Name:

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 Unit Specification: Unit 7 – Business Decision Making
Unit in brief

Learners study skills relating to business concepts, processes and data developed in
earlier mandatory units to enable the formulation of business decisions and
solutions.

Unit introduction

The aim of this unit is to consolidate understanding and skills to enable you to
interpret data, and to formulate decisions and solutions to given complex business
problems.

You will consider business situations/scenarios where you are required to select and
use appropriate evidence from several sources to support your arguments. You will
predict probable consequences, identify faulty arguments or misrepresentations of
information or data, compare information and data, provide reasonable alternatives,
and evaluate and justify your proposed solutions.

To complete the assessment task within this unit, you will need to draw on your
learning from across your programme. This unit will help you to understand the
importance of decision making and planning in a business and enable you to
progress to employment, self-employment, training or higher education. This has
been selected as an externally-assessed unit as it allows you to demonstrate your
ability to extract relevant information and apply the knowledge and understanding
you have developed.

Summary of assessment

This unit is assessed under supervised conditions. The supervised assessment

period is a maximum of three-hours single session timetabled by Pearson. Learners
will complete and submit a set task on a case study/business scenario released at
the start of the supervised assessment period. The set task is provided and marked
by Pearson.

The number of marks for the set task is 70.

The assessment availability is twice a year in December/January and May/June.

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Assessment outcomes

AO1 Demonstrate knowledge and understanding of the concepts, key terms,

functions, processes and theories that determine business decisions.

AO2 Apply knowledge and understanding of the factors that influence decision
making to real-life business scenarios.

AO3 Analyse and evaluate evidence and data, demonstrating the ability to interpret
the potential impact and influence on complex business planning and development
problems.

AO4 Be able to recommend business solutions in context with appropriate

justification, using a range of evidence to support arguments.

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 Learning Outcome A – Business Plans

Activity 1 – Start-up Business Ideas

Describe what a business plan is.

As we go through where ideas come from when starting up a business, fill in the
table by explaining the reason for the business idea and give an example of a
business that has started in that way.

Reason for a Explanation Business example

business idea
Gap in the market

Competitors

Current trends

Likely demand

Discussion: What other businesses have started due to a gap in the market?

NOTES:

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 Activity 2 – Gymshark Case Study
Read the case study below or online by clicking the link and then answer the
questions provided.

How Gymshark Disrupted The Fitness Industry

CLICK HERE FOR ONLINE ARTICLE

How Gymshark became the UK's most successful sportswear brand and what we
can learn from their success.

It all started in 2012 when the Founder of sportswear brand Gymshark, Ben Francis,
asked his mother to teach him how to use a sewing machine, so he could make
vests and t-shirts him and his friends could wear to the gym. Fast forward eight
years, and today, Ben’s company Gymshark has joined the list of fewer than 25
British firms that have achieved Unicorn status since 2001 – following a major
fundraise, Gymshark is now valued at over £1 billion. In August, the online retailer
announced that it has entered a strategic partnership with global growth equity firm
General Atlantic, which has taken a 21% stake in the company. How has the
company managed to achieve such impressive success in the eight years it’s been
active for and what can other companies learn from their approach?

Headquartered in Birmingham, UK, Gymshark was founded because Francis spotted

a gap in the sportswear market – the lack of affordable activewear for young gym-
goers. Thanks to the success their garments have seen since the early days of the
online retailer, Gymshark has always kept their focus on this niche market; since the
company’s very beginning in 2012, they’ve made clothes for people aged 16-30.

It was around this time when health and fitness accounts were a growing trend on
social media platforms like Instagram and YouTube – many young people, who
weren’t called influencers at the time, were creating social media accounts to track
their progress at the gym and post photos and videos of their workouts and healthy
meals. What struck Francis was that back then, most brands were offering either
bodybuilding activewear for older male gym-goers or high-end and pricey fitness
apparel designed to be more practical than trendy. Those gym enthusiasts on
Instagram, who obviously wanted to be seen, were thirsty for sportswear that is

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functional, affordable and most importantly – fashionable. They all wanted to look
good while training.

And it’s not just their online presence Gymshark is passionate about – over the
years, the company has fostered a sense of community offline too by organising
meetups, expos and pop-up stores where fans can meet their favourite influencers
and buy from the brand while enjoying the traditional way of shopping.

