Business 0450 · IGCSE · Business and the international economy
Business and the international economy — practice question
DGC is a public limited company. It has built a reputation for selling branded clothes and shoes of high quality to women. As a multinational business, it owns shops in 10 countries. In each shop, there is only a short chain of command between the shop manager and the sales employees. DGC plans to expand into country Z for the first time. It has already completed some secondary market research and discovered that country Z has cultural and social trends that differ from those in its current markets. The Managing Director believes DGC ought to open the shops in country Z as a franchise. By contrast, the Finance Director believes DGC should purchase its own shops by using an appropriate source of finance.
(a)[2]
State two methods of secondary market research.
(b)[2]
What does the term ‘chain of command’ mean?
(c)[4]
Identify and explain two advantages for DGC of operating as a multinational company.
(d)[6]
Identify and explain two factors that DGC ought to think about when selecting a source of finance for expansion.
(e)[6]
Do you think DGC ought to open shops in country Z as a franchise? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Statistics published by government departments” …