Explain Edexcel Business dynamic markets through online retailing, market change, innovation, growth and how businesses adapt to changing customer and technology trends.
Sources for use with Section A
Extract A
Fresh food from small farms
Farmhopping is an online retailing service, started by Rossi Mitova, which lets small farms in Bulgaria sell their products directly to customers. Rossi started the business when a local farmer, who was struggling with rising farming costs and competition from larger farms, asked her for help.
Farmhopping is now a successful business that employs 15 people and allows people to shop online for fresh food from more than 100 small farms across Bulgaria. The online service enables the farmers to get a fair price for their produce and reduces the need to sell to intermediaries such as wholesalers and supermarkets. Farmers pay a fee to Farmhopping for using the website.
To sell on the Farmhopping website, farmers must share the same social objectives as Farmhopping. Farmers must support environmentally friendly farming methods such as not using chemicals and pesticides, ensuring fair treatment of farm animals and respecting the landscape and wildlife. Food sold on the website must be fresh, natural and organic and packaged using recyclable materials.
In 2017, Rossi Mitova was recognised as one of the top 100 women entrepreneurs and Forbes magazine included her in its social entrepreneurship awards.
Extract B
About Rossi Mitova
Rossi has always been inspired by challenging what she saw and taking action. When she was asked to help save the small farm in Bulgaria that was struggling to survive, it gave Rossi a perfect opportunity to combine her biggest passions, which were nature, food and business. Rossi worked hard to create the Farmhopping website and convince farmers to use her online service.
In an interview Rossi said, “The most challenging parts of starting the business were learning to deal with the uncertainty and to be a good leader. I have worked hard at selecting the right team and motivating them while ensuring we are true to the social objectives of Farmhopping. I have made many mistakes on the way but learn from my mistakes. I always listen to the feedback from others and work hard on continually improving the business. The one thing I am most proud of is that I never give up despite the many setbacks and challenges I have faced in business.”
Discuss the advantages for small businesses, such as the farms in Bulgaria, of using an online retailing service to sell their products.
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with
the general marking guidance. The indicative content below exemplifies
some of the points that candidates may make but this does not imply that
any of these must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation – indicative content
• Online retailing is the sale of goods and services using the
internet.
• Farmhopping is an example of an online retailing service which
allows farmers in Bulgaria to sell farm produce directly to
customers using a website.
• The advantage to a business is that because they are not selling
to supermarkets or wholesalers, they may be able to increase
their profit margins.
• Selling directly to consumers may help them receive a fair price
for their products and help them survive in business.
• Small businesses may not require a physical shop to sell their
products which reduces operational costs.
• Farmers can provide fresh produce directly to homes and small
businesses. They may build up a good reputation with these
customers and encourage customer loyalty and repeat purchase
to enable them to compete against the larger farms.
• However, the farmers have to pay a fee to Farmhoppers which
increases the business costs and reduces profit margins.
• If the website is not reliable and/or connectivity is poor this will
impact the service and discourage customers from using it.
• The costs of distribution may be higher for a small business due
to the need to manage a high volume of smaller orders rather
than larger orders direct to supermarkets and wholesalers.
Level
Descriptor
0
No rewardable material.
Level 1
1–2
Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2
3–5
Accurate knowledge and understanding.
Applied accurately to the business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced and
unlikely to show the significance of competing arguments.
Level 3
6–8
Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, well contextualised, using quantitative and/or
qualitative information, and shows an awareness of competing
arguments/factors.