And while Gymshark successfully filled in this gap, fully disrupting the entire industry
and becoming a rightful competitor to established activewear giants like Adidas and
Nike, it’s also managed to keep all sales on its own website, refusing to sell its
products on third-party online retailers like ASOS; which is something that both
Adidas and Nike do.

What’s more, Gymshark was one of the first clothing brands to start working with
Instagram and YouTube influencers and turn them into their ambassadors – or
“Gymshark athletes” as they call them. Back when they were selling a limited
number of items online, the company began sending fitness influencers free
sportswear, hoping that they would love the brand and that they would start wearing
and promoting it to their large number of followers. As Ben explains in a YouTube
vlog: “At the time, no one else was doing [influencer marketing]. It came totally
naturally to us because we were just fans of the guys.”

The marketing approach proved to be successful – the company saw an immediate

increase in sales which prompted Gymshark to take this strategy further and sponsor
18 influencers, with a combined following of over 20 million people. Today,
Gymshark sponsors tens of social media bodybuilders and fitness personalities from
across the globe and is one of the first companies which benefited from and saw
first-hand how powerful influencer marketing can actually be.

Their entire ‘Gymshark athletes’ strategy is perfectly planned – they’re constantly

wearing Gymshark’s clothes online and they ramp it up a notch right before a new
line launch or a sale (the company is known for doing only two major sales a year –
a Birthday Sale in June and a Black Friday Sale). All athletes post videos where they
try on the activewear and review it, offering their honest opinion, answering their
followers’ questions about it and providing them with a link they can shop from once
the sale starts or the new launch is live. The athletes make a commission off every
sale made through their link, which motivates them to promote it even more;
however, none of this is done in a pushy or irritating way. Their followers end up
purchasing the exact same outfits their favourite fitness influencers wear in their
photos and videos, the influencers make money off sales made through their links
and Gymshark ends up selling out certain lines within minutes! And there you have it
– a great sales strategy which makes everyone involved happy!

But in addition to relying heavily on influencer marketing, Gymshark has made sure
to develop their own social media channels too, where they post helpful articles,

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tutorials and videos. The company’s active on Twitter, Instagram, Facebook,
YouTube, Pinterest and TikTok – recognising the difference between the users of
different platforms and tailoring their content accordingly; which has helped them
build a huge following and grow fast. And it’s not just their online presence
Gymshark is passionate about – over the years, the company has fostered a sense
of community offline too by organising meetups, expos and pop-up stores where
fans can meet their favourite influencers and buy from the brand while enjoying the
traditional way of shopping. Each event is advertised weeks before on social media
(and not only) and ends up being an audience magnet, often featuring live classes,
demos and product offers in addition to the influencer appearances.

To further cement his company’s strong online presence, Ben practices what he
preaches and has his own YouTube channel too where he shares with his 176,000
subscribes how he started Gymshark, how he’s grown the business, how the
company’s dealt with the COVID-19 pandemic, and answering questions about his
role and the company. He also posts videos which show his subscribers what a
typical day of his life looks like – showing a more personal side of his life with
everyone interested to see what it’s like to be Ben Francis.

In a recent post on his Instagram page where he announced Gymshark’s £1 billion

valuation, Francis added that they’re “just getting started”, finishing his post with the
company’s slogan: “Be a visionary”. With its well-established target customer base,
fundamental understanding of the market, excellent use of social media and the
opportunities it offers, and ability to drive community engagement, this young
company is indeed showing potential for an even brighter future!

Questions:
Gymshark is one of only 25 UK businesses to have achieved unicorn status since
2001. What is unicorn status?

What gap in the market did Ben spot?

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What was the trend that Gymshark identified?

Explain how Gymshark managed to create demand for their product.

How do you think Gymshark used its competitors to help them establish their brand?

Identify the key strategies Gymshark have used in their sales strategy.

Using the article and your own research assess why Gymshark’s business idea has
been so successful.

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 Activity 3 – Business Development Ideas
As we go through the ideas associated with developing a business, complete the
table below just like you did in activity 1.

Reason for a Explanation Business example

business idea
Changes in the
economic climate

Trends

Competition

Discussion: What businesses have you noticed do something new and

innovative during the pandemic?

NOTES:

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 Activity 4 – Trends
Create a product extension based on a current trend for a business of your choice
for example it could be a vegan Mars Bar.

Your chosen company is…

Describe the current product you are going to extend.

Research a trend and explain that trend below.

Explain what you are going to do to the original product to meet this trend.

Justify how these changes meet this new trend.

