Case Study on Assessment Themes: CakeShop Business Model

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1CASE STUDY
Case Study on Assessment Themes
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2CASE STUDY
Table of Contents
Task 1: Setting up a Business..........................................................................................................3
Task 2: Market Research.................................................................................................................5
Task 3: Employment Law................................................................................................................6
Task 4: Ethical Dilemmas................................................................................................................7
Task 5: Accounting Basics..............................................................................................................8
References......................................................................................................................................10

3CASE STUDY
Task 1: Setting up a Business
As the start-up business has a budget of £20,000, the business chosen is a Homemade Cake and
Snacks company, named as CakeShop in Bristol that delivers cakes, pastries, and snacks to ones
who orders. The business would be operated in the Food and Beverage industry, and the location
will be in Bristol, South West London. Besides, the target customers would be mostly the local
customers of Bristol that fancy on the Cake and beverage items, which are homemade and does
not have enough calories or fats (Casadesus‐Masanell and Zhu, 2013). To analyse the business
model of Cakeshop, a business Canvas model is made to identify the different customer groups,
with cost metric parameters.
Key Partners
The start-up
collaborates with
local NGOs for
providing job
opportunities in
localities of Bristol.
It bakes seasonal
ingredients, herbs
and local spices
from farms in
Bristol to decrease
carbon footprint to
avoid shipping.
Key Products
Daily baked sweet,
savoury goods and
sweet. This may
work in terms of
catering where
there could be large
scale production
Value Proposition
With USP, they
will establish loyal
customer base in
the neighbourhood
in the locality of
Bristol. CakeShop
keeps their price at
affordable rate for
the growth of
business.
Customer
Relationships
They associate
loyalty first to
nurture neighbour
first to analyse the
prestige to attract
the loyal customers.
Customer
Segments
20% of the parties
and catering, 50%
mainly the local
residents preferring
for home delivery
and 30% one-time
visitors
Customer profiles
may include
families, busy
professionals and
foodie millennials
Key Resources
It requires water
and gas that are
sourced with Green
Energy companies
to produce own
electricity and heat
water with the solar
panels.
Channels
Mostly include
social media and
word-of-mouth
communication
Cost Structure
Due to exponential growth for franchisee business, the
position of the cost structure with the available
Revenue Streams
It is intending to operate at just 15% profitability that
may rise to 8-9% by 2019 Q2. The walk in sales may

4CASE STUDY
resources for the locals. There will also be a fair
chance for employers that are eligible for tax
exemptions (Zandoval Bonazzi and Ari Zilber, 2014).
cover 80% of revenue to cater for the homemade
business. As revenue stream may not gain
consistency, it may plan to rise part of the business to
maintain sustainable principles of CakeShop.
Table 1: Business Canvas Model of CakeShop
(Source: Learner)
To identify the Visual identity of CakeShop, the logo proposed below reflects on the flavour of
Cakes and pastries with different homemade recipes. With a strong corporate ethic, it may reflect
in characterizing volunteerism support for involvement and good causes in community. As the
brand is new in the market, the simple coherent design and layout is characterized to identify the
visual representation in the business working with their product packaging (Euchner and
Ganguly, 2014).
Figure 1: Logo of CakeShop
(Source: https://creativemarket.com/maraz.dhaka/2960312-Cake-Shop-Logo)
The major values that need to be promoted as a Cake and Pastry business will work on several
factors, depending on diversity, social and environmental functions. In terms of social factors,

5CASE STUDY
the company’s Cake and beverage images will be uploaded to social media, and valuable clients
will observe it in order to order the homemade items. In Bristol, there are varied customers
having different cultural differences but some of them tend to attract their origin in flavoured
cake items, mostly the homemade delicacies. Even, CakeShop owner finds that giving discounts
on first and second orders could be an effective campaign to attract customers in large numbers
(Zandoval Bonazzi and Ari Zilber, 2014). Towards environmental functions, as the Cake
Company is homemade, proper waste disposal can be made, without hampering the local
environment of Bristol.
Task 2: Market Research
To analyse the Market research of CakeShop, which would be a start-up business in Bristol, the
use of Primary and Secondary research will prove to be effective. At first, for analysing the
primary research, the use of Online Surveys can be effective, since it is relatively low cost and it
is used by small businesses to capture the view of potential and existing customers. The use of
online survey will be carried out in the form of email, which will be distributed to the local
customers in Bristol (Barnham, 2015). The benefit of conducting surveys is that a proper market
research on how the CakeShop business will progress among the local customers in Bristol.
Likewise, the use of face-to-face interviews from company’s managers on the existing SMEs
will be carried out to identify how the market would progress for CakeShop. Further, the use of
secondary research will also be carried out to identify from web articles regarding the small-
medium companies, like CakeShop that has progressed so far (Boddy, 2016). In case, secondary
research will be made to illustrate by reading articles, magazines and the industry publications.
In terms of carrying out quantitative research, numerical analysis in the form of a report has to be
done to generalise results from a sample size. The sample size, for instance 30 customers will be
asked close-ended questions regarding how the CakeShop will progress, on relative factors about
their distribution, customer group, their favourite items, etc (Whiting and Williams, 2013).
Because the budget is low for the start-up venture, it will use numerical analysis to analyse the
response made from the customers in Bristol. Further, face-to-face interview would be carried
out to analyse the qualitative method in the form of transcripts regarding their opinions and
views with open-ended questions, on what market factors the company will succeed.

