Background

Read the resources and answer the following questions.

Background: Breadwinners is a social enterprise based in the UK offering support to refugees and people
seeking asylum.

Resource 1 - Breadwinners background

Our story - Transforming lives one loaf at a time since 2015.

Growing from a bike delivery to a market model to an e-commerce and wholesale service, Breadwinners
has sought to continuously improve over the years to be able to support more young refugees and people
seeking asylum through selling bread!

Our mission is to improve the well-being of refugees. We are driven to create a community where
refugees can thrive in the UK. Founded in 2016, we are a grassroots charity supporting young refugees in
work. We deliver three employability programmes in London and Brighton that provide jobs, work
experience, training, and mentoring at our market stalls and through our wholesale service.

Our unique programmes include work, training, and mentoring to allow participants to gain practical
work experience, develop skills, and expand their networks. The programmes allow participants to
advance through stages, building on their learned skills. 'Risers' supports youth seeking asylum aged
16-24 through a tailored work experience programme as market stall assistants. 'Breadwinners' supports
refugees with newly received status struggling to find work by providing opportunities for their first job
in the UK. 'Proofers' supports Breadwinners graduates with further online customer service experience
and IT skills through running our online shop and wholesale services.

● 428+ refugees and young people seeking asylum supported through our programmes
● 93% report a significant increase in well-being after taking part in a programme
● 88% of Breadwinners participants have progressed into further work, university, or volunteering
after graduating.

Source: www.breadwinners.org.uk
 Resource 2 – Bakery market in the UK

Bakery Product Retailing in the UK market size (2024-2029)

Industry revenue has declined at a CAGR of 1.4% over the past five years to reach an estimated £3.3bn
in 2023.

Market share concentration for the Bakery Product Retailing industry in the UK is moderate, which
means the top four companies generate between 40% and 70% of industry revenue.

TRENDS AND INSIGHTS

● Consumers' consumption of traditional baked goods has fallen as they become more health
conscious.
● Consumers are increasingly concerned about healthier lives and are more consciously examining
their food choices.
● Bakeries adapt to changing times - As consumers become more vocal about their changing
appetites, retailers are introducing alternative products to satisfy demand.
● Large players strategically position themselves to take advantage of shifts in consumer behaviour.
● Well-established bakeries, like Greggs, are investing heavily in positioning themselves to meet
changing preferences and needs, enabling them to stay ahead of change.

Source:
https://www.ibisworld.com/united-kingdom/market-research-reports/bakery-product-retailing-industry/#I
ndustryStatisticsAndTrends
 Resource 3 - Financial information of Breadwinners for 2022 & 2023 (all figures are in USD)

2022:

● Cost of sales: $250,000

● Average stock: $10,000
● Sales revenue: $410,000
● Gross profit: $260,000
● Net profit: $140,000

2023:

● Cost of sales: $210,000

● Average stock: $25,000
● Sales revenue: $356,000
● Gross profit: $146,000
● Net profit: $101,000

Resource 4 – The UK economy

● In January 2024, average prices in an average UK household's spending 'basket' were 4% higher
than in January 2023.
● GDP growth in the UK has been near zero since early 2022. GDP fell between the first quarter of
2022 and the final quarter of 2023.
● GDP per head remains lower than before Covid-19 - which means that one measure of our living
standards is worse now than before the pandemic.

Source: https://www.economicsobservatory.com/what-is-the-state-of-the-uk-economy-in-early-2024
 Resource 5 - Email between Breadwinner’s founders

From: elliem@breadwinners.com

To: joshn@breadwinners.com

Hi Josh,

We need to scale up our efforts concerning Breadwinner’s marketing.

To do this successfully, we must hire a specialist marketing manager.
My vision for the business is to implement the following:

● Market development strategy to launch Breadwinner’s products in small

villages outside London. We will need to consider which villages
carefully.
● Launch of our social media pages - to date, this has been non-existent.
● Set up meetings with supermarket chains based in London to retail our
products through.

Let’s discuss the above in greater detail during our meeting tomorrow.

