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This Teachers’ Guide has been written following research amongst hundreds of teachers. 1. Worksheets reduce preparation time. 2. Lesson plans provide ideas for use of the Case Studies and also reduce preparation time. 3. Brief Cases widen the potential use of Case Studies by providing shorter versions with less complex language. These materials and more are all available on Worksheets and lesson plans can be downloaded from Brief Cases are available from the Home-Page along with shorter Case Study summaries at a language level closer to the original Case Studies. All the materials have been created to be used with either online access to our website or with this guide and the A3 printed binder. Please let us have your feedback on the appropriateness of these new Case Study summaries. We hope you will find them useful and time-saving and thank you for taking the time to send us your feedback.

Brief case studies in alphabetical order Worksheets Applied Business GCSE GCSE Business Studies GNVQ Intermediate AVCE AS Business A2 Business Scottish Business management standard Scottish Business management Intermediate Scottish Business management Higher Scottish Business management advanced higher Worksheet answers Lesson plans Sources and uses of finance Stakeholders Market Planning Segmentation Decision making Product life cycle Lesson plan answers ACCA BT Dixons Gillette Hazelwood Sandwiches Kelloggs 53 54 55 56 57 58 59-61 Coca-Cola Vodafone McDonalds Argos Kraft BG Group Nissan Cadbury’s MFI United airlines Competition The marketing mix Franchising Business culture Budgeting Investment appraisal Operations Social responsibility SWOT analysis External factors 38 39 40 41 42 43 44 45 46 47 48-52 1-37

SWOT Analysis
Abbey is a bank. In the same way that a shop sells goods, Abbey sells financial products. These are products such as bank accounts, mortgages and credit cards. Abbey is part of the financial services industry. Abbey’s old name was Abbey National.

Abbey’s results
Abbey found the following: ◗ Its main STRENGTH was its expert knowledge of finance. This meant that it should focus on this area. ◗ Its main WEAKNESS was its size. As only the 6th largest bank, it could not offer the same range of products as bigger banks. This meant that it should offer a simpler range. ◗ The main OPPORTUNITY was to provide simpler products which customers would better understand. ◗ The main THREAT was from other banks, who might want to take over Abbey, so it needed to become stronger. As a result of this, and other research, Abbey National decided to launch a range of products that was easier to understand. It decided to make things simpler by changing: ◗ Its name – to Abbey. ◗ Its product range into three simple types of mortgage (a long term loan to buy a house or other property) and savings accounts. ◗ Its communications to customers – making its entire letters, brochures and so on clearer.

Market research
The financial services industry sells hundreds of products from many types of business. Abbey National offered a wide range of products but found it was making a loss on some of them. In 2003 it carried out some market research, to find out why it was making these losses and how it could improve.

SWOT analysis
Part of this market research was to carry out a SWOT analysis. This meant trying to find out what it was really good at, and what might be holding it back. SWOT stands for: ◗ Strengths ◗ Weaknesses ◗ Opportunities ◗ Threats. Strengths and Weaknesses are internal – Abbey can control these. Opportunities and Threats are external. This means that they are outside Abbey’s control.

It launched the new range with a big advertising and promotional campaign. It also ran a huge training programme for its staff. They could then better tell customers about the new ‘customer-led’ products.

The financial services industry sells the products it thinks customers want. It then tries to persuade them to buy. This is called a product-led market. Abbey carried out market research to see what customers really wanted. It then provided the products. This is called a customer-led market. Abbey hopes its approach will be the more successful one.

