Emilios is looking to maintain standards at the ice cream shop while reducing costs.
Analyse one action Emilios could take to reduce its costs.
How to approach this question
This is a 6-mark "analyse" question. You need to show depth and use the case study.
1. **Identify** an action to reduce costs, based on the information in Item D (e.g., stop using the cleaning company, switch ingredient supplier).
2. **Explain** how this action would reduce costs.
3. **Apply** it directly to Emilios' situation using evidence from the text. For example, link stopping the cleaning company to the fact that "staff do not have much to do" in the mornings.
4. **Analyse** the impact of this action. Explain *why* it would be effective and consider the instruction to "maintain standards". How can they cut the cost without the shop becoming dirty?
Full Answer
The case study (Item D) provides two clear opportunities for cost reduction:
1. **The Cleaning Company:** Emilios pays a "fixed amount" for cleaning. However, its own staff "do not have much to do" in the quiet mornings.
- **Action:** Cancel the cleaning contract and have the existing staff clean the shop during their paid hours.
- **Analysis:** This would directly reduce fixed costs. Since staff are already being paid and are under-utilised, this makes the business more efficient. To maintain standards, management would need to ensure staff are trained and the cleaning is done properly.
2. **Ingredient Supplier:** The cost of ingredients from the wholesaler has "increased by 25% over the last two years". A new "low-cost supermarket" has opened nearby.
- **Action:** Switch from the wholesaler to the low-cost supermarket for some or all ingredients.
- **Analysis:** This could significantly reduce variable costs (cost of goods sold). However, this comes with a risk to standards. The supermarket is known for its "cheap 'value' range". Emilios must ensure the quality of these ingredients is high enough not to compromise the taste and reputation of its ice cream, which is "made on site". A blind taste test might be needed before switching.
Common mistakes
✗ Discussing more than one action. The question asks for "one".
✗ Not using the information from Item D to support the answer.
✗ Forgetting to address the "maintain standards" part of the question.
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