Kind regards,
Ellie
Question 1

Identify the human need Breadwinners is satisfying and link this to a specific area of the course.
[2]

Key points:

● Maslow's hierarchy of needs: Physiological needs are the basic survival needs such as
food, shelter, and health. By Breadwinners offering asylum seekers jobs at a living wage,
they can afford these necessities.
● Maslow's hierarchy of needs: Safety and security needs are being met through providing
the refugees with work to support their resident status in the UK.
● Maslow's hierarchy of needs: Esteem needs are being met by allowing students to
advance through the work experience programmes, upskilling themselves, and gaining
knowledge in different business areas.
● Herzberg's two-factor theory: Offering exciting tasks to the refugees will motivate them.
Once they have completed the first two programmes, they can progress to gaining IT skills
by running the Breadwinners website.
● Deci and Ryan's self-determination theory states that refugees are trained in different
business functions, improving their skills in these areas.
● McClelland's theory of needs: The need for Achievement describes a person's need to
feel a sense of achievement. Breadwinners provides training to refugees that enable them
to find employment in other businesses and create a good life for themselves in the UK.
● Sustainable Development Goals: The goal of economic growth is being met by providing
education and a chance for refugees to become skilled and employable.

Sample Response:
Breadwinners satisfy the human need for competence, which is a core component of Deci and
Ryan's Self-Determination Theory. This theory posits that feeling competent involves an
individual's ability to execute tasks effectively through skills and knowledge acquired. At
Breadwinners, refugees and asylum seekers are engaged in structured employability programmes,
such as 'Risers', 'Breadwinners', and 'Proofers', each designed to build specific skills relevant to
employment. For instance, the 'Risers' programme focuses on market stall management,
providing practical, hands-on training that enhances participants' job readiness and business
acumen. Similarly, 'Proofers' advances these skills into areas like online customer service and IT,
further broadening their competencies. The success of these programmes is evidenced by the high
percentage of participants who report significant increases in well-being and those who progress
into further work or education, as detailed in Resource 1. This engagement boosts their
competence in various job-related tasks and significantly enhances their overall performance and
well-being, making them more capable and confident in the job market. This targeted approach
meets the refugees' immediate needs for competence and aligns with broader goals of social
integration and personal development.
Mark allocations
Mark as [1+1].
1 mark for using an appropriate business management theory, e.g., Deci and Ryan's Self-Determination Theory, and [1] for
describing the human need in the case study context, e.g., autonomy, competence, and relatedness.
Question 2

Explain two potential organisational challenges facing Breadwinners. [6]

Challenges facing Breadwinners:

● UK economy: Breadwinners is currently operating in a country facing a recession, with

rising inflation and low GDP growth
● Financial sustainability: Breadwinners is facing decreased sales revenue, profitability,
and stock turnover. If this continues, the long-term sustainability of the business will be in
question.
● Competition: Breadwinners face heavy competition from other larger competitors, such as
supermarket chains. In addition, changing lifestyle trends encourage people to lead
healthier lifestyles and avoid products such as baked goods.
● Marketing: Breadwinner's marketing has been non-existent since its establishment. The
marketing department now faces the momentous task of marketing the business to increase
sales revenue while keeping to a limited budget.

Sample Response:
One major challenge facing Breadwinners is the absence of a structured marketing strategy. Until
now, the organisation has primarily relied on word-of-mouth to promote its social enterprise and
its products. This approach may limit their reach and growth potential, especially in the highly
competitive UK bakery market, which is experiencing a shift in consumer preferences towards
healthier options and more conscientious consumption, as highlighted in Resource 2. The lack of
active marketing efforts could hinder Breadwinners' ability to effectively communicate its unique
value proposition—that of transforming lives through employment and training opportunities for
refugees. To overcome this challenge, Breadwinners could consider allocating resources to
develop a comprehensive marketing strategy that includes digital marketing to reach a broader
audience, partnerships with well-established retail chains for wider distribution, and targeted
promotions that highlight the social impact of purchasing their products.

Another significant challenge is the economic environment in which Breadwinners operates. The
UK economy is currently stagnant with little to no GDP growth, and inflation has increased by
4%, as stated in Resource 4. This economic downturn has likely contributed to a tightening of
consumer spending, directly impacting Breadwinners' sales revenue as consumers seek more
cost-effective alternatives. This challenge is compounded by the organisation's need to manage
higher operational costs due to inflation. To navigate these economic difficulties, Breadwinners
might need to explore additional revenue streams such as introducing a premium product line that
can command higher prices due to its social value or expanding into new geographical markets
where the economic impact may be less severe. Additionally, optimising costs through improved
supply chain management and potentially leveraging government grants or funding to support
social enterprises could help mitigate some of the financial pressures.