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If employees feel they have been unfairly treated they can try to sort it out with their employer. in 1974. If this does not work. a website and a helpline (08457 474747). ◗ It trains businesses on good practice and managing change. Jobs Acas has a number of roles. Acas is keen to train and advise businesses on communication. interactive quizzes and revision . Around three quarters of cases are solved at this point. it can then go to a tribunal Conclusion Good working relations are vital to good business.tt100. they can take their case to an employment tribunal. to provide good service. ◗ It spends 10% of its time on large scale disputes (like the fireman’s strike of 2002/3).What does Acas do? Introduction An industrial dispute is when employers and employees fall out. ◗ It spends 40% of its time on smaller disputes between individuals and their employer. It also works hard to help organisations solve disputes and avoid them in the first place.000 such cases a year. This is the largest part of the Acas workload. Individual problems The largest number of disputes are those when an employer feels she or he has been wrongly sacked. but works with all sides. 2 briefcase Access www. Acas is sent a copy of the application Acas tries to sort out problem by helping each side to see the other’s point of view. Acas has a duty to try to solve cases before they reach the tribunal. The process is: Employee thinks they have been treated unfairly Not able to sort it out with the employer Acas Employee applies for tribunal Acas stands for: ◗ Advisory – Acas gives advice to businesses ◗ Conciliation – Acas helps each side to see the other’s point of view ◗ Arbitration – Acas will listen to both sides and then put forward a solution ◗ Service – Acas doesn’t take sides. good employment practice and good management. To help cut down the number of disputes the government. If Acas can’t solve the problem. advisers. The number of cases solved is one of the key things that tells Acas if it is doing its job well. This can be bad for both. Acas has done its job so well that both employers and employees trust it to be fair and impartial. There are around 100. It helps businesses to avoid disputes and also helps to solve them. It tells them about key points to do with employment. through publications. This is like a court that will decide the case. set up for this study. ◗ It gives advice and information. It can also be bad for the economy.

It carried out some market research to see if its IBOs would be keen to work this way. Amway could see that the direct sales model worked well on the web.3 million IBO customers all over the world. It found that many IBOs: ◗ wanted advice and information quickly ◗ wanted to work from home ◗ were ‘go getters’ keen to use new technology. Products are then ordered from Amway by IBOs. As far as it could. Over a third (and rising) of Amway’s UK sales are now made using this website. The use of the web has helped Amway – with its direct sales model – to compete better with other businesses that use more traditional methods. It also lets them work at any time of the day they want.Using the Internet to meet customer needs Introduction The Internet has quickly become very important to businesses. and also to order products on-line. and from where they briefcase for this study. These people (called Independent Business Owners or IBOs) then sell them to consumers. It makes and brands its own products. it grouped countries together to lower costs. Amway’s plan Amway’s plan was to provide websites for all of Europe in just two years. Amway gives IBOs help and support when it is needed. Access www. Conclusion Amway uses the web to link to its 3.tt100. Amway thought that the best way to do this. It allows one computer to talk to others. across the world and at any time of the day (24/7) was through websites. distribution and production. advice. It sells these to people who want to run a business selling Amway products. The Amway model Amway helps IBOs by giving them advertising and other material to help sell its products. linking them across the world. The web helps with sales. Amway then took the best parts of the sites – the bits that worked the best – and used these in its new sites. The new site in the UK is called AMIVO. The main way of doing this is through websites. transport. A website allows IBOs to get the information they need. Once the first sites were running. What is Amway? Amway is one of the world’s largest direct sales companies. interactive quizzes and revision 3 .

