HSC Business

SUCCESS ONE HSC
BUSINESS
STUDIES
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2008–2019
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2019 HSC EX AMINATION PAPER • QUESTIONS
CHAPTER 12
NSW Education Standards Authority
2019 HIGHER SCHOOL CERTIFICATE EXAMINATION
Business Studies
General • Reading time – 5 minutes
Instructions • Working time – 3 hours
• Write using black pen
• Draw diagrams using pencil
• Calculators approved by NESA may be used
Total marks: Section I – 20 marks (pages 2–8)

100 • Attempt Questions 1–20
• Allow about 35 minutes for this section
Section II – 40 marks (pages 9–16)

• Attempt Questions 21–24
© Pascal Press ISBN 978 1 74125 714 4
• Allow about 1 hour and 15 minutes for this section
Section III – 20 marks (page 17)

• Attempt Question 25
Section IV – 20 marks (page 18)

• Attempt either Question 26 or Question 27
SUCCESS ONE HSC • BUSINESS STUDIES 341

CHAPTER 12 • 2019 HSC EX AMINATION PAPER
Section I
20 marks
Attempt Questions 1–20
Allow about 35 minutes for this section
Use the multiple-choice answer sheet for Questions 1–20.
1 Sam runs a business that designs and sells custom-made, high fashion clothes.
In which type of market is Sam’s business operating?
A. Intermediate
B. Mass
C. Niche
D. Resource
2 A business is purchasing a new property.
Which source of finance would be the most appropriate?
A. Shares
B. Mortgage
C. Debenture
D. Letter of credit
3 A business in crisis needs to make immediate and timely decisions in order to survive.
Which leadership style does a manager of this business need to adopt?
A. Autocratic
B. Bureaucratic
C. Democratic
D. Laissez-faire
342 S U C C E S S O N E H S C • B U S I N E S S– S2T–U D I E S
4 A business requires new manufacturing equipment.
Which of the following would provide leasing for this equipment?
A. Unit trusts
B. Property trusts
C. Finance companies
D. Superannuation funds
5 A bakery produces organic bread that is sold in health food stores.
Which is the most appropriate channel choice for this product?
A. Exclusive
B. Extensive
C. Intensive
D. Selective
6 A biscuit manufacturer reduces the price of its biscuits to below cost in order to attract
more customers.
Which of the following identifies this approach?
A. Skimming
B. Loss leader
C. Price points
D. Production leader
7 Which term refers to a sales technique disguised as market research?
A. Sugging
B. Telemarketing
C. Implied conditions
D. Engaging in fair competition
–S3U –C C E S S ONE HSC • BUSINESS STUDIES 343

8 What effect would a global downturn in the economic outlook have on Australia’s
unemployment, output and exchange rates?
Unemployment Output Exchange rates

A. Increase Increase Decrease
B. Decrease Increase Increase
C. Decrease Decrease Increase
D. Increase Decrease Decrease
9 A business reduces product defects by using inspections in the production process.
This is an example of quality
A. control.
B. improvement.
C. innovation.
D. production.
10 What is the common sequence for resolving workplace disputes?
A. Mediation, negotiation, involvement of courts and tribunals

B. Negotiation, mediation, involvement of courts and tribunals
C. Involvement of courts and tribunals, negotiation, mediation
D. Negotiation, involvement of courts and tribunals, mediation
11 A sole-trader cleaning business purchases generic products to lower costs and be price
competitive.
This is an example of which strategy?

A. Cost leadership
B. Economies of scale
C. Inventory management
D. Goods and service differentiation
344 S U C C E S S O N E H S C • B U S I N E S S– 4
S T–U D I E S
12 Which of the following allows shareholders of a public company to acquire additional

shares at a discount?
A. New issues
B. Placements
C. Private equity
D. Unsecured notes
13 The table shows a Gantt chart.
31/1/20 29/2/20 31/3/20 30/4/20

Receive customer order
Purchase stock
Prepare tools for manufacture
Receive raw materials
Manufacture item
Quality improvement
Deliver finished item
In which month would this business begin manufacturing the item?
A. January
B. February
C. March
D. April
14 Which of the following is the correct order for financial planning?
A. Developing budgets, determining financial needs, maintaining record systems,

identifying financial risks, establishing financial controls

B. Determining financial needs, establishing financial controls, identifying financial
risks, maintaining record systems, developing budgets
C. Determining financial needs, developing budgets, maintaining record systems,
identifying financial risks, establishing financial controls
D. Developing budgets, maintaining record systems, identifying financial risks,
establishing financial controls, determining financial needs
–S 5U C–C E S S ONE HSC • BUSINESS STUDIES 345

