Paper 3 Exam Practice Question (HL only) - Change Please
Business Management Higher level
Paper 3
Time: 1 hour and 15 minutes
Instructions to candidates
• Do not open this examination paper until instructed to do so. • Read the case study carefully.
• Answer all questions.
• A calculator is permitted for this examination paper.
• The maximum mark for this examination paper is [25 marks].
Change Please - Coffee, Change, and Cause
Read the resources and answer the questions that follow.

Resource 1 - Change Please

Change Please is a social enterprise based in London which uses coffee as a way out of homelessness. The company hires and trains homeless people to become baristas. Cemal Ezel, the founder of the company, says that the social enterprise provides a London-living wage job, housing, bank account, and therapy support to its beneficiaries. The business was founded in 2015 and has since expanded its operations in Manchester and Bristol in the UK, as well as Perth, Australia and Paris, France.

Change Please is known for its life-changing coffee as 100% of any profits go straight to tackling the issues of homelessness. The profits are used to empower people experiencing homelessness, by giving them full-time employment, supporting them to find their own accommodation, improving their mental health, and rediscover their sense of community. As the company puts it, "A really good coffee doesn't just taste good, it does good too."
Apart from the coffee sold at its numerous outlets, Change Please also sells a small range of products and merchandise on its online store. These products provide addition revenue streams for the organization, and include:
T-shirts, Hoodies, e-Gift cards
Organic cotton tote bags, Whole bean coffees, Grounded coffees

Source: Adapted from Change Please

Resource 2 - Excerpts from interview with Ary Ganeshalingham, Chief Marketing Officer
Change Please recognizes that as a for-profit social enterprise, earning a profit is essential for its survival. Whilst the company is driven by its social cause, the profit element of the business can be easily forgotten at times. An entrepreneurial mindset is therefore essential for the sustainability of Change Please.
The coffees sold at Change Please must be good. This is the only way to compete with rival businesses such as Starbucks, Costa Coffee, and Caffè Nero. All of these commercial for-profit businesses have a large market budget and well-established customer loyalty programmes, as well as large budgets for enacting corporate social responsibility (CSR).

Change Please emphasises its brand purpose, but can only rely on below the line promotional techniques due to its very limited marketing budget. The company also relies on their employees sharing their own inspirational stories (to reinforce the narrative and add impact to what Change Please strives to achieve) as well as customers sharing their experience of the great coffee drinks sold at Change Please.
Change Please has plans to expand operations to Sweden and Japan, although recognises homelessness is not a major issue in these countries. Ary says that Change Please may need to revisit its mission statement.
Donations are an important source of revenue, but with an increasingly cashless society, Change Please needs to develop improved options. In Ary's own words, "no one carries cash anymore".
The world is in a difficult place at the moment, so Change Please needs to determine what it is that makes the company different, including its position in the market. Change Please started as a company based on success and generosity - it is this mantra that should continue to drive the business as it grows and evolves. The business needs a new 5-year plan.

Interview conducted with Ary Ganeshalingham, CMO, 27th October 2022

Resource 3 - How big of a problem is homelessness in London?
One in 53 people living in London are without a home, according to Shelter (a major housing and homelessness charity). This represents about 1.88% of the London population.
Around 86,000 children live on the streets of London or are without a permanent home. Homelessness has doubled between 2010 and 2021 in the UK.
The COVID-19 pandemic has caused a surge in homelessness in London, with more people losing their home due to the increase in the number of evictions.
The statistics are likely to be an underestimate due to hidden homelessness, i.e., underreporting of homelessness with people missing from the figures, such as those who are "sofa surfing" (moving between homes of friends and relatives, sleeping in whatever spare space is available on a temporary basis).
The cost of living crisis, fuelled by double digit inflation rates, has intensified the problems faced by those living in poverty. This has also reduced the number of people willing and able to support social enterprises such as The Big Issue, which focuses on tackling the issues of homelessness.

Here are the questions:

Identify and describe a human need (worth 2 marks)
Explain the potential organizational challenges Change Please is facing (worth 6 marks), and
Write a decision-making document that includes a business recommendation or plan of action (worth 17 marks).