The marketplace
8
Unit
OCR Business Studies for AS
Revision questions
(24 marks; 45 minutes)
1 Outline three features of the market for fast food near to where you live. (6)
Possible answers include:
●
a high degree of competition
●
some product differentiation
●
fierce price competition, leading to lower prices.
2 Section 8.2 lists five factors determining the demand for a product: price, incomes, actions of competitors, marketing activities and seasonality. Identify which two of these would most heavily affect
sales of:
(a) strawberries
●
seasonality and price
(b) easyJet tickets to Barcelona
●
could be any two of the five
(c) tickets to see Newcastle United
●
income and seasonality
(d) DFS furniture
●
income, marketing activities, price and seasonality. (8)
3 Analyse the effect of minimum wage legislation on the demand and supply for labour, taking
account of the long-term effects on:
Possible answers include:
●
Wages – minimum wage legislation has the long-term effect of increasing wages. This will potentially increase the supply of labour as more people are willing to work at higher wages, but may
decrease the demand for labour as businesses’ labour costs increase.
●
Costs – labour costs are one of the costs of production, so higher labour costs as a result of
minimum wage legislation would result in higher overall production costs.
●
Prices – businesses may attempt to pass the cost of higher wages on to the consumer by
increasing prices.
© Hodder Education 2008
The marketplace
8
Unit
OCR Business Studies for AS
●
Demand for products – if prices increase as a result of businesses attempting to pass on higher
labour costs this may result in a reduction in the demand for some products. The extent to which
this occurs will depend on the nature of the product and its price elasticity of demand.
●
Employment – businesses sometimes argue that minimum wage legislation has the effect of
decreasing employment because businesses reduce the number of people that they employ to
offset increased labour costs, although in practice this has proved not to be the case. (10)
Revision exercises
B1 Data response
(20 marks; 25 minutes)
1 Using the information in the article, explain two reasons why there has been an increase in the
price of wheat. (4)
Reasons for the increase in the price of wheat:
●
Balance between supply and consumption
●
Increased use of wheat for fuels
●
Weather and bad harvests
●
Restricted amount of land to grow wheat.
2 Using your knowledge of the determinants of demand and supply, explain why the increase in the
price of wheat affects the prices of other products. (6)
●
In economics, the increase in the price of one product will invariably influence the price of
another. This is particularly true when the products are closely linked.
●
Example: If the price of wheat rises due to a shortage of wheat, the price of bread and any products made from wheat will also rise. Wheat and grains are also used to feed livestock, so the price
of meat will rise. Because bread is regarded as a necessity, the fall in supply of wheat and the constant demand for bread will result in increased prices for many products as well as wheat itself.
6 marks
Level 2
Application of knowledge in context
(6-4)
Level 1
Knowledge and understanding of business concepts
(3-1)
© Hodder Education 2008
The marketplace
8
Unit
OCR Business Studies for AS
3 To what extent do environmental considerations impact on the future of wheat supplies? (10).6
Environmental considerations include:
●
Corporate social responsibility
●
Organic foods
●
Alternative fuels
●
Land used for wind farms/other environmental schemes
●
European legislation.
This question requires the student to analyse the implications of the environmental lobby on the
future of wheat supplies, and to balance the argument. Suggestions as to the way forward would be
rewarded. The argument would need to consider the following criteria:
●
Demographics
●
Cost
●
Timescale
●
Use of finite resources
●
Demand/supply of wheat.
10 marks
Level 3
In order to achieve evaluation marks, candidate must make a
supported judgement on how far wheat supplies are affected by
at least two environmental considerations.
(10-8)
Level 2
Candidate analyses at least two environmental considerations in
terms of wheat supplies.
(7-5)
Level 1
Candidate explains environmental considerations with limited
reference to wheat supplies.
(4-1)
© Hodder Education 2008
Market structures
9
Unit
OCR Business Studies for AS
Revision questions
(35 marks; 35 minutes)
1 What is a competitive market? (2)
●
A market in which there is a high level of competition
2 Explain how the marketing mix of Virgin Trains might be affected by a decision by government to
allow other train operating companies to compete on Virgin’s routes. (4)
●
Virgin would have to persuade customers to use its trains, either by increasing brand loyalty
through promotion or by decreasing the price in order to make its service more attractive.