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Redesign the packaging of this product to reflect the changes that you have made.

DRAW OR PASTE YOUR DESIGN BELOW:

Justify how the changes you have made to the packaging meet this new target
market and trend.

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 A1 Knowledge Check Activity 5 – Successful Business Idea
Similar to the case study you read on Gymshark, perform your own research on a
successful business and create a presentation that covers the following:

• Background of the founders

• Explanation of how the business idea started (i.e. gap in the market, trend,
competition etc)

• How the business managed to meet the needs of their customers through the
product or service they offered

• How the business has developed their business over the years with new ideas

• Facts, figures and research that show that the business is a success today.

IDEAS FOR PRESENTATION:

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 Outcome A2 – Purpose & Structure of a Business

Activity 6 – Beyond Meats Mission

Watch the video and then answer the questions about how the purpose of the
business is reflected in their product.

Beyond Meats Mission : ‘We believe there is a better way to feed our future and that
the positive choices we all make, no matter how small, can have a great impact on
our personal health and the health of our planet. By shifting from animal to plant-
based meat, we can positively impact four growing global issues: human health,
climate change, constraints on natural resources, and animal welfare.’

For further research visit the link below.

ABOUT BEYOND MEAT BEYOND MEAT VIDEO LINK

Explain what the founder and CEO of Beyond Meats ‘why’ is for starting the
business.

The interviewer identifies him as a mission based entrepreneur. Describe what you
think that means.

What stats came from the University of Michigan’s study on the agricultural impact of
Beyond Meat compared to Livestock?

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Using the previous questions and the mission statement provided, assess whether
the product Beyond Meat has created is helping them reach their mission (are they
aligned?).

Extension questions

What is the biggest problem you currently see in the world?

Can you think of a business idea that would impact that for the better?

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 Activity 7 – Types of Ownership
Watch the video named ‘Types of Business Ownership Explained | Sole Traders,
Partnerships, LTD, PLC and Franchise’ and answer the following questions.
TYPES OF OWNERSHIP VIDEO LINK

Sole Trader vs Partnership Starting a Business Scenario: Rheo has just

completed a business qualification and has decided to set up a small digital
marketing business. He plans to start the business as a sole trader with no
employees but his friend (Lucy) who studied business in the same class wants to join
Rheo and set up a digital marketing business together as a partnership. He has
come to you as he is not sure what to do and does not understand the difference
between the two options and how it will impact him.
Task: Rheo has asked you to specifically explain what the difference is between a
sole trader and a partnership business, including the advantages and drawbacks of
each.

Task : After explaining the differences above, Rheo has now asked you to
recommend with justification which option he should choose for his digital marketing
business.

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Becoming a Limited Company Scenario: Private vs Public – Rheo thanks you
for all your help above and eventually decided to go into partnership with Lucy,
naming their business ‘Rhucy Marketing’. It is now five years later and what a great
five years it’s been for them both. The digital marketing business has been very
successful, they have a number of loyal customers, three employees and a city
centre office. Furthermore, they have just updated their business plan and acquired
some funding to support the business’ growth over the next year.
However, they are having a big disagreement about becoming a limited company.
They are considering changing the legal status of the business to operate as a
limited company (incorporation). However, Rheo is certain that if they do, the general
public can buy shares in the business and is very worried about this. Lucy is
confident that this is not the case as long as they set up as a private limited company
and not a public limited company.

Task: Help Rheo and Lucy settle the debate by explaining the key differences
between a Private Limited Company (Ltd.) and a Public Limited Company (PLC)
including the advantages and drawbacks of each.

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Finding out about Franchises
Task: Firstly, explain what a franchise is below and then research the cost of 5
different franchise businesses.

Task: Now you have the cost information for 5 different franchise businesses, you
are required to choose and justify which one you would choose to run if you had the
funds. To help you justify your choice you must consider as many factors as you can,
such as: the location where you would open it, who the target market would be, and
what the current demand for the business is etc.

Explain why a business may change its ownership type.

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 Activity 8 – Organisational Structures
Whilst watching the video complete the activity in the student booklet regarding the 3
organisational structures discussed.

Organisational Structures Word Search - complete the word search below based
on the key words discussed in the YouTube video.