15 Use the information to answer Question 15.
Balance sheet as at 30 June 2019

($) ($)
Current assets Current liabilities
Cash 10 000 Accounts payable 10 000
Accounts receivable 5 000 Overdraft 5 000
Stock 8 000
Non-current assets Non-current liabilities
Plant and equipment 35 000 Mortgage 135 000
Land and buildings 292 000
Total equity
Capital 184 000
Net profit 16 000
350 000 350 000
What is the gearing ratio (total liabilities ÷ total equity) for this business?
A. 0.67 : 1
B. 0.73 : 1
C. 0.75 : 1
D. 0.81 : 1
16 Which independent federal body ensures that businesses adhere to government regulations,
maintain appropriate financial information and provide consumer protection?
A. Reserve Bank of Australia

B. Australian Securities Exchange
C. Australian Prudential Regulation Authority
D. Australian Securities and Investment Commission
346 SUCCESS ONE HSC • BUSINES–

S 6
S T–U D I E S
Use the following information to answer Questions 17 and 18.
The table compares four businesses on an annual basis.
A B C D
Absenteeism
8 5 8 5
(average per employee)
Accidents per 500 employees 4 2 2 4
% of staff turnover 11 9 9 11
Average output per employee 10 14 10 14
17 Which business is likely to compromise work safety in return for an increase in output?
A. A
B. B
C. C
D. D
18 Which business is likely to be managing its human resources most effectively?
A. A
B. B
C. C
D. D
–S 7U C–C E S S ONE HSC • BUSINESS STUDIES 347

Use the following critical path diagram to answer Questions 19 and 20.
Task E 1 day Task F
1 day 1 day
Start 1 day 1 day 1 day Finish
Task A Task B Task D Task G
3 days 2 days
Task C
19 Which tasks need to be completed prior to completing Task D?
A. A, B only
B. A, B, C only
C. A, B, E, F only
D. A, B, C, E, F only
20 An improvement in technology reduces the time between Task C and Task D to one day.
What is the new length of the critical path?
A. 3 days
B. 5 days
C. 6 days
D. 10 days
348 S U C C E S S O N E H S C • B U S I N E S–S 8S –
TUDIES
Centre Number
Business Studies
Student Number
Section II Answer Booklet
40 marks
Attempt Questions 21–24
Allow about 1 hour and 15 minutes for this section
Do NOT write in this area.
Instructions • Write your Centre Number and Student Number at the top of this
page.
• Answer the questions in the spaces provided. These spaces

provide guidance for the expected length of response.
• Extra writing space is provided at the back of this booklet.

If you use this space, clearly indicate which question you are
answering.
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SINESS STUDIES 349
Question 21 (11 marks)
A business sells luxury cars. The cars are stylish, high performance and include
advanced safety features integrating leading edge technology.
(a) Describe ONE factor influencing customer choice for this business. 3
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(c) Why is it important for this business to conduct market research? 4

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SINESS STUDIES 351
(a) Outline ONE ethical issue related to the preparation of financial reports. 2
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(b) Explain ONE advantage of debt financing. 3

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(a) Outline ONE employer obligation in an employment contract. 2

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(b) Distinguish between awards and enterprise agreements. 4

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SINESS STUDIES 353
Question 23 (continued)
(c) Assess the impact of ONE social influence on human resource management. 5
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A juice bar is operating in a shopping centre. The juice is served to customers in

plastic cups with plastic straws. The high sales volume and quick turnover demand an
efficient operations process.
(a) Identify TWO transforming resources used in this business. 2

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SINESS STUDIES 355
Business Studies
Section III
20 marks
Attempt Question 25
Answer the question in the Sections III and IV Writing Booklet. Extra writing booklets are
available.
Your answer will be assessed on how well you:

● demonstrate knowledge and understanding relevant to the question
● apply the hypothetical business situation
● communicate using relevant business terminology and concepts
● present a sustained, logical and cohesive response in the form of a business report
A business, Roo’s Outback Eatery Pty Ltd, is opening an additional restaurant

in NSW. They plan to position the restaurant as an exclusive restaurant
specialising in modern Australian food with quality customer service. The
owners require assistance with the following:
• the acquisition and development of suitable staff
• additional funds for the day-to-day running of the business
• the close monitoring of working capital.
You have been hired as a consultant to write a report for the owners. In your report:
• discuss methods this business could use in the acquisition and development of staff
• recommend TWO appropriate working capital management strategies for this business.
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1002 356 S U C C E S S O N E H S C • B U S I N E S–S 17

S T–U D I E S
Section IV
20 marks
Attempt either Question 26 or Question 27
Answer the question in the Sections III and IV Writing Booklet. Extra writing booklets are
available.
Your answer will be assessed on how well you:

