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ADVANCED SUBSIDIARY GCE BUSINESS STUDIES F291 An Introduction to Business Monday 16 May 2011 * F 2 2 6 2 5 0 6 1 1 * Candidates answer on the question paper. OCR supplied materials: Afternoon None Duration: 1 hour Other materials required: • A calculator may be used * F 2 9 1 * INSTRUCTIONS TO CANDIDATES • Write your name, centre number and candidate number in the boxes above. Please write clearly and in capital letters. • Use black ink. Pencil may be used for graphs and diagrams only. • Read each question carefully. Make sure you know what you have to do before starting your answer. • Write your answer to each question in the space provided. Additional paper may be used if necessary but you must clearly show your candidate number, centre number and question number(s). • Answer all the questions. • Do not write in the bar codes. INFORMATION FOR CANDIDATES • The number of marks is given in brackets [ ] at the end of each question or part question. • The total number of marks for this paper is 60. • The quality of your written communication will be taken into account in marking your answer to the question labelled with an asterisk (*). • This document consists of 12 pages. Any blank pages are indicated. A calculator may be used for this paper © OCR 2011 [M/500/7948] OCR is an exempt Charity DC (SM) 25425/6 Turn over
2 STARBUCKS LOSES ITS SHINE Starbucks is an international chain of coffee shops. It has over 15,000 branches in 49 countries including the UK. In the 1990s it expanded rapidly, but by 2009, after years of growth, the business was in trouble. So what happened? Some business consultants say Starbucks simply grew too fast, too soon. Starbucks’ growth means that as well as ‘coffee and cakes’, the company also sells books, music, 5 and films. These activities have, however, not always been profitable. “Success was built on the coffee experience,” said one consultant. “By moving so far beyond that without a clear business plan, it risked losing everything.” Starbucks has also been the target for protests on issues such as employment and also fairtrade policies. In 2008, an American court ordered Starbucks to pay its waiters and waitresses more 10 than $100m which managers had illegally taken from their tips. Others have claimed that Starbucks does not pay its suppliers an ethical price for its coffee. Starbucks disputes this and points to the fact that it has set up the ‘Shared Planet’ initiative to minimise environmental damage and to create a better future for coffee farmers. These criticisms have had some effect on consumer demand. Consumer demand has also been 15 affected by a range of other external factors. To make matters worse, Starbucks has also been faced with the threat of higher costs for coffee as a result of poor harvests. Starbucks operates in an oligopolistic market, alongside other well known high street retailers such as Costa Coffee and Caffé Nero. A Starbucks’ spokeswoman declined to comment on the closure of any under-performing UK 20 coffee shops or how many it would open over the next year. She said, “Starbucks continues to plan new store openings internationally, including in the UK.” © OCR 2011
3 Answer all questions. 1 (a) Starbucks is regarded as a large business. Identify two ways to measure the size of a business. 1: ............................................................................................................................................... 2: .......................................................................................................................................... [2] (b) Large businesses often gain economies of scale. Outline two economies of scale from which Starbucks might benefit. 1: ............................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... 2: ............................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... .............................................................................................................................................. [4] (c) ‘Starbucks operates in an oligopolistic market’ (lines 17–18). State two characteristics of an oligopolistic market. Characteristic 1: ........................................................................................................................ Characteristic 2: ................................................................................................................... [2] (d) ‘Without a clear business plan, it risked losing everything’ (lines 7–8). Outline two ways in which Starbucks could benefit from clear business planning. 1: ............................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... 2: ............................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... .............................................................................................................................................. [4] © OCR 2011 Turn over
4 2 Analyse one likely effect on Starbucks of a rise in the cost of coffee. You may draw a graph as part of your answer, but it is not necessary in order to gain full marks. .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... [6] © OCR 2011
5 3 ‘Starbucks continues to plan new store openings internationally, including in the UK.’ (lines 21–22) Analyse two human resource implications of this expansion. .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... © OCR 2011 Turn over
6 .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... ................................................................................................................................................... [10] © OCR 2011
7 4 Discuss the extent to which Starbucks should be concerned with ethical issues. .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... © OCR 2011 Turn over
8 .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... ................................................................................................................................................... [14] © OCR 2011
9 5* Other than ethical issues, evaluate factors that might determine the future success of Starbucks. .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... © OCR 2011 Turn over
10 .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... © OCR 2011
11 .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... ................................................................................................................................................... [18] © OCR 2011
12 PLEASE DO NOT WRITE ON THIS PAGE Copyright Information OCR is committed to seeking permission to reproduce all third-party content that it uses in its assessment materials. OCR has attempted to identify and contact all copyright holders whose work is used in this paper. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced in the OCR Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download from our public website (www.ocr.org.uk) after the live examination series. If OCR has unwittingly failed to correctly acknowledge or clear any third-party content in this assessment material, OCR will be happy to correct its mistake at the earliest possible opportunity. For queries or further information please contact the Copyright Team, First Floor, 9 Hills Road, Cambridge CB2 1GE. OCR is part of the Cambridge Assessment Group; Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. © OCR 2011

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Starbucks Shines Light on Business Planning

