 2026 included £42m of amortisation, £29m of costs to deliver margin enhancement initiatives, including redundancy costs, and £22m of Marlowe transaction and integration costs.

• Shareholder returns. About £60m of shares were bought back in 2026, and £100m of buybacks are planned for the year to March 2027. Shares were also issued to help pay for Marlowe.

Source: Mitie Group plc

Appendix B: Strategy and the three pillars

• Targets for the year to March 2027. High single-digit annual revenue growth; operating margin of at least 5%; free cash flow of £150m; return on invested capital above 20%. The operating margin was 5.3% in the second half of the year to March 2026.

• Marlowe. Added £208m of revenue in its first eight months; Mitie and Marlowe's combined compliance businesses have about £0.5bn of annual revenue. Cost savings of £7m in the first year, from merging alarm-monitoring centres, leaving 15 Marlowe properties and moving payroll and purchasing onto Mitie's systems; at least £30m expected by March 2028. Some revenue was lost in the first months after the deal, as competitors that had used Marlowe moved their work away.

• Growth with existing customers. Mitie provides integrated facilities management to only about 40% of its largest contracts, and about 80% of Transformation projects are for existing customers.

• Contracts. Renewal rate 84% (2025: 59%; long-term average about 90%). Order book £16.3bn (2025: £15.4bn).

Source: Analyst, using Mitie Group plc

Assess whether moving into Facilities Transformation and Facilities Compliance is the right strategic direction for Mitie.

Calculate Mitie's operating profit margin in the year to 31 March 2025 to support your answer. Give your answer to one decimal place.

Source A: JD Sports

JD Sports Fashion plc, founded in 1981 in Bury, Greater Manchester, is listed on the London Stock Exchange. It sells trainers, clothing and accessories from brands such as Nike and Adidas, and some own-brand products, through 4 811 stores in 36 countries and online. Its shop names include JD, Size?, Hibbett, Finish Line, Shoe Palace, Courir and Go Outdoors.

Online made up 20% of sales in the half year to August 2026. Its JD STATUS loyalty programme has more than 10 million active members. In 2026 JD became one of the first US retailers to let customers buy its products and pay directly within an AI platform.

In July 2024 JD bought Hibbett, a US chain of about 1 000 stores, funded mainly by a $1 billion loan, and in November 2024 the French chain Courir. It is converting many of its US stores that trade as Finish Line to the JD name. It follows a "fewer, bigger, better" approach to its UK stores, and in 2026 JD Germany was reduced from 91 to 62 stores.

In the year to 31 January 2026 sales rose 10.5% to £12 662 million. Organic sales, which exclude acquisitions, rose 2.1%, and like-for-like sales, from stores and websites open in both years, fell 2.1%. Free cash flow rose. JD describes its market as "highly promotional".

Its medium-term priorities are sales growth ahead of its markets, a rising operating margin and strong free cash flow. It aims to generate more than £1.4 billion of free cash flow over the three years to January 2028.

Source: JD Sports Fashion plc, results for the year to 31 January 2026 and the half year to 1 August 2026

Appendix A: JD Sports financial data

• Prices. JD made "controlled price investments", or price cuts, particularly online; their cost to gross margin was offset by higher marketing contributions from brands.

• Shareholders. A £200m share buyback each year, alongside the 20% higher dividend.

• Half year to 1 August 2026. Sales £5 899m (2025: £5 940m); profit before tax and adjusting items £282m (2025: £351m); like-for-like sales down 2.8%. Guidance for profit before tax and adjusting items for the year to January 2027 was cut from £750m-£850m to £700m-£800m.

Source: JD Sports Fashion plc

Appendix C: Strategy, technology and customers

• Five priorities for 2026/27. A broader product range, including own brands; store productivity and optimisation; completing new e-commerce platforms worldwide; "accelerating AI adoption"; and using data to personalise marketing.

• Online. 20% of sales in the half year to August 2026 (2025: 19%). Organic online sales grew 12.2% in North America and 3.8% in Europe in the year to January 2026. New e-commerce platforms went live in North America, South-East Asia, Italy, and the UK and Ireland.

• JD STATUS. In the US, 5.7m active members made about 40% of JD and Finish Line's sales across stores and online, spending 21% more than non-members. In the UK and Europe, 3.7m members made about a third of sales, spending 25% more.