6CASE STUDY
Task 3: Employment Law
As the case shows that the CakeShop business has grown well for employing two members of
staff on the Zero hour Contract, diversity may take a more positive outlook. To comply with the
Diversity and Equality law for selecting applicants for CakeShop, a positive approach is required
for selecting best person in terms of merit and has ability to do the job. It is important to identify
the principles on what constitutes indirect and direct discrimination during recruitment process.
Besides, a positive approach towards diversity could be an effective way for avoiding issues to
attract wide number of candidates (Countouris, 2016). From the Equality Act 2010, it helps in
protecting people from discrimination or other detriment in terms of gender reassignment, civil
partnership, or any kind of disability. It is found that burden of proof done with employer may
show that they have lawfully discriminated on grounds, covered by legislation (Williams and
Scott, 2016). It may be considered that individuals that take discriminatory decisions and actions
are accountable potentially, when provided that CakeShop to demonstrate taking liable steps in
preventing employee from victimising, harassing and discriminating someone.
From the Equality Act 2010, it shows that while selecting participants, Cakeshop needs to treat a
person with disability that is less approving without justification. On failing to this, for making
reasonable adjustment may enable employee or job applicant for carrying out the particular job.
Within the application, if the candidate needs any kind of reasonable adjustments to aid process
of recruitment process, then reasonable adjustments can be made for selecting the candidate by
taking an interview (Adams, 2016). It is evident that a positive action needs to be taken in order
to encourage represented groups for the CakeShop job, may be the role of cashier. By law, some
legal rights for the worker in CakeShop have to be considered. At first, the employee has to be
paid at least a National Minimum Wage that is presently £6.70/hour for workers aged 21. For the
18-21 years old, the National minimum wage is £5.30/hour. Within two months in starting job,
one needs to attain a written statement, which would clearly state details and conditions of
employment. One has to attain a payslip that would offer breakdown of deductions and pay.
Under safety and the health laws, one has to weekly rest the breaks, as it comprise getting daily
rest period of 20 mins, if working day exceeds 6 hours (Countouris, 2016). One cannot be forced
in working to more than 48 hours, unless one agrees to put extra working hours to confirm in

7CASE STUDY
writing. For attending disciplinary hearing, one has to be entitled with a trade union
representative that accompanies hearing.
Task 4: Ethical Dilemmas
As the ethical dilemma shows that the business of CakeShop is promoted by a popular website at
discounted price, but the website company accuses treating employees badly with harassment,
bullying and discrimination. It is found that website can increase business for CakeShop heavily,
so that thousands of customers can be attracted. Now, as there is a risk factor that CakeShop may
find damaging their brand, or de-motivating staffs. In this case, an ethical dilemma is found, as
CakeShop can take CSR policies, so that no risk factor for their viable employees can be found.
To work for the business, the employees needs to be motivated, though they have to be given
instances where for company’s benefit, risk needs to be taken (Crane and Matten, 2016). Unlike,
for benefit of business, the company should take initial chances so that offering resources can
actively reinforce ethics. It is important that the firm should account in compromising the
conflict of interest for the growth or the loyalties of change to increase achievement targets for
business (Shapiro and Stefkovich, 2016.). Hence, documenting ethical behaviour with the
website company may encourage ethics, as employees may write a personal code to make a
decision on right time.
As laws are geared towards transgressions, smaller ethics in violence may damage company
reputation. In that case, right planning will help to encourage employees not to involve in such
considerations. A legal case is intended from the Judgement clarified from s. 1 (1) Defamation
Act, 2012 to the serious harm. This is where Claimants need to approve serious harm in terms of
reputation, which will hold a high threshold for substantial harm in damaging the brand or de-
motivating staffs (Donaldson et al. 2010). The case intends that no special damage can be made
to the brand, as they are taking help from a third party to build their website for the benefit of the
company (Johnson, 2017). In that case, proper agreement has to be made that no disturbances
may be made to CakeShop, or else full cost of making the website needs to be refunded at any
case.

