BON's Case Study PDF

Answers to BON’s Case Study 1. Define the term environmental sustainability. [2 marks] Ecological sustainability refers to the ability of an economy or society to maintain the use of its renewable and non-renewable resources without jeopardising opportunities for future generations. Depletion of the...

Answers to BON’s Case Study 1. Define the term environmental sustainability. [2 marks] Ecological sustainability refers to the ability of an economy or society to maintain the use of its renewable and non-renewable resources without jeopardising opportunities for future generations. Depletion of the earth’s scarce resources is not ecologically sustainable as they cannot be continued or used indefinitely. Award [1 mark] for a definition that shows some understanding of environmental sustainability. Award [2 marks] for a clear and accurate definition of environmental sustainability, similar to the example above. Application and examples are not required 2. Define the term revenue streams. [2 marks] Revenue streams are the different sources of money or income coming into the business from various activities, such as revenue from the sale of goods or services, licensing fees, subscription fees, advertising revenue, and merchandise. Award [1 mark] for a definition that shows some understanding of revenue streams. Award [2 marks] for a clear and accurate definition of revenue streams, similar to the example above. Application and examples are not required 3. Explain the significance for BON of implementing eco-friendly alternatives such as bamboo plates and cutlery at its music festivals. [4 marks] Being eco-friendly means BON acts to conserve and preserve the earth’s scarce resources. Using alternatives such as plates and cutlery made from sustainable bamboo helps to reduce the environmental impact of using traditional materials like plastic or other non-biodegradable compounds. This is because bamboo plates and cutlery are biodegradable and renewable resources, so have a lower environmental footprint compared to disposable plastic substitutes. Implementing eco-friendly alternatives at music festivals demonstrate BON’s commitment to ecological sustainability, which can help to enhance its brand image and corporate reputation. People increasingly value environmentally responsible businesses (lines 35 – 36) so adopting eco-friendly practices, such as mitigating or minimizing plastic waste, can help to attract environmentally conscious music concert and festival goers. Furthermore, such practices can ensure regulatory compliance as environmental guidelines become more stringent. Award [1 – 2 marks] for an answer that shows limited understanding of the demands of the question and/or an answer that has minimal, if any, reference to the stimulus material. Award [3 – 4 marks] for an answer that shows good understanding of the demands of the question, with a clear explanation of the significance for BON of implementing eco-friendly alternatives, such as bamboo plates and cutlery, at its music festivals. There is clear and effective use of the stimulus material. There is appropriate use of business management terminology throughout the response. 4. Explain one advantage and one disadvantage for BON operating a business that is seasonal in nature. [4 marks] Advantage: High revenue during peak seasons – BON has the potential to earn very high sales revenue during peak season (the summer months) for music festivals (line 12). Music festivals often attract large crowds, resulting in increased ticket sales, merchandise purchases, and sponsorships. BON can capitalize on this peak demand, when customers are less sensitive to prices, in order to generate substantial sales revenue within a relatively short period. Disadvantage: Dependence on seasonal demand – BON’s business is heavily dependent on seasonal demand and the associated weather conditions. Unpredictable weather patterns due to climate change (line 54), even during the summer months in Europe, such as heavy rain or extreme temperatures, can impact attendance and revenues at music festivals. Mark as a 2 + 2 Award [1 mark] for a relevant advantage (or disadvantage). Award a further [1 mark] for each explanation, written in the context of case study, up to the maximum of [4 marks]. 5. Calculate the total annual value of BON’s direct costs the five music festivals held each year. [2 marks] BON organizes five music festivals each year (line 8). The direct costs per festival include the fees for using farmland ($100,000) and the cleanup cost per festival ($250,000). Total annual direct costs for BON = (Fee for using farmland + Cleanup cost) × Number of festivals per year Total annual value of direct costs = ($100,000 + $250,000) × 5 = $1,750,000 Accept answers that show $1.75 million. Award [1 mark] for appropriate working and [1 mark] for the correct answer. 6. With reference to the external environment, explain two challenges for BON. [6 marks] Economic uncertainty – The persistent high interest rates in Europe (lines 61 – 62) can negatively impact consumer spending, affecting ticket sales for BON’s music concerts and festivals. At the same time, the higher cost of borrowing also means higher costs for businesses with existing loans. This can harm BON’s liquidity position. It can also mean lower sponsorship revenues for corporate partners of BON’s festivals. Climate change – The increasing frequency and severity of extreme weather conditions throughout the world due to global warming and climate change pose significant risks to outdoor music festivals, potentially disrupting schedules, damaging infrastructure, and even endangering the safety of festival goers. Therefore, BON is likely to face challenges in developing measures to minimize risks and adapt their operations to changing environmental conditions. Mark as 3 + 3 For each point, award [1 mark] for stating a potential external challenge and, depending on the depth and clarity of the explanation, an additional [2 – 3 marks], up to the maximum of [6 marks]. SECTION B Answer one question from this section. 