Exam code: 4BS1
Blaze is a small pizza restaurant in Lisbon, Portugal. It opened two years ago and has seen a steady increase in customers. However, the owner, Sofia, has noticed that a new pizza restaurant has recently opened on the same street, offering lower prices.
Outline one reason why Blaze could fail as a business.
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The Alternative Drum School (TADS) was set up in the wealthy area of Cricklade, England in 2008 by Ollie Tanner who had a passion for and enjoyed drumming. Ollie invested all of his savings into the drumming school. He saw the potential of being located away from other drumming schools.
Ollie promotes his business by writing columns in local papers, performing at local music festivals and by word of mouth recommendations. He has invested heavily in computer technology to allow students to produce the music they enjoy playing.
Ollie finds it difficult to maintain a good work-life balance. Ollie currently works 60 hours a week in a business that does not have reliable profits.
TADS is looking to expand by offering lessons in other musical instruments.
State one reason why this could lead to the business failure of TADS.
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Define the term market share.
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GreenLeaf is a small organic café in Manchester, England. It opened 18 months ago and has quickly built a loyal customer base. The owner, Amir, focuses on high-quality locally sourced ingredients and excellent customer service.
Outline one reason why GreenLeaf is successful as a business.
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Define the term revenue.
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Hive is an online stationery business based in Stockholm, Sweden. The owner, Erik, has seen rapid growth in sales over the past year. However, Erik has been spending more on stock than the business is earning, and several customers have been slow to pay their invoices.
Outline one reason why cash flow problems could lead to the failure of Hive.
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The Better Toy Store (TBTS) is a children’s toy shop. TBTS has three shops in Singapore. Two of the shops are located in busy shopping malls and the third is located at the Jewel Changi Airport. TBTS has a website for customers looking to buy toys online.
TBTS selects toys to sell that are excellent for play, value, design and quality. All TBTS toys are environmentally friendly.
State one way TBTS can measure its success as a business.
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GreenBrew Coffee (GBC) is a specialty coffee company based in Manchester. GBC operates two café locations in the city centre and one café inside Manchester Airport. GBC also runs an online store where customers can purchase coffee beans and brewing equipment.
GBC sources all of its coffee beans from fair-trade farms and prides itself on offering high-quality, ethically produced coffee at competitive prices.
State one way GBC can measure its success as a business.
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Define the term market growth.
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Define the term overtrading.
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Saha is a small business in Türkiye that opened in 2020 with 15 employees. It designs and manufactures robots which are used in hospitals, hotels and restaurants. In hospitals its robots are used to move medical supplies between departments. In hotels and restaurants, the robots are used to welcome customers as they arrive and deliver food and drinks to hotel rooms and restaurant tables. Saha provides a seven day a week customer service for all businesses buying its robots.
Many new businesses are entering the global robot market and are competing for market share. Competitors in Türkiye include NIO, Zoox and Vention.
Saha has ambitious growth plans and has started to design robots that will be used in the home to help people with cleaning, shopping, security and entertainment. It aims to become a multinational business within five years to manufacture robots in all continents of the world.
Analyse two possible reasons that may lead to business failure for Saha.
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BrightWave is a small business based in Manchester, UK. It manufactures and sells fitness trackers and smartwatches. Last year, total sales in the UK wearable technology market were £180,000,000. The year before, total sales in the same market were £150,000,000.
Calculate the market growth of the UK wearable technology market.
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Explain one reason why businesses fail.
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Explain one measure a business can use to judge its success.
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GreenLeaf is a small business in Kenya that was established in 2019 with 10 employees. It grows and supplies organic fruit and vegetables to supermarkets, hotels and schools across the country. For supermarkets, GreenLeaf provides weekly deliveries of fresh produce. For hotels and schools, it offers customised meal-prep boxes tailored to their menus. GreenLeaf guarantees next-day delivery on all orders placed before midday.
The organic food market in Kenya is growing rapidly, with new competitors such as FreshFarm, OrganicKenya and PureHarvest entering the market.
GreenLeaf has experienced strong sales growth since it opened. Its success has been driven by its reputation for high-quality organic produce and its reliable delivery service. It now plans to expand into neighbouring countries, including Tanzania and Uganda, within the next three years and aims to double its workforce to meet growing demand.
Analyse two possible reasons why GreenLeaf has been a successful business.
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Flux is a small electronics business in Berlin, Germany. It sells wireless headphones and portable speakers. Last year, Flux sold 12,000 pairs of headphones at a price of €45 each and 8,500 portable speakers at a price of €60 each. Total sales in the German portable audio market last year were €25,000,000.
Calculate Flux's market share in the German portable audio market
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BrightSpark is a small business in Nigeria that was founded in 2020 with 8 employees. It designs and sells affordable solar-powered lighting systems to households, small shops and rural schools across the country. For households, BrightSpark offers easy monthly payment plans. For small shops and rural schools, it provides free installation and a two-year warranty on all products. BrightSpark also runs a 24-hour customer helpline for technical support.
The demand for off-grid energy solutions in Nigeria is increasing as many rural communities still lack reliable access to electricity. New competitors such as SolarNaija, PowerUp and SunWave have recently entered the market.
BrightSpark has seen rapid sales growth since it started trading. Its success has been driven by its affordable pricing and strong after-sales support. It now plans to expand into Ghana and Cameroon within the next two years and aims to triple its number of employees to keep up with rising demand.
Analyse two possible reasons why BrightSpark has been a successful business.
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The first Premier Inn hotel was opened in 1987. Premier Inn now has over 820 hotels in the UK, United Arab Emirates (UAE) and India with over 83,000 rooms. It has recently expanded by opening the first Premier Inn in Germany and has plans to open more in other countries. The majority of the hotels have restaurants with facilities for guests to buy meals and drinks.
In 2022 the current assets for Premier Inn were £9 566 million and current liabilities were £5 447 million.
Evaluate whether a business such as Premier Inn should only consider profit to measure its success. You should use the information provided as well as your own knowledge of business.
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Nantgwynfaen Organic Farm (NOF) is a farm growing a range of fruit and vegetables. It has a farm shop and offers accommodation with breakfast. It was set up by Amanda and Ken Edwards in West Wales, UK.
NOF supports farmers by selling local organic produce in its farm shop. The produce from the farm shop is served to the visitors staying overnight at the farm.
NOF is committed to being environmentally friendly by recycling, avoiding the use of packaging and reducing the use of electricity.
Evaluate the factors that NOF might consider when measuring the success of its farm shop. You should use the information provided as well as your own knowledge of business.
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Thrive is a small gym in Barcelona, Spain. It was set up four years ago by Marta and has grown to employ eight personal trainers. The gym has 600 members and revenue has increased every year since it opened. However, Marta has noticed that several members have recently cancelled their memberships, and online reviews suggest that some customers are unhappy with the cleanliness of the facilities and long waiting times for equipment.
Marta wants to choose the best way to measure the success of Thrive going forward. She is considering two options:
Option 1: Focus on financial measures of success, such as revenue and profit.
Option 2: Focus on non-financial measures of success, such as customer satisfaction and employee satisfaction.
Justify which one of these two options Thrive should choose.
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