• Products. Apparel and accessories reached 36% of sales; footwear sales were weaker because of the brands' product cycles, and JD describes the market as "highly promotional".

• Operations. Automation was introduced at JD's distribution centre in Heerlen, the Netherlands.

• Market. JD expects "muted market growth" and cites consumer cost-of-living pressures.

Source: Analyst, using JD Sports Fashion plc

Assess whether cutting prices to protect sales is the right strategy for JD Sports.

Calculate JD Sports' operating margin before adjusting items in the year to 31 January 2026 to support your answer. Give your answer to one decimal place.

Source A: ITV

ITV plc is a UK broadcaster and programme maker listed on the London Stock Exchange. It has two divisions:

• Media & Entertainment (M&E) runs ITV1, ITV2 and other channels and the streaming service ITVX, and earns most of its income from advertising.

• ITV Studios makes and sells programmes, such as Coronation Street, Emmerdale and Love Island, to ITV and to other broadcasters and streaming services around the world.

ITV follows its "More Than TV" strategy, which has three parts: expanding ITV Studios, "supercharging" streaming and optimising broadcast television. In 2025 ITV made £63 million of permanent cost savings through technology, organisational redesign and growing use of AI.

In 2025 total revenue was £4 121 million, almost unchanged on 2024. The company faces two main pressures:

• Viewing. ITV says that "linear viewing continues to decline, particularly among younger audiences".

• Advertising. Total advertising revenue fell 5% in 2025. Digital revenue, mainly from ITVX, rose 10% to £614 million, but most advertising revenue still comes from the broadcast channels.

On 6 July 2026 ITV agreed to sell M&E, including its channels, ITVX and the Channel 3 licences, to Sky for up to £1.6 billion. ITV Studios would remain a separate company listed in London. The sale must be approved by regulators, including the Competition and Markets Authority. ITV and Sky argue that, including online advertising, they would have about 20% of UK advertising spending; on a television-only measure the share would be much higher. The sale is expected to complete in the second half of 2027.

Source: ITV plc, results for 2025 and the first half of 2026, and announcement of 6 July 2026

Appendix A: ITV financial data

Adjusted EBITA is profit before interest, tax, amortisation and one-off items.

Source: ITV plc

Appendix B: Viewers, streaming and technology

• Digital target. In 2022 ITV set a target of £750m of digital revenue. After deciding to give less priority to paid subscriptions, it says reaching it "will take slightly longer".

• YouTube. ITV shows its programmes on YouTube; over 40% of the viewing of ITV content on YouTube is by people under 35.

• ITV Studios. 59% of its revenue comes from outside the UK.

• Costs. £63m of permanent cost savings in 2025, and £253m since 2019, through technology, organisational redesign and growing use of AI; a further £20m is planned for 2026.

Source: Analyst, using ITV plc

Assess whether ITV Studios is in a stronger strategic position than ITV's Media & Entertainment business.

Calculate the adjusted EBITA margin of ITV's Media & Entertainment business in 2025 to support your answer. Give your answer to one decimal place.

Source B: Macknade

Macknade is a family-owned food hall on the edge of Faversham, Kent, on the site of a farm the Neame family began farming in 1847. The company, Macknade Fine Foods Ltd, employed an average of 82 people in the year to 31 March 2025.

In 1979 Patricia Neame and her husband Renato Cuomo, who was born on the Italian island of Ischia, opened a pick-your-own business on the farm. In 2001 the family stopped farming to concentrate on retail. Their son, Stefano Cuomo, the sixth generation to run the business, became managing director in 2013 and later Chief Executive.

The seven-acre site is dominated by a 10 000 square foot food hall, which sells:

• local and Mediterranean produce

• more than 100 cheeses

• meat from its own butchery, which opened in 2016 and buys whole carcasses from farms using regenerative "Pasture for Life" methods

The site also has a café and an outdoor food village of street-food traders. Other businesses rent space on the site, including a vet, a fitness studio and a sauna.

In 2021 Macknade's managing director said that "community is at our core". Its Chief Executive has described a shopper with a "dual shopping list", who buys some items in supermarkets and others from independent shops.

In 2020 Macknade opened a second shop, in Ashford. Its website now lists only the Faversham site.