These are targets to reach that lead to rewards. Argos have three more parts to their mix – people. Conclusion The success of the changes means that Argos now does better than the rest of the market. Argos brought out a new logo and new slogan: ‘Brighter Shopping’. It also increased the types of product it sold. Business culture means the values and beliefs shared across the organisation. Each of these parts were changed: ◗ Product: Market research showed the Argos brand was seen as boring and stuffy. The new boss. process and physical environment. Those who ‘get it’ – who understand and like the brand. Promotion: Argos splits its market into two main groups. Physical environment. ◗ 4 briefcase Access www. Between 2002 and 2003 sales grew by 13% and profits grew by 17%.Changing business culture and the marketing mix Introduction Argos is one of the UK’s largest chain stores. ◗ ◗ Argos keeps prices as low as possible. it provided support through better training. In part this means what the staff think of Argos. The new culture he came up with is one that values: ◗ good customer service ◗ close teamwork ◗ managers being given more responsibility ◗ all staff showing respect for each other ◗ all staff wanting to better compete and to improve the business. set out to improve its performance by giving it a better image. This is the mix of the right product at the right price available in the right place and backed by promotion. ◗ ◗ ◗ Argos talked to staff and built good teams. In for this study. Process: As well as the usual ways to shop Argos brought out ‘Quick Pay’ and ‘Text and Take Home’. Place (distribution): The Argos catalogue is the main way that people find out about products. It is found in 70% of British homes. Argos smartened up its shops. Argos also opens many new shops. who were keen to improve. ‘Quick Pay’ cuts down on queues by letting customers order and pay using credit or debit cards. it was taken over by GUS plc. It also made more ways to be promoted and used performance targets. People: Argos gave good training for its staff as part of the culture change. Customers can text to see if an item is in stock. Argos decided to change its marketing mix.tt100. and collect it later. called Terry Duddy. He decided to change the business culture at Argos. To help with this. interactive quizzes and revision . and those who ‘don’t get it’. and how well they work for it. The ‘get it’ group is used to help persuade the other group. after poor results. Marketing mix As well as the change to the culture.

tt100. What do accountants do? Accountants deal with the financial information of businesses. Access www. Accountants have good knowledge of how well a business is doing. ACCA only allows accountants who have passed their exams to join. In a large business most figures can be found in the final accounts. it is making a profit. ACCA provides advice to its members. This means that they will often rise to high positions in a business. It has a code of ethics (doing what is right) for its members to follow. ◗ Balance sheet. ACCA is one of the main bodies that set down these ways. Accountants lay out accounts in set ways to make them easier to follow. These are called stakeholders.Business accounts and the accountants that draw them up Introduction ACCA stands for the Association of Chartered Certified Accountants. the most important part of the business is its people. The people in a business who make decisions can use the accounts to see: ◗ how well the business is doing now ◗ how well it might do in the future. This shows if the business has enough money to keep trading. It is the largest professional body for accountants. If it earns more than it spends. The main accounts are: ◗ Profit and loss account. ACCA makes sure that its members. This information is very important to those people with an interest in the business. interactive quizzes and revision briefcase 5 . ◗ Cashflow statement. These are usually drawn up at the end of a trading year. It is a world-wide organisation. as against what it for this study. If it spends more than it earns. This shows if the business earns more or less than it spends. ACCA also insists that its members are polite and behave honestly. It also encourages them to act in a proper manner. are the best a business can have. or standards. This shows what the business owns. The need for qualifications Accountants need to be qualified to do the job well. Conclusion For many businesses. accountants. it is making a loss.

Liability, ownership and growth
Many businesses first start as sole traders or one-person businesses. Sole traders carry all the risk of the business. They have unlimited liability. This means that, if the business fails, they have to pay all of its debts – even if it means having to sell their own things. Sole traders tend to be small, so they may have problems raising money to expand or invest in new plant or products. To solve these problems they might decide to form a private limited company. This is: ◗ private – shares are not on sale to the public ◗ limited – the responsibility for debt is limited to the amount of money put in ◗ company – is legally separate from the owners (so it can be sold, for instance). A growing business might feel it needs to raise even more money and so offer shares to the public. Anyone can buy these 'new issue' shares, which are then traded on the stock market. When a business offers shares to the public, it is called ‘floating’ the company. The company will become a public limited company (plc).

Why own shares?
Shareholders own a small part of the business (a share). They make money by having a share of the profits. They also have a say in how the business is run as each share is worth one vote at the AGM (Annual General Meeting). Shareholders may be persons or institutions (like banks or pension funds). It is usual for them to hold a number of shares.

If a body owns more than half of the shares it is called the majority shareholder and can out vote the other shareholders. Investment trusts will hold a lot of shares in a company and may even be the majority shareholder. This means they can make sure that the companies in which they own shares do not take too many risks.

