FOUNDATION EXAMINATION

August 2016

Exam Bank 017

Business Studies 1
2 hours and 30 minutes

Instructions

Please write in blue or black ink. Pencil may be used for diagrams and graphs only.

Answer ALL the questions in Section A - 20 marks;

Total marks: 70

All answers and rough work should be written in the separate answer book. Candidates are
reminded of the need for good English and orderly presentation of their answers.
 BELLERBYS COLLEGE FOUNDATION EXAMINATION

SECTION A – SHORT ANSWER QUESTIONS

Answer ALL questions in this section.

You should spend no more than 45 minutes on this section.

1. Name 1 external source of finance. (1 mark)

2. Give 2 examples of start-up costs. (2 marks)

3. Name 2 characteristics an entrepreneur should have. (2 marks)

4. Give an example of someone who would find a business plan useful. Explain why. (3 marks)

5. Name 2 advantages of opening an independent business rather than a franchise. (4 marks)

6. Name 2 stakeholders affected by the opening of a new, large Tesco in a suburb of London (an
area on the edge of London). Explain how they would be affected. (4 marks)

7. Name 2 advantages of setting up a Ltd company. (4 marks)

Total for Section A = 20 marks

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SECTION B – CASE STUDIES

You should spend no more than 50 minutes on this section.

Case Study 1:

Shelly’s Cakes

After having worked for a high street bakery for 10 ten years, Shelly was starting to feel trapped
in her job. She had developed a fascination for artistic and unusual cake designs, for a wide range
of occasions, but was not able to apply her creativity in her role at the bakery. She noticed that
many customers would enquire about wedding cakes, anniversary cakes, christening cakes, but
were turned away. Shelly approached her manager about diversifying the range of celebration
cakes and maybe considering more unique designs. Her manager thought her ideas were great,
but unfortunately the owners were happy with how the business was working and were worried
about the increase in costs if they followed her ideas.

Shelley’s husband had noticed how down she was becoming, so for her 40th birthday he decided he
would give her a very special present. He got together with his and her parents to discuss the
possibility of Shelly opening her own specialty cake shop. She was so thrilled and excited to
receive £20,000 to help her start up her own business.

Despite having little business experience, Shelly set about planning her venture. She sought
advice from a business advisor at her bank, who both helped her with her budgeting and assisted
her on finding premises she could lease. With the help of her friends and husband she spent a
week redecorating the shop front and fitting the new kitchen equipment at the back. Initially her
old bakery agreed to refer customers to her for alternative celebration cakes and charged her a
ten percent commission. At the end of her first month she compared her actual
income/expenditure with the budget she had prepared with the help of the business advisor, which
is set out below.

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Forecast(£) Actual(£) Variance (£) Favourable or

Questions

1. Give a definition for the term Entrepreneur. (2 marks)

2. Copy the table above and complete the variance column. Indicate whether the variance is
favourable or adverse using the letters F A in the last column. (4 marks)

3. Using the "ACTUAL" figures shown in the table, calculate the profit/loss. (4 marks)

4. Evaluate the importance of someone like Shelly putting together a budget before starting her
business. (15 marks)

Total 25 marks

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Case Study 2:

Top 25 Worst Customer Service Stories

Many people feel that the customer service we receive today is getting poorer and poorer because
businesses tend to prioritise this less and less. Many businesses prioritise sales over and above
after sales. This is a grave mistake as customers are becoming more choosey as to where they
shop. Poor customer service, even once, is enough to turn customers away and permanently.

Here’s the story from Ron B: I had a problem with a new piece of electronic equipment and called
customer services for assistance. The first technician I talked with insisted that there was nothing
wrong with his company’s equipment, that it must be my fault. When I explained that everything
in the network had worked perfectly until I powered the new item up, he laughed at me. When I
asked to talk to his supervisor, he responded by refusing and hung up. I called back and spoke
with a different technician who was able to resolve the problem in a matter of minutes and who
then asked his supervisor to join us on the line. When I told the supervisor of my earlier
experience, she asked me to give her one day so she could resolve the problem. She called back in
less than fifteen minutes to tell me that she and the call centre manager had reviewed the tape of
the call, fired the original technician, and promoted the second one to a customer service training
position. It went from being the worst customer service experience ever to one of the best in less
than half an hour.
—Submitted by: Ron B. - See more at: http://katenasser.com/worst-customer-service-stories-
train-best-csrs/#sthash.8iIx3Ca4.dpuf

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 BELLERBYS COLLEGE FOUNDATION EXAMINATION

Questions

1. Give a definition of customer service. (2 marks)

2. Name 2 ways poor customer service was experienced from the case study above. (2 marks)

3. Name 2 ways the business turned the situation around and provided a good service. (2 marks)

4. Based on the problems Ron B was experiencing, suggest and explain two ways the business
could improve customer service to prevent further bad customer service. (4 marks)

5. Evaluate the importance of good customer service for a business, such as a mobile phone
network provider (e.g. Vodaphone, 3, EE). (15 marks)

Total 25 marks

Total for Section B = 25 marks

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SECTION C - ESSAYS

Answer ONE essay question only.

You should spend no more than 50 minutes on this section.

1. An experienced Polish head waiter of an exclusive restaurant has decided to go it alone and
set up her own Polish restaurant in London. What is the likelihood of her being successful?
How could she minimise the risk of failure in setting up her own business. Evaluate. (25 marks)

2. Using a multi-national company of your choice, such as Samsung or Apple, evaluate the
importance of completing a SLEPT analysis to help them remain competitive. (25 marks)

3. Jennifer has decided not to go onto University, but instead she would like to set up her own
coffee shop. To do this she will need a bank loan. Evaluate the importance of producing a
comprehensive business plan to include financial information before starting up a new
enterprise. (25 marks)

Total for Section C = 25 marks

END OF EXAM

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