3 Describe the main features of an oligopolistic market. (3)
●
just a few firms operate in the market
●
high barriers to entry
●
focus on non-price competition.
4a What is a price war and … (3)
●
when two or more companies compete with each other over which can charge the lower price.
This drives the price down, thus benefiting consumers.
4b why are they rare? (3)
●
Most companies want to avoid a price war at all costs (as they demolish profit margins) so will
not enter into a price war unless there is a very good reason for it.
5 Explain why product differentiation becomes more important as competition within a market
increases. (3)
●
The more competitors there are in a market, the more choice the consumer has and therefore
the more a firm needs to differentiate itself in order to attract consumers. If a firm had
a monopoly it would not need to differentiate its product as it would be the only option for
customers.
6 Identify four factors that could be used to identify whether or not a business is competitive. (4)
●
price
●
efficiency
© Hodder Education 2008
Market structures
●
design
●
brand image.
9
Unit
OCR Business Studies for AS
7 How might the size of an organisation affect its efficiency? (3)
●
As the size of an organisation increases, its efficiency may fall as communication between staff
becomes more complex and less direct and thus motivation falls. A fall in motivation is likely to
lead to a fall in efficiency. An increase in the size of an organisation is likely to lead to an increase
in the bureaucracy which may lead to a fall in efficiency. However, one could argue that an
increase in the size of an organisation could, in some circumstances, lead to an increase in
efficiency if the increase led to increased technology which may speed up communication and
production processes.
8 Why might a firm that is struggling to be competitive increase its training budget? (3)
●
Although increasing training budget will lead to an increase in costs in the short term, in the
long term it could actually lead to a fall in costs, as increased training can improve motivation
and thus increase productivity. An increase in productivity will result in a fall in average cost per
unit, thus enabling a firm to cut its price, making it more efficient. Furthermore, increasing
training may lead to better quality which would also make the firm more competitive.
9 Explain how the quality of management can impact upon an organisation’s efficiency. (4)
●
Better management may better motivate staff, thus leading to an increase in efficiency.
●
Better management may be more aware of efficiency and think more about how to improve it.
●
High-quality management may be more efficient themselves which would directly improve
efficiency and potentially breed a more efficient culture in the organisation.
10 Apart from market research, how might a firm achieve its goal of attempting to get closer to the
consumer? (3)
●
selling direct to the consumer
●
management could use a product or service themselves (especially services) to experience what
a customer experiences.
© Hodder Education 2008
Market structures
9
Unit
OCR Business Studies for AS
Revision exercises
B1 Data response
(35 marks; 40 minutes)
(Refer to questions on page 58 of the textbook.)
1 Using the table, explain what has happened to the degree of competition within the UK Indian
restaurant market over the last 50 years. (6)
●
Since 1960 the degree of competition in the UK Indian restaurant market has increased. The
competition increased dramatically during the 1970s, 1980s and 1990s as the number of restaurants grew faster than the market was growing. Between 2000 and 2004 the degree of
competition has increased slightly.
2 Giving your reasons, discuss whether the Indian restaurant market in the UK is an example of a
fiercely competitive market. (6)
Possible reasons to say yes include:
●
the number of restaurants has increased from 500 to 8750 over the last 50 years
●
fierce price competition would suggest a heavily competitive market
●
the increase in product differentiation also suggests a high degree of competition.
Possible reasons to say no include:
●
Although the number of restaurants has increased, so has the number of customers (market
size).
●
The answer will depend on the area in question. In some areas competition may be very fierce
and in other areas of the UK there may be little or no competition.
●
Although it is a clearly a competitive market there is no conclusive proof that it is fiercely
competitive.
3a Explain how efficiency might affect the competitiveness of an Indian restaurant. (4)
●
Increased efficiency leads to a lower cost per unit, which enables a restaurant to charge lower
prices, thus increasing its competitiveness.
© Hodder Education 2008
Market structures
9
Unit
OCR Business Studies for AS
3b How might an Indian restaurant set about improving its efficiency? (4)
●
improve training
●
increase motivation through financial and non-financial incentives
●
use innovative fast-cooking processes.
4 Identify and explain three internal factors that might affect the competitiveness of an Indian
restaurant. (6)
●
price
●
efficiency and quality of service
●
brand image.
