1.3. Size of business
A subsection of Business Studies, 9609, through 1. Business and its environment (AS Level)
Listing 10 of 16 questions
Perfect Pizza (PP) Paul is a chef. He is looking to set up a new pizza restaurant in his local town in country A. He has done some research into the pizza market in this country. Fig. 1: Percentage of total pizza market sales in country A for 2016 National chain D, 5% PP, 20% Independent restaurants, 12% National chain A, 22% National chain B, 13% National chain C, 28% Paul is considering whether he should set up his own independent pizza restaurant or enter into a franchise agreement with Perfect Pizza (PP), a national chain of pizza restaurants. Paul has calculated that an independent restaurant will cost $25 000 to set up. This includes all of the furniture and signs required for the restaurant. It also includes some below the line promotion in the local area. Paul has obtained the following information about opening a PP franchise restaurant. • It would cost a total of $40 000 to set up • PP would provide all furniture and signs, branded with the PP logo • Paul will have to pay a 5% royalty of his monthly revenue to PP • PP will provide national above the line promotion • PP has policies for diversity and equality that Paul can use to help with human resource management. Paul will manage the kitchen. However, he will require a restaurant manager to be in charge of customer service, inventory management and to supervise the non-kitchen employees. Paul has set up a meeting with his bank manager to discuss a suitable long term source of finance that could be used for this investment. Define the term ‘long term source of finance’ (lines 18–19). Briefly explain the term ‘diversity and equality’ (line 14). Refer to Fig. 1. The total value of market sales in country A in 2016 was $50m. Calculate the total value of sales for the three largest businesses. Explain two appropriate methods (other than market share) that could be used to measure the size of PP. Analyse two factors Paul should consider when selecting a restaurant manager. Evaluate whether Paul should enter into a franchise agreement with PP.
9609_s17_qp_22
THEORY
2017
Paper 2, Variant 2
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Questions Discovered
16