Organisational Structures Key Words

J R G P V N J T X S I Y S J O L W L K T C W D Z
N X F Z R H N O P Q M X P X I C X D G T B W N D
U T B I S O X Q Z E N O I T O M O R P R S M W Z
T B B J Y T J U R X C O L E P W S O S A R C B D
Z O H S O R G E Z N Y D Y B C K J X E H C W I S
R T Y J V S Z R C J H P X G D D K E T C V Q E R
E Z L W B Z P M A T N Y A K K R Y C A L J I A O
V O O J S J X N H H T C C O Q T T Y N A R R S R
X F R T W K P D C A V E N Z H K I S I N W E Y G
Z A T D O D E N O V R K A D T L L J D O L S X V
F Q N M E U W Q M Q K B N M A A I H R I C P O U
W N O A A B L T M W Y U K C S J B F O T O O Z P
H Z C T J G Z B U G F H I N R Q A Z B A H N F Z
B O F R Q Y H R N M S H M B Y P T X U S R S V C
M O O I W B C J I U C G O K K I N O S I H I P E
E U N X G H L N C R O S A R A C U L G N J B S F
I O A X C L M V A B B V R D A H O R N A I I K S
N K P P U J I R T C N T X T C D C Y Z G T L B Y
W C S V R F E E I K Y U X Z B O C L A R X I Y E
X Q E V A I T F O F O J Q X T Q A V E O M T Y Y
R L X S H K I A N E N J G D J Q Q Y F Z W Y P D
Y O C L Z W D Z L D N A M M O C F O N I A H C K
K M V L N N N G F F L Y W X S V U Y Z K F H A F
X W C E C T K R J B Z L Y O B O L Y R K B W P W

   Project teams       Communication       Responsibility       

Accountability   Promotion       Organisational chart       Flat       Hierarchical       
Matrix       Span of control       Chain of command Subordinates   

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Explain what the three key words discussed at the start of the video mean.

Explain the key features of a hierarchical structure.

Assess the benefits and drawbacks of adopting a hierarchical organisational

structure.

Suggest why a flat organisational structure has a wide span of control.

Argue whether a flat structure is the best option for a large organisation to adopt (use
the advantages and disadvantages covered in the video).

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Describe clearly what a matrix structure is.

Choose a business of your choice and create an organisational chart for that
business.

For the organisational chart you have just created, evaluate the effectiveness of this
organisational structure.

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Extension – Justify an alternative structure for the business chosen ensuring to cover
the benefits and drawbacks of adopting this new structure.

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 Activity 9 – Business Location
Watch the video on Business Location. Answer the questions about the video and
then complete the scenario activity.

BUSINESS LOCATION VIDEO LINK

List the three key influences on where a business decides to locate.

Explain why a business such as a fish and chip shop would want to be in close
proximity to its market.

Assess the influence proximity to labour has on where a business decides to locate.

What type of business would proximity to raw materials be an important influence on

where to locate? (Circle the correct answer)

Retail Service Manufacturing

Argue whether being close to customers is an import factor when picking a location
for a service.

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Describe the term ‘brick & clicks’.

Evaluate the influence the internet has had on business location.

Scenarios – For each scenario pick an ideal location for that type of business
and justify why you have chosen that location. Possible locations could be city
centres, industrial estates, residential areas, town centres, shopping centres, e-
commerce and bricks & clicks.

Layton is starting his own clothing brand and has about £5000 saved up to launch
his business. He lives in a small town. Justify a location for Layton’s clothing brand.

Eve makes running shoes in her garage and sells them online. She is looking for a
location to expand as demand has grown for her shoes. Justify a location where Eve
can manufacture her trainers.

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Aman supplies local coffee shops with speciality coffee in his local area. He currently
has a huge warehouse but is looking for a location to start his own coffee shop.
Justify a location where Aman can open his coffee shop.

Lucy has been an accountant for several years and has decided to start her own
accountancy business. Justify a suitable location for Lucy to launch her new
business.

Extension – Discuss whether you think it is possible to run a business solely

from social media platforms with no need for a physical location or even a
website.

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 Discussion: Think about a big purchasing decision you had to make in your
life (It could be the next phone you should buy or whether or not to buy an
expensive item of clothing). What process do you go through to get to your
final decision?

NOTES:

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 A2 Knowledge Check Activity 10 – Purpose and Structure of a
Company
The business I am looking into is ___________________________________

Identify the business’s mission statement and core values.

Identify the structure of the business and state how that structure helps them operate
effectively.

Describe how the product or service they offer aligns with their mission vision and
core values.

Explain the type of ownership they operate within and how that helps them achieve
their mission.