● demonstrate knowledge and understanding relevant to the question
● apply relevant business case study/studies and contemporary business issues
● communicate using relevant business terminology and concepts
● present a sustained, logical and cohesive response
Analyse the relationship between market segmentation and marketing strategies.
OR
Analyse the relationship between performance objectives and operations strategies.
End of paper
© 2019 NSW Education Standards Authority

2019 HSC Examination Paper

Sample Answers
Section I Answers (Total 20 marks)
1 C Sam is selling to a small group of customers with specific requirements.
2 B A mortgage is a loan which is paid back over a longer period of time with low
interest rates. It is tied to property so if the loan is not paid, the property is taken
by the lender.
3 A When a decision needs to be made as quickly as possible, there is no time for

lengthy discussions or collaboration.
4 C Finance companies provide credit to businesses and individuals.
5 D Due to its organic quality, the bread is catering for a specific group of customers so
the bakery selects health food shops to sell the product.
6 B In order to be the leading seller of biscuits, the manufacturer will make a loss.
7 A Disguising attempts to sell a product as research is called sugging.
8 D As Australia is part of the world economy, when there is a downturn the effects
include increased unemployment, decreased production and less demand for the
Australian dollar.
9 A The business is controlling the quality of the product as it is made.
10 B Negotiation is the least costly form of resolving disputes with courts and tribunals,
only used when nothing else seems to work.
11 A By lowering costs and prices, the business aims to become the most popular
cleaning business.
12 B Placements allow existing shareholders the opportunity to buy new shares before
external shareholders. The price is usually discounted as it costs less to sell them
by this method.
13 D In planning for the smooth sequence of manufacturing the product, the order would
be taken in January, supplies ordered in February, preparation would take place in
March, production would occur in April and the customer would receive the item
at the end of April.
14 C Financial planning starts with a budget and finishes with building in controls.
358 SUCCESS ONE HSC • BUSINESS STUDIES

2019 HSC EX AMINATION PAPER • ANSWERS
15 C Total liabilities equal $150 000. Total equity equals $200 000.
150 000 75
Thus, 200 000 is 100 which equates to 0.75 : 1.
16 D All of the agencies mentioned regulate business behaviour to some degree but
ASIC also provides consumer protection.
17 D While business D has greater output per worker, it also has a high rate of accidents.
18 B This business has a lower rate of accidents, absenteeism and staff turnover, yet
productivity is high.
19 D For Task D to be complete, all of the other tasks need to be finished too. Then Task
G can be carried out.
20 C Some tasks can be completed simultaneously so the new path is six days.
Section II Answers
Question 21
(a) Students need to provide characteristics and features of ONE factor that influences a
customer to buy the luxury car.
A sample answer is:
Perception, which is the way that consumers interpret information, is a factor that will
influence a customer to buy this product. For example, a buyer may perceive that other
people will see them as being classy and admire them when they drive the luxury car. The
buyer may also think that the car is safer than others due to its technology. (3 marks)
(b) Students should make evident the relationship between the marketing and finance functions
in the business mentioned in the stimulus.
A sample answer is:

Due to the fact that these cars are more expensive than others, the marketing department
will rely on the finance department to source the funds to purchase the cars for sale. An
appropriate location will be required to sell the cars to the target market and so the finance
department arranges a lease, mortgage or funds to acquire this location. In addition, if the
marketing department advertises low interest loans to customers buying the cars, the
finance department will have to organise the funds for these loans. Thus it can be seen that
for the business to successfully sell these cars, marketing and finance must work together.
(4 marks)

(c) Students need to show the consequences of the business engaging in market research.
A sample answer is:
The business is selling an expensive car with special characteristics. This means that it is
aimed at a specific customer type. It is important that the management carry out market
research to find out who these customers are, how much money they are willing to spend
and where they live. If the business does not do this, it may find that it establishes itself
in a location which does not attract its target market, or chooses the wrong media to
advertise the product. Failure to identify and attract the target market to the product can
lead to business failure. (4 marks)
Question 22
(a) Students should sketch in general terms ONE ethical issue that relates to financial
reports.
A sample answer is:
An ethical issue is the valuing of equipment at its original price in assets on a balance
sheet. Most equipment loses its value over time and with use. By including assets at
original values, the business can look more financially sound on paper than it really is.
This is misleading for stakeholders such as suppliers and investors.
(b) Students should provide information about ONE advantage of using debt finance.
A sample answer is:
One advantage of debt financing is that the cost of the loan, such as fees and interest rate,
appears as a business expense on the income statement which reduces the taxable income
of the business.
(c) Students should provide information about ONE disadvantage of using equity financing.
A sample answer is:
One disadvantage of equity financing is that the ownership of the business becomes
diluted. When equity financing is used, it means that the profits and decision-making are
suddenly shared among more owners which may not be an acceptable option for the
current owners. (3 marks)
Question 23
(a) Students need to provide the main features of ONE responsibility that employers have to
employees in a work contract.
A sample answer is:
One employer obligation in an employment contract is to pay the employee the agreed
amount for coming to work and carrying out their duties. (2 marks)

