Feb/March 2016

Singh Foods (SF) produces a variety of pickles and preserves, including jams. Even though the economy is in recession, the business has grown rapidly. The Human Resources manager thinks employees have contributed to SF’s success by accepting new working methods. She motivates the 200 full-time employees using both profit sharing and non-financial techniques. Only a small number of employees leave each year. Most communication takes place via a weekly printed newsletter. She is unsure whether this is still the most effective way to keep in touch with employees.

Motivating employees

Dhoni is a profitable small business. It operates five shops selling kitchen equipment such as cooking pots and knives. Most of its products go to restaurants and hotels. The company has been offered a takeover price of $700 000 by a large rival. Dhoni’s shareholders have been studying the accounts and are unsure whether the takeover would bring them a benefit. Dhoni’s return on capital employed was 7% in 2015 and 9% in 2016.

Analysis of accounts

Autovision is a business in the private sector that is based in Europe. It produces specialist glass for cars and enjoys economies of scale. Quality assurance matters to Autovision. In recent years, the Operations Director has installed new technology, altering the production process. ‘It was expensive to buy, but we have 20 fewer workers than 3 years ago and can now make many different designs.’ Autovision sells 50% of its products in Asia. The Operations Director believes Autovision ought to relocate to Asia.

Costs, scale of production and break-even analysis

AirGo is a market-orientated business. It offers flights to 10 airports throughout Asia. 90% of its customers are holidaymakers. AirGo advertises only in national newspapers. The Marketing Director is concerned that demand for AirGo’s flights may be price elastic. Last year revenue decreased because competition increased. She would like to aim at a different market segment, such as business customers. She is unsure how new legal controls designed to protect the environment could affect AirGo.

Marketing, competition and the customer

Identify and explain two advantages to DWP that arise from becoming a private limited company.

Types of business organisation

Identify and explain four management functions that Dilip should carry out.

Organisation and management

Identify and explain one advantage and one disadvantage for the business when Dilip trains production employees through on-the-job training.

Marketing mix

Identify and explain two possible effects that strict legal controls on product descriptions in advertisements could have on DWP.

Business and the international economy