Page 1: Introduction

Document Overview

• Title: CTEC Business Pre Release Unit 1: The Business Environment

• Date: 8th January 2025

Page 2: Copyright Information

Fair Use Policy

• Educational use for instruction or examination.

• Content available at www.orc.org.uk.

• Not a replacement for published information from the awarding body.

Page 3: Business Table

Businesses Listed

• TESCO

• WAITROSE

• PIZZA - & PARTNERS

• Box numbers: 01, 02, 03, 04, 05

Page 4: Exam Structure

Exam Details

• Date: 8th January 2025

• Duration: 2 hours

Assessment Structure

• Section A: Multiple choice questions.

• Section B: Short answer questions (90 marks).

• Section C: Short answer and extended response questions based on an unseen scenario.

Grading Criteria

• Near-Pass, Pass, Merit, or Distinction based on external assessment.

Page 5: Examination Instructions

Research Requirement

• Conduct your own research for preparation.

• Mandatory to bring all research compiled in this document to the exam.

• Use tables, pictures, graphs for better preparation.

Page 6: Research Brief

Themes for Research

1. Meeting external stakeholders' objectives.

2. Compliance with the Consumer Rights Act.

3. SWOT analysis in action.

4. Operational responses to rising disposable income.

5. Use of short-term sources of finance.

Page 7: Research Section

Notes Placeholder

• Place for personal research entries.

Page 8: External Stakeholder Objectives

Objectives Overview

• Identify internal and external stakeholders.

Conflict Management

• How businesses respond to conflicting objectives.

Response Strategies

• Internal/external groups' influence on business behavior.

Page 9: Internal Stakeholders

Stakeholders Defined

• Role of stakeholders: CEOs, directors, managers, employees, trade unions.

Importance

• Stakeholders have vested interests in business activities.

Page 10: External Stakeholders

Categories

• Customers: crucial for sales.

• Suppliers: essential for product availability and costs.

• Local Community, Government: influence through regulations and support.

Page 11: Conflicting Stakeholder Objectives

Examples of Potential Conflict

• Customers seek low prices vs. owners profit goals.

• Suppliers demand higher prices vs. business cost management.

• Government regulatory effects on profit margins.

Page 12: Business Responses

Responses to External Objectives

• Influence of stakeholders on business decisions.

Page 13: Conflict Resolution Techniques

Business Strategies

1. Set clear standards and written policies.

2. Improve communication with stakeholders.

3. Explore acceptable compromises for conflicting interests.

Page 14: Customer Value Proposition

Yearly Focus

• Commitment to value through pricing strategies.

Examples

• Price cuts, promotional campaigns, and assurances of economic relief.

Page 15: Community Involvement

Local Engagement

• Initiatives like Stronger Starts, meal donations, and community programs.

• Impact of cost-of-living crisis on community needs.

Page 16: Community Engagement Strategies

Programs and Contributions

• Significant meal donations.

• Community project support and involvement.

Page 17: Research Prompts

Questions for Reflection

1. What are stakeholder objectives?

2. How does Tesco meet their stakeholders' needs?

3. Consequences of failing to meet these needs.

Page 18: Example Response

Customer Satisfaction Example

• Tesco cuts prices on groceries, enhancing customer retention and sales.

Page 19: Compliance with Consumer Rights Act

Legal Obligations

• Importance of adhering to consumer protection laws and implications of violations.

Page 20: Consumer Protection Laws

Overview

• Inclusion of digital content in consumer rights.

• Ensuring satisfactory quality, fitness for purpose, and accurate descriptions.

Page 21: Product Standards

Compliance Criteria

• Goods must be: appropriate quality, fit for intended use, and as described.

Customer Rights

• Refund eligibility for defective goods.

Page 22: Volkswagen Scandal Analysis

Key Points

• Impact of the scandal on trust and sales.

• Consequences including regulatory fines and loss of consumer confidence.

Page 23: Volkswagen's Response

Warranty Overview

• Comprehensive warranty for customer assurance.

Changes and Future Products

• Improvements to product offerings post-scandal.

Page 24: Research Prompts on Consumer Rights

Questions for Exploration

1. What is the Consumer Rights Act?

2. What rights do consumers have?

3. Consequences for businesses failing to comply.

Page 25: Example Response Structure

Writing Guidance

• Use Point, Explain, Example, Leading to format for a structured answer.

Page 26: SWOT Analysis Overview

SWOT Framework

• Definition: Tool assessing internal strengths/weaknesses and external opportunities/threats.

Page 27: SWOT Analysis Breakdown

Purpose

• Assists businesses in decision-making and current position assessment.

Page 28: SWOT Elements

Elements Defined

• Strengths (internal advantages), Weaknesses (internal drawbacks), Opportunities (external favorable conditions), Threats (external risks).

Page 29: TESCO SWOT Analysis Details

Key Metrics

• 2023 Sales and Market Share overview.

• Business Growth and Community Involvement Impact.

Page 30: Consumer Behavior Insights

Market Dynamics

• Trends in consumer spending and focus on sustainability and value.

Page 31: Principal Risks Overview

Major Risks

• Cybersecurity, data privacy, and operational safety risks.

Page 32: Research Prompts on SWOT Analysis

Questions for Analysis

• Define SWOT and its utility; perform SWOT for Tesco.

Page 33: Example Answer Template

Structuring Responses

• Encourage use of structured approach for analysis, covering products or industry context.

Page 34: Operational Responses Overview

External Influences on Businesses

• Focus on societal factors affecting retail strategies.

Page 35: Concept of Disposable Income

Definition

• Disposable income: Money available for spending or saving after taxes.

Page 36: Business Strategies Based on Disposable Income

Strategic Responses

• Stocking luxury goods during high income phases.

• Adjusting pricing strategies according to economic context.

Page 37: Waitrose's Responses

Community Engagement in Different Economic Levels

• Strategies to cater to varying disposable incomes:

  • Store presence adjustments.

  • Product offering diversity.

Page 38: Research Prompts on Disposable Income

Evaluative Questions

1. Importance of understanding disposable income.

2. Responses made by businesses in relation to income trends.

Page 39: Example Answer Structure for Disposable Income

Structuring Guidance

• Use structured approach for focusing on product implications and financial outcomes.

Page 40: Short-term Finance Overview

Financial Planning Importance

• Need for varying financial sources (internal/external, short/long-term).

Page 41: Short-term Finance Implications

Cash Flow Management

• Recognizing issues leading to potential business failure and measures to resolve cash flow problems.

Page 42: Definition of Short-term Finance

Characteristics

• Short-term finance: liabilities settled within 12 months.

Page 43: Overdraft Use

Overdraft Features

• Allows businesses quick access to funds;

• Advantages for managing operational costs and emergencies.

Page 44: Case Study: Pizza Box

Contextual Application

• Use Pizza Box scenario illustrating need for short-term finance during growth periods.

Page 45: Research Questions on Short-term Finance

Guided Questions

• Importance of short-term finance and its various forms; case studies for contextual understanding.

Page 46: Structured Response Example

Writing Instructions

• Use Point, Explain, Example, Leading to format with application to industry specifics.