  • 1. ADVANCED SUBSIDIARY GCE BUSINESS STUDIES F291 An Introduction to Business Monday 16 May 2011 * F 2 2 6 2 5 0 6 1 1 * Candidates answer on the question paper. OCR supplied materials: Afternoon None Duration: 1 hour Other materials required: • A calculator may be used * F 2 9 1 * INSTRUCTIONS TO CANDIDATES • Write your name, centre number and candidate number in the boxes above. Please write clearly and in capital letters. • Use black ink. Pencil may be used for graphs and diagrams only. • Read each question carefully. Make sure you know what you have to do before starting your answer. • Write your answer to each question in the space provided. Additional paper may be used if necessary but you must clearly show your candidate number, centre number and question number(s). • Answer all the questions. • Do not write in the bar codes. INFORMATION FOR CANDIDATES • The number of marks is given in brackets [ ] at the end of each question or part question. • The total number of marks for this paper is 60. • The quality of your written communication will be taken into account in marking your answer to the question labelled with an asterisk (*). • This document consists of 12 pages. Any blank pages are indicated. A calculator may be used for this paper © OCR 2011 [M/500/7948] OCR is an exempt Charity DC (SM) 25425/6 Turn over
  • 2. 2 STARBUCKS LOSES ITS SHINE Starbucks is an international chain of coffee shops. It has over 15,000 branches in 49 countries including the UK. In the 1990s it expanded rapidly, but by 2009, after years of growth, the business was in trouble. So what happened? Some business consultants say Starbucks simply grew too fast, too soon. Starbucks’ growth means that as well as ‘coffee and cakes’, the company also sells books, music, 5 and films. These activities have, however, not always been profitable. “Success was built on the coffee experience,” said one consultant. “By moving so far beyond that without a clear business plan, it risked losing everything.” Starbucks has also been the target for protests on issues such as employment and also fairtrade policies. In 2008, an American court ordered Starbucks to pay its waiters and waitresses more 10 than $100m which managers had illegally taken from their tips. Others have claimed that Starbucks does not pay its suppliers an ethical price for its coffee. Starbucks disputes this and points to the fact that it has set up the ‘Shared Planet’ initiative to minimise environmental damage and to create a better future for coffee farmers. These criticisms have had some effect on consumer demand. Consumer demand has also been 15 affected by a range of other external factors. To make matters worse, Starbucks has also been faced with the threat of higher costs for coffee as a result of poor harvests. Starbucks operates in an oligopolistic market, alongside other well known high street retailers such as Costa Coffee and Caffé Nero. A Starbucks’ spokeswoman declined to comment on the closure of any under-performing UK 20 coffee shops or how many it would open over the next year. She said, “Starbucks continues to plan new store openings internationally, including in the UK.” © OCR 2011
  • 3. 3 Answer all questions. 1 (a) Starbucks is regarded as a large business. Identify two ways to measure the size of a business. 1: ............................................................................................................................................... 2: .......................................................................................................................................... [2] (b) Large businesses often gain economies of scale. Outline two economies of scale from which Starbucks might benefit. 1: ............................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... 2: ............................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... .............................................................................................................................................. [4] (c) ‘Starbucks operates in an oligopolistic market’ (lines 17–18). State two characteristics of an oligopolistic market. Characteristic 1: ........................................................................................................................ Characteristic 2: ................................................................................................................... [2] (d) ‘Without a clear business plan, it risked losing everything’ (lines 7–8). Outline two ways in which Starbucks could benefit from clear business planning. 1: ............................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... 2: ............................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... .............................................................................................................................................. [4] © OCR 2011 Turn over
  • 4. 4 2 Analyse one likely effect on Starbucks of a rise in the cost of coffee. You may draw a graph as part of your answer, but it is not necessary in order to gain full marks. .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... [6] © OCR 2011
  • 5. 5 3 ‘Starbucks continues to plan new store openings internationally, including in the UK.’ (lines 21–22) Analyse two human resource implications of this expansion. .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... © OCR 2011 Turn over
  • 6. 6 .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... ................................................................................................................................................... [10] © OCR 2011
  • 7. 7 4 Discuss the extent to which Starbucks should be concerned with ethical issues. .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... © OCR 2011 Turn over
  • 8. 8 .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... ................................................................................................................................................... [14] © OCR 2011
  • 9. 9 5* Other than ethical issues, evaluate factors that might determine the future success of Starbucks. .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... © OCR 2011 Turn over
  • 10. 10 .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... © OCR 2011
  • 11. 11 .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... ................................................................................................................................................... [18] © OCR 2011
  • 12. 12 PLEASE DO NOT WRITE ON THIS PAGE Copyright Information OCR is committed to seeking permission to reproduce all third-party content that it uses in its assessment materials. OCR has attempted to identify and contact all copyright holders whose work is used in this paper. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced in the OCR Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download from our public website (www.ocr.org.uk) after the live examination series. If OCR has unwittingly failed to correctly acknowledge or clear any third-party content in this assessment material, OCR will be happy to correct its mistake at the earliest possible opportunity. For queries or further information please contact the Copyright Team, First Floor, 9 Hills Road, Cambridge CB2 1GE. OCR is part of the Cambridge Assessment Group; Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. © OCR 2011