Instructions to candidates. â¢ Do not open this examination paper until instructed to do so. â¢ A clean copy of the business and management case study is required for this examination paper. â¢ Read the case study carefully. â¢ Section A: answer
A clean copy of the business management case study is required for this examination paper. â¢ Read the case study ... growth (line 52). . (b) With reference to John, explain the key functions of management.  ... (c) Using the information above
Do not open this examination paper until instructed to do so. â¢ You are not permitted access to any ... Section B: answer one question. â¢ Use fully labelled diagrams and references to the text/data where appropriate. ... direct taxes and cutting
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(a) State two elements of the extended marketing mix (seven Ps) for FC. . (b) Using the ... if successful. Probability: 0.45. Forecast revenue if not successful. Probability: 0.55 research and develop new environmentally friendly soaps. $990 000 .
May 1, 2017 - A clean copy of the business management formulae sheet is required for this examination paper. â¢ Section A: answer one ... suggests that new, untested software could be developed by her project team to significantly reduce the costs o
May 1, 2017 - A clean copy of the business management formulae sheet is required for this examination paper. â¢ Section ... (c) Referring to information in Table 1 and your calculations, explain the change in BF 's liquidity ... Secco Vineyards (SV
May 1, 2017 - A clean copy of the business management formulae sheet is required ... Recruitment is difficult due to the number of hotels in the areas ... (b) (i) Explain two disadvantages for Wire of introducing a piece rate system of wages.
May 9, 2016 - Instructions to candidates. â¢ Write your session number in the boxes above. â¢ Do not open this examination paper until instructed to do so. â¢ Section A: answer all questions. â¢ Section B: answer all of the questions from one of
Business management Standard level Paper 2 Monday 1 May 2017 (morning) 1 hour 45 minutes Instructions to candidates yy Do not open this examination paper until instructed to do so. yy A clean copy of the business management formulae sheet is required for this examination paper. yy Section A: answer one question. yy Section B: answer one question. yy Section C: answer one question. yy A calculator is required for this examination paper. yy The maximum mark for this examination paper is [50 marks].
Section A Answer one question from this section. 1.
Sotatsu Electronics (SE)
Sotatsu Electronics (SE) manufactures electronic products and is famous for its innovative televisions. In late 2015, SE introduced a new high-definition television with twice the quality of the best-selling television of its chief competitor. Determining that it would be two years before its competitors could have a similar product, SE adopted a price skimming strategy.
Table 1: Select financial information for SE for 2015 and 2016. Figures in $000 000. 2015 2016 Cash 300 250 Cost of goods sold 2100 2300 Creditors 180 230 Expenses 1200 1300 Fixed assets 1075 1275 Gross profit X 2800 Net profit before interest and tax 1000 Y Sales revenue 4300 5100 Total current assets 650 700 Total current liabilities 275 300
Define the term price skimming.
Calculate the values of X and Y in Table 1 (no working required).
Construct a profit and loss account for SE for 2015 and 2016.
Calculate net current assets (working capital) for 2016 (show all your working).
Tom operates Anubis as a sole trader, selling cell/mobile phone cases on the internet. The market is increasingly competitive. The retail price of phone cases is predicted to fall in the second quarter of 2018. Employees at Anubis will receive a 3 % rise in wages starting from 1 April 2018.
Tom has forecasted the following monthly cash outflows for January through March 2018: Heating and lighting: $4000. Wages: $50 000. Packaging: $15 000. Delivery charges: 5 % of sales revenue. Cost of goods sold: $220 000.
Additional information: Opening balance on 1 January 2018: $8000. Sales revenue: $300 000 each month. Rent of $2000 paid quarterly: first payment in January 2018. Receipt of a tax refund in February 2018: $3000.
(a) Outline two appropriate external short-term sources of finance for Anubis other than loans from family and friends.
Using the information above, prepare a fully labelled cash-flow forecast for Anubis from January to March 2018.
Comment on the predicted cash flow for Anubis for 2018.
Section B Answer one question from this section. 3. Dales
Dales is a public limited hotel chain operating in a highly competitive tourism market. Dales is positioned as a high-price and high-quality chain. The majority of its staff are on permanent contracts, but wage rates at Dales are below the average for the hotel industry. Consequently, staff turnover is high. Recruitment is difficult due to the number of hotels in the areas where Dales hotels are located and the wages paid.
In 2010, in order to remain competitive, Dales outsourced the cleaning of hotel rooms to Wire. Outsourcing reduced the cost of cleaning rooms for Dales from 5 % of total revenue per room to 2 %. Net profit after tax and interest increased and share prices rose by 10 %.