5 Product differentiation is essential if an Indian restaurant is to survive in the long run. Discuss. (9)
Possible answers include:
●
It depends on the restaurant. If it is the only restaurant in the area it will not need to be differentiated. However, if there are lots of Indian restaurants in the area, any given restaurant will
need to differentiate itself in some way in order to survive. The more competition there is in the
local area, the greater the need for differentiation.
B2 Case study
(35 marks; 40 minutes)
(Refer to questions on page 60 of the textbook.)
1 Describe three characteristics of a highly competitive market. (6)
●
high product differentiation
●
low prices
●
lots of special offers
●
heavy promotion.
6 marks
Level 2
Application of knowledge in context
(6-4)
Level 1
Knowledge and understanding of business concepts
(3-1)
© Hodder Education 2008
Market structures
9
Unit
OCR Business Studies for AS
2 Why has the market for consumer electronics become more competitive? (4)
●
because supermarkets have entered the consumer electronics market
●
because there are fewer barriers to entry for retailers as prices of consumer electronics have
plummeted
●
because the market has increased in size, thus attracting new entrants.
3 Explain three factors that would affect the competitiveness of a manufacturer of consumer electronics. (6)
●
size (and hence ability to benefit from economies of scale)
●
brand loyalty
●
design
●
brand image.
4 What is a loss leader and why do supermarkets use this tactic? (4)
●
A loss leader is a product which is sold at below cost price. Supermarkets sell them as they attract
customers who will then, hopefully, purchase other products, on which the supermarkets will
make a profit.
5 How might the degree of competition impact upon the marketing mix used by a Chinese manufacturer of own-label toasters? (5)
●
Price: the more competition in the market, the lower the price will be.
●
Promotion: the more competition in the market, the heavier the promotion will be.
●
Product: the more competition in the market, the more differentiated the product is likely to be.
6 In today’s increasingly competitive market for consumer electronics, firms must constantly cut
costs and prices if they are to survive. Discuss. (10)
●
If a firm cannot be competitive in any other way, it will need to cut costs in order to survive.
However, if it can create differentiation or brand loyalty through other means but price, it will
not have to cut costs to survive.
8 marks
Level 3
Analysis of information in context
(8-7)
Level 2
Application of knowledge in context
(6-4)
Level 1
Knowledge and understanding of business concepts
(3-1)
© Hodder Education 2008
Technological change
10
Unit
OCR Business Studies for AS
Revision questions
(35 marks; 35 minutes)
1 A database could be used by an aircraft manufacturer such as Boeing to record the supplier and
batch number of every part used on every aircraft. How might this information be used? (3)
Possible answers include the following.
●
If there are any defects in the parts, the problem can be traced back to the supplier. This is particularly important in the airline industry where safety is paramount.
●
Modern stock control systems are based on laser scanning of bar-coded information. This
ensures the computer knows the exact quantity of each product/size/colour that has come into
the stockroom. In retail outlets, a laser scanning till is then used to record exactly what has been
sold. This allows the store’s computer to keep up-to-date records of current stocks of every item.
Such data can enable a buyer to decide how much extra to order, or an electronic link with the
supplier can re-order automatically.
2 State two benefits of good database management in achieving efficient stock control. (2)
Possible answers include:
●
it enables a firm to carry out an aged stock analysis, which helps to minimise wastage
●
it enables the manager to make informed decisions about what to do now and in the future.
3 Read the High-grade application on JCB Dieselmax. Identify two benefits of ‘virtual safety
testing’. (2)
●
to enable the firm to meet safety standards
●
to alert JCB to potential safety problems and thus enable it to make improvements.
4 Look at Figure 10.3. Explain one possible implication for:
(a) a UK factory owner feeling under pressure from competition from China (3)
●
It may encourage the UK factory owner to switch to a more capital-intensive form of production – cheaper robot prices and improvements in quality, efficiency and speed may help to
reduce unit costs and allow it to compete more effectively against firms from low-cost
economies, such as China.
(b) a UK worker, with few qualifications or skills, thinking of taking a job in a factory. (3)
●
A UK worker with few skills may find it difficult to find factory work, given that robots are likely
© Hodder Education 2008
Technological change
10
Unit
OCR Business Studies for AS
to prove to be cheaper and are able to carry out repetitive tasks more accurately and consistently
than humans.
