Business Location (AQA GCSE Business)

Devine Jewellery Plc imports and exports goods to and from the UK, where it is based. One of its most successful export markets is the USA, where it has 14 stores. It also imports diamonds to the UK from India, as they are much cheaper to buy from here than other countries. This means DJ can make a larger profit on each item sold. DJ only has stores in large cities, so customers mainly use the website to find information on jewellery items.

DJ has always advertised in fashion magazines read by its wealthy target market but wants to raise its profile further. Other jewellery businesses are promoting their brands by sponsoring big events such as sports competitions, festivals and awards ceremonies. DJ would like to sponsor a fashion show in London for a world-famous British designer with an expensive clothing range. The designer has agreed that if the sponsorship goes ahead, the models will all wear jewellery from the DJ collection. As well as attracting reporters and photographers from around the world, the fashion show will be streamed live on the Internet and shown on television.

Krispy Kreme opened its first UK store in 2003 in London. The business sells doughnuts containing responsibly sourced ingredients in their stores, coffee shops, kiosks and cabinets in Tesco. Doughnuts can also be ordered online.

Krispy Kreme received planning permission from Glasgow City Council before converting a historic Glasgow building into their newest store. The store took £60 000 on its first day (three times Krispy Kreme’s previous record). Some customers travelled hundreds of miles. There were traffic queues on local routes for much of the first week.

The business supports the communities in which it operates. A policy of recruiting the long-term unemployed has worked really well.

In January 2015 Krispy Kreme relaunched their coffee products because Krispy Kreme aims to operate ethically. The coffee is sourced from Rainforest Alliance Certified TM farms in South America that are managed in a way that looks after the land and protects the planet. This coffee costs 20% more than coffees that do not carry the Rainforest Alliance seal.

Krispy Kreme sell their coffee at £1.90 per cup. Research shows that some coffee shop customers are willing to pay more for ethically produced coffee and that most of these customers expect to pay around 10% more for this type of coffee.

Eve is a single parent and sole trader with extensive experience as a buyer in the fashion industry. She owns and runs Style the Chic (STC) from her home in Lancashire. STC is a fast fashion website aimed at females aged 16–24. Eve started the business five years ago, following the birth of her twins. She invested her £5,000 life savings. The business made a profit of £450,000 last year.

Fast fashion means producing cheap clothes as quickly and as frequently as possible. STC works with reality TV celebrities that have a large social media following. The celebrities help design and promote a collection (range of clothing items).

STC has 30 remote employees. However, Eve makes all the major decisions in the business. She decides which products to order from suppliers and the selling prices. The buying team works directly with suppliers. Recently, staff turnover in the buying team has increased.

In 2004 Apple closed all production facilities in the USA to help save costs.

Production was outsourced to China.

 In 2013, a newspaper reported that a factory based in China was paying their workers £1.12 per hour or a salary of £180 per month. They work an average of 10 hours per day.  Chinese people queue up for work and say conditions are better than other factories in the area.

 Apple has a code of conduct for these factories. They carry out regular inspections on working conditions. In 2014 these inspections increased by 40%. Apple works closely with these factories, and have paid for 60,000 employees to go on college courses in China.

 China is a growing market for Apple accounting for 25% of their sales in 2015. This is an 84% increase on 2014.

 In 2015 Apple made a net profit of $54,000 million.

TradeUp

TradeUp is a high street retailer that buys, sells and exchanges second-hand entertainment products and technology. These products include video games, mobile phones and tablet computers. TradeUp was established in 2002.

The demand for some second-hand products, such as mobile phones, changes quickly. Amelia needs to make sure that her prices are competitive with other second-hand retailers; otherwise she will lose customers.

Table 1 Extract of Income Statement for year ending April 2020

Amelia has always liked her location in a busy town centre and has never had any direct competition. This location has provided Amelia with loyal customers who like the convenience of being able to visit her store when they are in town shopping.

However, another retailer located nearby has announced that it will start to offer a similar service to TradeUp. Amelia has heard that a unit on an out-of-town retail park has become available. She has found out that although the size of the unit at the retail park is bigger than her current location, the rent would be £825 per month, which is lower than her current payment of £1100 per month. There is a bus link every hour to the retail park and lots of free parking; however, not all her current employees can drive.

Thorntons’ chocolates are made at its factory in Derbyshire. It employs experienced and highly skilled chocolate makers to design products and oversee production. It has approximately 200 stores throughout the UK.

At its store in Derby, Thorntons has successfully introduced job production where a chocolate maker shows customers how the delicious treats are made. Unique premium products can be made to order exactly as the customer requests. The store in Derby was chosen as it has lots of space for the production equipment. It is located near to the factory and each day a chocolate maker from there is selected to be sent to the store.