(b) Students should provide information about the difference between awards and enterprise
agreements.
A sample answer is:
The difference between an award and an enterprise agreement is that an award will cover
the pay and working conditions of a whole occupation or industry; for example, nurses
in the public health system have an award. An enterprise agreement will provide for the
pay and working conditions of an enterprise; for example, employees at QANTAS are
covered by an enterprise agreement. (4 marks)
(c) For this answer, students must make a judgement about the impact of ONE social influence
on the management of human resources.
A sample answer is:
A social influence on human resource management (HRM) is the increased participation
of women in the workforce. In addition, more women with children in the workforce
means that their partners have taken on a greater share of responsibilities at home. This
has resulted in businesses needing to be more conscious of providing flexible working
conditions if they want to attract and maintain skilled employees. Thus HRM needs to
consider greater negotiation around rosters and places and hours of work to benefit from
this social influence. (5 marks)
Question 24
(a) Students must state TWO transforming resources that apply to the business in the scenario.
A sample answer is:
Two transforming resources for the juice bar are:
• the physical layout of the juice bar so that there is an efficient way of making and
dispensing the juice and serving the customers;
• employees of the juice bar with the correct training in customer service and making
juice. (2 marks)
(b) Students need to make clear the impact that providing variety has on making the juice.
A sample answer:
For the juice bar, variety refers to providing customers with a greater choice of flavours.
This means the production process needs to be flexible enough to be used to make more
than just one juice choice. This can make the production more expensive as different
ingredients are needed and employees need a wider knowledge but, if done well, it will
attract more customers and lead to more income. However, if the business offers too
much variety it will slow down the quick turnover and lead to reduced sales volume.
(4 marks)

(c) Students should provide clear reasons for the business not wanting to be more socially
responsible.
A sample answer:
The juice bar is providing customers with single-use plastic cups and straws which assist
with the efficient operations process but are not seen as being environmentally responsible.
The business may be reluctant to change from these practices as the alternatives are to
provide paper-based cups and straws, which may not be popular with customers as they
get soggy quickly and are not suited to the product. Buying better quality straws and cups
could prove expensive and so reduce profits. Changing practices may also slow down
customer service. (4 marks)
Section III Question 25 (Total 20 marks)
Outline of Answer
In the business-report format, with relevant business terminology, concepts and information,
students should present a sustained, logical and cohesive response which demonstrates
extensive knowledge and understanding. The expected length of response is around six
to eight pages of an examination writing booklet (approximately 1000 words).
Introduction/Executive summary
Include a short outline of the issues to be considered in the report.
Body
Students should identify issues and provide points for and/or against different ways of
recruiting and developing staff for the restaurant so that it meets its objectives.
Students should also provide reasons in favour of TWO working capital strategies that
are appropriate to the restaurant.
These strategies could include any of the following:

• control of current assets—cash, receivables, inventories
• control of current liabilities—payables, loans, overdrafts

• strategies—leasing, sale and leaseback.
Recommendations/Conclusion
Include a summary of points to be provided to management of Roo’s Outback
Eatery Pty Ltd.

Sample Answer
Introduction
The following report will provide advice to the management of Roo’s Outback Eatery
Pty Ltd in its quest to expand and position itself as an exclusive restaurant. Information
will be supplied on how to recruit and develop staff. In addition, advice will be given
regarding appropriate strategies to manage working capital.
Acquiring staff
As Roo’s is wanting to position itself as an exclusive restaurant, it is important that it acquires
employees who will be able to provide this service to customers. Acquisition refers to
the process of recruiting staff. It involves working out the requirements of the position
and writing a job description, detailing the duties that will be carried out in the position
and identifying the skills needed. From this a job advertisement can be written. It is
important that the business does this well at the start of the process as hiring staff can be
expensive and time-consuming and, if the wrong employee is chosen, the whole process
may have to start again.
Outsourcing the process—advantages and disadvantages
As Roo’s is not a large business, management should consider how they will carry out
the recruitment process, as they may not have the time or skills to do it themselves.
Many businesses outsource recruiting to a business that specialises in providing this
service. While this can be expensive, it does mean that the job description and advertising
for employees do not contravene employment legislation, are well-written, and the
advertisement is suitably placed. In addition, the recruitment firm is able to read
application letters and reduce the number to the most suitable applicants. They can also
interview suitable applicants.
However, outsourcing also has disadvantages. It can be expensive in the short term as
Roo’s will be paying another business to carry out this function. In addition, as the recruitment
firm does not know the culture of Roo’s, the new recruit may not fit into the existing
culture of the business. Therefore it is important that management are involved in some
way in the acquisition of new employees; this can be done by taking part in the final
interviews.
Development of staff
Development refers to making sure that employees are able to carry out the duties
required of the position. For Roo’s, this involves training the new worker to carry out
their duties in the restaurant and developing their ability to work as part of a team.