5 Explain one benefit and one drawback of computer-aided manufacture (CAM). (4)
Benefits include:
●
ensures products are all the same quality – important for branding
●
may lead to an increase in productivity.
Drawbacks include:
●
expensive to set up
●
may also be expensive to maintain in terms of qualified staff and/or external maintenance.
6 From your reading of the whole unit, outline three ways in which technology can lead to improved
quality. (6)
●
improved quality standards result because technology is more precise than machinery
●
improved stock control may mean products do not stay on the shelf as long
●
CAD may help to improve the design of a product, which could improve its quality
●
a CAD system can be linked to computer-aided manufacturing (CAM) to provide integrated,
highly accurate production.
7 How significant might internet retailing become for each of the following types of business:
(a) a music shop specialising in 1960s classic pop and rock (2)
●
Very significant as music has been a very big part of the internet revolution. In order to be
competitive, the music shop may need to start selling online. However, it does have a high
degree of product differentiation so may be able to continue without internet retailing.
(b) a builders’ merchant (selling bricks, cement, etc.) (2)
●
Unlikely to be hugely significant in the building industry as most builders will already have
merchants so are unlikely to use the internet to find them in the short term.
(c) a mail-order clothing firm? (2)
●
Mail order is becoming a thing of the past and thus it is likely to be very significant to the
mail-order firm. It would need to get into internet retailing soon to avoid loss of revenue.
© Hodder Education 2008
Technological change
10
Unit
OCR Business Studies for AS
8 From your reading of the whole unit, explain two ways in which technology can reduce waste
within a business. (6)
●
CAD and CAM can make the production process leaner, thus minimising wastage
●
the use of automated stock control systems could also assist in minimising wastage.
Revision exercises
B1 Data response
(30 marks; 35 minutes)
(Refer to questions on page 66 of the textbook.)
1a Explain in your own words the meaning of ‘downtime’. (3)
●
when a machine or person is not being used to produce output.
1b Why may firms be keen to minimise downtime? (4)
●
because a halt in production means reduced productivity and thus increases the average cost per
unit of production.
2 Examine the importance to this ‘major UK manufacturer’ of the accuracy and flexibility of these
three robots. (6)
Possible answers include:
●
the accuracy of the robots enables the firm to produce better-quality products with fewer mistakes
●
the flexibility of the robots may reduce changeover times and therefore reduce downtime.
6 marks
Level 2
Application of knowledge in context
(6-4)
Level 1
Knowledge and understanding of business concepts
(3-1)
3a Calculate the % increase in production speed now that robots are producing rather than people.
(3)
●
4.2/12 ⫻ 100 ⫽ 35%
The process is now 35% faster.
© Hodder Education 2008
Technological change
10
Unit
OCR Business Studies for AS
3b Analyse two ways in which the manufacturer can benefit from the extra speed. (6)
●
An increase in productivity leads to a lower fixed cost per unit.
●
This reduced cost may allow the manufacturer to reduce prices and increase demand.
●
Alternatively, the reduction in cost per unit could allow the manufacturer to keep prices the
same and increase profit.
4 Using the information in the case and your own knowledge, discuss two ways in which human
workers may be more valuable than robots. (8)
Possible answers include:
●
machines can be used only for the purpose that they were created for and are therefore less flexible than humans
●
robots are not able to spot some mistakes that humans can
●
humans have creativity and are therefore able to come up with ideas to improve processes and
products, which robots cannot.
8 marks
Level 3
Analysis of information in context
(8-7)
Level 2
Application of knowledge in context
(6-4)
Level 1
Knowledge and understanding of business concepts
(3-1)
B2 Data response
(25 marks; 30 minutes)
(Refer to questions on page 67 of the textbook.)
1 Outline three benefits of the CAD system to this architectural business. (6)
●
improved productivity of the design process
●
increased accuracy
●
enables the firm to more easily communicate design intentions to customers on the site.
2 Explain how the iPhone-linked CAD has reduced time wastage for the business. (4)
●
allowed it to communicate directly with consumers
© Hodder Education 2008
Technological change
●
10
Unit
OCR Business Studies for AS
enabled it to consult quickly with builders.
