A Level Business Transition Assessment - Schudio



A Level Business Transition Assessment1. In how many years were sales of white wine at least 10% higher than sales of red wine? (1)On average, how many bottles of red wine were sold between 2009 and 2014? (1)In which year was the percentage growth in white wine, when compared to the previous year, the highest? (1)2. A business reduces its selling price from ?12 to ?7.50. Calculate the percentage decrease in price. (3)3. A business sells a product for ?150 per unit. It decides to reduce the price by 20%. Calculate the new selling price per unit. (3)4. In 2018, the size of a market by volume was 400,000 units. The market is expected to grow by 6% per year for the next 5 years. Calculate the expected market size by volume in 2019 and 2020. (3)5. The graph below shows the number of customers who visited a restaurant during February, March and April. Based on the graph above, calculate: The percentage increase in customers between February and April. Write your answer to two decimal places. (3)The percentage increase in customers between March and April. (3)6. This year a business estimates that it will sell 138,000 units, 15% less than last year. Calculate the estimated number of units sold last year. (3)Good Guys: Q1 and Q2 each worth 9 marksSo what went wrong at Toys R Us? Out-of-town In 1950s America, when retail was taking off as a leisure activity, the time was right for a huge, Aladdin's cave of toys, that could overwhelm children with a wealth of choice. In the 1990s, the model still worked for UK shoppers keen to pick up the latest Furby, Power Ranger or Tamagotchi. At the time, cheaper out-of-town real estate with purpose-built free parking, plus places to eat, offered an easy weekend day out. But these days, out-of-town can mean out-ofsight compared with rival outlets. We're more likely to pick up a fidget-spinner or some loombands on the way to the supermarket till or be lured into a High Street shop as we stroll past by the sight of someone demonstrating a remote-controlled helicopter. New kids on the block Kids are changing. An eight-year-old now, they can download an app in 30 seconds to distort their face and make them look like Spiderman. Retail almost can't keep up. Birthday presents are now tech-related, such as virtual reality headsets, drones or go-pro cameras. That wasn't something Toys R Us was able to get into very successfully. They did it in a generic way... it was just another aisle. And like the rest of us, children are seeking experiences rather than possessions. So a trip to a toy store is competing with trampolining parks, laser tag and gokarting. But the digital ecosystem can be an opportunity as well as a challenge, it isn't hard for retailers to spot fashions - like the current trend for making slime - and capitalise on that. The Irish chain Smyths has done so. But Toys R Us failed there too. Priced out When it comes to toys, brand loyalty is to the manufacturer. You want to buy a box of Playmobil, a Barbie doll or a Scalextric set - it doesn't matter who you buy from. That makes the market on and offline fiercely price-competitive. Hamleys, Woolworths and Hawkins Bazaar all suffered from the onslaught of internet shopping, plus the discounters and supermarkets before them, but Toys R Us didn't learn from their example. Even in clearance now, they've been undercut by discounters and big brands like WH Smiths and The Entertainer. Lack of drama For a magical place, it's not very magical. If you can't compete on price, you can at least compete on theatre. If I walk into the Lego store in Meadowhall in Sheffield, the first thing I look for is not the products piled up, but the huge benches of Lego to play with, and the team members are there waiting to build with me. That's very exciting for a child. In comparison, a trip to Toys R Us was mundane and lacking in inspiration. Retail analyst Nick Bubb agrees: "The main problem is simply that the stores are too big and unwelcoming," he says. "They have tried a few smaller, mall stores, without much success, perhaps because the store format was too boring." Lack of imagination 413289838671But in the end, they just needed to do something, anything to update what they were offering. Geoffrey the giraffe - the 1990s cartoon character on the company's logo - should have gone long ago. They should have put children's experiences front and centre. Even if they didn't want to give over their stores to the kinds of hands-on experience that you get in Hamleys or a Lego store, they should have done more to keep customers happy, been less functional, more on-trend. They just needed some buzz. The general feel isn't one of fun, it's one of tiredness. There is a Toys R Us store in York where the first sign you see is that they reserve the right to check your bags as you leave. That's a horrendous message in a toy shop. As a customer, you don't really feel valued. "That shouldn't be what a toy shop is. It should be a place of joy." Toys R Us Financial Data: Transition Work Questions: What are the 5 forces in Porter’s Five Forces model? Can you identify which of Porter’s 5 forces affected Toys R Us? Explain how. Using the information provided, work out the 3 different profit margins over the past 5 years. Suggest 3 ways (using the article) they could have boosted profitability. ‘Toys R Us’ have been selling Pop Vinyl Figures at ?12.99 and sell 400,000 a week. They put the price down to ?9.99 and sell 500,000. Calculate and comment on the Price Elasticity of Demand for this product. What is ‘lean production’? Assuming ‘Toys R Us’ didn’t use lean production, how could this method have helped them? Try and use the article to suggest why they didn’t. Design a decision tree based on the following: It would cost ?500,000 to implement a new marketing campaign that removes Geoffrey the giraffe – the likelihood of it working without any response from rivals and seeing an increase in revenue of ?2.5 million is 60%. If rivals respond, then the expected increase is ?1.2 million with a 40% chance. It would cost ?800,000 to open 4 new ‘Toys R Us’ in city centre locations. There is a 50% chance this strategy will work and makes ?7 million and a 50% chance it will flop badly leading to a ?1 million loss. What’s their best strategy given the decision tree analysis? Supporting Information: Link to revision notes on Porter’s 5 Forces: Formulas for calculating profit margins: Gross profit margin % Gross profit Sales revenue × 100 Operating profit margin % Operating Income Sales revenue × 100 Profit for year margin % Net Income Sales revenue × 100 Link to revision notes on Price Elasticity of demand: Price elasticity of demand formula: Percentage change in quantity demand Percentage change price Link to revision notes and video on Lean Production: ................
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