8CASE STUDY
Task 5: Accounting Basics
To analyse the key accounting parameters for the small-sized business in Bristol, the liabilities
that needs to be considered is the loan amount to be taken from local bank by showing property
documents of the owner (Frankel and Forman, 2017). As there is a budget of £20,000 for the
business, the owner would take £15,000 from the bank and the rest £5,000 would be taken from
savings account. The assets will be the owner property, showing to the bank with a valuation of
£100,000. In that case, the bank will grant the amount with all legal documents of the owner to
start the business, by acquiring license from the UK government.
Assets Liabilities
Bank £17,700 Loan £15,000
Computer £900
Oven £100
Equipments £700 Owner’s Capital £5,000
iPhone £600
Balance £20,000 Balance £20,000
Table 2: Assets and Liabilities
(Source: Learner)
To analyze the expenses and gains of CakeShop, the major expense will be done in setting up the
business in homemade area, which needs the available equipments having a counter attached to
home (Frankel and Forman, 2017). It is imperative for the business like using phones, employee
salaries, link with delivery partner fees like Uber Eats, raw materials for making the cakes and
pastries, supplier contact, etc. It is important that these expenses will be fulfilled in the budget
decided with £20,000, so that gains can be estimated with 30% more to the budget in the first 3
months in setting the business.

9CASE STUDY
To avoid the cash flow projections for CakeShop with the estimated budget of £20,000, it is
intended that setting targets for the next six months will keep a track on finances to avoid the
shortfalls (Juárez, 2015). It is decided that sending invoices promptly and chasing overdue bills
will worth in setting out the clear terms in payment from suppliers. Finally, effective stock
management will be effective to manage the cash flow of the decided budget of CakeShop.

10CASE STUDY
References
Adams, E.M., 2016. Human rights at work: Physical standards for employment and human rights
law. Applied physiology, nutrition, and metabolism, 41(6), pp.S63-S73.
Barnham, C., 2015. Quantitative and qualitative research: Perceptual foundations. International
Journal of Market Research, 57(6), pp.837-854.
Boddy, C.R., 2016. Sample size for qualitative research. Qualitative Market Research: An
International Journal, 19(4), pp.426-432.
Casadesus‐Masanell, R. and Zhu, F., 2013. Business model innovation and competitive
imitation: The case of sponsor‐based business models. Strategic management journal, 34(4),
pp.464-482.
Countouris, N., 2016. The changing law of the employment relationship: comparative analyses
in the European context. Routledge.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Donaldson, T.M., Fistein, E. and Dunn, M., 2010. Case-based seminars in medical ethics
education: how medical students define and discuss moral problems. Journal of medical
ethics, 36(12), pp.816-820.
Euchner, J. and Ganguly, A., 2014. Business model innovation in practice. Research-Technology
Management, 57(6), pp.33-39.
Frankel, M.E. and Forman, L.H., 2017. Mergers and acquisitions basics: the key steps of
acquisitions, divestitures, and investments. John Wiley & Sons.
Johnson, C.E., 2017. Meeting the ethical challenges of leadership: Casting light or shadow. Sage
Publications.
Juárez, F., 2015. The accounting equation inequality: A set theory approach. Global Journal of
Business Research, 9(3), pp.97-104.

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Shapiro, J.P. and Stefkovich, J.A., 2016. Ethical leadership and decision making in education:
Applying theoretical perspectives to complex dilemmas. Routledge.
Whiting, A. and Williams, D., 2013. Why people use social media: a uses and gratifications
approach. Qualitative Market Research: An International Journal, 16(4), pp.362-369.
Williams, S. and Scott, P. eds., 2016. Employment relations under coalition government: the UK
experience, 2010-2015. Routledge.
Zandoval Bonazzi, F.L. and Ari Zilber, M., 2014. Innovation and Business Model: a case study
about integration of Innovation Funnel and Business Model Canvas. Revista Brasileira de
Gestão de Negócios, 16(53).