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Ed's Easy Diner is a chain of 1950s American-themed restaurants - Edexcel - GCSE Business - Question 2 - 2017 - Paper 1
Question 2
Ed's Easy Diner is a chain of 1950s American-themed restaurants. Since opening its first outlet in London, the chain has expanded rapidly. It now has 40 diners acros... show full transcript
Worked Solution & Example Answer:Ed's Easy Diner is a chain of 1950s American-themed restaurants - Edexcel - GCSE Business - Question 2 - 2017 - Paper 1
Step 1
One advantage identified and explained
Answer
One advantage of introducing the doughnut burger is improved customer loyalty. By offering a unique and trendy item like the doughnut burger, Ed's Easy Diner can attract more customers who are looking for exciting menu options. This increase in customer loyalty leads to more frequent visits, resulting in higher sales revenue for the restaurant. Additionally, as customers enjoy the novelty of the doughnut burger, they are likely to spend more on other items, enhancing the overall profitability.
Step 2
One disadvantage identified and explained
Answer
A disadvantage of introducing the doughnut burger could be cash flow problems. The initial investment required to develop, market, and produce a new menu item can be significant. If the doughnut burger does not sell as anticipated, Ed's Easy Diner may struggle with cash flow, as they could have invested more money than they are generating in sales. This financial strain can hinder the restaurant's ability to manage its day-to-day operations effectively.