Business F297

Hey everyone I've just prepared a few revision cards to help you and myself if your doing an OCR business F297 on wednesday. If anyone does have any analysis of data such as decision trees then could you please post in the comments below. Thank you and hope this helps!

Happy Revising :) 

  • Created by: naina
  • Created on: 10-06-13 13:32

Cavendish cycles

  • LTD- Private limited company meaning that the shareholders are members of the cavendish family. 
  • Retails bicycle and life style complementary products- In the service/Tertairy sector of the economy. Bicycles are luxury products and not neccesities. 
  • First shop opened in 1981-Mailot Jaune in oakford (East Midlands) 
  • Another Mailot Jaune opened in 1992 at Market Harworth
  • Then 3 shops opened under the name Peddlers. The first peddler opened in 1994 at a local reservoir. Second peddler opened in 2001 outside Market Harworth 
  • (Mailot Jaune and Peddlers are both in the same location at Market Harworth)
  •  Third Peddler opened near a camp and caravan site on the edge of a Rockingham Forest in 2011
  • Ecommerce operation branded as CCL direct was opened in 2010 (Focus on the limitations and drawbacks of branding) 
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The company is owned and run by the Cavendish Family, found and managing director Phil Cavendish. 

  • 59 non adminstration staff in late 20s
  • Phil + 10 staff are on average older so we can assume that they are in their 30
  • Bradley Smith- CCL's marketing manager
  • Sam Tipper- Manager of Rockingham Forest outlet
  • Ned Boulting- Finance director 
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Objectives of CCL

  • Bringing the Rockingham Forest Peddler outlet to break even by the end of 2014 
  • Increasing the proportion of revenue from ecommerce to 55% by the end of the 2014
  • Becoming the number one bicycle retailer in the East Midlands 

Objectives of a business depends on its 

  • AGE 
  • SIZE 
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Stakeholder objectives

  • Employees want good wages, job satisfaction, job security, promotional prospects 

- The case study shows that staff are trained well to create new relationships with customers

-All staff at each store knows each other and will 'muck in' and take 'turn and turnabout' which means that staff is not being burdened with responsibilty as they are sharing tasks by job rotation which involves the movement of employees through a range of jobs in order to increase interest and motivation. However an drawback of this could be that employees may take time in adjusting with the new environment.

  • Customers want good quality, safe products and lower prices 

CCL business philosphy of customer care and making them feel valued will create a good impression of them. All staff receive training in customer care, hence ensuring the needs of customers of having good quality and safe products. However the change in monetery policy will change the demand from customers as their confidence and willingness to spend will decrease.

Monetary Policy is a goverment policy that manipulates the level of demand through the rate of intrest.

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Effects of Macroeconomic variables

Macroeconomics is the study and analysis of the behaviour of the whole of the economy. 

1) A low and stable rate of inflation- Inflation means that prices would rise which is bad for CCL as inflation can lead to decreased demand and so exceeded supply. Because CCL is a luxury service therefore an rise in inflation is most likely to prevent customers from buying bicycles and use their finance to invest in daily life neccesities. 

2) High Level of employement- This will benifit stakeholders such as goverment as they want high level of employement to prevent themselves from being burdened with complaints of not having jobs,Unemployement is a waste of human resource and is bad for the economy as a whole. 

3)Economic growth- If more goods and services are produced then people have higher standards of living. Table 1 of the case study shows that 2011 had the least annual rate of growth as inflation and unemployement rate in East Midlands was very high which led to a decrease in the economic growth and so the growth of the economy.However drawbacks of this forcast may be that it may not be reliable as past data cannot always predict the future trend. 

4) A balance of payment equilbrium- A record of all transactions made between one particular country and all other countries during a specified period of time. BOP compares the difference of the amount of exports and imports, including all financial exports and imports-Balance of Trade!

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Market Analysis

Having the knowledge of the market is vital information to any business. 

Consumer information-Carrying out market research amongst their customers. CCL could carry out market research to decide whether to install the solar panel bicyles and how much it would be preffered by customers. This would make them find out the ethical beliefs of their customers and may present the business as eco-friendly. However carrying out market research would be time consuming and may incurr costs for the business. 

Market share is the proportion of the market under the control of a particular business. For market share predicts its sucess- CCL does not mention if it is competion, however the ecommerce 

Enviroment- As well as monitoring their sales and changes in their market, businesses now need to asess the enviromental impacts of their operation. CCL is a business with low carbon footprint which implies that the business is ethical as it not harming the enviroment and protecting the economy from increasing global warming. 

Market size and growth- Market size can be measured in terms of volume or values of sales. 

Market growth- increase in the size of the total market which can be measured by, sales, increase in size of the market and changes in taste/product - Appendix 1 shows the growth of CCL from 2011 and 2012 and the growth of different shops. Appendix 2 shows the monthly profit assessment from 2011-2012 

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Forecasting is the use of existing data to predict future trends. CCL uses the method of decision trees to predict whether an additional sponsorship would be a sensible idea. The use of existing data such as the investments by the 4 options will be able to help predict future trends. The profit centre performance from 2011-2012 will help predict the profit or loss of the next year. 

Advantages of forcasting

  • Shows the trend in figures
  • Recent information is useful 

Limitations of forcasting- 

  • Not reliable 
  • Does not take into account any objectives in the business

Time series data -can indicate the movement of a variable over years, quarters, months or another time period. Moving avarage is the data over a period of time and combines it over different periods which is then used to give projected figures for the future. 

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CCL- Appendix 1 

Profitability ratio- asses the level of profitabilty in the business over a period of time 

  • Gross profit margin- Gross profit / sales (turnover) x 100 To work out gross profit it will be gross profit - costs of good sold 
  • Net Profit Margin- Net profit/sales x 100 
  • ROCE- Net profit/ equility share funds (Net profit after sales) 

Liquidity ratio- asses the level of cash remaining in the business 

  • Current ratio- current assets/ current liablities 
  • Acid test ratio- Current assests- stock/ current liabilities 

Assests- (own) Liabilities (owe) 

Asset turnover- Sales revenue- Net assets

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Measure of business performance

  • Productivity
  • Absenteeism 
  • Labour 

Labour productivity measures the efficency of the workforce 

Productivity= Total output/number of employees 

The higher the productivity the greater the efficency of the workforce and the lower the wages per unit 

Absenteeism- gives an indication of the morale of the workforce and the level of job satisfaction that the staff have. Reasons for being absent- 

  • Lack of job satisfaction 
  • Work is too challenging 
  • Workplace relations 

Drawbacks of absenteeism- Imposes costs on the business because production is lost and may incurr long term costs for the businesss 

Labour turnover- measures the performance of the  workforce 

Number of people leaving/ total number of people 

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OCR Business exam F297!! answering techniques

The term discuss, which appears often in essay questions, directs you to examine, analyze carefully, and present considerations pro and con regarding the problems or items involved. This type of question calls for a complete and entailed answer. (Always an 18 marker) 

In an evaluation question you are expected to present a careful appraisal of the problem stressing both advantages and limitations. Evaluation implies authoritative and, to a lesser degree, personal appraisal of both contributions and limitations. (Always an 23 marker)

Recommend- (Always an 18 marker too) 

13 markers is most likey to be on assesing some sort of data!

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Cameron Hill


"Consumer information-Carrying out market research amongst their customers. CCL could carry out market research to decide whether to install the solar panel bicyles and how much it would be preffered by customers. This would make them find out the ethical beliefs of their customers and may present the business as eco-friendly. However carrying out market research would be time consuming and may incurr costs for the business."

This wrong, it was talking about solar panels on the shop, not on the bikes

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