James Morgan is the Managing Director and franchisee of a hotel in London called The

Trafalgar. The Trafalgaris one of 25 hotels operated under the Blue16franchise. All its 25 hotels
are situated near airports or in the centre of towns and cities. The guests are mainly business
people working in the area for a short time or tourists sight-seeing and visiting relatives.

The Trafalgarhas 60 bedrooms and is typical of other hotels in the Blue16 franchise. Staff are
employed either on a permanent or temporary basis.

All Blue16 hotels have facilities that include:

• a restaurant

• a fitness centre

• meeting rooms

• car parking

1. (a) Using the information, complete the organisational chart below. [6X1=6]
The Trafalgar has a reputation for offering quality customer service.

(b) What is meant by ‘the chain of command? [2X1=2]

(c) ‘Having a formal organizational structure helps to control a business.’ Analyse this statement.

[6X1=6]

Hotel ratings classify hotels according to their quality. The more stars the hotels have the better
they are supposed to be. For the past five years, The Trafalgarhas had a 4* rating, with 5* being
the best rating.

(d) Analyse why James will want to keep this 4* rating. [6X1=6]

(Total for Question 1 = 20 marks)

2. James has been a franchisee for the past 10 years.

(a) Discuss two advantages of being a franchisor. [5X1=5]

(b) Discuss two disadvantages of being a franchisee. [5X1=5]

(Total for Question 1 = 10 marks)

3. If Rojaz is considering forming a partnership.

(a) What is meant by the term ‘partnership’? [2X1=2]

(b) Identify two advantages of being in a partnership. [4X1=4]

 (c) Examine two disadvantages of being in a partnership. [4X1=4]

Ronald and Jazwinder realize that providing consumer satisfaction is very important to the
success of Rojaz.

(d) Why is consumer satisfaction important for Rojaz? [6X1=6]

Rojaz has been told that if he takes on a partner he needs to sign a deed of partnership.

(e) How would a deed of partnership benefit Rojaz? [4X1=4]

(Total for Question 1 = 20 marks)

4. Rojaz must consider all aspects of marketing his business.

(a) What is meant by the term ‘marketing’? [2X1=2]

(b) Identify four elements of the marketing mix. [4X1=4]
(c) Rojaz has set the objective of survival for Designer Cuts. [4X1=4]
(d) Why would Rojaz set this objective? [4X1=4]
(e) What two objectives, other than survival, could Rojaz set for Designer Cuts? [4X1=4]
(Total for Question 1 = 18 marks)

5. The products that Rojaz sells have a life cycle.

Name each of the four stages shown in the product life cycle below, numbered 2, 3, 4 and 5 and
describe them. [20X1=20]

i. Development
ii. ........................................................
iii. ..........................................................
iv. ..........................................................
v. ..........................................................

(Total for Question 1 = 20 marks)

6. Propshore uses trade credit to buy raw materials.
(a) Analyse one advantage and one disadvantage of trade credit as a source of finance.[6]
(b) Analyse the benefits of market segmentation. [6]

(Total for Question 1 = 12 marks)