long questions - Brebner High School

GRADE 10
BUSINESS STUDIES
LONG QUESTIONS
The National Credit Regulator (NCR) was established as the regulator under the
National Credit Act No. 34 of 2005 (The Act) and is responsible for the regulation of
the South African credit industry. It is tasked with carrying out education, research,
policy development, registration of industry participants, investigation of complaints,
and ensuring the enforcement of the Act.
Discuss the National Credit Act in terms of:
 The purpose of the Act.
 Implications for businesses.
 Problems resulting from this Act.
 Advantages of this Act.
[40]
INTRODUCTION:
The National Credit Act was introduced to provide both credit providers and credit
applicants with clear guidelines regarding their rights and responsibilities. √√
(any relevant introduction)
CONTENT:
The purpose of the National Credit Act:
 Promoting the development of a credit market is accessible to all South Africans.
√√
 Encourage responsible borrowing. √√
 Promoting equity in the credit market. √√
 Addressing and correcting imbalances in negotiating power between consumers
and credit providers. √√
 Discourage reckless credit granting by credit providers. √√
Implications for businesses:
 A credit provider must provide a consumer with a quotation, showing all relevant
costs and repayment values. √√
 Before granting credit, a credit provider must assess the consumer’s
creditworthiness. √√
 This strict credit control results in a reduction of available credit. √√

More difficult for enterprises to sell their products and more difficult for consumers
to buy products. √√
Problems resulting from this Act:
 Restricts access to credit in time of economic slowdown. √√
 Businesses struggle to survive because they depend on customers who have
access to credit. √√
Advantages of this Act:
 Protecting consumers against unfair credit practices. √√
 Promoting responsible access to credit. √√
 Protecting businesses against non-payment of customers. √√
CONCLUSION:
This credit Act will have a positive/negative influence on a business. Credit
providers must be careful to give credit to anyone and customers must be careful in
overspending money on credit which they cannot afford. √√
(any relevant conclusion)
DESCRIPTION
Introduction
Layout
Analyses
Structure
Originality
Conclusion
Facts
TOTAL
MARKS
2
2
2
2
2
2
28
40
Study the following case study and answer the questions:
Ernest lives in Freedom Park in an informal settlement near Johannesburg. He is a
sole provider of the United National Sorghum Breweries (UNSB) products and sells
Sorghum beer. In many communities in South Africa people are fond of Sorghum
beer. Up until now the UNSB won’t deliver their products to tavern and shebeens, in
Freedom Park because they are afraid of crime and their vehicle will be hijacked.
Ernest has a big plot (area), which is well situated. He can hire property from the
municipality. The plot lies in an intersection of a well-known area. It is a very busy
area where many people shop or drive through. He plans to fence the whole plot and
there is also a building he can lock up products. He plans to sell Sorghum to the
clients and later on develop part of the plot for people to dance. In these manner to
attract international tourists, something that the government subscribe. There is
already people who sell Sorghum beer and if Ernest become sole provider in the
area these small wholesales must buy from him.
Ernest did not go far with school and is not so young anymore. However he had lots
of experience in this beer business, because he had concession in another
company. Unfortunately, that beer company became bankrupt. Political influences
and corrupt officials want him to pay bribe money. There are also tavern owners in
the area, but Ernest is sure that there is enough business for both of them. He
wants to finish all these because he wants to start his business.
Give a detailed description of the SWOT-analyses with examples and identify the
STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS which can
influence his business opportunity.
[40]
INTRODUCTION:



Refers to the fact that people should discover the strengths and weaknesses of
your business idea and what opportunities and threats are in the environment.
This analyses investigates the internal as well as the external factors that
influence the business to compete in the market.
The strengths and weaknesses are internal aspects that the entrepreneur can
control, which the opportunities and threats are external factors where he/she
have no or limited control over factors. √√
(Any relevant introduction= 2 marks)
CONTENT:
(S) STRENGHTS: √√
It is all the things that your business is performing well. √
For example, you have previous experience in the business area that you want to
enter now; experience of management, marketing or bookkeeping, a product or
service that is better than those of competitors, employees that is well trained or
competent. √
(W) WEAKNESSES: √√
 All the things that you or your business are not performing well. √
 For example, your product is more expensive than products of competitors, less
money to advertise, location of the shop or factory not as good as those of
competitors. √
(O) OPPORTUNITIES: √√
 It is the incidents or circumstances in the community and further away that gives
advantage to your business and lucratively extract. √
 For example, there is less or no competitors in your business, your product
become more popular, not enough educated labour or enough of the right quality
of sources in community. √
(T) THREATS: √√
 Things all around the community and further away that pose as a disadvantage
for your business or the functioning there of. Negative influence. √
 For example, new competitors that enter the community, competitors
manufacturing substitutes of your product that can possibly chosen by
consumers, introduction of new technology can cause problems for your product.
√
(Definition plus any relevant example= 4 marks)
(4 x 4= 16)







