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Case Studies

Case Studies

Extended business scenarios for analysis and evaluation. Each case tests multiple subunits — read carefully before attempting the questions.

Subunits covered
  • 1.3 Business Objectives — mission, vision, CSR
  • 1.4 Stakeholders — stakeholder interests and conflict
  • Also draws on: SWOT analysis, types of business entities (1.2)

Case Study 1: Fire in the Fast Lane

Ignite Apparel plc is a US-based public limited company. Its mission is "to deliver the hottest styles at the coolest prices." Its vision is "to set the world alight with fashion that everyone can afford."

In its glossy annual reports, Ignite Apparel frequently highlights its commitment to Corporate Social Responsibility, pointing to community projects and its long-term business objective to "lead the industry in sustainability while delivering growth and shareholder value."

On a Tuesday morning in one of its supplier factories in South Asia, a fire broke out in the fabric storage area. The sprinklers failed to activate. Smoke spread quickly, and as workers rushed for the exits they found one of the doors padlocked shut. Several employees were injured as they tried to escape through windows.

Video footage later emerged of the local manager saying, "The real emergency is getting those orders out on time." Within hours, hashtags like #HotFashion and #InfernoChic trended worldwide.

At Ignite Apparel's US headquarters, executives scrambled to hold an emergency board call. Shareholders pressed for reassurance. One was overheard saying, "A fire is bad optics, but not as bad as a bad quarter." Another added, "We can't let a few singed shirts burn through our margins."

Meanwhile, outside the factory gates, injured workers spoke to reporters. A machinist remarked, "The smoke cleared faster than the promises."

Customers reacted online with a mix of anger and cynicism. One wrote, "I wanted distressed jeans, not distressed workers." Another confessed, "I'll boycott… at least until the next sale."

Non-governmental organisations were quick to comment. An activist told journalists, "Your clothes are cheap because someone else paid the real price."

Local government regulators downplayed the incident. One official said, "The report says minor incident. Let's not fan the flames." Rumours circulated of inspections being "thorough… when paid to be."

In an attempt to restore confidence, Ignite Apparel issued a statement promising an "independent safety audit" and "industry-leading reforms to ensure our CSR commitments are met." Soon after, the company launched a celebrity-fronted advertising campaign under the slogan: "Our clothes are fire. But safely made." Its official communications continued to emphasise growth and shareholder value as its primary business objectives.

Questions
1. Identify the stakeholders in this case study. For each, state whether they are internal or external to Ignite Apparel.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

Look for:

  • Internal: Shareholders/executives, managers (the board and local factory manager), factory workers (supply chain employees — these may be classified as external if you argue they are employed by the supplier, not Ignite directly; accept either with justification)
  • External: Customers, NGOs/pressure groups, local government/regulators, local community around the factory, media
2. For each stakeholder group you identified, describe what their interests are in this situation.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

  • Shareholders: Financial reassurance — they want to protect the share price and avoid reputational damage that might reduce dividends. Evidence: "not as bad as a bad quarter."
  • Managers: Operational continuity and personal reputation. The local manager prioritised orders over safety.
  • Factory workers: Safety, fair treatment, compensation for injuries, job security.
  • Customers: Mixed — some want ethical assurance; others prioritise price. Evidence of both in the case.
  • NGOs: Accountability, improved supply chain conditions, public pressure for reform.
  • Regulators: Nominally, enforcement of safety laws — though the case suggests capture/corruption.
  • Media: The story — viral engagement around the incident.
3. Explain how the interests of different stakeholders come into conflict in this case. Focus in particular on the tension between shareholders, managers, employees, customers, and NGOs.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

Look for specific conflicts where you explain the incompatibility — not just what each group wants. Key conflicts:

  • Shareholders vs workers: Shareholders want profit protection; workers want compensation and safety improvements. Both cost money.
  • Managers vs workers: Local manager prioritised production deadlines over worker evacuation — a direct and extreme conflict.
  • Customers vs shareholders: Ethical customers want Ignite to bear the cost of genuine reform; shareholders want to minimise costs. Marketing ("safely made") attempts to satisfy customers without real reform.
  • NGOs vs management: NGOs demand structural change; management issues PR statements. The "independent audit" may be intended to delay rather than act.
  • Regulators vs business: Regulators should represent the public interest but the case implies regulatory capture — a conflict between stated and actual roles.
4. Analyse how Ignite Apparel's mission and vision statements compare with its behaviour in this situation. To what extent do its stated aims align with its actions?
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

Strong responses contrast the language of the mission/vision with specific evidence of behaviour from the case:

  • Mission: "deliver the hottest styles at the coolest prices" — the low prices are achieved through supply chain conditions that led to the fire. The mission's emphasis on cost implicitly drives the behaviour it needs to deny.
  • CSR objective: "lead the industry in sustainability" — contradicted by padlocked doors, failed sprinklers, and a response focused on PR rather than accountability.
  • The celebrity campaign ("safely made") is evidence of the gap between stated and actual values.

