Case
Real smoothies plc, Horbury plc, Miyagi Motors case study and markscheme
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- AQA
This is a case study that includes the answers for gcse and as level student. It covers the whole topic in chapter 1 on what is business
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Real Smoothies (Business objectives and profit)Spec ifica tion topic: Busi ness obje ctive s and prof it
Case Study: Real Smo othie s pie
r met at university and decided to
Real Smoothies was formed when Jack Brown and Samir Milne
l food products by ethically sourcing
start up a small business cashing in on the growt h in natura
in Wakefield shopping centre.
ingredients and making and selling smoothies from a kiosk
no added preservatives or flavouring
Unlike most soft drinks on the market Rea l Smoothies had
the founders were able to sell at a
giving them a USP and adding value to the brand . As a result
ing" since a carton of each smoothie
prem ium price and cash in on consumer "conscience spend
of fru it and vegetables . Unique flavours
would contain 3 of the recommended 5 per day servings
to consumers and very soon the plan was
like Mang o and Lemongrass added to the variet y offered
start supplying supermarkets. Jack was
hatched to move production to a large indus trial unit and
they made a successful pitch to some
deter mined to take the products to a national audience and
In order to raise finance for the
retail buyers from the second largest UK supermarket chain.
any, selling shares to the public via the
ventu re the business was converted to a public limite d comp
stock marke t.
closed t heir kiosk in Wakefield and
With the success of their supermarket order, Jack and Samir
ding their supplier netwo rk and produ cing
move d on to supplying more supermarket chains, expan
as their regular 0.5 and 1 litre cartons.
new sizes of smoothies for children's lunch boxes as well
suppliers using the "flash paste urisat ion"
The smoo thies keep up to 5 days in a fridge due to their
perishing. Taking on larger orders allow ed
techn ique which stops the natural fruit ingredients from
iques to be used, both of which
for bulk purchases from suppliers and flow produ ction techn
lower ed variable costs of produ ction.
"We could take this brand to a global
At this point Samir starte d becoming even more ambitious.
in the UK drinks mark et and was makin g
audie nce" he said after it had gained a 7% mark et share
liked the brand for their ingre dients ,
huge sales throu gh the super mark et chains. Customers
profit s had always been dona ted to
simpl e packaging and their charitable work - 10% of their
were sourced. After much delibe ration
chari ties in the count ries from which the fruit ingre dients
g in the firm to a global drinks brand ,
Jack and Sami r sold a large amou nt of their share holdin
thies to the global audie nce using their
Intern ation al Drinks Ltd who prom ised to take the smoo
vast distri butio n channels aroun d the world .
Real Smoothies pie
Last year This year
£81m £144 m
Revenue
£46m £79m
Costs
Exam-style ques tion s
able company (9 marks)
1. Analyse the reasons why Real Smoothies pie have been a profit
, Horbury o·1vers1'f1cations
• (Forms of business organisation and share price)
Specification topic: Forms of business organisation and share price
Case Study: Horbury pie
Horbury pie started off in the music industry in the late 1970's and quickly expanded into
entertainment, travel and lifestyle. Horbury continues to develop its expansion plans by
diversifying into several new markets, from electronics to toy manufacturing. While there is
some overlap between these markets, City analysts fear that the firm's lack of experience in
some areas could eventually have a detrimental impact on its cash flow and sales.
The balance sheet value of Horbury pie showed that the company was worth £19,800,000 in
February 2014. However, the company could have been bought out for £6,400,000 at this time
as the share price had collapsed to 16p, thus undervaluing the company. At this point profits
were damaged by the low sales of electronic items in the UK when the economy was weak.
When the company was floated in 2010, 40,000,000 shares were issued to the public at a price
of 48p. By September 2014 the share price had risen to SSp, although there have been many
fluctuations in its share value over time. The board is now considering whether to buy back
the company and turn it into a private limited company.
Share price
fl
C
C1I
C.
Feb-14 Sep-l 4
Mar-11 Sep-12 Aug-13
Flotation Dec-lO
2010
Time j
E -style questions
xam have seen the share price fall as it did in Feb 2014 (9
1. Analyse the reasons why Horbury may
marks)
. . would be a better form of
that a private l1rn1ted company
2 To what extent do you agree
· mars
organ1sat1on or or ury ·
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