OCR GCSE BUSINESS STUDIES A293/01/CS Production, Finance and the External Business Environment PRE-RELEASE CASE STUDY

Section 6 The Festival Field

Please complete this worksheet while you watch the presentation

Lesson objectives To be able to demonstrate knowledge and understanding of competitive and monopoly markets To be able to analyse and discuss how a business may change its competitive environment

Starter Read section 6 – which of these words does not appear… The word that does not appear is forecast – it is in section 5

BOWTON PARK

What is the cost of the venue of The Festival in 2016 and 2017? Bowton Park Bowton Park is located behind Bowton Town Hall. Each year, during the festival weekend, the Park becomes The Festival Field. What is the cost of the venue of The Festival in 2016 and 2017?

Who might own the park which is the venue for The Festival? Cost of venue 2016 – 10% of £280,000 = £28,000 2017 – 9% of £350,000 = £31,500 Who might own the park which is the venue for The Festival?

Venue owner The park is likely to belong to Bowton council They will set the price each year for “renting” the space to hold The Festival

RETAILERS

All business operate in a market Candidates should be able to: • demonstrate knowledge and understanding of competitive and monopoly markets • analyse and discuss how a business may change its competitive environment • demonstrate knowledge and understanding of why the government promotes competition.

Perfect competition market Lots of competitors Lots of substitute retailers and products Prices may be lower as competition drives down prices Retailers may have to compete on non-price factors to attract customers e.g. customer service

Monopoly market Only one retailer, or few retailers in the market Higher prices as there are no substitutes for customers to choose from Demand may be higher than supply, leaving customers unable to buy products that have sold out

Retailers at The Festival There will be five food stalls including two temporary restaurants housed in marquees How competitive is the market for food at The Festival?

5 food stalls 2 Marquee Restaurants

Low competition - market for food 5 food stalls which includes two marquee restaurants – which means only 3 different food stalls Write a list of potential problems for food stalls at The Festival

Lack of competition for food Lack of competition for food at The Festival will mean several things: Demand may be more than supply meaning long queues for food Stalls may run out of food so customers go hungry Lack of competition may push up prices A captive market may not be able to get food for specific needs: Kosher, Halal, Veggie, Nut allergy

How competitive is the market for bars at The Festival? There will be six bars How competitive is the market for bars at The Festival?

6 bars Write a list of the potential problems of having six bars at The Festival

Competitive market for bars More bars than food stalls may mean that visitors to The Festival may consume too much alcohol Alcohol without food may mean more drunk visitors at the festival Too many bars means that this may drive prices down as they discount to attract customers

Adventure holiday firms at The Festival There will be seven adventure holiday firms How competitive is the market for adventure holiday firms at The Festival?

7 Adventure holiday firms What will be the potential impact on customers of having seven adventure holiday firms on display at The Festival?

Competitive market for adventure holiday firms Impact on customers of having 7 firms to choose from: Might give customers lots of ideas for new holidays Lots of choice is good for the customer Firms may offer lower prices, discounts or promotions to attract customers, so they may benefit from the deals available at The Festival

Competitive market for specialist retailers Twenty two specialist retailers of outdoor pursuits products will rent stalls on the field to sell their goods and services to festival visitors. Several of these retailers are large national chains. How competitive is the market for specialist retailers of outdoor pursuits gear at The Festival?

Twenty two specialist retailers of outdoor pursuits products What will be the impact on the Sprit of Adventure of all the competition for selling outdoor pursuits products at The Festival?

The small independent shop – spirit of adventure Spirit of Adventure buys in additional stock to sell during the festival weekend The national chains are able to sell their outdoor pursuits gear at cheaper prices through their shops compared to the prices that Spirit of Adventure charges Spirit of Adventure may have to use non-price methods to compete (such as attentive customer service)

National chains National chains of outdoor pursuit gear. These are retailers that have shops all over the country (national). They can buy in bulk so will enjoy economies of scale and be able to offer lower prices than the independent shops.

OUTDOOR PERSUITS MARKET During the Festival weekend, the national chain retailers offer additional discounts on goods sold from their stalls on The Festival Field.

Impact on Spirit of Adventure What happens if the Spirit of Adventure buys in extra stock to sell at The Festival? On the positive side On the negative side

Impact on Spirit of Adventure If Spirit of Adventure buys in extra stock to sell at The Festival On the plus side More stock to sell will make sure they can meet all the customer demand at The Festival and they won’t run out. Customers will have lots of choice which may attract them to the stall. On the negative side There are 21 other companies trying to sell similar clothes at The Festival, with so much competition Sprit of Adventure may have to drop their prices. If sales are poor they may be left with lots of surplus stock.

Impact on Spirit of Adventure The national chains are able to sell their outdoor pursuits gear at cheaper prices through their shops compared to the prices that Spirit of Adventure charges. On the positive side On the negative side

Impact on Spirit of Adventure The national chains are able to sell their outdoor pursuits gear at cheaper prices through their shops compared to the prices that Spirit of Adventure charges. On the positive side Some customers may regard the national chains as cheap and possibly poorer quality than Sprit of Adventure. Section 1 tells us that the customers are from a higher income so may not shop based on price On the negative side The national chains can bulk buy brands and may be able to negotiate cheaper prices – economies of scale Customers may be persuaded to shop based on price

How many bars? How many food stalls? How many outdoor pursuits businesses? How many adventure holiday firms? Where is The Festival Field?

Six bars Five food stalls Twenty two outdoor pursuits retailers Seven adventure holiday firms Bowton park is the festival Field and it is behind the Bowton town hall

Glossary Specialist retailer; This is a shop that caters to one specific retail market. Examples of specialist stores include camera stores, pharmacies, stationers and bookstores. Stock; This is finished goods that are intended to be sold by the business National chain; This is a retailer which has stores all over the country, so sells nationally, for example Marks and Spencer's, Debenhams, Tresspass etc.

Resources written by Sarah Hilton for revisionstation.co.uk