Cambridge O Level: 7115/22 Business Studies

Cambridge O Level
BUSINESS STUDIES 7115/22

Paper 2 Case Study October/November 2020
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11_7115_22_2020_1.4
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2
Cell Covers (CC)
Aisha worked for several years for a company that repairs mobile (cell) phones in country Z. She
had always wanted to be her own boss and decided to leave her job to set up CC to produce covers
for mobile phones. She went into partnership with her brother, Aruna. He worked as an Operations
Manager for a company producing children’s clothes.
The sources of finance for the business were $10 000 of savings from each partner and a bank
loan of $10 000. CC was also given a government grant to help the new business get started. CC
leased a factory, bought some equipment and had to pay some expenses before the business had
regular cash inflows.
CC’s current product is a range of standardised phone covers which are sold in the mass market.
These are sold using a competitive pricing method through mobile phone shops. CC employs 10
skilled production workers who are paid just above the legal minimum wage. These workers have
been trained how to operate the equipment and work as a team on the production line. During the
production process there is a lot of waste plastic produced and CC sends this to landfill sites. The
business has just completed its second year of trading.
CC is about to launch a new range of individual personalised phone covers. It will need to recruit
2 additional production workers. Aruna knows that the marketing mix for this new product may have
to be different to the marketing mix used for the standardised products. The new product will be
aimed at a niche market of high income consumers between the ages of 18 to 25. There are few
other competitors in this market at present.
Appendix 1
Newspaper article in Main News
Country Z has been in a recession but the economy is now growing rapidly and unemployment is
falling. With higher incomes the majority of people now own a mobile phone. This makes
communication easier. Mobile banking is becoming more popular and it is used by a large percentage
of the population.
© UCLES 2020 11_7115_22_2020_1.4

3
Appendix 2
Advertisement for CC’s standardised mobile phone covers
Do you want to protect your phone from damage? Then buy a phone cover from CC. Your phone
will never be damaged if you use one of our high quality covers!!
We offer a range of standardised covers at competitive prices. The CC range has many different
colours and designs so you will stand out from the crowd.
Appendix 3
Summary of CC’s financial information from the end of the second year of trading ($)
Revenue 800 000
Cost of sales 400 000
Gross profit 400 000
Expenses 250 000
Profit 150 000
Current Assets 20 000
of which: Inventory 5 000
Current liabilities 15 000
© UCLES 2020 11_7115_22_2020_1.4

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Cambridge O Level

BUSINESS STUDIES 7115/22

This document has 4 pages. Blank pages are indicated.

Cell Covers (CC)

Newspaper article in Main News

© UCLES 2020 11_7115_22_2020_1.4

Advertisement for CC’s standardised mobile phone covers

Revenue 800 000

Cost of sales 400 000

Gross profit 400 000

Expenses 250 000

Profit 150 000

Current Assets 20 000

of which: Inventory 5 000

Current liabilities 15 000

© UCLES 2020 11_7115_22_2020_1.4

© UCLES 2020 11_7115_22_2020_1.4

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