3 Examine Patti Stough’s suggestion that having CAD on the iPhone leads to ‘huge productivity
gains’. (6)
●
Any reduction in time wasting will lead to an increase in productivity as the time that would
otherwise have been wasted can be used effectively.
●
Whether or not those productivity gains are really huge is not clear from the text but there is certainly evidence that productivity gains would be made.
4 To what extent is the portable CAD system likely to improve Patti’s customer service? (9)
●
If the CAD system enables better and faster communication with customers this would improve
customer service.
●
Furthermore if the CAD system enables Patti to improve productivity this may speed up customer service.
●
The extent to which the portable CAD system will improve Patti’s customer service depends on
how effectively the system is implemented, and on the communication of the system to customers.
Essay questions
1 Information technology is reducing the need to meet people face to face. Discuss the implications
of this for running a successful business.
Possible answers include the following.
●
Reducing face-to-face contact with consumers may have a negative effect on the relationships
businesses can forge with consumers. However, as this would have a more pronounced effect on
big companies which use more IT than small companies, it could lead to an increase in the competitiveness of small firms.
●
Reducing face-to-face contact between employees may lead to poorer communication between
departments and between managers and employees, which could lead to a greater number of
mistakes and thus a fall in productivity.
●
This lack of internal face-to-face communication could also lead to a loss in motivation of staff
as employees do not feel as strongly that they are part of the organisation.
© Hodder Education 2008
Technological change
10
Unit
OCR Business Studies for AS
2 If industrial robots get cheap enough, they may replace almost all unskilled factory workers in the
future. Discuss the benefits and costs of this to society.
Benefits include:
●
increase in productivity, which would lead to a fall in cost per unit
●
this fall in cost per unit could lead to a fall in price, which would benefit consumers
●
more skilled jobs would emerge (e.g. in robot design and maintenance), which would benefit
society.
Costs to society include:
●
structural unemployment, which would be costly for the government
●
increased unemployment may also cause increases in social problems such as depression, crime
and anti-social behaviour.
3 ‘Internet retailing will mean the death of the high street.’ Discuss.
●
The increase in internet retailing may lead to less use of the high street but is unlikely to ever
totally replace it because:
(a) there will also be people who enjoy the act of shopping
(b) some products need to be seen/touched before purchase (especially luxury products – most
customers who are paying a high price would like to see and touch what they are buying)
(c) internet retailing has its problems (e.g. fraud and identity theft) and therefore some people will
always be against it.
●
The high street is unlikely to die in the short term but as people get more and more used to shopping online, and as solutions are found regarding fraud, one day it is entirely possible that the
internet will become, if not the only, then the preferred method of retailing.
© Hodder Education 2008
OCR Business Studies for AS
11
Unit
Social, cultural, moral and ethical
influences
Revision questions
(30 marks; 30 minutes)
1 Outline two possible reasons why Maltesers are still selling successfully, over 75 years after the
brand was created. (4)
Possible reasons:
●
Brand loyalty
●
No substitute
●
Excellent marketing
●
USP.
2 As the UK’s Polish population grew, Sainsbury’s launched a range of Polish foods, before the other
major supermarket chains did so. How might Sainsbury’s have benefited from being the first supermarket to provide fully for Polish shoppers in Britain? (5)
Possible benefits:
●
New target market
●
Target population centres
●
Increased sales
●
Word-of-mouth advertising
●
USP.
3 In February 2008, Cadbury’s announced a range of Easter eggs that would not have any outer packaging, just be sold in a foil wrapper.
(a) Outline one advantage and one disadvantage of this. (4)
Advantages:
●
Less waste
●
Less cost to Cadbury’s
●
Greater profit margin.
© Hodder Education 2008
OCR Business Studies for AS
11
Unit
Social, cultural, moral and ethical
influences
2 marks for explaining any one advantage.
Disadvantages:
●
Less ability to market products
●
More difficult to stack and store
●
More easily damaged.
2 marks for explaining any one disadvantage.
(b) Do you think this approach will be successful for Cadbury’s? Explain your reasoning. (4)
Possible reasons for success:
●
Environmentally friendly
●
Informed market will still buy them
●
Less waste for customers
●
Cadbury’s have brand loyalty, don’t need packaging.