Initially, Wire paid cleaners at Dales a low wage of: $6 per hour for 8 hours, 5 days per week. Cleaners cleaned, on average, 13 rooms per day.
In 2016, Wire introduced a piece rate system: $2 is paid per room cleaned. Cleaners have a target of 20 rooms per day, 5 days per week.
In recent years, newspaper reports highlighting poor pay and working conditions have damaged Dales’s brand image. Recent customer feedback has also highlighted concerns about food quality, room cleanliness and poor customer service at Dales hotels. Room bookings fell during the same period. Profits in 2016 decreased from $24 m to $4 m.
The current contract with Wire is up for renewal. Dales is considering insourcing.
(a) Outline two common steps taken by a business in recruitment.
(b) (i) Explain two disadvantages for Wire of introducing a piece rate system of wages for its cleaning staff.
(iii) Calculate the change in cleaning costs per room from the introduction of the piece rate system used by Wire.
Recommend if Dales should stop outsourcing the cleaning of hotel rooms.
Calculate the financial impact on cleaners employed by Wire from the introduction of the piece rate system in 2016 (show all your working).
Secco Vineyards (SV)
Secco Vineyards (SV ) is a family-owned business producing wine in Sonoma, California. In 1947, SV opened using cost-plus (mark-up) pricing. For SV ’s customers, the wines were medium priced and available in local grocery stores.
In 1977, Joe Secco, grandson of the founder, created a new strategy. He re-branded SV ’s wine for a niche premium market. SV began to sell directly to customers at its winery instead of in local grocery stores. SV stopped using cost-plus (mark-up) pricing and began to sells its wines at much higher prices than before. Regular wine tastings and promotional events were held at its winery. At these events, wine experts would promote SV ’s wines by creating an elegant experience based on a luxurious culture of wine consumption: stylish wine glasses, classical music and food that complements the wine.
However, SV has recently faced intense competition and sales have fallen. Local wine producers and overseas competitors have entered the market with similar market positioning. In order to maintain its brand image, SV has not changed its pricing strategies.
SV conducted secondary market research about other possible markets in the US for its premium wines. The research suggested that other possible markets for high-quality wines, such as those of SV, exist. As a result, SV is considering two options to increase sales in addition to its current distribution channel: Option 1: open a business-to-consumer (B2C) e-commerce store Option 2: sell SV wines to wholesalers serving the whole of the US market for premium wines.
(a) Describe one characteristic of a niche market.
With reference to SV, explain one advantage and one disadvantage of using secondary market research.
Given the intense competition, explain two pricing strategies SV might consider.
Recommend which of Option 1 and Option 2 SV should consider in order to increase sales.
Gen Y Limited
Gen Y Limited is an internet start-up business owned by Zack Johnson. Zack owns 80 % of the shares and venture capitalists own the other 20 %. Gen Y has specialist programmers and coders who create innovative market research data reports for clients. These data reports have revolutionized Gen Y ’s clients’ ability to understand and respond to customers in their markets.
To retain the best programmers, employees are given cognitive training and are empowered to make decisions and take risks. They are also regularly praised for the impact that their reports are having on their clients’ decision making. One day a week, employees can work on their own “dream, but risky, projects”. Intrapreneurship is strongly encouraged at Gen Y. However, Gen Y lacks the capital to develop some of these projects into future revenue streams.
Virtually all of Gen Y ’s costs are fixed – salaries. As of 2017, Gen Y has not yet generated a profit. Without more revenue they will have to reduce the number of programmers. Petra, a new investor, is being considered to provide fresh capital to invest in Gen Y. Ownership of Gen Y will change to: Zack Venture capitalists Petra
40 % 20 % 40 %
Petra believes in intrapreneurship but is concerned that “dream” projects are not generating profits. She has said that if she is going to invest in Gen Y two conditions must be met: Management at Gen Y will change to an autocratic leadership style. Programmers will be expected to meet sales targets. As a result, programmers will have no autonomy.
(a) Outline two features of an autocratic leadership style.
(c) Explain one reason, other than increased sales revenue, why it is important that Gen Y generates new revenue streams.
Apply Daniel Pink’s motivation theory to the programmers at Gen Y.
Discuss whether Zack should sell Petra half of his shares with her conditions.
Section C Answer one question from this section. The organizations featured in sections A and B and in the paper 1 case study may not be used as a basis to your answer. 6.
With reference to an organization of your choice, examine the impact of globalization on innovation.
With reference to an organization of your choice, examine the impact of ethics on organizational strategy.
With reference to an organization of your choice, discuss the ways in which culture can promote or inhibit change.