Analyse + Outline

Question 1

Analyse the likely impact on —- of this changing level of consumer income.

Answer 1

• If income goes down, less likely to spend money and would rather safe, so less disposable income, won’t want to spend money in more luxury items and so less sales, may need to reduce price to attract customers and so lower profit margins

Question 2

Discuss reasons for cashflow problems

Answer 2

• Seasonal demand, periods of high demand and others low because of nature of product, not receiving receipts at certain times of year, not have sufficient cash to pay so bad cashflow
• Bad credit terms with supplier and customer, pay supplies in cash but allow customers to pay later so cash outflows are more so poor cashflow

Question 3

Analyse the impact on —– of operating as a private limited company.

Answer 3

• Limited liability so can’t lose more than invested, so if sued by customer or employee then won’t have to sell personal assets etc
• Name ltd, makes it seem more established so customers more likely to buy from them, higher sales
• Can sell shares, so easier to raise finances

Question 4

Analyse the impact on —- of customers using social media to review the business.

Answer 4

• Review can be shared and seen by other people so increase customers and so sales
• Difficult to correct negative review, even if incorrect anyone can read so negative brand rep

Question 5

Analyse the impact on —– of reducing costs to lower its break-even level of output

Answer 5

• Reduce costs, more profit if price stays same, sell fewer for breakeven
• May have to reduce quality/training etc, negative effect on product/service so might have lower demand

Question 6

Analyse the impact on —— of allowing customers to order their food online in advance

Answer 6

• Less time to wait, quicker service, customer satisfaction

Question 7

Analyse the impact of the internet on the location of —- premises

Answer 7

• Don’t need physical shop, so less fixed costs so lower breakeven sale amount
• Don’t have to spend on office facilities etc
• Can work form home so no need for physical outlet, so only need to store not need expensive high street location, reduce fixed costs and increase profitability

Question 8

Analyse the impact on —- of using a bank loan to pay for the contactless payment system

Answer 8

• Higher fixed costs, might increase price of food, less sales etc
• Larger amount so can pay for everything

Question 9

Analyse the impact on Sports Tours Ltd of using market mapping to target customers.

Answer 9

• Can spot gaps, wider range of customers, more sales etc
• However, gap might be there for a reason, no demand for produce and so targeting market that doesn’t exist, business failure

Question 10

Outline one reason why cash would be important

Answer 10

• Pay employees, rent, etc

Question 11

Outline one impact on —- of an increase in the value of the pound

Answer 11

• Imports are more expensive

Question 12

Outline one way that a business plan could have helped

Answer 12

• Finance, obtain business plan

Question 13

Outline one risk taken by the owners when starting

Answer 13

• Left stable jobs in ____ industry

Question 14

Outline one method of promotion that would be appropriate for

Answer 14

• Free samples, vouchers, special offers

Question 15

Outline one way in which the economic climate might impact on —– business.

Answer 15

• If income goes down, less sales

Question 16

Outline one way that —- meets customer needs

Answer 16

• Range, quality, price

Question 17

Outline one likely impact of changing levels of consumer income on

Answer 17

• Less income, less sales etc

Question 18

Outline one benefit to employees at —- from being mentored by

Answer 18

• Feel more valued, happier, more motivated