7. Discuss the importance of corporate social responsibility (CSR) for BON. [10 marks] Corporate social responsibility (CSR) is the conscience of a business with consideration of the organization’s actions on its various stakeholder groups (consumers, suppliers, employees, and local communities) and the natural environment. It involves BON monitoring and ensuring its compliance with the ethical standards in Europe. For BON, implementing socially responsible practices can be of utmost importance due to the potential benefits of CSR. These include but are not limited to enhanced corporate reputation and improved brand Image – By engaging in CSR practices such as promoting environmental sustainability (lines 10 and 32) and supporting local communities (line 67), BON can enhance its reputation and brand image. Although this may take some time to develop, it can lead to increased customer loyalty, positive word-of-mouth, and a stronger competitive advantage for BON in the music festivals industry. However, drawbacks or limitations of implementing CSR practices for BON could include compliance costs, as the high costs associated with implementing CSR initiatives, such as investing in green technologies (line 74) and renewable energy sources like solar power (line 51), may pose enormous financial challenges for BON, particularly if the returns on investment are uncertain or take time to materialize. Overall, corporate social responsibility encompasses various actions and initiatives taken by businesses like BON to contribute positively to society and the environment beyond their core business activities. The case for implementing CSR practices at BON is multifaceted. While there are clear benefits for being socially responsible, such as enhancing BON’s brand reputation, there are also challenges and potential drawbacks, including financial constraints. In conclusion, given the growing importance of sustainability and ethical considerations in the music festivals industry, embracing CSR is not only a moral imperative for BON but also a strategic necessity for the company to maintain its appeal and trust with festival goers and its long-term viability in a rapidly evolving industry. Award [1 – 2 marks] for a response that shows little understanding of the demands of the question. There is minimal use of Business Management tools and theories, which are irrelevant or used inaccurately. There is little, if any, reference to the stimulus material. Award [3 – 4 marks] for a response that shows some understanding of the demands of the question. There is some use of Business Management tools and theories, but these are mostly lacking in accuracy and relevance. There is superficial use of information from the stimulus material, often not going beyond the name of the organization. Any arguments made are largely not substantiated. Award [5 – 6 marks] for a response that shows an understanding of the demands of the question, but these demands are only partially addressed. There is some relevant and accurate use of Business Management tools and theories. There is some relevant use of information from the stimulus material that goes beyond just the name of the organization but does not effectively support the argument. Arguments are substantiated but are mostly one sided. Award [7 – 8 marks] for a response that mostly addresses the demands of the question. The response contains mostly relevant and accurate use of Business Management tools and theories. Information from the stimulus material is generally used to support the argument, although there is some lack of clarity or relevance in some places. Arguments are substantiated and the response has some balance. Award [9 – 10 marks] for a response that shows clear focus on addressing the demands of the question throughout. There is relevant and accurate use of Business Management tools and theories. Relevant information from the stimulus material is integrated effectively to support the argument. Arguments are substantiated and balanced. There is an explanation of the limitations of the case study or stimulus material. Answers to BON’s second Case Study: 1. Define the term expansion. [2 marks] This is the growth of a business due to an increase in the size of the organization and/or growth in the market as a whole. Expansion is usually measured by an increase in metrics such as sales revenue, market share, capital employed, or profits over time. Award [1 mark] for a definition that shows some understanding of expansion. Award [2 marks] for a clear and accurate definition of expansion, similar to the example above. Application and examples are not required. 2. Define the term average cost. [2 marks] The average cost of production is the cost per unit of output. Average cost (AC) is derived from dividing the total costs (TC) of production by the quantity of output (Q), or, AC = TC / Q. Award [1 mark] for a definition that shows some understanding of average cost. Award [2 marks] for a clear and accurate definition of average cost, similar to the example above. Application and examples are not required 3. Describe two elements of BON’s marketing plan for running music festivals. [4 marks] Market research – Conduct market research to identify the target demographic for BON’s music festivals, including age groups, interests (preferred music genres of favourite music performers), and geographic locations. Promotion – Promotional campaigns and initiatives could include special offers like early bird discounts (concessions for those who book early), group packages, loyalty rewards, and exclusive perks to incentivize ticket purchases and encourage repeat attendance to BON’s music festivals. BON’s official website will be essential for conveying information and promoting its music events. Mark as 2+2 Award [1 mark] for a relevant element, plus a further [1 mark] for an appropriate description written in the context of the case study, up to a total maximum of [4 marks]. If there is no application shown, award a maximum of [2 marks]. 4. Explain how BON’s use of renewable energy sources such as solar power aligns with its commitment to environmental sustainability. [4 marks] Renewable resources, such as solar and wind energy, are natural resources that are replenishable through natural reproduction processes. They replace the resources that have been depleted by usage in production and consumption. Environmental sustainability refers to the ability of an economy or society to maintain the use of its renewable and non-renewable resources without jeopardising opportunities for future generations. Renewable energy sources generate electricity without the need to burn fossil fuels, which significantly reduces carbon emissions. Unlike finite fossil fuels, such as coal or oil, solar energy is clean, abundant, and renewable, ensuring long-term energy security and reducing BON’s dependence on non-renewable resources. By using solar energy to power its music festival sites, BON can minimize its carbon footprint and contribute to mitigating climate change, aligning with the goal of reducing the environmental impact of its music events (line 45) and its commitment to environmental sustainability. Award [1 – 2 marks] for an answer that shows limited understanding of the demands of the question and/or an answer that has minimal, if any, reference to the stimulus material. Award [3 – 4 marks] for an answer that shows good understanding of the demands of the question, with a clear explanation of the link between the use of renewable energy sources and how this aligns with BON’s commitment to environmental sustainability. There is clear and effective use of the stimulus material. There is appropriate use of business management terminology throughout the response. 