Feb/March 2017

TXE is a major food retailer. Last year, profit dropped by 10%, so the Finance Director is concerned. ‘I blame competition and increased taxes. We have spent more on sales promotions, but these have not been successful. We have to find ways to increase profits.’ TXE operates 200 shops and intends to shut 50 of them in order to cut costs. TXE might choose to offer a broader product range, including clothes, to help raise its profits.

Enterprise, business growth and size

QAC makes 70 different cleaning products, including soap and polish, through batch production. To satisfy higher demand for two products, X and Y, QAC could spend $10m on flow production with new technology. The Finance Director is concerned about QAC’s cash flow position, as shown in Table 1. He believes it is important to keep inventory at a high level, but he also wants the cash flow position to improve.

Cash-flow forecasting and working capital

Dipta and Ravi are friends who are planning to launch a chocolate-making business for sale at local markets. Many raw materials, including cocoa beans, will need to be brought in from overseas. Ravi’s primary market research indicates that consumers will like ingredients obtained from ethical suppliers. Neither Ravi nor Dipta has any business experience, although Dipta has prepared a business plan. They require $500 for equipment, but they cannot choose which source of finance to use.

Market research

BGN markets furniture items like beds and tables. It began as a partnership, but it is now a private limited company. BGN has expanded rapidly and now has 10 shops in different cities. The manager of each shop is responsible for recruitment and for decisions about inventory levels. They submit a monthly report to the Board. The Managing Director uses a laissez-faire leadership style. Customer complaints have risen and employees feel that internal communications ought to be improved.

Internal and external communication

Identify and explain two reasons why BB benefits from its products having a brand image.

Marketing strategy

Identify and explain four different ways BB could use the Internet.

Marketing strategy

Identify and explain two benefits to BB from having an organisation chart.

Cash-flow forecasting and working capital

Identify and explain two reasons why batch production is appropriate for BB.

Production of goods and services