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GCE JUN 2010 : (AS 1) The Competitive Business - Revised

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Sp N ec e i w ca tio n ADVANCED SUBSIDIARY (AS) General Certificate of Education 2010 assessing The Competitive Business [AT111] AT111 Assessment Unit AS 1 *AT111* Business Studies FRIDAY 11 JUNE, AFTERNOON TIME 1 hour 30 minutes. INSTRUCTIONS TO CANDIDATES Write your Centre Number and Candidate Number on the Answer Booklet provided. Answer both questions. INFORMATION FOR CANDIDATES The total mark for this paper is 80. Quality of written communication will be assessed in question 1 parts (d) and (e) and question 2 parts (d) and (e). Figures in brackets printed down the right-hand side of pages indicate the marks awarded to each question or part question. ADVICE TO CANDIDATES You are advised to take account of the marks for each question or part question in allocating the available examination time. 6251 1 Study the information below and answer the questions that follow. Greggs Greggs plc Greggs, the bakery chain, is planning to invest in around 600 new shops in the UK over the next six or seven years, with 50 60 stores planned for 2010. The expansion drive will cost between 50m and 60m per year. Greggs has performed well during the recession, adding value by producing a range of traditional foods at competitive prices. It has placed greater emphasis on attracting male customers with its food-on-the-go product range. Greggs, the largest food-on-the-go operator on the High Street, already has more than 1400 outlets nationwide, many strategically located where consumers work and travel. The second biggest bakery chain in the UK is Sayers with 150 stores. Although there are more than 3000 independent bakeries in the UK, Greggs offers prices that most cannot match. Independent bakeries generally use batch production methods to bake relatively small quantities. Scott Jefferson, Marketing Director of Greggs, describes how Greggs differs; Because we make the vast majority of what we sell, we can absolutely control the costs all the way through. The business has over five million customers each week. Although Greggs sells a wide variety of products sandwiches, savouries, bread and cakes, along with regional specialities, it continues to expand its range. It uses a variety of market research methods to obtain customer feedback. Recently, the Chilli Steak Lattice was developed in response to changing customer tastes. Extensive taste tests were conducted at bakeries nationwide to ensure the flavour was right. Graeme Nash, Brand Marketing Manager from Greggs says, We listen and are able to respond quickly to customer feedback. Adapted from Greggs savours the taste of million mince pies a week The Times 14th January 2010, www.greggs.co.uk/about, How did Greggs conquer the High Street www.news.bbc.co.uk/1/hi/magazine/8330573.stm 6251 2 (a) Explain what is meant by adding value, using an example from the case study to illustrate your answer. [4] (b) Explain what is meant by batch production, using an example from the case study to illustrate your answer. [4] (c) Analyse how Greggs seeks to achieve competitive advantage in its market. [8] (d) Discuss the advantages and disadvantages to a business such as Greggs of deciding to use internet surveys and focus groups as market research methods. [12] (e) Evaluate the implications for Greggs of its plan to invest in 50 60 new stores in the UK during 2010. [12] 6251 3 [Turn over 2 Study the information below and answer the questions that follow. Nestl Nestl employs almost 7000 people across 23 sites in the UK and Ireland. It manufactures a wide product portfolio which includes some of the UK s most popular brands, such as Nescaf , KIT KAT, Carnation, Shredded Wheat, Buxton Water, Ski and Bakers Dog Food. It is estimated that around 95% of households in the UK consume Nestl products. KIT KAT, Nestl s biggest-selling chocolate biscuit, is manufactured in York. Approximately one billion KIT KAT bars are sold in the UK every year. The product, originally called Chocolate Crisp, was developed as a four-finger wafer bar in 1935. Since then sales have grown steadily. There have been many variations of KIT KAT produced and currently it is possible to buy: - Four-finger milk and dark, - Two-finger milk, mint, orange and caramel, - Chunky milk and caramel - KIT KAT Senses Caramel Cream. KIT KAT was first advertised on television in 1957 using the iconic line Have a Break Have a KIT KAT . In 2006, Nestl moved production of another famous brand, Smarties, from the York factory to Germany, in order to enable KIT KAT production facilities to be modernised. Many parts of the manufacturing process are now fully automated. Nestl states that it favours long-term business development over short-term profit. The UK chocolate market is currently dominated by three large manufacturers. Although Nestl managed to achieve a 20.4% market share in November 2009, it lags behind rivals Mars and Kraft. In such a market structure, the importance of getting the marketing mix right is crucial. The KIT KAT name and image is reproduced with the kind permission of Soci t des Produits Nestl S.A. 6251 4 (a) Outline what is meant by the product element of the marketing mix, using an example from the case study to illustrate your answer. [4] (b) Explain two reasons why a business such as Nestl needs to continually invest in new machinery. [4] (c) Analyse how the concept of the product life cycle might help with decision-making in a business such as Nestl . [8] (d) Evaluate the usefulness of price elasticity of demand, to Nestl , when making business decisions in relation to KitKat. [12] (e) Discuss the implications for Nestl of operating in a market currently dominated by three large chocolate manufacturers. [12] THIS IS THE END OF THE QUESTION PAPER 6251 5 Permission to reproduce all copyright material has been applied for. In some cases, efforts to contact copyright holders may have been unsuccessful and CCEA will be happy to rectify any omissions of acknowledgement in future if notified. 6251/1

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Additional Info : Gce Business Studies June 2010 Assessment Unit AS 1 The Competitive Business - Revised
Tags : General Certificate of Education, A Level and AS Level, uk, council for the curriculum examinations and assessment, gce exam papers, gce a level and as level exam papers , gce past questions and answer, gce past question papers, ccea gce past papers, gce ccea past papers

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