Mark allocations
Mark as [3+3] For each challenge, award one mark for identifying an appropriate challenge, one mark for explaining the
challenge, and one mark for application to Breadwinners.
Question 3

Using all the resources provided and your knowledge of business management, recommend a
possible plan of action for Breadwinners to ensure sustainability over the next three years. [17]

Possible plans of action

Finance plan of action:

● Breadwinners' stock turnover ratio has decreased from 25 to 8.4 from 2022 to 2023. This
is a significant decrease in the amount of stock Breadwinners was selling and replenishing
in the same time frame when compared year on year. Breadwinners will need to address
this matter on priority and identify ways in which they can get their stock moving again
and therefore improve their sales revenue. This will involve heavy investment into the
marketing department of the business. Breadwinners may also consider their costs and
how this may be impacting their profitability. A solution to this would be to look for a
cheaper supplier but Breadwinners need to be assured that the quality of the ingredients is
as good so that the reputation of their products does not suffer.

● Breadwinners also need to consider the competitive environment in which it is operating

and the impacts on their financial sustainability in the long term if they do not act now.
The Gross Profit Margin has decreased from 63% in 2022 to 41% in 2023 while the Net
Profit Margin has decreased from 34% in 2022 to 28% in 2023. This large difference
between GPM and NPM suggests that the business's expenses are considerable, and
therefore Breadwinners need to identify how to reduce these or else increase their prices.
However, because Breadwinners' competition is heavy, and these larger competitors can
benefit from economies of scale, Breadwinners would be better placed to keep the prices
of their products the same while trying to reduce costs.
Human resources plan of action:

● Marketing is an area of focus for Breadwinners. Appointing a marketing manager to

encourage business development is currently needed. Social media platforms as well as
product and market development strategies need to be implemented as soon as possible to
increase stock turnover and sales.

Marketing plan of action:

● By expanding into different markets and offering a more diverse array of products,
Breadwinners is likely to become more attractive to customers and sales revenue will
therefore increase. These two strategies will involve both market development and product
development techniques to appeal to new customers.

● Breadwinners needs to develop its marketing strategy to become more competitive and
well-known locally. Breadwinners needs to build their brand as a social enterprise and
make customers aware that when they purchase goods from Breadwinners they are not just
buying baked goods but are supporting the social mission of the business. Breadwinners
can do this by engaging with customers on social media platforms and below-the-line
promotional methods such as distributing flyers in local markets where they sell their
products and local supermarkets.

● Breadwinners can also use a market penetration strategy to sell their products through
local supermarkets. This would ensure steady sales revenue and would not require
volunteers or employees to stand at a market stall to sell the products. However, to do this
successfully the business will need to be scaled up, and the operations department
increased. Breadwinners would need to produce in bigger quantities as well as improve
their marketing efforts in terms of packaging to attract customers in the supermarket to
their products.
Structure of the answer

Introduction:
Write a short paragraph summarising the key points about the social enterprise. Make reference to
the background of the business and the current situation it is facing, which requires a plan of
action to be made. Address the long-term plan and how it supports the social enterprise's mission
and vision. End the paragraph with an introduction to the recommendations you will make.
Remember to focus on answering the question - how will the business ensure sustainability? In
other words, how can it ensure it continues operations?

Body paragraphs:
Comment on one area of the business and analyse how the plan of action addresses a challenge
you mentioned in Question 2 and how it supports an existing strength of the social enterprise.
Examine the advantages and disadvantages within that business function or across different ones.
Evaluate the impacts of the plan of action on key stakeholders - how will different stakeholder
groups be impacted, and will there be any potential conflict?

Conclusion:
Recap on the main arguments. Justify the recommendations you make in your plan of action.
Explain how the recommendations link to the objectives of the social enterprise and why it is the
best strategic choice for the business at this point. Ensure that there is no new information in the
conclusion.

Sample Response:
Breadwinners faces several challenges that will impact its financial sustainability over the coming
years. The current competitive environment in the baked goods industry threatens Breadwinner's
long-term sustainability (Resource 2). Its current marketing strategy is non-existent (Resource 5),
with the social enterprise relying on word of mouth to spread awareness of its operations. Its
decreasing sales revenue and profitability (Resource 3) are hindering the sustainability of the
business. To ensure Breadwinners can continue its operations and grow as a social enterprise, a
plan of action will be needed to explore changes it can make to increase its revenue through
marketing techniques and develop other revenue streams to diversify its product offerings and
markets in which it sells.

