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
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
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller AngelaSteven. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £10.89. You're not tied to anything after your purchase.