Push yourself to evaluate: is this a company that has failed in one incident, or one whose stated values were never operationally embedded? The structural nature of the gap is worth exploring.

5. Evaluate whether Ignite Apparel's approach to Corporate Social Responsibility appears consistent with its stated objectives.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

This is an evaluation question — weigh evidence on both sides before making a judgement.

Evidence of CSR commitment: Annual report highlights community projects; promised independent safety audit; launched reform initiative.

Evidence against: CSR is performative — communications emphasise "growth and shareholder value" as primary objectives; the immediate board response was financial, not ethical; the celebrity campaign followed the fire rather than preceded it; there is no evidence of systemic change.

Judgement: The evidence strongly suggests Ignite's CSR is reputational rather than operational — it functions as marketing rather than governance. Consider whether the term "greenwashing" applies here, and support your view with specific case evidence.

6. Conduct a SWOT analysis for Ignite Apparel based on this case. Identify internal strengths and weaknesses, and external opportunities and threats. Explain how the events in the case illustrate each element.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

  • Strengths: Established brand with global reach; aggressive marketing capability (celebrity endorsement deployed quickly); cost structure that maintains competitive pricing.
  • Weaknesses: Over-reliance on low-cost supply chain creates ethical and reputational risk; disconnect between stated CSR values and operational behaviour; management culture that prioritises quarterly results over long-term brand stewardship.
  • Opportunities: Crisis as catalyst for genuine reform — could differentiate from competitors; growing ethical consumer segment willing to pay more for verified supply chains.
  • Threats: Social media amplification of supply chain failures; NGO campaigns; boycotts; regulatory tightening; competitor brands positioning on ethics.
7. Evaluate three possible strategies Ignite Apparel could adopt to balance shareholder value with its ethical objectives. In your answer, consider: the type of business entity, the goals and objectives of the business, the source and degree of power for each stakeholder group, and the short- and long-term effects of each strategy. Recommend one strategy.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

Possible strategies include:

  • Strategy A — Genuine supply chain audit and reform: Independent verification of all suppliers against safety/labour standards. Short-term cost; long-term brand protection and reduced boycott risk. Shareholders bear immediate margin pressure but gain long-term security.
  • Strategy B — Vertical integration (acquiring suppliers): Ignite buys key factories to directly control conditions. Higher capital cost but eliminates supply chain opacity. As a PLC, can raise capital through share issue. Long-term operational control.
  • Strategy C — PR and incremental reform: Continue current approach — audit promises, celebrity campaigns, incremental supplier guidelines. Cheapest short-term; highest long-term risk if another incident occurs.

A strong recommendation will argue that as a PLC, Ignite's long-term share price depends on brand integrity, and that ethical consumers and ESG investors are a growing force. Any well-reasoned recommendation supported by case evidence is valid.

Subunits covered
  • 1.2 Types of Business Entities — social enterprises, NGOs
  • 1.3 Business Objectives — mission, vision, competing objectives
  • 1.4 Stakeholders — stakeholder interests and conflict

Case Study 2: FairStart Microfinance

FairStart Microfinance is a social enterprise founded in the same country as the factory where the Ignite Apparel fire occurred. Its mission is "to unlock opportunity through small loans that change lives." Its vision is "a future where every person can build a livelihood with dignity."

FairStart traditionally supports rural households, especially women, by providing loans to start home-based businesses such as tailoring, food stalls, or handicrafts. It has built a reputation for careful loan allocation and a strong repayment record, which it highlights in its donor reports.

After the Ignite Apparel fire, many displaced workers approached FairStart for loans to set up small tailoring enterprises.

At a staff meeting, one manager commented: "We built our reputation supporting rural families. If we shift resources into the city, do we risk leaving our core clients behind?"

Another staff member countered: "If we say no, aren't we ignoring workers in crisis right now?"

Newspaper headlines celebrated the idea of helping garment workers rebuild their lives. Yet long-term rural clients worried about reduced funding. One borrower remarked: "We kept our repayments faithful for years. Now they tell us funds are running low because of factory workers?"

FairStart's donors also questioned whether the organisation was straying from its stated objectives.