Explore the location of the business and again link this to the business’s purpose.

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Justify whether the overall structure of your chosen business helps them achieve
their mission.

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 Activity 11 – Test Your Knowledge Learning Outcome A Kahoot
Test your knowledge of Learning Outcome A of Unit 7: Business Decision Making by
clicking this link: PLAY OUTCOME A KAHOOT

Once you have completed the quiz, answer the questions below to assess your
strengths and areas of development.

What did you score on the Kahoot quiz?

What areas of Learning Outcome A can you identify as your strengths after playing
the quiz?

What areas of Learning Outcome A can you identify as your development areas after
playing the quiz?

How do you plan to develop the areas you have identified to increase your
knowledge and understanding of these topics?

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 Activity 12 – Word Scramble Learning Outcome A

1. ERRUERENEPTN ______________________________________
2. APG NI HTE EATMRK _________________________________
3. TNEDSR ____________________________________________
4. OSORPCTIMET _______________________________________
5. KLELYI MDDNEA _____________________________________
6. SAIM NAD JCEITVOSBE _______________________________
7. RPOINSEWH _________________________________________
8. IREALHHICRAC ______________________________________
9. RTXMAI ____________________________________________
10. NSSBUSEI TEUSURCRT ________________________________
11. IHNCA OF AMDOCNM __________________________________
12. MNATCICIMOONU _____________________________________

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 Activity 13 – Word Search Learning Outcome A

R V M U T A S T W T I F B Y F H A W U P W C H L
L M C C J F I P Z Z S M U I N R V O D X O U R H
S F M Z N E M E R K D V S S V D W C G M Y K V N
I G E Z A F X F V O N O I J G K V O M B I K A E
Q A S M H O W C P S E B N D C K E U S B V N K E
R P L G G G G W O E R O E Y M Q N K R Z O K C S
Q I C R Q U O R T X T J S A R I W E K L U D X G
L N Z O N Y J C N T P I S T C Z H V L Q F W S O
D T C P H D R T V Y F R S A O Q U L S C C E B E
L H U J R H T I O T R T T P O W N E R S H I P N
I E Y K M E E K M K Q I R V L J N O W N A O U T
K M S G E Q E A H L O F U A D E I K Q B N P H R
E A K R P C H A I N O F C O M M A N D W U K M E
L R E E O R O Q H S K I T A V F S N W G I B Y P
Y K D E M T S W W M H W U Y Y U X H K O B K U R
D E J J Q G I A K C D O R P M A V I S L B H P E
E T J Z F A N T R L A P E P E I V N R O E Z J N
M Y J K Y E K A E E Y A E C D A U N I T A N O E
A E W T F N R B W P D F G U B U O C D V A Z V U
N N B X W E M Y O Y M C W B D H U L F Y D M M R
D B W V I M B X Z L J O J B U G G G G B V K M S
Z Q Y H W A V V R W R S C J D N N F V Q W A K J
Y Z U E D N E H G J G C R R N L V R C G C W G G
Z A I M S A N D O B J E C T I V E S U W G F V U

  

 Communication       Chain of command       Business structure       Matrix       

Hierarchical       Ownership       Aims and objectives       Likely demand       

Competitors       Trends       Gap in the market       Entrepreneur   

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 Activity 14 – Crossword Learning Outcome A

4 5 6 7

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Across Down

3. A structure that brings employees 1. Spotting an area of the market that has
based on their skills. not been filled.

6. A simple business structure with a 2. Local, national, international?

short chain of command.
4. McDonalds may look at what Burger
8. These are how an organisation plans King are doing as they are their...
to achieve their goals.
5. Private, public and not-for-profit?
9. A structure that has clearly defined
people of authority and subordinates but 7. Business ideas that emerge due to the
also has a long chain of command. general direction in which something is
developing or changing.

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 Activity 15 – Business Decision Making Learning Outcome A

Unit 7: Business Decision Making

Learning Outcome A: Business Plans

Topic Your explanation of the Exam ready?
terminology
A1 – Business ideas

Start-up business:
Gap in the market

Competitors

Current trends

Likely demand

Developing business:
Changes in the economic
climate
Trends

Competition may force

diversification for survival
A2 – Purpose and structure of a business

Aims and objectives

Product/service

Types of ownership

Reasons why a business

may need to change
ownership
The structure of the
business – flat, matrix and
hierarchical
The location of the
business – local, national
and international
Evaluation, justification
and synthesis of business
ideas

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