Oct/Nov 2015

TWH produces a variety of toys through batch production. TWH’s Managing Director, Dylan, intends to invest in new technology in order to cut average costs. ‘It’s the only way to increase efficiency because I do not know how we can improve employees’ motivation’ he said. Dylan is unable to decide whether retained profits or a long term loan would be the better source of finance. Table 1: 2014 figures

Costs, scale of production and break-even analysis

Ramford is a private limited company. It runs four factories that manufacture a broad selection of food products, including breakfast cereal and ice cream. The Finance Director is worried about the company’s financial results. She has read that many businesses collapsed in the previous year. ‘I think we are suffering from diseconomies of scale’ she said. Ramford’s directors have chosen to reduce the number of different products it makes from 80 to 10. Table 2: Extract from accounts

Analysis of accounts

Grimshaw produces mobile (cell) phones for the mass market. In the previous year, its market share rose by $3\%$. The Managing Director is intending to establish a new factory in country T so that it can supply the mobile phone market there for the first time. Grimshaw intends to launch a new model of mobile phone. The Managing Director has requested market research. He said: ‘As a multinational, we can locate a new factory anywhere; I want to find out whether the Government of country T will give us any support to build our factory there.’

Market research

Tebo has recently been made redundant from his job as a car mechanic. He is thinking about starting his own business. Although he has no management experience, he knows that managing cash flow will matter to the success of the business. Tebo is considering whether to apply for a FIXIT franchise. This franchise would cost $15000$, which would use up all of his savings. FIXIT is a car repair franchise, and there are 36 franchises.

Types of business organisation

Walt is the owner of a firm that has created a new computer game for adults. A focus group report indicates that customers like it. Walt has been thinking about the marketing mix, including the packaging for this product, which is likely to be sold in many countries. ‘I don’t want to use a wholesaler as it would affect my profit margin’ he said.

Marketing mix

CLW produces wood furniture, such as chairs and tables. Demand has increased rapidly over the last 3 years, so the business must expand the scale of production at its factory. The factory is situated close to the city in an area where unemployment is low. The Finance Director has drawn up a business plan, which includes a balance sheet. The Finance Director is satisfied with CLW’s liquidity.

Analysis of accounts

NCE makes cars in 4 factories by using flow production. The NCE Human Resources Director believes that effective induction training can help the business reach high productivity. Factory X is the most efficient of its factories. In the previous year, the size of the new car market fell by 20%. NCE now has to make 400 workers redundant at one of its other factories. ‘I am pleased that NCE is a large business,’ said the HR Director, ‘because I think a small business cannot survive in this competitive market’.

Recruitment, selection and training of employees

Nellis is a public limited company. Its business is the construction of large, high-end houses. In the last 3 years, profits have gone up because the country is going through an economic boom. “It’s not all good news - the Government has announced plans to increase interest rates and introduce new legal controls to protect the environment,” said the Managing Director. He thinks these new legal controls to protect the environment will simply reduce the profitability of businesses such as Nellis.

Economic issues

Identify and explain one advantage and one disadvantage for CC of operating as a public limited company.

Internal and external communication

CC’s Marketing manager is planning market research. Identify and explain two factors that may affect how accurate the market research data is.

Marketing mix

Identify and explain two benefits that CC workers could gain from trade union membership.

Costs, scale of production and break-even analysis

Identify and explain one advantage and one disadvantage to CC of having skilled workers employed in the factories.

Enterprise, business growth and size

RRM is a small business. Identify and explain two reasons why RRM could stay small.

Marketing strategy

Rafael’s son would like to understand employee motivation more fully. Identify and explain four levels of Maslow’s hierarchy of needs as they could apply to the workers in Rafael’s company.

Motivating employees

Complete the two different forms of presentation shown below for the population data in Appendix 1. Explain the benefits of each presentation.

Analysis of accounts

Identify and explain how the following could affect Rafael's business. An import quota on motorbikes.

Business and the international economy