Questions
1. Identify the stakeholders in this case study. For each, state whether they are internal or external to FairStart.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

  • Internal: FairStart staff/managers, FairStart leadership/board
  • External: Existing rural clients/borrowers, displaced factory workers (potential new clients), donors, media/newspapers, local community
2. Describe what the main stakeholder groups want from FairStart in this situation.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

  • Existing rural clients: Continued access to loans and FairStart's attention — they fear being deprioritised after years of faithful repayment.
  • Displaced factory workers: Access to loans to rebuild livelihoods after losing their jobs in the fire.
  • Donors: FairStart to remain true to its stated mission and objectives — they funded a rural microfinance model, not an urban crisis-relief operation.
  • Staff: Clear direction — the case shows internal disagreement, with staff wanting to know how to balance competing demands.
  • Media/public: FairStart to act compassionately and visibly toward displaced workers — there is reputational pressure to respond to the crisis.
3. Explain how the interests of these stakeholders come into conflict. Give specific examples from the case.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

  • Existing clients vs displaced workers: FairStart's funds are finite. Allocating loans to factory workers means less for rural clients who have a prior claim through their long-term relationship. Quote: "funds are running low because of factory workers?"
  • Donors vs displaced workers: Donors gave money for a rural microfinance mission. Serving displaced urban workers is a different objective — donors may withdraw funding if they feel their intent is being disregarded.
  • Staff internal conflict: Different staff members have incompatible views — one sees mission fidelity as paramount; another sees human compassion as overriding the stated scope. This creates decision paralysis.
4. Analyse how FairStart's mission and vision align with its current dilemma. To what extent is the organisation staying true to its objectives?
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

Note that FairStart's mission and vision are genuinely ambiguous in this situation — unlike Ignite's case, this is not a clear-cut misalignment:

  • Mission: "unlock opportunity through small loans that change lives" — this could apply to displaced workers; it does not specify rural or female clients.
  • Vision: "every person can build a livelihood with dignity" — "every person" is inclusive; displaced workers are people too.
  • However, FairStart's operational identity and donor relationships were built around a specific model (rural women). Expanding scope risks diluting both.

Think about the difference between a mission's literal meaning and its operational context — genuine mission alignment depends on interpretation.

5. Propose a pathway forward for FairStart. Suggest a strategy that balances support for displaced workers with the needs of existing clients and donors. In your answer, consider: the type of business entity, the goals and objectives of the business, the stakeholder groups and their power, and the short- and long-term effects of your proposed strategy.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

A strong response will:

  • Identify FairStart as a social enterprise (not a profit-maximising firm) — its obligations are to mission and donors, not shareholders
  • Propose a concrete strategy (e.g. ring-fence existing rural funds; create a separate emergency fund for displaced workers; actively communicate to donors)
  • Consider stakeholder power: donors hold significant power (can withdraw funding); existing clients have a moral claim but limited power; displaced workers have a sympathetic media narrative but no prior relationship
  • Address short-term effects (potential strain on resources) and long-term effects (if handled transparently, could expand FairStart's scope and donor base; if handled poorly, could lose core identity)

There is no single correct answer — the quality of reasoning matters more than the specific strategy chosen.

Subunits covered
  • 1.5 Growth and Evolution — internal vs external growth, reasons to grow or stay small, economies of scale
  • Also draws on: 1.1 (entrepreneurship), 1.3 (objectives), 1.4 (stakeholders)

Eight Businesses — Should They Grow?

Read each business scenario. The questions at the end apply to all eight cases — work through them for at least two businesses of your choice.

1. The Artisan Bakery

A family-run bakery in a mid-sized town has built its reputation on fresh sourdough and pastries made from locally sourced flour. The mission is "to provide the community with honest, high-quality bread." The bakery opens early and sells out before midday, creating long queues. Customers often ask why they do not produce more. The owners, a husband-and-wife team, enjoy the balance between work and family life and worry about the stress of managing a bigger team. Their current staff is three bakers and two counter workers. A nearby town with no artisan bakery has invited them to expand.

2. EcoTech Repair

EcoTech Repair was started by two engineering graduates who wanted to tackle electronic waste. Their vision is "to reduce e-waste by making repair affordable and fashionable." They currently employ ten technicians and operate from a single workshop, but demand for smartphone and laptop repairs is rising fast, with customers travelling from neighbouring districts. They pride themselves on friendly service and affordable pricing, though the workshop is cramped. They have been offered a small bank loan to refurbish and expand their workshop, but the founders worry that raising prices to cover costs might clash with their vision.

3. Lotus Café

Lotus Café is a boutique coffee shop located near a busy university campus. It is known for personalised service, high-end coffee beans sourced directly from farms, and a relaxing environment. The owner employs eight staff, most of whom are former students. The staff say they enjoy the "family-like" workplace culture. Recently, a large shopping mall has approached the owner about opening a second branch inside the mall. This could bring higher revenue, but the owner fears losing the intimate atmosphere that defines the café's reputation. Customers say they value the café's authenticity and worry a mall location might "sell out" the brand.