Source: Macknade, Macknade Fine Foods Ltd accounts and press interviews

Appendix D: Macknade Fine Foods Ltd balance sheet data

• In the year to 31 March 2025 Macknade spent £107 559 on new fixed assets, including property improvements, equipment and fixtures, and charged £59 714 of depreciation.

• As a small company, Macknade is not required to publish its profit and loss account, and does not.

Source: Macknade Fine Foods Ltd

Appendix E: The Faversham site

• The site also offers an online shop for hampers and gift boxes, events, venue hire and catering.

• Macknade won a Farm Shop & Deli Retailer Award in 2023.

Source: Macknade and press reports

Assess whether developing its Faversham site as a destination is the right strategy for Macknade.

Calculate Macknade's acid test ratio at 31 March 2025 to support your answer. Give your answer to two decimal places.

Source B: Royal Shakespeare Company

The Royal Shakespeare Company (RSC) is a registered charity based in Stratford-upon-Avon, the town where Shakespeare was born. Its Co-Artistic Directors are Daniel Evans and Tamara Harvey. Its mission is to "redefine how Shakespeare and great story-telling connects us, creates opportunities and brings joy".

The RSC performs in three theatres in Stratford, transfers productions to London, tours the UK and abroad, and works with schools nationwide. It also earns income from licensing its productions, including the musical Matilda, which has had more than 5 000 performances in London since 2011 and began a UK tour in October 2025.

Its income comes from ticket sales, an annual grant from Arts Council England, Theatre Tax Relief, donations, catering and retail.

In 2024/25 the RSC sold more than 25 000 tickets at £25 or less, and in Stratford it sold 77% of its seats but achieved 64% of its potential ticket income. It sold more than 23 000 tickets at £10 to young people aged 14 to 25, in a partnership with the social media company TikTok. Linear television viewing is declining, particularly among younger audiences.

The RSC faces two pressures:

• Income. In the year to 31 March 2025 income fell from £92.1 million to £82.0 million, partly because the previous year's income from Matilda and other productions was not repeated, and spending exceeded income.

• Audiences. The RSC sees cost-of-living pressures as a risk to audience levels.

In 2025 it announced plans to reduce its workforce by 11%, first through voluntary redundancy, to close a shortfall of about £5 million.

Source: Royal Shakespeare Company, Report and Financial Statements for the year ended 31 March 2025, and press reports

Appendix D: RSC financial data

• Free reserves are money not tied up in buildings or given for a particular purpose.

• In 2021 the RSC borrowed £19.4m from the government's Culture Recovery Fund for 20 years at 2%; repayments of about £1.5m a year began in February 2025 and run to 2041.

Source: Royal Shakespeare Company

Appendix E: Audiences and productions

• 2024/25 season. 17 plays on four stages in Stratford; 68% of actors made their RSC debut; more than 25 000 tickets sold at £25 or less. Productions transferred to London theatres, and one toured to Chicago.

• Matilda. More than 5 000 performances in London since 2011; a UK tour began in October 2025.

• Theatre Tax Relief. Worth £8.1m in 2024/25; the rates fell by 5 percentage points from 1 April 2025.

• Estate. Spending on buildings and equipment was £4.2m (2023/24: £1.6m); the RSC describes its estate as "a major drain on our resources".

Source: Royal Shakespeare Company

Assess whether the RSC should rely more on commercial activities, such as catering, retail and licensing, to fund its work.

Source A: Burberry

Burberry Group plc is a British luxury fashion brand, headquartered in London and listed on the London Stock Exchange, where it is a member of the FTSE 100. It was founded in 1856 by Thomas Burberry, whose gabardine fabric and trench coat became the basis of the brand. It sells mainly through its own stores, of which there were 410 at 28 March 2026, and online. It also sells to other retailers and earns income from licences.

In the 52 weeks to 29 March 2025 Burberry's comparable store sales fell by 12% and its adjusted operating profit fell to £26 million. Joshua Schulman, who became Chief Executive in July 2024, launched a strategy called Burberry Forward in November 2024. Its aims include restoring the brand's cultural relevance and asserting its authority in outerwear and scarves before extending that success to other categories.