5. Outline the importance of revenue streams for BON. [2 marks] Revenue streams are the different sources of money or income coming into the business from various sources, such as sales of tickets or merchandise from music festivals. They are crucial for BON’s financial stability and growth as they provide the necessary funds to cover the company’s operational expenses (such as venue rental, stage setup, fees for freelancers, security measures, and marketing efforts). Without sufficient revenue, BON would struggle to cover these costs and may risk operational disruptions, liquidity issues, or even bankruptcy. Award [1 mark] for an answer that shows some understanding of the importance of revenue streams. Award [2 marks] for an answer that shows good understanding of the importance of revenue streams for BON, similar to the example above. 6. Explain two advantages and one disadvantage of BON’s Human Resources (HR) department relying on temporary workers and freelancers. [6 marks] Advantages: Flexibility – Temporary workers and freelancers can be hired on an as-needed basis, based on the level of demand for each music festival. This flexibility enables BON to adapt quickly to changes in attendance levels, event schedules, and staffing requirements. Creativity and innovation – Temporary workers and freelancers often bring new perspectives and ideas to BON’s music events. This helps to contribute to creativity and improvement within the organization and the music festivals it runs, thereby improving audience engagement and experience Disadvantage: Lack of familiarity– Temporary workers and freelancers are unlikely to have the same level of familiarity with BON’s organizational culture, policies, and procedures as permanent employees. This leads to inconsistencies in performance and communications. For each point, award [1 mark] for each of the two suitable advantages, and one disadvantage, and a further [1 mark] for each explanation, written in the context of the case study. 7. Recommend whether BON should invest in sustainability initiatives. [10 marks] Sustainability is about using the planet’s resources in such a way that future generations are not deprived of access to what the current and previous generations have enjoyed. Reasons in favour of BON invest in sustainability initiatives, such as the use of bamboo plates and cutlery instead of traditional disposable plastic utensils (lines 40 – 41) include improved brand reputation, because investing in sustainability initiatives, such as the possibility of powering BON’s festival sites using solar power (lines 43 – 44) can enhance its brand reputation within the industry and among environmentally-conscious stakeholder groups. By demonstrating a commitment to environmental and social responsibility, BON can differentiate itself from competitors that do not place sustainability as a priority and attract attendees who prioritize such values. However, drawbacks or limitations of BON investing in sustainable initiatives include increased costs for the company, as the set-up costs of implementing sustainability initiatives are highly expensive (line 47). The upfront investment expenditure for projects such as solar panels and solar technology can present financial challenges for BON. This could be a significant factor if BON is already facing financial hurdles or has limited resources. This could strain its budget and hinder BON’s ability to invest in other critical areas of its business, such as its expansion (line 6). That said, a commitment to sustainability is undeniably important for BON, as it enhances brand reputation. However, BON must navigate challenges such as financial difficulties. Sustainability is of growing importance to customers and governments, especially with the growing awareness of climate change and the importance of environmental conservation (line 38). Also, it is increasingly challenging for organizations to ignore sustainability issues. In conclusion, given the growing importance of sustainability and ethical considerations in the music festivals industry, embracing sustainability is not only a moral imperative for BON but also a strategic necessity for the company to maintain its appeal and trust with festival goers and its long-term viability in a rapidly evolving industry. Award [1 – 2 marks] for a response that shows little understanding of the demands of the question. There is minimal use of Business Management tools and theories, which are irrelevant or used inaccurately. There is little, if any, reference to the stimulus material. Award [3 – 4 marks] for a response that shows some understanding of the demands of the question. There is some use of Business Management tools and theories, but these are mostly lacking in accuracy and relevance. There is superficial use of information from the stimulus material, often not going beyond the name of the organization. Any arguments made are largely not substantiated. Award [5 – 6 marks] for a response that shows an understanding of the demands of the question, but these demands are only partially addressed. There is some relevant and accurate use of Business Management tools and theories. There is some relevant use of information from the stimulus material that goes beyond just the name of the organization but does not effectively support the argument. Arguments are substantiated but are mostly one sided. Award [7 – 8 marks] for a response that mostly addresses the demands of the question. The response contains mostly relevant and accurate use of Business Management tools and theories. Information from the stimulus material is generally used to support the argument, although there is some lack of clarity or relevance in some places. Arguments are substantiated and the response has some balance. Award [9 – 10 marks] for a response that shows clear focus on addressing the demands of the question throughout. There is relevant and accurate use of Business Management tools and theories. Relevant information from the stimulus material is integrated effectively to support the argument. Arguments are substantiated and balanced. There is an explanation of the limitations of the case study or stimulus material..