Shareholders buy shares in order to make money from profits but they could lose their money. Investment Trusts spread the risk by buying shares in a number of companies.

Investment trusts
There is a risk involved in buying shares as their value could go up or down. People put money in an Investment Trust so that the Trust can buy shares in a number of companies. This helps to spread the risk. Most Trusts will belong to the Association of Investment Trusts (AITC) which has around 250 members.



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Recruitment, selection and training
A brand is often as important to a business as the product itself. The Audi Brand is well known and trusted. Audi has the image of being sporty, forward looking and up to date with new technology. To keep the Brand strong it is vital to have good, well trained staff who can support and promote the Brand.

Franchise dealers
Audi cars are sold through dealers who have bought a franchise. A franchise is the right to sell a successful brand or product. The dealer sets up an Audi Centre. Each Audi Centre has modern buildings, new showrooms and the best people. Audi Centres buy from Audi UK, who import the cars from Audi AG in Germany. Audi provides help to dealers to recruit and train the best staff to better support the Audi Brand.

Staff development and training
Development helps staff to meet their own needs, such as further education. Training helps staff to meet Audi’s needs, such as learning more skills. Audi makes sure that it always has the best staff by providing good development and training. This is good for Audi because it gives: ◗ Audi Centres highly skilled staff who support and promote the Audi Brand ◗ customers the benefit of knowing that they are being dealt with by expert staff ◗ employees the benefit of helping them to be better at their job.

Audi Centre employees are all given the chance to train to become 'qualified' in their job role. It is very important, for instance, for technicians to keep up with new technology. The ‘Audi Academy’ sets out a series of training courses so that an apprentice (at the bottom) can progress to become a master technician (at the top). To help reward the staff who do well, prizes are offered.

Audi can see that there are benefits in having well trained staff who are keen to do well. This way they are better able to promote and support Audi's Brand values.

Hiring staff
Audi have a thorough recruitment and selection process. Recruitment means looking in the right places to find the best staff. Selection means choosing the best staff from those who apply. Audi UK provide a recruitment service to all Audi Centres. This includes: ◗ role descriptions (what the person in the job has to do) ◗ pay advice ◗ guidelines for interviews. Audi hopes that by recruiting good staff, there will be the same good levels of customer service at all Audi Centres.

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Business decision making
What is BG Group?
BG Group is a business in the gas industry. It is involved at every stage from looking for new sources of gas to final sales. More and more customers are turning to gas because of its clean image and reasonable cost. This means that BG Group has to find new sources of gas in new gas fields.

Investment appraisal
One way to help make decisions is by using a technique called investment appraisal. BG Group looks at how much money will be tied up in the project and for how long. It then looks at what else it could be doing with that money. It will also look at the likely rewards. It may be that just putting the money in the bank, with no risk, would get the company better rewards!

Making ethical decisions means making the right moral choices. Sometimes this can be the hardest part of decision making. Gas may be found in places where the environment is important; or in conflict zones; or in places where locals have land rights. BG Group has ethical guidelines to help it make the right choices.

Investment decisions
To develop a new gas field is a big risk so businesses like BG Group have to be very careful. There are a lot of factors to take into account. New gas fields are: ◗ very expensive: a lot of money has to be spent on equipment and drilling ◗ very slow to pay back any money to the business. Sometimes it can be as long as five years before any money is made from a new gas field.

The world’s demand for energy is growing. Businesses like BG Group have to try and meet this demand. They try to make the best decisions by using experts and techniques like investment appraisal.

BG Group tries to limit the risk by using experts. These experts will try to decide if a risk taken is going to be worth the likely reward. These experts are: ◗ geologists, who decide on whether or not gas is present ◗ engineers, who decide the best ways to extract the gas ◗ experts who look at the likely health, safety and environmental risks ◗ economists, who predict things like the possible future demand for gas. (There is no point drilling for gas if nobody wants it!) Managers and experts have to weigh up risks and rewards before making any decisions.