In the 52 weeks to 28 March 2026 Burberry's revenue was £2 420 million, compared with £2 461 million the year before, while comparable store sales rose by 2% and adjusted operating profit rose to £160 million. The Chief Executive described the year as "a meaningful inflection point". During the year the company:

• achieved savings in operating costs of £80 million, while continuing to invest in marketing;

• spent £45 million on restructuring, mainly on redundancies and consultancy;

• opened 200 scarf bars in its stores;

• increased e-commerce sales by a percentage in the high teens;

• opened 9 stores and closed 21.

Outerwear sold better than other categories in every region, scarves grew throughout the year, and sales of leather goods improved in the second half.

Sales growth differed between regions. In Europe, the Middle East, India and Africa, sales were held back by a fall in tourist numbers. In Japan, sales fell by 6% in the final quarter as fewer visitors arrived, while South Korea grew by 13%, helped by visitors from China. In Greater China and the Americas, sales in the final quarter grew by 10%, driven by local customers.

For the year to March 2027 Burberry expects to increase both its revenue and its profit margin, but says it is mindful of the uncertain economic and political environment.

Source: Burberry Group plc, Preliminary Results, 14 May 2026

Appendix A: Burberry selected data

The gross margin in the year to March 2026 was helped by better sales at full price and by recovery from the clearance of excess inventory in the previous year.

Source: Burberry Group plc

Appendix B: Comparable store sales by region, year to 28 March 2026

Change in comparable store sales on the same quarter a year earlier

• EMEIA: the fall in Q4 reflected fewer tourists in the region and conflict in the Middle East towards the end of the quarter.

• Americas and Greater China: growth in Q4 was driven by spending by local customers.

• Asia Pacific: South Korea grew 13% in Q4, helped by visitors from China; Japan fell 6% as fewer visitors arrived.

Source: Burberry Group plc

Appendix C: Burberry Forward and the year ahead

• In stores. 200 scarf bars opened in FY26. "Polo galleries" and "trench destinations" are being introduced in FY27 to encourage customers to buy across categories.

• Online. E-commerce sales grew by a percentage in the high teens, helped by an improved website.

• Costs. Savings of £80 million were achieved in FY26; annual savings are expected to reach £100 million in FY27. The company continued to invest in marketing.

• Expectations for FY27. Growth in revenue and in profit margin; store space broadly unchanged; sales to other retailers expected to grow by a mid-single-digit percentage in the first half; capital spending of about £120 million.

• Risks. The company is mindful of the uncertain geopolitical and economic environment and its possible effect on consumer confidence.

• Board. The Chair will retire in November 2026 and be succeeded by a new Chair who joins the Board in July 2026.

Source: Analyst, using Burberry Group plc

Burberry has asserted its authority in outerwear and scarves, and says it is extending this success to other categories.

Evaluate whether Burberry should focus on selling more outerwear and scarves or on growing other categories, such as leather goods.

Source A: ITV

ITV plc is a UK broadcaster and programme maker listed on the London Stock Exchange. It has two divisions:

• Media & Entertainment (M&E) runs ITV1, ITV2 and other channels and the streaming service ITVX, and earns most of its income from advertising.

• ITV Studios makes and sells programmes, such as Coronation Street, Emmerdale and Love Island, to ITV and to other broadcasters and streaming services around the world.

ITV follows its "More Than TV" strategy, which has three parts: expanding ITV Studios, "supercharging" streaming and optimising broadcast television. In 2025 ITV made £63 million of permanent cost savings through technology, organisational redesign and growing use of AI.

In 2025 total revenue was £4 121 million, almost unchanged on 2024. The company faces two main pressures:

• Viewing. ITV says that "linear viewing continues to decline, particularly among younger audiences".

• Advertising. Total advertising revenue fell 5% in 2025. Digital revenue, mainly from ITVX, rose 10% to £614 million, but most advertising revenue still comes from the broadcast channels.

On 6 July 2026 ITV agreed to sell M&E, including its channels, ITVX and the Channel 3 licences, to Sky for up to £1.6 billion. ITV Studios would remain a separate company listed in London. The sale must be approved by regulators, including the Competition and Markets Authority. ITV and Sky argue that, including online advertising, they would have about 20% of UK advertising spending; on a television-only measure the share would be much higher. The sale is expected to complete in the second half of 2027.