One solution to Breadwinners' financial challenges includes developing more revenue streams.
Breadwinner's stock turnover ratio and sales revenue has declined in the past year, and its surplus
is also decreasing (Resource 3). This is partially due to the UK's competitive landscape in the
bakery industry, with larger bakeries and supermarkets offering a more comprehensive range of
baked goods to appeal to a wide range of customers (Resource 2). This is further compounded by
the current economic situation in the UK, where inflation is rising, making it more costly to
operate a business (Resource 4). By diversifying its product range and offering healthier baked
goods, Breadwinners can appeal to a growing health-conscious segment of the market (Resource
2). This product development strategy will ensure a wider variety of goods for sale by
Breadwinners and position them as a brand that cares about their customer's health. The increased
sales revenue and surplus generated from these goods will help to provide the resources needed to
train the refugees in essential business practices through their employability programmes. This
will also help to build Breadwinner's brand image.

Breadwinners needs to build their brand as a social enterprise and make customers aware that
when they purchase goods from Breadwinners, they are not just buying baked goods but
supporting the business's social mission and helping these refugees in need (Resource 1).
However, this product development strategy would increase the organisation's expenses further
and will require investment in the operations department of the business. Workers and volunteers
will also need more training to create the new baked goods. This may result in volunteers
becoming overworked if more volunteers cannot be obtained to keep up the pace of the business.

The second solution is to develop a comprehensive marketing plan for Breadwinners to become
more well-known. Currently, no one is in charge of this at Breadwinners, with the founders
focusing solely on the creation and sale of goods as well as the social mission of the business.
One of the founders is in favour of hiring a marketing manager to oversee a marketing strategy
for the enterprise (Resource 5). There are several more strategies that Breadwinners will need to
implement simultaneously to ensure its marketing success. One strategy that Breadwinners can
use is to create social media platforms for the enterprise to promote the difference they make in
the lives of these refugees (Resource 1) and how customers can purchase their products. This will
improve the business's popularity and encourage customers to choose this social enterprise
amongst the larger competitors who do not have a social cause, thus increasing Breadwinner's
stock turnover and sales revenue, which has decreased recently (Resource 3). This strategy is
low-cost for Breadwinners in terms of its marketing budget and will be significant in helping to
build the brand image of the social enterprise. In addition, Breadwinners will need to expand on
where it sells its products. Currently, It sells its baked goods through local market stalls in
London. A marketing manager will be able to conduct market research to identify areas outside of
London where competition is less intense, and Breadwinners can sell their stock quickly.
However, the investment will be required to appoint a marketing manager who is experienced in
this field and can drive business development in this area, and this will result in an additional
salary being paid, which will decrease the business surplus further. However, this is a significant
issue for the business. Without the implementation of an effective marketing plan, the surplus
may continue to decline, resulting in a business that cannot sustain itself in the long run.

In conclusion, both options present viable solutions for the business. However, the second
solution of developing the enterprise's marketing strategy seems to be the most vital change that
needs to occur now to ensure its sustainability in the long term. By addressing the marketing
aspect, the business's finances will improve, as there will be increased awareness of the enterprise
and its mission due to increased promotional activity and placement of its products.
Mark Allocations:
Criterion A: Utilization of Resource Materials

This criterion evaluates how effectively a student uses the provided resources to support their
recommended action plan.

0 marks: Does not meet the standards of the descriptors.

1 mark: Limited reference to or ineffective use of the provided resource materials.
2 marks: Some reference to the provided resource materials, used superficially.
3 marks: Refers to most of the provided resource materials.
4 marks: Effectively refers to and uses all provided resource materials.

Criterion B: Application of Business Management Tools and Theories

This criterion assesses the extent to which the student's plan of action uses appropriate business
management tools and theories effectively.

0 marks: Does not meet the standards of the descriptors.

1 mark: Limited application of appropriate business management tools and theories.
2 marks: Superficial application of appropriate business management tools and theories.
3 marks: Satisfactory application of business management tools and theories.
4 marks: Effective application of business management tools and theories.

Criterion C: Evaluation of Impact

This criterion measures how effectively the student evaluates the expected impact of their plan of action
on relevant business areas.

0 marks: Does not meet the standards of the descriptors.

1-2 marks: Descriptive with limited analysis or evaluation of the plan's impact, with minimal reference to
relevant business areas.
3-4 marks: Analyses the impact of the plan with some reference to relevant business areas; includes some
evaluation but not consistently.
5-6 marks: Effectively evaluates the impact of the plan on the business and considers compromises
between different areas.

Criterion D: Sequencing of Ideas and Plan of Action

This criterion looks at how clearly and coherently the student sequences their ideas and plan of action.

0 marks: Does not meet the standards of the descriptors.

1 mark: Limited sequencing of ideas and plan of action.
2 marks: Ideas and plan of action are present but not always clearly sequenced.
3 marks: Ideas and plans of action are sequenced in a clear and coherent manner.