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better pens for presents.g. These are called ‘power brands’ where BIC has the biggest lead over competitors. England rugby captain Martin Johnson has been used and BIC has also linked up with Disney. Products Its products are put into just three categories. Customers buy: ◗ for value for money – e. It targets these at carefully defined market segments. Customers and the Stationery Market BIC found that customers buy stationery for three main reasons. Access www.000 people.tt100. BIC sells products that fit with each of these reasons. The BIC brand has been made stronger through new products and through advertising. To compete in world markets BIC needs to focus on its best selling pens. The company is also always looking for new growth areas and new and exciting ways to change its products in order to sell more. income and gender ◗ what products can be used for (e. The business sells in 167 countries and employs over 9. Conclusion BIC sticks to just three types of product. Products are made in huge ‘super-factories’ and then transported around the world. interactive quizzes and revision briefcase 9 .biz/bicbs for this study. that are high quality and that are new and eyecatching. This means that the costs to make the products can be kept really low. It sells products that are value for money.Marketing and segmentation Introduction BIC is a brand name that is known all over the world. Segmentation BIC splits its different market segments by: ◗ age. Its two key sets of customers are: ◗ the shops that it sells to ◗ the people who buy from the shops. which are that products must be: ◗ functional – designed to do their job well ◗ affordable – within the right price range ◗ universal – can be used by anyone in the world. It targets each of these. a pen that does not cost too much ◗ for special benefits – e. BIC divides (or segments) its market so that it can target certain products at certain customers. lighters and shavers. the pocket lighter range was extended to include the Megalighter for barbecues) ◗ the wants and needs of the customers who buy the products. These all carry BIC’s values. stationery. or for their own use ◗ without thinking (impulse buying) – this means good point-of-sale material is needed. It uses market research to see what each group wants.g. razors and lighters.g.

These can take up to two years to write. in business terms. Standards Because business is now so global. Standards are set to meet the needs of consumers. is the extent to which consumers’ wants and needs are met by a product. Consumers are more likely to buy products if they know that they are safe and reliable. when there were complaints about the outside of certain toasters getting too hot. This Kitemark is only found on those products and systems that have been tested and reached the standard. having standards also helps to cut costs. To receive this a business must show that it has constant improvement in place. governments and users. Why have standards? Standards are good for both consumers and businesses. Businesses gain from rules that help them to produce quality products. If they meet the for this study. This is also good for business. 10 briefcase Access www. BSi listens to consumers when they have concerns. For example. they are also meeting consumer needs. The symbol used by BSi is the Kitemark. Some are ‘formal standards’. products have to meet certain standards. There are now new systems such as ‘total quality management’ (TQM) and ISO 9001. In the UK these standards are set by the British Standards Institution (BSi). as long as it does what pencils should do! To make sure of this. For businesses. They want ‘quality’ products.Standards and quality Introduction Consumers need to know that the products they buy are safe and can be relied on. standards that apply in markets outside the UK – such as Europe – are also vital. BSi brought out a new standard to stop this from happening. ISO 9001 is an International Standard. Safety Consumer safety is a key factor when setting standards.tt100. BSi also looks at quality management systems – how businesses make sure that products are always quality ones. Consumers gain from being able to buy with confidence. The main jobs of the BSi Group are to: ◗ create standards and encourage their use ◗ test products and issue certificates ◗ assess quality management systems. TQM means that every single person in a business is responsible for quality. BSi also creates codes of practice for industries. ‘Quality’. A cheap pencil is still a quality product. interactive quizzes and revision . and quality products. knowing they are buying safe. Conclusion Standards are important to both businesses and consumers. BSi will consult with businesses. Quality checks Quality control has moved on from the old way where products were only checked when they were finished. BSi helps to create these.

