Calculator Allowed: Yes



Transcription of this question: 5.Café ParadiseIn 2002, four years after the first Internet café opened in Morocco, Imran Kwashane transformedhis traditional café, Café Paradise, located in a suburb Of Rabat into an Internet café. Revenue andprofits grew rapidly. Within a year he had hired three part-time employees to help customers use thecafé’s computers.Many entrepreneurs were opening Internet cafés in Morocco. Soon there were 2500 Internet cafés.Facing strong competition, in 2005, Imran lowered his price Of Internet access from six tofour dirhams per hour Revenue fell, and, despite cutting costs by making one employee redundant,profits were lower than before. Moreover, in late 2008, following a decade Of economic growth,Morocco’s economy went into recession.When Café Paradise first opened, there were no government restrictions on Internet cafésin Morocco. The national government was actually encouraging computer use by upgradingthe country’s information communication technology (ICT) infrastructure and providing freewireless access (Wi-Fi) services in major cities like Rabat. As a result, sales Of computers,especially laptops, increased by 10% per year between 2000 and 2007. However, a provincialgovernment official has recently instructed local Internet cafés not to serve customers belongingto a banned pressure group. Many Moroccans also believe that there should be more control overaccess to inappropriate web sites.Internet café customers, increasingly knowledgeable about innovations in information technologies,have begun to demand newer, faster computers. As Café ParadiseS computers are sevenyears Old, Imran is considering purchasing 15 new computers at a cost Of 150000 dirhams.His wife Akila, however, thinks that the first generation Internet café sector will soon not befinancially viable. Rather than buying new computers, she recommends modernizing the décor*(at a cost Of 60000 dirhams), laying-off the two remaining part-time employees, and providingextra services such as scanning and printing photos for customers with laptops or memory sticks.(a)(b)(c)(d)Outline the importance Of innovation for Café Paradise.Explain the effect Of one political, one economic andCafé Paradise.Analyse the relationship between investment, profitCafé socialand cashfactor onflow atEvaluate Akila ‘s recommendation for the future direction Of Café Paradise.[2 marks][6 marks][5 marks][7 marks]

Leave a Reply