Induction
For any business, the first stage of development is to induct, or introduce, the employee
to the new position and place of work. The better the induction, the faster the staff
member will settle into the workplace and become productive. It is important that Roo’s
has a formal induction program which applies to every new staff member. Due to the
nature of the business, this should have an emphasis on workplace health and safety and
hygienic practices.
Development
As Roo’s wants to have a reputation as an exclusive restaurant, management will have

to develop staff to have a mindset where customer service is a high priority. This will
mean team-building activities so that employees work together to provide a smooth,
top-quality customer experience.
Training and development options
Management can decide to carry out training and development onsite or offsite. The
advantages of doing this offsite is that the staff member is not distracted by workplace
duties and the training is usually carried out by specialists in this field. However, once
again, it can be expensive and the training may not be fully relevant to the actual workplace.
Thus it is important to the management of Roo’s that they think about the best mix of
training and development for their employees to provide the most benefit to the success
of the business.
For example, management could invest in having one or two employees attend a course
run by a business that specialises in silver service. These employees could then train new
staff on how to do this.
Working capital management strategies
Working capital is the funds that a business has to meet short-term financial commitments.
It is important that a business has control over the money moving in and out of the
business in order to manage its working capital. Thus a business needs to have strategies
to ensure that its current assets are greater than current liabilities.
Inventory control
As Roo’s wants to establish a reputation as an exclusive restaurant specialising in modern

Australian food, having good-quality ingredients to make the items on the menu is
important to attract and retain customers. Inventory is a current asset for a business but
money owed to the suppliers for this stock is a current liability. It is important that the
business has tight control over its inventory as failure to do so will lead to loss of customers
and cash-flow problems. For this reason, the management of Roo’s need to build a very
good relationship with the supplier(s) of these ingredients. Once they have established
this, management should negotiate with the supplier to have trade credit.

Trade credit
Trade credit is when a supplier allows a business to buy its inputs and pay for them later,
usually within 28 days. As the restaurant’s customers will pay for their meals at the end
of the evening, and often with a credit card, it means that Roo’s will not necessarily have
the cash available to pay for supplies at the time of purchase; thus, trade credit will be an
effective working capital management strategy. It means that the business will not need to
go into debt to pay for its supplies. In most cases, trade credit does not come with interest
charges, but the management will have to pay the supplier on time to retain this relationship.
For the supplier, it has the advantage that it has steady sales as Roo’s will maintain
loyalty with them.
Leasing
Roo’s management should consider leasing as a working capital strategy. Leasing refers
to renting business items rather than paying for them upfront. For example, management
could rent premises in the new location rather than take out a loan or use the retained
profits of the business to buy a building. This would have the advantage of being able
to quickly move on if the business is not successful. It also means that the business
retains cash to meet the short-term debts of the business, especially if any unexpected
issues arise, thereby minimising working capital problems.
Management could also consider leasing equipment for the restaurant, such as the ovens
and refrigerators. This not only has the same advantages as discussed above but also
means that if something goes wrong, the item is repaired or replaced by the lessor. The
disadvantage of leasing is that the business does not own the asset, and so it does not
appear on a balance sheet as an asset. However, for a business such as Roo’s it is a good
strategy to have retained profits available in the business to meet financial commitments.
Another advantage is that the lease payments appear as a cost on the profit and loss
statement of the business and so reduce its taxable income.
Recommendations
The management of Roo’s Outback Eatery are being very sensible in considering the
different issues that could arise in the business expansion. It is recommended that it
outsources some aspect of its acquisition of staff to a business that specialises in this
function. However, it is important that management are involved in the process to make
sure that the new employees fit within the culture of the business. In developing staff,
it is essential that effective induction is provided to all new employees and any training
creates a culture suited to the reputation of the business. In terms of managing working
capital, Roo’s should rent its premises for the new location and lease equipment at least
until the new restaurant becomes successful. By doing all these things, Roo’s has a high
chance of success.

