7115_w15_qp_12
A paper of Business Studies, 7115
Questions:
4
Year:
2015
Paper:
1
Variant:
2
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1
Walt owns a company which has developed a new computer game for adults. A focus group report shows customers like it. Walt has been considering 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. What is meant by a ‘focus group’? Identify two reasons why packaging might be important for the new computer game. Reason 1: Reason 2: Explain why the profit margin might be important for Walt’s business. Identify and explain two advantages to Walt if he decided to use a wholesaler to distribute his products. Advantage 1: Explanation: Advantage 2: Explanation: Consider two possible methods of promotion that Walt could use for the new game. Recommend which method he should use. Justify your answer.
3. Marketing  →  3.1. Marketing, competition and the customer
3. Marketing  →  3.3. Marketing mix
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2
CLW makes wood furniture, including chairs and tables. Demand has risen quickly over the past 3 years and the business needs to increase the scale of production at its factory. The factory is located near the city centre in an area of low unemployment. The Finance Director has produced a business plan, including a balance sheet. The Finance Director is pleased with CLW’s liquidity. Table 1: Extract of financial information Non-current assets ($m) Current assets: Inventory ($m) Trade receivables ($m) 24 0 Cash ($m) Total current assets ($m) Current Liabilities ($m) Current ratio 1.25:1 ? Acid test ratio 0.875:1 ? What is meant by a ‘business plan’? What is meant by a ‘balance sheet’? Identify and explain two possible benefits for CLW of holding high inventory levels. Benefit 1: Explanation: Benefit 2: Explanation: Identify and explain two factors (other than finance) that CLW’s management need to consider when increasing the scale of production. Factor 1: Explanation: Factor 2: Explanation: Do you think the Finance Director is right to be pleased with the liquidity of CLW in 2014? Justify your answer using the data in Table 1 and appropriate ratios.
5. Financial information and decisions  →  5.5. Analysis of accounts
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3
NCE manufactures cars in 4 factories using flow production. NCE’s Human Resources Director thinks good induction training helps achieve high productivity. Factory X is its most efficient factory. Last 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 NCE is a large business’, said the HR Director, ‘I think a small business cannot survive in this competitive market.’ Table 2: NCE operations data for 2014 Number of cars made Number of employees 168 000 What is meant by ‘flow production’? Calculate the output per employee in 2014. Identify and explain two ways in which induction training might benefit NCE. Way 1: Explanation: Way 2: Explanation: Identify and explain two factors that NCE would need to consider in deciding which workers to make redundant. Factor 1: Explanation: Factor 2: Explanation: The HR Director thinks that ‘a small business cannot survive in this competitive market’. Do you agree with this view? Justify your answer.
2. People in business  →  2.3. Recruitment, selection and training of employees
4. Operations management  →  4.1. Production of goods and services
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4
Nellis is a public limited company. It specialises in building large luxury houses. Over the past 3 years its profits have increased as the country is experiencing 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 believes these new legal controls to protect the environment will only make businesses (such as Nellis) less profitable. What is meant by an ‘economic boom’? Identify two stages (other than boom) of the business cycle. Stage 1: Stage 2: Explain how a rise in interest rates might affect Nellis. Identify two stakeholder groups. Explain why each group is important to this business. Stakeholder group 1: Explanation: Stakeholder group 2: Explanation: The Managing Director believes that the new legal controls to protect the environment will only make businesses (such as Nellis) less profitable. Do you agree? Justify your answer.
6. External influences on business activity  →  6.1. Economic issues
1. Understanding business activity  →  1.3. Enterprise, business growth and size
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