Possible reasons why it will not succeed:
●
Damaged eggs increase cost
●
Customers don’t like change
●
Supermarkets may not be keen due to storage problems.
Student should think about how Cadbury’s might overcome these problems in order to ensure
success.
4 marks for a judgement supported by a balanced argument.
4 Choose two of the following examples and explain whether you believe these businesses are pursuing a profitable marketing approach or a good social purpose. (8)
(a) HSBC bank running a ‘January sale’, based on linking its products to environmental
improvements.
(b) B&Q deciding in January 2008 to stop selling outdoor patio heaters.
(c) Coca-Cola sponsoring the London marathon.
© Hodder Education 2008
OCR Business Studies for AS
11
Unit
Social, cultural, moral and ethical
influences
Points to consider:
●
All three options reflect both a profitable marketing approach and a good social purpose. Most
corporate social responsibility creates costs for business which they have to balance with an
increase in business and hopefully profit.
●
Businesses have a number of stakeholder groups which need to be satisfied. Which stakeholders
will be satisfied with these options and which may not be?
●
How do these actions fit in with the corporate objectives?
●
What is the likely outcome in the short and long term?
●
All the examples are large, well-known businesses: what difference does this make to their
choices?
5 Should shoppers see it as their personal responsibility to think about how a shop is able to sell a
new suit for £25 or a chicken for £1.99? (5)
The aim of this question is to think about whether the customer should consider how a business
is able to sell goods well below the market price. The insinuation is that they must be keeping their
costs as low as possible in order to set these prices.
●
In the case of the suit, this may be because they have outsourced production to the developing
world and are using cheap/child labour to make the suit. To what extent do you think customers
should consider this when making purchases? What factors are important to us when we buy a
product like a suit?
●
In the case of the chicken, should we consider how the chicken was treated in its short life, what
it was fed on and in what conditions it was kept? All these factors contribute to the price we pay.
What factors affect the customer when buying the chicken?
Revision exercises
B1 Data response
(27 marks; 35 minutes)
(Refer to questions on page 70 of the textbook.)
1a Calculate the percentage increase in expected sales between 2006 and 2007. (3)
●
% increase between 2006 and 2007
© Hodder Education 2008
OCR Business Studies for AS
Difference × 100
Amount 2006
= 348 – 290.6 =
57.4
290.6
11
Unit
Social, cultural, moral and ethical
influences
= 19.75%
1b Explain two reasons why this increase might have taken place. (4)
Possible reasons for increase:
●
Increasingly well-informed market
●
Ethically aware consumer
●
High-profile marketing.
Communication in the market has increased customer awareness about the plight of the developing world. This has resulted in an increase in sales of Fairtrade products.
2 marks for each reason.
2 Using examples from the data, analyse to what extent ethical issues should influence business
objectives. (8)
If a question says ‘use the data’, it is important that there is evidence of this in the answer.
Data which could be used in the answer:
●
Cooperative Group research figures
●
Information from Dan Welch, Ethical Consumer.
Possible ways in which ethical issues could support the objectives of these businesses:
●
increased sales
●
corporate social responsibility
●
a new market segment
●
greater market share
●
growth in product portfolio.
This answer requires analysis of the issues in order to make a judgement as to how much ethical
issues should influence the objectives.
8 marks
Level 3
Analysis of information in context
(8-7)
Level 2
Application of knowledge in context
(6-4)
Level 1
Knowledge and understanding of business concepts
(3-1)
© Hodder Education 2008
OCR Business Studies for AS
11
Unit
Social, cultural, moral and ethical
influences
3 Apart from ethical issues, evaluate the impact of one other external influence on businesses in the
retail sector. (12)
Possible external influences to consider:
●
Economy – local, national and global
●
Legislation
●
Demographic and social changes – religion, culture etc.
●
Political
●
Technological changes.
Any one influence can be analysed in terms of its implications for the retail sector.
Example: What has been the impact of increasing oil prices on the retail sector? This is an evaluation question and will therefore require a judgement to be made, based on the previous analysis,
in terms of how important this external factor is to the business as a whole.
