Phipps & Cornes (P&C) is a tertiary sector fashion retailer which is owned as a

partnership. It has 20 shops in Hong Kong and is known for its high quality and high
price. Its customers are usually business men and women aged between 25 and 40 years
old. P&C was started by two young entrepreneurs in 1990 and has grown to be one of
the leading male fashion businesses in the region. However, as the competitors of P&C
have also grown some of the stakeholders are concerned that profitability may well fall
in the near future.

1a) What is meant by the term ‘tertiary sector’?

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1b) Identify two possible stakeholders who may be interested by the potential fall in
P&C’s profits. Explain why these stakeholders may be interested.

Stakeholder 1: .........................................……………………………………………………………

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Stakeholder 2: .........................................……………………………………………………………

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1c) Do you think P&C should change it’s type of business organisation to a private
limited company? Justify your answer.

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Squiggy and Ka Wing are business partners who own three restaurants in the Causeway
Bay Area. The restaurants are all called The Little Rainy Days Cafe. The businesses are
all profitable and receiving excellent reviews from the local press. To take advantage of
this they are planning on opening four more restaurants in the next two years around HK
and Kowloon. In a meeting with Squiggy, Ka Wing made the following statement “We
have done really well with our first three places Squig! I don’t know why people think we
would benefit from drawing up a business plan for our next four places, locals will use
our restaurants regardless due to our good food!”

2a) Identify and explain two possible benefits to Squiggy of having a business partner

Reason 1: .........................................……………………………………………………………

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Reason 2: .........................................…………………………………………………………………..

Explanation : ……………………………………………………………...
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2b) Identify and explain one characteristic of an entrepreneur such as Ka Wing or

Squiggy

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2c) Identify two reasons why some businesses fail, while others grow like Squiggy and
Ka Wing’s.

Reason for failure 1:

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Reason for failure 2:

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2d) Do you think Squiggy and Ka Wing need a business plan for the business to be
successful in the future. Justify your answer.

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2e) Squiggy and Ka Wing have been debating the opening of their new restaurants.
Squiggy thinks they should consider opening a franchise of a more famous restaurant
such as KFC. Ka Wing thinks they should remain independent and simply open another
Little Rainy Days.

Do you think they should open a more famous franchised restaurant or open another
Little Rainy Days? Justify your answer.

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