Section IV Question 26 (Total 20 marks)
Outline of Answer
This response could be in either extended-response format or in business-report format.
It needs to contain relevant theory, illustrated by a relevant case study or studies, using
relevant business terminology and concepts. These can be integrated throughout the
response or stand alone after the theory is explained.
To gain the maximum range of marks, the response must present a sustained, logical and
cohesive response and communicate clearly using relevant business terminology and concepts.
Students need to identify the relationship between market segmentation and marketing
strategies, and also draw out and relate implications of using appropriate strategies to
suit a business’s customer base.
Strategies could include those related to product choice, promotion of the product/business,
pricing, place where the products are sold, and people, processes and physical evidence.
Students should integrate into this analysis a relevant business case study or studies and
examples of business issues.
Sample Answer
Marketing refers to the activities that plan, price, promote and distribute the goods and
services of an organisation so that a customer will be happy with the final product. For
this to be successful, a business needs to have a clear understanding of who its customers
actually are as this will allow management to devise suitable strategies aimed at this
segment of the market. It is very important that business managers understand that there
is a relationship between identifying the customer base and developing specific strategies
for these customers. Woolworths is an example of a business that has successfully segmented
its market and developed strategies to attract its different market segments to its supermarkets.
Market segmentation
Market segmentation means identifying the smaller markets within the mass market. It
is the process of dividing a market of potential customers into groups, or segments,
based on different characteristics such as age, lifestyle, location and income. By doing
this a business is able to group customers with similar characteristics and develop
strategies that are suited to attracting customers to its product. The benefits for a business
of spending time on working out its market segment (or specific customers) include the
better matching of customer needs, greater customer loyalty and a larger share of the
market for the business. This means that because the business knows its customers, the
customers are more likely to keep buying its products and, of course, this results in higher
profit. Larger businesses will try to provide as many options as possible to consumers
so that all market segments are covered. An example of this is Tip Top Bakeries which
makes a range of different bread products. Smaller local bakeries will just provide the
bread products that are most requested by their customers.

Market segmentation means the business is able to apply appropriate market strategies
to attract the customers to the product. Marketing strategies are the tactics that businesses
use to differentiate themselves from the competition; that is, to make the business and
its product stand out. Marketing strategies allow the business to attract and retain
customers. These tactics include where the product is sold, the range of product available,
prices charged and how the business promotes the product. It is important that these
strategies reflect the characteristics of the business’s market segment otherwise it is
wasted time, effort and money.
Woolworths and market segmentation and strategies

Woolworths is an example of a business that has researched the different types of customers
who shop with it and has developed successful strategies to target these market segments.
In terms of lifestyle Woolworths has identified that consumers don’t all shop in the same
way. For example, the marketing department has identified one of its marketing segments as
‘smart shoppers’. These customers gain self-esteem from their shopping success of spotting
and obtaining a bargain. Woolworths’ marketing management has recognised that this
segment does not like consistent product and pricing offers. Instead, these consumers need
a variety of sales promotions and price differences between stores so they can seek out
the best offers in the marketplace.
In order to attract and keep these customers, Woolworths has used marketing strategies
that include frequent sales promotions; products sold in a variety of packaging sizes;
online shopping options, along with easy-to-find price information; easy-to-compare
price tickets (such as price per serving size); weekly catalogues that highlight the store’s
weekly specials; and Loyalty programs which have easy-to-access rewards.
Woolworths’ management have named another of its market segments as the ‘fast and
furious’ shopper. These are consumers who want to get their shopping over as fast as possible
and are loyal to supermarkets and brands mainly due to their need to have a highly time-
efficient supermarket experience. Woolworths has identified people in this group as being
busy career people, aged between 30 and 50, who need to get in and out of the supermarket
as fast as possible. So as to meet the needs of these customers, Woolworths has used the
marketing strategy of people, processes and physical evidence which is all about building
an ongoing relationship with the customer. To do this management ensures that every
supermarket has a very similar layout with logical aisle design and clear signage. All stores
have fast, efficient checkout options, including self-checkout and cashless payment. Staff
are trained to assist in this process. Extended shopping hours make these supermarkets
attractive to this segment as well. These marketing strategies are cost-effective as they
have the benefit of suiting all Woolworths’ customers.
Woolworths has also identified a newer type of ‘fast and furious shopper’. These are
people who shop in their lunch hour or on their way home from work. In return for a faster
shopping experience, these consumers are prepared to accept a smaller range of products
and pay a higher price as long as the products meet their needs. Through researching
this market segment, management has been successfully able to use appropriate marketing
strategies to attract this customer.

