Dynamic nature of business — 4-mark explain

Zara is a 23-year-old entrepreneur who noticed that most local coffee shops still use paper cups and offer no loyalty scheme via smartphone. She is planning to launch "BrewUp", a coffee-cart business with a dedicated app for ordering ahead and collecting loyalty points digitally.

Explain two reasons why Zara identified this as a business opportunity.

[4 marks]

Mark scheme (AO1 + AO2):

Award up to 2 marks per reason:

• 1 mark for identifying the reason (AO1).
• 1 mark for applying it to the context of BrewUp/Zara (AO2).

Indicative content:

• Changes in technology: smartphone technology enables mobile ordering and digital loyalty schemes (AO1). Zara can use an app to allow customers to pre-order, reducing queue time and increasing convenience for busy workers (AO2). ✓
• Changing consumer needs: consumers increasingly prefer cashless, convenient transactions and expect businesses to offer digital services (AO1). By meeting this expectation, BrewUp differentiates itself from traditional coffee carts that still rely on paper cups and cards (AO2). ✓
• Existing businesses becoming obsolete/competitors' weaknesses: local coffee shops relying on paper cups and stamp cards offer an inferior experience vs digital alternatives (AO1). Zara is spotting the gap before rivals do (AO2). ✓

Total: 4 marks.