For the Distinction grade:
In the findings section of the report have a section headed:
"Changes Costa may need to make in the UK and China because of future economic, social, political and legal changes."
Things that may happen that will impact on Costa.
Two factors for each country (e.g. one political and one economic for UK and one social, one legal for China)?
UK: Political
Brexit.
Brexit will have political and economic consequences:
While some findings provide clear evidence of gains or losses from Brexit, what others reveal is open to
interpretation.
There have been many attempts to model the economic consequences of Brexit.
Nearly all of
which find that there will be a long-term loss of GDP for the UK economy.
This means lower GDP than would otherwise be the case, not
an actual fall in prosperity.
To the extent that there is a loss of GDP, it will also, in economic terms, mean a lower level of
employment in the UK economy.
Some job losses are likely in financial services in the City of London.
Will some of these branches of Costa Coffee close?
What is the Chief Executive of Whitbread saying about the possible impact of Brexit on the firm?
Details here.
Less migration into the UK. How might Costa respond?
What should Costa Coffee do if a large number of their employees from Eastern Europe return home?
What reasons does the expert in the video above give for migrants into the UK returning home?
How could Costa Coffee attract British workers to work in their stores?
How could conditions in the
workplace be improved?
What financial / non financial incentives might be appropriate?
Could they replace people with
machines in their stores?
Click on the picture of the Costa Express machine below:
What would be the advantages and disadvantages of replacing workers with machines?
What do you think?
Give a judgement (evaluation).
UK: Economic
Explain why Brexit may lead to a fall in the value of the pound.
How might this impact on Costa?
Are there any strategies businesses can use to protect themselves from currency movements?
More details here.
What are the benefits of hedging?
What are the possible disadvantages of
hedging?
On balance, is it a good idea and why?
Also, fears of a recession may push UK interest rates down.
Could this be considered an opportunity for Costa Coffee?
If they took out loans with low interest repayments, what could they spend the money on and why?
If a recession follows Brexit how might Costa respond?
Social issues in China:
The migration of people from the Chinese countryside is likely to continue.
The Chinese middle class is expected to grow further.
Nice video here.
How should Costa react?
Describe how they could move into 'lower tier' Chinese cities.
Click on the picture below:
Are more Chinese people becoming concerned about their diet? Click on the graphic:
Legal issues in China. See this document.
Brand piracy. Click on the picture.
Click on the headline:
If Costa Coffee found that other businesses were using its intellectual property (trade marks and copyright) what should they do?
Why would this be beneficial to Costa Coffee?
If Costa Coffee found that other businesses were using its intellectual property (trade marks and copyright) what should they do?
Why would this be beneficial to Costa Coffee?
