Unit 7 business and decision making exam notes for 2024 activity 2
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Course
Unit 7 - Business Decision Making
Institution
PEARSON (PEARSON)
Unit 7 business and decision making exam notes for 2024 activity 2 . This documents contains detailed information regarding structures and all the crucial information you need to write in the exam
btec business unit 7 business and decision making notes
notes on unit 7 btec business
january 2024 exam for unit 7 business decision mak
Written for
BTEC
PEARSON (PEARSON)
Business 2016 NQF
Unit 7 - Business Decision Making
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Front cover
Setting up a Coffee
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Slide 1
Businessprofile
Speaker notes
The market research has been conducted and came up with 2 potential options to choose
the best option for the client to set up its own business within the Coffee market. In this
presentation, I will summarise the benefits and drawbacks of both options, key information
about the current market, trends, impacts of recommendations, and justification of the two
options.
Slide 2
The Market
● UK had over 16000 coffee shops with a turnover of £6.2 billion.
● Costa Coffee, Starbucks, and Caffe Nero remain the UK’s leading brands with a
combined market share of 54%
Speaker notes
Costa coffee, Starbucks, and Caffe Nero are the UK’s leading brands with a combined
market share of 54%, so I would assume that 18% of the market share of each business.
Costa Coffee’s net profits were up 15.8% to £153 million with a return on capital of almost
50%.
Given the growth forecast, the choices faced by the client are whether to open an
independent coffee shop or whether to buy out an existing coffee shop business.
Slide 3
Option 1
● Buying an existing coffee shop ( NPM 16.4%)
Speaker notes
Option 1 which is buying an existing coffee shop costs £85,000 to start up the business
without operating costs but the client has £35000 which means that the client needs to take
a loan from the bank or investments such as hire purchase or leasing which would assist the
client to manage the budget more effectively in order to start-up a new business. Comparing
option 1 to costa coffee, their Net profit margin was up 15.8%. The market research shows
that by using option 1 the client would have revenue of £180,000 and £150440 operating
costs which indicates that the Net profit for option 1 would be £29,560 with a 16.4% of Net
profit margin. Option 1 has a 3.7% more Net profit margin than Costa coffee. This would
have a positive impact on client decisions as the client will have the opportunity to gain more
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