STRENGHT
Ernest has big plot √√
A lot of experience of Sorghum beer
√√
Ernest has vision (wants to be a sole
provider) √√
OPPORTUNITIES
Sorghum beer is in great demand in
many communities. √√
Plot- good location (The plot lies in an
intersection of well known area) √√
Extended opportunities √√
International tourists √√
(Any 2 of the SWOT- 4 x 4= 16)


WEAKNESSES
Ernest does not have enough
education. √√
Crime √√
THREATS






Crime √√
Hijack √√
Competitors √√
Political influences √√
Corruption and bribery √√
Other tavern owners √√
CONCLUSION:
Ernest Strength and Opportunities are more than the Weaknesses and Threats
therefore he can be successful as he can influence the Weaknesses and Threats by
enrolling for further studies and CSI projects. √√
(Any relevant conclusion= 2 marks)
DESCRIPTION
Introduction
Layout
Analyses
Structure
Originality
Conclusion
Facts
TOTAL
MARKS
2
2
2
2
2
2
28
40
The structure of society is constantly changing. The role of woman in society has
changed drastically over recent decades. HIV/AIDS has arisen as a prominent
health issue which has significant socio-economic impact in South Africa. Population
growth and availability of job opportunities are other significant social issues. Such
changes can be an opportunity or a threat to a business, depending on how
management addresses them.
“It is the business responsibility to address the issues that is mentioned in above
scenario.”
Discuss the Socio-economic factors that you as upcoming entrepreneur will face
when starting a business and also explain what businesses can do to assist in
fighting the social problems.
[40]
INTRODUCTION:
There are a wide number of contemporary socio-economic issues that effects South
African businesses.
These include issues such as poverty and unemployment, HIV/AIDS, gambling,
crime, riots inclusivity, teenage pregnancy, etc. √√
(Any one= 2 marks)
CONTENT:
Inequality & poverty: √√
• Cost is very high for a business. Business spend money on relieving poverty
through social economic responsibility programmes. √√
• Poor people cannot afford to buy luxuries. It shrinks the market
• Leads to crime.
(heading & any description= 4 marks)
Inclusivity: √√
• Business have to adapt to the policies that comply with legislation that promotes
inclusivity. √√
• Only businesses that comply with this legislation can be considered for
government contracts.
• Businesses that doesn’t comply with legislation can face fines and will not be
considered for government contracts
(heading & any description= 4 marks)
Unemployment and unproductive labour force: √√
• Limits growth and expansion √√
• Increase labour costs.
(heading & any description= 4 marks)
HIV/AIDS: √√
• High absenteeism. √√
• Reduction of the business labour force.
• Reduction of the countries workforce.
• Increased recruitment costs.
• High cost of ARV medication.
(heading & any description= 4 marks)
Gambling, money laundering, pyramid schemes: √√
• Theft √√
• Cost of rehabilitation
• Loss of productivity
• Bad publicity
• Criminal charges
(heading & any description= 4 marks)
Piracy: √√
• Financial losses. √√
• Businesses found guilty of selling pirate goods face fines and business owners
face criminal charges.
(heading & any description= 4 marks)
Counterfeiting: √√
• Business enterprises lose out on money that could have been used for expansion
and the creation of job opportunities. √√
• Often result in price increases of original goods.
(heading & any description= 4 marks)
Strikes: √√
• Scare off potential investors. √√
• Result in losses of production.
• Business has to close down.
• Result in losses of income.
(heading & any description= 4 marks)
Violence: √√
• Scare off potential investors. √√
• Loss of income and productivity.
• Employees may be less productive.
(heading & any description= 4 marks)
Crime: √√
• Loss of income due to fraud and the replacement of stolen goods. √√
• Increase on security expenses.
• Loss of skilled employees who emigrated.
• Loss of productivity when employees use work time for personal matters.
(heading & any description= 4 marks)
MAXIMUM AMOUNT= 28 MARKS
CONCLUSION:
•
•
Socio economic issues will definitely have an impact on businesses.
It is for this reason that businesses cannot fold their arms and do nothing to the
situation in their communities and country. √√
(any relevant conclusion= 2 marks)
DESCRIPTION
Introduction
Layout
Analyses
Structure
Originality
Conclusion
Facts
TOTAL
MARKS
2
2
2
2
2
2
28
40
Mr. Gilbert Chalmers is a pharmacist. He has been working at the Link Pharmacy
Company for seven years. He now wants to open his own pharmacy because he
has accumulated sufficient capital. He has heard that some forms of ownership can
be started by a single person, but is not sure of the one that would best suit him. He
is not keen on the form of ownership with unlimited liability and would prefer one that
does not involve a long formation procedure. His last request is that the business
must be able to adapt easily to change. Mr. Chalmers has requested advice from
you.
(Hint= have up to 10 members in this form of ownership)
Write a report in which you outline:
 Type of ownership recommended.
 Characteristics of this type of ownership.
 Advantages and Disadvantages.
[40]
INTRODUCTION:
Mr Chalmers is a very successful entrepreneur and want to convert his business into
a CC. √√
(any relevant introduction= 2 marks)
CONTENT:
Proposed form of ownership:
Mr Chalmers ideal form of ownership is a Close Corporation. He can be the only
