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Paper 1 Unit 6

Ravi has conducted market research indicating that using an ethical supply chain will be popular with customers for Dipta and Ravi's planned chocolate business. They have written a business plan but need $500 for equipment and must decide how to finance their startup costs, as they have no prior business experience running their own company

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Jichan An
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55 views2 pages

Paper 1 Unit 6

Ravi has conducted market research indicating that using an ethical supply chain will be popular with customers for Dipta and Ravi's planned chocolate business. They have written a business plan but need $500 for equipment and must decide how to finance their startup costs, as they have no prior business experience running their own company

Uploaded by

Jichan An
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Dipta and Ravi are friends. They want to start up a business making chocolates to sell at local markets.

Most ingredients such as cocoa beans will be imported. Ravi’s primary market research shows that using
ethical sources of supply for the ingredients will be popular with consumers. Ravi and Dipta have no
business experience, but Dipta has written a business plan. They need $500 for equipment, but they
cannot decide which source of finance to use.

1. Identify and explain two benefits to Dipta and Ravi of acting in an ethical way. [4]
People's positive evaluation of the business and corporate awareness increase due to
sponsorship or volunteer donations.
2. Identify and explain two possible advantages of importing for Dipta and Ravi’s business. [4]

If imported items have good quality, they can set a higher price than domestic products.

There may be more profits than domestically produced products. Because people have a strong
perception that overseas products are expensive, differentiated marketing can be performed
using this.

GKK makes plastic bottles for a range of products from food to chemicals. GKK buys its raw materials
from a low-cost country. GKK’s organizational structure is wide with a short chain of command which
allows for delegation. The Government plans to introduce new legal controls to protect the
environment. The Operations manager said: ‘The Government might achieve one of its objectives but
how does it affect GKK? This is a competitive market so prices are important.’ He wants to improve
efficiency and plans to use lean production.

3. Identify and explain two ways in which new legal controls to protect the environment might
affect GKK.
[6]

Depending on how legal control is carried out, the situation may change a lot or production may
take place without any problems. Consumers will complain that high taxes will increase the price
of the product, and if the maximum number of products is set, a big problem may arise if they
sign a contract because they cannot provide products to consumers who have been selling
before. If plastic is not allowed at all, new bottles using glass bottles or other mixtures may be
developed. However, it is very unlikely that plastic barrels will be restrained to store chemicals
or other special things because such items are less accessible. In fact, this is because the
problem of plastic bottles or objects used in real life is greater in the number of cases where the
environment is contaminated with plastic.

The Government of country Z has decided to invest a large amount of capital in building a new road
system. Some people don’t like the decision because of the social costs that it will create. However,
most businesses think the decision is a good one. The business sector would also like to see the
Government lower taxes on goods and remove some of the consumer protection and employment laws
that it claims increase business costs.

4. Identify two reasons why Governments put taxes on goods. [2]


To raise revenue to finance government spending
Changing the distribution of income and wealth

5. Identify and explain two reasons why many business managers think the decision to build more
roads is a good one. [4]
This is because it lowers consumers' accessibility and gives businesses a better advantage in
terms of opportunity.

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