A-AS Level (CIE) Business Studies Paper-2: Specimen Questions with Answers 18 - 19 of 52

Passage

Case Study- 2

CAP Markets, a steadily growing chain of some 50 neighborhood supermarkets in Germany. Other examples are the St. Mary՚s Place Hotel in Edinburgh and the Hotel Tritone in Trieste. Social franchising also refers to a technique used by governments and aid donors to provide essential clinical health services in the developing world. Event franchising is the duplication of public events in other geographical areas, while retaining the original brand (logo) , mission, concept, and format of the event. As in classic franchising, event franchising is built on precisely copying successful events. Good example of event franchising is the World Economic Forum, or just Davos forum which has regional event franchisees in China, Latin America etc. Likewise, the alter-globalist World Social Forum has launched many national events. When the Music Stops is an example of an events franchise in the UK, in this case, running speed dating and singles events in short strong of time all these three companies have expanded their base and covered every corner of India. The biggest highlight of these companies is that despite being big players in the market they still provide small business franchise opportunities to the people. Apart from these three other entrepreneurs too offer attractive and alluring small business franchise opportunities.

Question 18 (1 of 6 Based on Passage)

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Short Answer▾

Why a firm changes it legal structure?

Explanation

A Firm Changes Its Legal Structure Because of the Following Reasons

  • Business expansion acquisition: To acquire a new business it may require a new structure.
  • Public Stock offering: In order to make public stock offering and in order to accomplish this they must change their structure.
  • Venture Capital funding: Venture capital fund is acquired through stock share.
  • Owner may want less compliance fewer requirements.
  • Tax Reasons: A company may change its legal structure to take advantage of taxation.

Question 19 (2 of 6 Based on Passage)

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Short Answer▾

Explain the term:

a. Franchising

Explanation

Franchising is a form of licensing in which a parent company the franchiser grants another independent identity (the franchisee) the right to do business in a prescribed manner. This right takes the form of selling the parent company՚s products, using name, techniques of production and marketing strategies or business approach. One common forms of franchising involve the franchisor supplying an important ingredient (part, material) for the finished product, like the Coca-Cola supplying the syrup to the bottlers.

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