owner and don’t want any complicated procedures to start his business. √√
(2)
Characteristics of a CC:
*
Owned by 1-10 members. √√
*
Name must end with CC- Close Corporation. √√
*
Have continuity. √√
*
CC are legal entities. √√
*
Assets belong to the CC. √√
*
Profit belong to the CC. √√
*
Tax is paid by the CC. √√
(7 x 2= 14)
Advantages:
*
Members have limited liabilities for debt. √√
*
Appropriate for small and medium businesses. √√
*
Financial statements need to be audited. √√
*
Tax rates for businesses are lower than tax rates for individuals. √√
*
Auditing of financial statements is voluntary. √√
(5 x 2= 10)
Disadvantages:
*
Capital is limited to 10 members. √√
(1 x 2= 2)
(Total= 28 marks)
CONCLUSION:
Mr Chalmers would be very happy in choosing this form of ownership, because the
advantages is more than the disadvantages and have a limited liability of debt
towards the membership. √√
(conclusion= 2 marks)
(any relevant conclusion)
DESCRIPTION
Introduction
Layout
Analyses
Structure
Originality
Conclusion
Facts
TOTAL
MARKS
2
2
2
2
2
2
28
40
Business enterprises are part of society and play an important role in society. They
help to raise the standard of living by employing people and by the economic growth
they bring.
Nowadays, business enterprises are encouraged not only to focus on producing
good profits, but also to consider the interests of society.
You need to right a report on CSI by focussing on the following:
 Examples of giving something back to the society through CSI.
 Benefits of CSI for businesses.
 Problems of CSI for businesses.
[40]
INTRODUCTION
CSI is the investment that businesses make to make a contribution to the well being
of a society. √√
(any relevant introduction)
CONTENT
Business can give back something to the society through CSI by:
• Investing in well-being of employees. √√
• Investing in potential customers. √√
• Investing in potential suppliers. √√
• Providing education & training. √√
• Delivering services to government. √√
• Protecting environment. √√
(max 4 x 2= 8)
Benefits of CSI for businesses.
• Recruit superior and happy workers. √√
• Improve the perception of the business among its staff. √√
• Improve image of business. √√
• Attract customers. √√
• Attract investors. √√
• Make communities a better place. √√
(max 5 x 2= 10)
Problems of CSI for businesses.
• Business may lack skills. √√
• CSI requires a lot of time. √√
• CSI cost a lot of money. √√
• CSI can lead to an increase in prices. √√
• Business pay a lot of taxes to government so that social issues can be
addressed. √√
• Detailed reports have to be prepared. √√
(max 5 x 2= 10)
MAXIMUM 28 MARKS
CONCLUSION:
CSI do not always benefit the businesses but also benefits the communities. √√
(any relevant conclusion)
DESCRIPTION
Introduction
Layout
Analyses
Structure
Originality
Conclusion
Facts
TOTAL
MARKS
2
2
2
2
2
2
28
40
QUESTION 7
M & C General Store is Facing Problems!!
M & C General Store, which sells groceries, experienced a problem with one
of the canned food products in the shop. Mrs Thulule purchased the canned
food product and experienced severe illness after consuming it. After a visit to the
doctor it was confirmed that she had food poisoning. Mr Smith purchased the same
product a day later and experienced the same problem. The conclusion was that the
canned food product seemed to be the problem.
This matter reached the local newspaper and the complainants issued a statement
to the effect that the product was purchased from M & C General Store. The medical
doctor also confirmed that he had treated Thulule and Smith for food poisoning.
This eventually lead to a decrease in the customers and sales. M & C
General Store got worried about the negative publicity and decrease in
customers' trust. They had to solve the problem.
You, as the owner of M & C General Store, have to solve the problem. Discuss
SEVEN (7) logical steps that you will follow to solve the problem.
[40]
INTRODUCTION:
Problem solving is an ongoing process and sometimes you will need several
attempts to solve a problem.
CONTENT:
The following steps you will need to work through.
Identify the problem: √√
If the problem is not identified accurately it can also not be solved properly.
It is important to identify the root of a problem. √√
Define the problem: √√
Write the problem down and thing of ideas surrounding the problem. √√
Formulate a strategy: √√
The more possible solutions you find, the more likely it is that you will discover the
most effective solution.
Choose the best solution to the problem. √√
Implement the strategy: √√
Convert idea into an action plan. √√
Implement a solution to the problem. √
Allocate resources:
Determine what resources you will need to solve your problem √
Following resources include:
Human resources (Input of employees) √
Financial resources (money & costs) √
Monitor problem solving: √√
Make sure the implementation of your solution or strategy goes according to plan.
√√
Evaluate problem solving: √√
Ask yourself if the solution you chose was in fact the best solution to the problem.
Did the solution work or not. √√
CONCLUSION
Problem solving is the best way to make sure that your business will be run
successfully and must be done regularly to ensure problems is solved efficiently.
DESCRIPTION
Introduction
Layout
Analyses
Structure
Originality
Conclusion
Facts
TOTAL
MARKS
2
2
2
2
2
2
28
40

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