This has included introducing the metro supermarket into its business model. The metro
stores are smaller than the suburban supermarket and are located in central business
districts, at busy railway stations and in large suburban unit complexes. These metro
supermarkets are easily identified by their distinctive Woolworths logo. They have a smaller
range of products and prices are higher but what they offer is suitable to their market
segment. These products include readymade meals that are suitable for lunch and dinner. The
layout and checkout features allow for a very fast shopping experience. Therefore Woolworths
is able to use the marketing strategies of people, processes and physical evidence, as well
as specialised locations and product range, to attract and retain this market segment.
With further research into its customer base, Woolworths’ management has identified
that in the inner city a mini metro supermarket will have success and has recently introduced
the Metro Go into the Strawberry Hills area of Sydney. Research has shown that not all
customers want to pay electronically so the metro stores still accept cash. In this way,
Woolworths continues to identify the changing needs of one of its market segments and,
thereby, retain them as customers.
Thus, it can be seen that by researching and grouping the different types of customers
who shop in supermarkets, Woolworths has been successful in identifying and applying
strategies to its market segments. In catering to the ‘fast and furious shopper’, Woolworths
has stopped these consumers from shopping at other convenience stores. Although prices
are higher and the range smaller in the metro stores, they will usually be better than those
offered in the local convenience store due to the fact that Woolworths can gain cost
savings due to bulk buying and has the logistical ability to change stock and restock
shelves as needed.
Conclusion
It is important that all businesses are able to identify the segment of the market that will
buy their product and understand the need to have suitable marketing strategies aimed
at these customers. Woolworths has proven successful in understanding the relationship
between segmentation and strategies. In identifying the market segments that shop in
Woolworths’ supermarkets, management has been able to develop strategies that are
specific to different groups of customers and, in doing this, attract and retain customers
and maintain profits.

Section IV Question 27 (Total 20 marks)
Outline of Answer
This response could be in either extended-response format or in business-report format.
It needs to contain relevant theory, illustrated by a relevant case study or studies, using
relevant business terminology and concepts. These can be integrated throughout the
response or stand alone after the theory is explained.
To gain the maximum range of marks, the response must present a sustained, logical and
cohesive response and communicate clearly using relevant business terminology
and concepts.
Students need to identify the relationship between performance objectives and operation
strategies, and also draw out and relate implications of using appropriate strategies to
meet a business’s production objectives.
Strategies could include those related to:

• new product or service design and development
• supply chain management—logistics, e-commerce, global sourcing
• outsourcing—advantages and disadvantages
• technology—leading edge, established
• inventory management—advantages and disadvantages of holding stock, LIFO (last-
in-first-out), FIFO (first-in-first-out), JIT (just-in-time)
• quality management
– control
– assurance
– improvement.
Students should integrate into this analysis a relevant business case study or studies and
examples of business issues.
Sample Answer
Operations is the business function that takes inputs and changes them in some way so
that the finished product is something that customers want to buy. Thus the operations
function is concerned with inputs, throughputs and outputs. In order for an operations
function to be successful, a business must have clear and achievable performance objectives
so that the final product is produced on time and to the expected quality. So as to meet
these objectives the business must put in place appropriate operational strategies. It is
very important that management understands the relationship between performance
objectives and operation strategies as this ensures that the methods chosen will match
the main objectives. Domino’s Pizza has been able to successfully match performance
objectives to operation strategies and so maintain its place as a market leader.

Performance objectives
Performance objectives are goals that relate to certain aspects of the production process.
Management sets targets and standards that need to be met in relation to such things as
quality, speed, dependability, flexibility, customisation and cost. In most businesses these
performance objectives are known as key performance indicators as they are a way for
management to target what is needed to make the business successful and allow management
to measure success. Different performance objectives will be emphasised, depending on
the nature of the product and customer needs and thus different strategies will be used
to meet these objectives. This means that the operational strategies chosen will need to
match the chosen performance objectives. For example, if speed of production is needed
to meet the customers’ needs, then a more expensive supply chain may be required.
Domino’s Pizza—Performance objectives and operations strategies

Domino’s Pizza has carried out extensive research on its customer base and how best to
meet its needs. This means that it is able to provide a dependable product of a certain quality,
at a certain cost that can be produced within a fairly fast period of time. Although management
of Domino’s realises that quality and consistency are important in providing pizzas to
customers, it has strongly emphasised its ability to meet the performance objective of
speed in order to retain customers. For any business, speed is the time it takes for the
operations processes to respond to the customer demand. As a performance objective, speed
aims to satisfy customer demands as quickly as possible. Therefore goals for speed
include reduced wait times, shorter lead times and faster processing times.
In order to respond to this objective, management of Domino’s has employed different

operations strategies. These strategies all involve using technology. For example,
technology is used to make sure that there is an effective supply chain as well as allowing
customers to order their food.
Technology
Technology can give a business a competitive advantage but will also be expensive to
implement. Operations management will need to decide whether to be a leader in reaching
and developing the necessary technology or to wait and see what other businesses do.
By being a follower, a business is able to look at the advantages and disadvantages of
introducing the established technology but it could mean that they lose customers to the
competition. Domino’s has decided to be a leader in its implementation of technology,

using it to achieve performance objectives.
Domino’s and leading-edge technology
Domino’s has put money into research and development of suitable technology so that
the business is able to meet its performance objectives. By understanding the relationship
between the objectives and the strategies that achieve the objective, management have
been able to provide leading-edge technology so that the final product matches what the
customers want.

