Oct/Nov 2022

SSG produces mobile (cell) phones by batch production. Maintaining quality control is essential. SSG employs 130 workers, and every one of them is given on-the-job training. The Marketing Manager is studying cost and output figures for product X. An extract is provided in Table 1.1. Because product X is at the maturity stage of its product life cycle, SSG is thinking about possible extension strategies.

Production of goods and services

DNG supplies electricity to 16 million customers. It operates as a limited company, so DNG’s shareholders have the protection of limited liability. DNG plans to end the use of coal in generating its electricity. Pressure groups have helped shape this decision. The Managing Director understands that changing to this approach will involve an opportunity cost. She is thinking about the most suitable way to pass this key information on to DNG’s 6500 employees.

Internal and external communication

CPK runs 5 sports clubs, and each club provides a variety of activities, including gym and yoga classes. To keep its 60 employees well-motivated, CPK uses job enrichment. For CPK’s success, having the correct marketing mix matters. The Finance Director is examining CPK’s financial statements, and an extract appears in Table 3.1. He wants to find out how a rise in taxation could influence CPK’s business.

Analysis of accounts

After a recession in country X has ended, Beena intends to start a hairdressing business. One possible route is to buy a franchise from an established hairdressing business. Beena has $800 in savings and realises that sufficient working capital will matter for her business. She plans to use market research to support her decisions. Beena knows that a market can be segmented in many different ways.

Market research

EQR operates 150 cafes. It offers a variety of drinks, coffee included. Being ethical matters to EQR. The Managing Director has been reviewing EQR’s statement of financial position. The business aims to raise its market share. The Managing Director intends to expand by selling franchises for $85\,000$. She is also considering methods of increasing added value.

Enterprise, business growth and size

Kemala produces beauty products of high quality. Demand for her best-selling hand cream is price inelastic. She promotes her products in specialist beauty magazines. Kemala is studying her income statement. An extract is given in Table 2.1. She said: ‘When I started my business, I did not understand why cash is important’.

Income statements

DBG is a construction firm. It constructs hospitals, roads and schools. DBG employs 2000 people. Its managers adopt a democratic leadership style. They understand that effective internal communication matters. DBG intends to alter its organisational structure. As a result, some employees will be made redundant. The Managing Director must decide how changes in government spending could influence business activity.

Organisation and management

TYA is a limited company that produces 300 000 cars each year. It employs 600 workers. TYA has high fixed costs. The Managing Director wants to improve efficiency in the factory. He said: «Globalisation is altering the way businesses work. Many manufacturing businesses are thinking about whether to move their operations to other countries.»

Location decisions

BSB produces an assortment of cakes and cookies. It employs 400 workers, and every one of them belongs to a trade union. A highly motivated workforce is important to BSB. All of its managers adopt a democratic leadership style. The Operations Director is reviewing BSB’s costs. She is concerned about the high level of waste in the factory and is thinking about introducing Kaizen to support the business in reaching lean production.

Achieving quality production

Ayesha is planning to launch a business. After completing secondary market research, she has chosen to open a jewellery shop that sells watches and rings. Ayesha intends to use crowd-funding as her source of finance. She has drawn up a cash-flow forecast. An extract is shown in Table 2.1. Ayesha must decide whether buying a franchise is the best way to begin a business.

Cash-flow forecasting and working capital

BHA sells clothing. It is a multinational company. BHA employs 2100 people and operates in 5 countries. In the previous year, BHA’s profit reached $90$ million. The owners of BHA want the business to expand, but the Managing Director is worried about the difficulties this could create. The Managing Director has found out that one of BHA’s suppliers uses child labour. She must judge whether changing supplier is the best response to this ethical issue.

Enterprise, business growth and size

YCG operates in the private sector. It produces toothpaste and toothbrushes. The manufacturing process uses quality control. The Marketing Manager is examining sales data for one of its top-selling products. He believes the product has reached the maturity stage of its product life cycle and is now thinking about possible extension strategies. A number of legal controls apply to the marketing of YCG’s products.

Marketing strategy

Explain four business objectives Tokumbo may choose to set for SA.

Business objectives and stakeholder objectives

Explain four reasons why quality matters in a business.

Business finance: needs and sources

Explain one benefit and one drawback to Tokumbo of operating as a sole trader.

Enterprise, business growth and size

Explain two possible effects on SA arising from the rise in the rate of inflation in country X.

Economic issues

Explain two reasons that the owners of CC may wish to expand the business.

Business and the international economy

Explain four functions of packaging for CC’s products.

Marketing mix

Explain two diseconomies of scale that CC could face as it expands.

Costs, scale of production and break-even analysis

Explain four advantages to workers of belonging to a trade union.

Business objectives and stakeholder objectives

Explain two reasons why KAT may be in danger of failing.

Recruitment, selection and training of employees

Explain the possible impact on a business of each stage of the business cycle.

Internal and external communication

Explain one appropriate objective for each of KAT’s stakeholder groups. • Owners • Employees • Customers • Local community

Business objectives and stakeholder objectives

Explain two reasons that show why KAT needs enough working capital.

Cash-flow forecasting and working capital