Source: ITV plc, results for 2025 and the first half of 2026, and announcement of 6 July 2026

Appendix A: ITV financial data

Adjusted EBITA is profit before interest, tax, amortisation and one-off items.

Source: ITV plc

Appendix B: Viewers, streaming and technology

• Digital target. In 2022 ITV set a target of £750m of digital revenue. After deciding to give less priority to paid subscriptions, it says reaching it "will take slightly longer".

• YouTube. ITV shows its programmes on YouTube; over 40% of the viewing of ITV content on YouTube is by people under 35.

• ITV Studios. 59% of its revenue comes from outside the UK.

• Costs. £63m of permanent cost savings in 2025, and £253m since 2019, through technology, organisational redesign and growing use of AI; a further £20m is planned for 2026.

Source: Analyst, using ITV plc

Appendix C: The sale to Sky

• Price. Up to £1.6bn: £1.2bn in cash, Sky's Love Productions (maker of The Great British Bake Off) valued at £200m, and up to £200m more depending on advertising revenue in 2027.

• What Sky would buy. ITV's channels, ITVX, the Channel 3 licences to 2034, ITV Sport and a 20% stake in ITN, which makes ITV News.

• Shareholders. About £950m, or 25p a share, would be returned to shareholders, after transaction and separation costs of about £185m.

• ITV Studios. Would become "a distinctive pure-play global content business", with a minimum of £2.1bn of programme spending committed by ITV M&E and Sky over 2028-2032.

• Public service broadcasting. ITV's duties as a public service broadcaster, "including nations, regional and national news", continue under the Channel 3 licences, which Sky would take over.

• Regulators. The Competition and Markets Authority invited comments in July and August 2026. ITV and Sky argue that, including online advertising, they would have about 20% of UK advertising spending; on a television-only measure the share would be much higher.

• Views. Chief Executive Carolyn McCall: Sky "will be a strong and responsible custodian" of ITV M&E. Chair Andrew Cosslett: the deal creates "a UK champion with the scale and resources to better compete with global streaming platforms".

Source: Analyst, using ITV plc, the Competition and Markets Authority and press reports

ITV has agreed to sell its Media & Entertainment business to Sky. The sale is not expected to complete until the second half of 2027.

Evaluate whether ITV should complete the sale or keep its Media & Entertainment business and ITV Studios together.

Source A: JD Sports

JD Sports Fashion plc, founded in 1981 in Bury, Greater Manchester, is listed on the London Stock Exchange. It sells trainers, clothing and accessories from brands such as Nike and Adidas, and some own-brand products, through 4 811 stores in 36 countries and online. Its shop names include JD, Size?, Hibbett, Finish Line, Shoe Palace, Courir and Go Outdoors.

Online made up 20% of sales in the half year to August 2026. Its JD STATUS loyalty programme has more than 10 million active members. In 2026 JD became one of the first US retailers to let customers buy its products and pay directly within an AI platform.

In July 2024 JD bought Hibbett, a US chain of about 1 000 stores, funded mainly by a $1 billion loan, and in November 2024 the French chain Courir. It is converting many of its US stores that trade as Finish Line to the JD name. It follows a "fewer, bigger, better" approach to its UK stores, and in 2026 JD Germany was reduced from 91 to 62 stores.

In the year to 31 January 2026 sales rose 10.5% to £12 662 million. Organic sales, which exclude acquisitions, rose 2.1%, and like-for-like sales, from stores and websites open in both years, fell 2.1%. Free cash flow rose. JD describes its market as "highly promotional".

Its medium-term priorities are sales growth ahead of its markets, a rising operating margin and strong free cash flow. It aims to generate more than £1.4 billion of free cash flow over the three years to January 2028.

Source: JD Sports Fashion plc, results for the year to 31 January 2026 and the half year to 1 August 2026

Appendix A: JD Sports financial data

• Prices. JD made "controlled price investments", or price cuts, particularly online; their cost to gross margin was offset by higher marketing contributions from brands.

• Shareholders. A £200m share buyback each year, alongside the 20% higher dividend.

• Half year to 1 August 2026. Sales £5 899m (2025: £5 940m); profit before tax and adjusting items £282m (2025: £351m); like-for-like sales down 2.8%. Guidance for profit before tax and adjusting items for the year to January 2027 was cut from £750m-£850m to £700m-£800m.