4. GreenCycle

GreenCycle is a medium-sized start-up that collects and recycles plastic bottles, selling the processed plastic to local manufacturers. The company has thirty employees and operates in one major city. It struggles with cash-flow problems and high staff turnover. Recently, a large NGO has offered to fund expansion into a second city, provided GreenCycle can commit to doubling its collection volumes within a year. The management team sees this as an opportunity to raise their profile, but employees worry about being overstretched. The company's social media following is growing, and it regularly posts about its mission of "turning waste into opportunity."

5. Zen Fitness Studio

Zen Fitness Studio offers yoga and wellness classes in a modern but intimate space. Its mission is "wellness for every body." Classes are capped at fifteen people to maintain a sense of community, and instructors pride themselves on knowing each client personally. The studio has around 200 loyal members who pay monthly subscriptions. Recently, a budget gym chain opened across the street, offering yoga classes at half the price but with fifty people per class. Some of Zen's instructors suggest expanding class sizes or adding new services, while others believe growth would compromise their identity. The founder is torn between remaining niche or adapting to stay competitive.

6. Urban Threads

Urban Threads is a fast-growing clothing brand founded by two designers. It started with handmade limited-edition streetwear sold on Instagram, but the brand now has a team of twenty employees, including seamstresses, marketing staff, and logistics coordinators. Demand is growing internationally, with customers asking for shipping to Europe and North America. The founders are debating whether to invest in more equipment and staff to produce larger batches, or to stay exclusive and keep the "limited drop" image that made them popular. They have rejected outside investors so far, insisting on keeping control of the brand's direction.

7. FreshWave Farms

FreshWave Farms is a hydroponic farm on the outskirts of a large city. It produces leafy greens and herbs for high-end restaurants and has built strong partnerships with local chefs. The founder employs 25 workers and believes in hands-on farming, refusing to automate too much. Recently, a national supermarket chain offered a lucrative supply contract, but it would require scaling production significantly. Taking the deal could mean higher revenues and brand recognition, but also debt for new infrastructure and less time spent on maintaining quality. The founder must decide whether to grow to meet supermarket demand or remain small and niche.

8. ByteTutors

ByteTutors is a small but rapidly growing online tutoring business that provides coding lessons to teenagers. The vision is "to make tech skills accessible for the next generation." It started as a side project by a group of university students, but now employs 12 part-time tutors and has several hundred students across different countries. Recently, demand has increased for structured courses and certificates. To meet this demand, ByteTutors would need to hire permanent staff, build a proper online platform, and invest in marketing. The founders are debating whether to take this next step or remain flexible and small, focusing on a niche group of loyal students.

Questions — apply to your chosen businesses
1. For each of your chosen businesses, identify the main arguments for growth and the main arguments against growth (i.e. for staying small). Use evidence from the scenario in your answer.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

Arguments should be specifically grounded in the scenario — not generic lists. For example:

Artisan Bakery — for growth: Excess demand (sells out daily); no existing artisan bakery in the nearby town (market gap); could achieve purchasing economies on flour.

Artisan Bakery — against growth: Owners value work-life balance; quality depends on personal oversight; mission is "community" not "scale"; managing a larger team adds complexity and stress.

Apply the same evidence-based standard to any business you choose. Try to frame each argument using relevant concepts (economies of scale, diseconomies, strategic vs personal objectives, niche vs mass market).

2. If the business were to grow, identify which internal method(s) of growth would be most suitable — for example: opening a new branch, increasing output, diversifying products, entering new markets, investing in equipment. Justify your choice with reference to the business's specific situation.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

Suitable methods vary by business:

  • Artisan Bakery: Opening a new branch in the neighbouring town — the market gap is explicit in the scenario.
  • EcoTech Repair: Expanding the existing workshop (investing in equipment/space) — the bottleneck is physical capacity, not geography.
  • Lotus Café: New branch is offered, but internal growth via longer opening hours or takeaway service may better preserve culture.
  • GreenCycle: Entering a new city — but the cash-flow problems and staff turnover must be resolved first.
  • ByteTutors: Investing in a proper online platform and diversifying into structured courses/certificates.
3. Choose one business and write a recommendation: should it grow, and if so, how? Your recommendation should weigh the business's objectives, stakeholder interests, and the risks of growth against the risks of staying small.
Sample answer
Note

This is a sample answer pending teacher review — use it to check your thinking, not as a definitive mark scheme.

A strong recommendation will:

  • State a clear position upfront
  • Support it with evidence from the scenario
  • Acknowledge the counter-argument
  • Reference objectives and/or stakeholder interests

There is no single correct answer — any well-reasoned, evidence-based recommendation with a genuine counter-argument addressed is valid.