Adding Value | Edexcel A Level Business AS

[Maximum number: 10]

Extract A About The Coffee House The Coffee House is a chain of coffee shops in Vietnam. The Coffee House opened its first shop in 2014 and within four years it had 100 shops across the country. Its shops are located on busy high streets in Vietnam's large cities. Coffee shops have grown in popularity in Vietnam and have attracted successful international businesses such as Starbucks. The Coffee House is an innovative brand that has been built by offering an attractive space, excellent customer service and product quality at affordable prices. The mission of the business is to 'deliver happiness'. It aims to provide excellent customer satisfaction as well as providing the employees with an enjoyable place to work. The Coffee House is recognised for its innovation by:
- creating a unique design for each shop to provide a welcoming atmosphere that feels like home
- regularly updating menus to adapt to changing tastes and trends
- providing dedicated and comfortable spaces where people can work
- being one of the first businesses in Vietnam to launch a mobile app to allow customers to order their drinks online
- investing in its own farm in Vietnam to provide coffee beans for its shops.

Extract B Leading coffee shop brands in Vietnam in 2022 (by number of shops)

Assess the benefits to The Coffee House from adding value to its products
and services.

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
- Added value is the increase in value that a business creates when producing a product/service. It is the difference between the price of product/service and the cost of the inputs involved in providing
it
- The Coffee House has added value by designing an atmosphere that feels like home where people come together to meet friends
- The Coffee House has added value by allowing customers to use their mobile devices to buy coffee online. This has given convenience to its customers and responding to changes in shopping trends. This
may increase revenue for the business
- Offering a service with added benefits, such as dedicated work areas,
may differentiate it from competitors such as Highland and attract
more customers
- A firm that is adding substantial value may be operating profitably as the selling price can be higher because of the added value
- However, adding value, such as providing dedicated work areas
may be expensive and may mean high investment which may
lead to lower profit margins in the short term
- Ordering drinks on-line is now quite common and may not help to
differentiate the business any more
- Uniquely designed stores may be costly to provide which may
increase the costs and the price to the consumer. This may result
in fewer customers in this competitive market
- Some consumers may not be interested in the design of a coffee shop and it may not influence their decision on which coffee shop to choose

Level	Mark	Descriptor
	0	A completely inaccurate response.
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	3-4	Elements of knowledge and understanding, which are applied to the business example. Chains of reasoning are presented, but may be assertions or incomplete. A generic or superficial assessment is presented.
Level 3	5-7	Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context. Analytical perspectives are presented, with developed chains of reasoning, showing cause(s) and/or effect(s). An attempt at an assessment is presented, using quantitative and/or qualitative information, though unlikely to show the significance of competing arguments.
Level 4	8-10	Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context. A coherent and logical chain of reasoning, showing cause(s) and/or effect(s). Assessment is balanced, wide ranging and well contextualised, using quantitative and/or qualitative information and shows an awareness of competing arguments/factors, leading to a supported judgement.

Edexcel A-Level Business AS 1.3.1 3f Adding Value Questions

Exam points

Edexcel A-Level Business AS 1.3.1 3f Adding Value Questions question 1