Source: JD Sports Fashion plc

Appendix B: Regions and stores

• US. All remaining standalone Finish Line stores are to be converted or closed by January 2028.

• UK. A "fewer, bigger, better" approach, with new flagship stores in Cardiff and Sheffield in 2026.

• Germany. JD Germany was reduced from 91 to 62 stores in 2026.

Source: Analyst, using JD Sports Fashion plc

Appendix C: Strategy, technology and customers

• Five priorities for 2026/27. A broader product range, including own brands; store productivity and optimisation; completing new e-commerce platforms worldwide; "accelerating AI adoption"; and using data to personalise marketing.

• Online. 20% of sales in the half year to August 2026 (2025: 19%). Organic online sales grew 12.2% in North America and 3.8% in Europe in the year to January 2026. New e-commerce platforms went live in North America, South-East Asia, Italy, and the UK and Ireland.

• JD STATUS. In the US, 5.7m active members made about 40% of JD and Finish Line's sales across stores and online, spending 21% more than non-members. In the UK and Europe, 3.7m members made about a third of sales, spending 25% more.

• Products. Apparel and accessories reached 36% of sales; footwear sales were weaker because of the brands' product cycles, and JD describes the market as "highly promotional".

• Operations. Automation was introduced at JD's distribution centre in Heerlen, the Netherlands.

• Market. JD expects "muted market growth" and cites consumer cost-of-living pressures.

Source: Analyst, using JD Sports Fashion plc

North America is JD Sports' largest region after the purchase of Hibbett, but JD also has stores across Europe.

Evaluate whether JD Sports should focus its growth on North America or on Europe.

Source B: Gadderby Sportswear

Gadderby Sportswear Limited is a private limited company, founded in 2008 by Martin Ashworth, a former rugby league player, and based in Huddersfield, West Yorkshire. It is owned by the Ashworth family, and Martin's daughter, Jo Ashworth, is Managing Director.

The company makes custom kit, including shirts, shorts, socks and training wear in each team's colours with names, numbers and sponsors' logos, for about 2 300 amateur rugby, football and netball clubs and 410 schools. Its mission is "kit made in Yorkshire for every grassroots team".

Every garment is cut, printed and sewn in its own factory, which allows it to deliver an order in 10 working days. The company repairs damaged kit free of charge for the first season and keeps each club's designs on file for quick reorders.

Revenue rose from £12.6 million to £14.2 million in 2025, and the factory made 610 000 garments. In 2025 the company began supplying clubs in Ireland and the Netherlands, which are in the European Union. Three rules apply to sales to EU customers:

• Tariffs. UK-made goods are free of tariffs if they meet the "rules of origin" in the UK-EU trade agreement.

• Customs. Every shipment needs a customs declaration.

• VAT. EU customers pay VAT when their goods arrive.

Many competitors sell online and import kit from factories in Asia, at lower prices but with deliveries that take four to six weeks.

The company's objective is to reach revenue of £20 million by 2030 with an operating profit margin of at least 10%.

Source: Gadderby Sportswear

Appendix D: Gadderby Sportswear selected data

Source: Gadderby Sportswear

Appendix E: Customers, competitors and trade

• Trade with the EU. Goods made in the UK can be sold to EU customers without tariffs if they meet the "rules of origin" in the UK-EU trade agreement, but every shipment needs a customs declaration, and EU customers pay VAT when their goods arrive.

• Service. Gadderby Sportswear repairs damaged kit free of charge for the first season and keeps each club's designs on file for quick reorders.

Source: Gadderby Sportswear and UK government guidance

Appendix F: Making in Yorkshire

• 41 of the 165 employees have worked for the company for more than ten years; 12 apprentices joined in 2025.

• Club survey, 2025: 64% of club secretaries said "made in the UK" was important to their choice of supplier; 71% said delivery time was important.

• A partner factory would need about six weeks to deliver, and minimum order sizes of 500 garments.

Source: Gadderby Sportswear

Appendix G: Three ways to grow

Source: Gadderby Sportswear

Gadderby Sportswear's objective is to reach revenue of £20 million by 2030 with an operating profit margin of at least 10%.

Evaluate two ways Gadderby Sportswear could grow and recommend which one it should choose.

Use information from Appendices D to G to support your answer.