This can be seen on the Domino’s website where a customer can order their pizza,
customise the base and topping to suit their taste, decide on the time they want it and
then use the ‘pizza tracker’ to follow the progress of their pizza.
This operations strategy allows the customer to save time by ordering the pizza from
anywhere, including their mobile device, and so means that less time is taken up ordering
in the store. In this way Domino’s can meet its performance objective of speed. In addition,
by giving customers control over the base and topping of their pizza, this strategy works
toward meeting the performance objective of customisation.
Further to this, Dominos has updated its technology so that customers will be shown a
real-time image of their pizza before it’s cut and boxed, ensuring there are no surprises
when it comes to pizza quality and consistency. This means that management are using
leading-edge technology to meet the performance objectives of quality and dependability.
Technology and supply chain management
Supply chain management is important for the production process to run smoothly as it
ensures that inputs are available on time. For Domino’s this means having processes in place
so that the ingredients for the pizzas are in each store as needed. Domino’s management
have implemented computerised management information systems which keep track of
trends in consumption at each location and inventory usage. In this way head office is
able to order and dispatch supplies as required for each Domino’s shopfront and, thus,
meet its performance objective of speed. This information system, by collecting data on
what consumers buy, means that the performance objective of flexibility can be met as
pizzas that are not selling well can be taken off the menu quite quickly.
Conclusion
The performance objectives of quality, speed, dependability, flexibility, customisation
and cost are important to all businesses; however, managers must understand which ones
require greater emphasis so that they can match operations strategies to achieving the
objective. Domino’s has been able to do this by investing in technology and this has meant
that the business has been able to successfully meet its main performance objectives and
remain a leader in its field. © Pascal Press ISBN 978 1 74125 714 4

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SUCCESS ONE HSC

Free-to-download Sample Tests with answers

NSW Education Standards Authority

2019 HIGHER SCHOOL CERTIFICATE EXAMINATION

Total marks: Section I – 20 marks (pages 2–8)

Section II – 40 marks (pages 9–16)

• Allow about 1 hour and 15 minutes for this section

Section III – 20 marks (page 17)

Section IV – 20 marks (page 18)

SUCCESS ONE HSC • BUSINESS STUDIES 341

Use the multiple-choice answer sheet for Questions 1–20.

In which type of market is Sam’s business operating?

2 A business is purchasing a new property.

Which source of finance would be the most appropriate?

Which leadership style does a manager of this business need to adopt?

4 A business requires new manufacturing equipment.

Which of the following would provide leasing for this equipment?

5 A bakery produces organic bread that is sold in health food stores.

Which is the most appropriate channel choice for this product?

Which of the following identifies this approach?

7 Which term refers to a sales technique disguised as market research?

–S3U –C C E S S ONE HSC • BUSINESS STUDIES 343

Unemployment Output Exchange rates

9 A business reduces product defects by using inspections in the production process.

This is an example of quality

10 What is the common sequence for resolving workplace disputes?

A. Mediation, negotiation, involvement of courts and tribunals

This is an example of which strategy?

12 Which of the following allows shareholders of a public company to acquire additional

13 The table shows a Gantt chart.

31/1/20 29/2/20 31/3/20 30/4/20

In which month would this business begin manufacturing the item?

14 Which of the following is the correct order for financial planning?

A. Developing budgets, determining financial needs, maintaining record systems,

identifying financial risks, establishing financial controls

–S 5U C–C E S S ONE HSC • BUSINESS STUDIES 345

15 Use the information to answer Question 15.

Balance sheet as at 30 June 2019

350 000 350 000

A. Reserve Bank of Australia

D. Australian Securities and Investment Commission

346 SUCCESS ONE HSC • BUSINES–

Use the following information to answer Questions 17 and 18.

The table compares four businesses on an annual basis.

Accidents per 500 employees 4 2 2 4

Average output per employee 10 14 10 14

18 Which business is likely to be managing its human resources most effectively?

–S 7U C–C E S S ONE HSC • BUSINESS STUDIES 347

Task E 1 day Task F

Start 1 day 1 day 1 day Finish

Task A Task B Task D Task G

19 Which tasks need to be completed prior to completing Task D?

What is the new length of the critical path?

2019 HIGHER SCHOOL CERTIFICATE EXAMINATION

• Answer the questions in the spaces provided. These spaces

• Extra writing space is provided at the back of this booklet.

© Pascal Press ISBN 978 1 74125 714 4

Please turn over

Question 21 (11 marks)

Do NOT write in this area.

(c) Why is it important for this business to conduct market research? 4

Please turn over © Pascal Press ISBN 978 1 74125 714 4

(b) Explain ONE advantage of debt financing. 3

Do NOT write in this area.