12 marks
Level 4
Evaluation and judgement of information in context
(10-12)
Level 3
Analysis of information in context
(9-7)
Level 2
Application of knowledge in context
(6-4)
Level 1
Knowledge and understanding of business concepts
(3-1)
B2 Data response
(20 marks; 25 minutes)
(Refer to questions on page 71 of the textbook.)
1 Explain why it is important that many of the businesses in the food industry adopt this watersaving objective. (5)
Reasons to save water:
●
Environmental – shortage of water
●
Costs
●
Part of a whole strategy to save energy
●
All large businesses with common goal.
© Hodder Education 2008
OCR Business Studies for AS
11
Unit
Social, cultural, moral and ethical
influences
Any one reason should be explained in terms of the food industry.
2 Explain why this water-saving objective might be described as a S.M.A.R.T. objective. (5)
Specific – What do they want to achieve? To cut back the use of water.
Measurable – Has it been achieved?
●
140m litres to save per day
●
£60m a year saving on water bills
●
Reduce water usage for food and drink manufacturers from 10% to 8%.
Agreed – with stakeholders, and to some extent with competition, but evidence is limited in terms
of others, e.g. shareholders. Voluntary, therefore not imposed by government.
Relevant and realistic – evidence suggests relevancy but it is questionable whether the whole
industry would agree. Targets are often set; the reality is that they are influenced by outside factors
which may prevent their achievement. Not sure how figures have been reached.
Time-bound – dates for achievement have been set.
3 To what extent would the following stakeholders benefit from this objective? (10)
This question requires a critical analysis of how each stakeholder would or would not be affected
by this policy of water-saving. It must not be assumed that each of the stakeholders would be
affected to the same extent or in either a positive or negative way. A judgement must be made as to
how great the impact is on each. It may be the case that the impact is limited or none at all.
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Customers: Negative
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Negative: may be compromises on Health and Safety
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Negative: shops may not be as clean
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Negative: quality of products may fall
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Positive: better image for shop
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Positive: prices may fall due to fall in costs.
Shareholders:
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Negative: long-term change often costs money in the short term
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Positive: fall in water costs might increase profits
© Hodder Education 2008
OCR Business Studies for AS
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Positive: better image, share price rise?
Government:
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Positive: increased profit = increased taxes
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Positive: environmental impact
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Positive: help with national water shortages
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Negative: Health and Safety issues
Community:
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Negative: Health and Safety issues
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Positive: everyone gains in periods of national water shortages.
B3 Data response
(26 marks; 30 minutes)
(Refer to questions on page 71 of the textbook.)
1a Outline briefly what is meant by the phrase ‘greenhouse gas emissions’. (3)
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Greenhouse gas emissions are gases such as carbon dioxide and methane which are emitted into
the air through industrial and agricultural processes.
1b To what extent are they the responsibility of supermarkets such as Tesco? (6)
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Greenhouse gas emissions are a global problem and therefore the impact of food retailers can
only be limited in its effect. However, any policy to reduce emissions caused by transportation
(e.g. importing foods from abroad), heating and refrigeration, lighting, 24-hour opening,
internet shopping and packaging will make a small contribution to the reduction of greenhouse
gas emissions and will set a policy which may become common in the future.
2 What evidence is provided in the article in support of the view that stores are to blame for ‘promoting unhealthy lifestyles’? (5)
Evidence to be considered:
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Sustainable Development Report – special offers for high calorie food outnumbered those for
healthy options.
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quarter of adults are obese.
© Hodder Education 2008
OCR Business Studies for AS
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Evidence for the accusation is limited.
3 A supermarket might respond to the Sustainable Development Commission’s report by pointing
out that all it is trying to do is provide choice and an efficient service to its customers. Discuss
whether this is a justified response to the report. (12)
Candidates should consider the following points either for or against the supermarket’s response:
For:
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supermarket’s objectives
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stakeholder satisfaction
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social responsibility
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supermarket image
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USP/marketing.
Against:
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ethical considerations
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shareholder view
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increase in transportation
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waste issues
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long-term view.
There is no correct answer here, it is how the issues are analysed in terms of their implications to
the supermarket and to the environment which are important. There would be few marks allocated
for knowledge, it is the application of the issues which is rewardable. Evaluation is achieved by this
analysis and subsequent justification, or not, of the supermarket’s response to the report.
© Hodder Education 2008