The way to solve this problem was through broadband. ◗ ◗ Market segments ◗ Markets can be broken down into slices or users. BT breaks down its market into two main segments. The right place. BT offers a range of prices so that users can choose which best suits their own needs. BT put together a marketing mix for gaming on broadband which had: Building markets BT needs to make profits out of new markets like broadband. Good promotion. BT noticed online gamers were more likely to want broadband than other groups so looked further at this market.000 CDs offering 30% discount on broadband. These are business and household users. Its growth was being slowed down due to slow speeds of information transfer. BT made sure the promotion was backed by the games and console makers. BT used all the parts of promotion: ◗ adverts for BT broadband running back-to-back with adverts for Xbox ◗ a PR campaign with Sony and Xbox ◗ a series of events for people to try out the new product ◗ 500. Access www. The advantages of broadband are that it is briefcase for this study. Household users are divided by how they use the web. ◗ The right product. It targets those areas and markets with the highest likely number of users first. It is rolling broadband out across the whole country. BT aimed its promotion at Tier 1 as this was a new market for it.males aged 16-35 ◗ tier 2 .Market segmentation and marketing mix . In 2003 BT launched a broadband product that allowed gamers to connect their console and their PC to broadband at the same time. The main uses are: ◗ education ◗ communication ◗ sport ◗ music ◗ online gaming. This is a mix of the right product at the right price in the right place and with good promotion.Gaming Introduction The World Wide Web (WWW) has grown very quickly over the past few years. It was timed to hit the pre-Christmas period when demand is highest. Gamers can buy BT broadband from BT Retail online and by phone.tt100. It split gamers into two tiers or levels: ◗ tier 1 . Marketing mix The key to success in this growth market is to provide a good marketing mix. it is always on and the phone can still be used. Conclusion BT used a good marketing mix to make sure that it won a large share of the new market of online gamers on broadband. interactive quizzes and revision 11 . The right price.

Conclusion BT believes that businesses should follow a moral line. interactive quizzes and revision .behaving in the right moral way. then the business has a good name and society as a whole is happy. these are looked after well and even offered shares in the company.Sustainable development and stakeholder value Introduction Businesses should try to produce what people need today without having a bad effect on what people may need in the future. BT’s approach BT believes that its ethical approach should be present in all that it does. They include: ◗ shareholders: BT makes sure they get value from the business ◗ employees. or are from a different ethnic background. Stakeholders BTs approach creates value for all of its stakeholders. For instance. It believes that access to the Web improves people’s lives by improved access to: ◗ education ◗ entertainment and ◗ other people (social use). This is by: ◗ bringing fast access to local areas through a scheme called Community Broadband ◗ working to provide access for special groups who do not use the Web. BT produces a Social and Environmental Report to see if it is reaching these goals. if one tree is planted for each one that is cut down.tt100. This is called ‘sustainability’. It is also working to include groups who do not yet have access. This may be because they are briefcase Access for this study.000 so having happy workers is vital ◗ customers. Corporate Social Responsibility refers to the actions a business can choose to take to help towards wider social or moral goals. These are those people or groups who have an interest in the success of BT. 12 www. If they do they will gain a good reputation. then sustainability will follow. it has seen that those who have access to the Web are better off than those who do not. It is making broadband. this is sustainable. This is called ‘everybodyonline’ and is being carried out with the charity ‘Citizens Online’. open to the whole country by 2005. Hitting social targets will lead to added value and keep stakeholders happy. It believes that if it acts in a moral way. or have little education. BT carries out in-depth research to make sure these are happy. BT believes that this idea is linked to ethics . fast links. BT reckons that one poor call-centre worker could upset its customers cutting its yearly profits by £300. BT wants to make sure Web access is for all. If all stakeholders are happy. It also believes that acting in a moral way will give it a good name – so it is good business sense. For instance.

this is called Corporate Social Responsibility (CSR). ◗ Supply. It also helps to improve the lives of people in countries it trades with. good pay and good training. Consumers Cadbury Schweppes’ is also keen to be fair to its consumers. Conclusion Cadbury Schweppes’ approach to behaving ethically is a core value. Pollution from the transport used has been reduced and drivers are trained in the most efficient ways to drive. Access www. Production.Ethics Introduction Cadbury Schweppes products are sold all over the world. It treats all its employees fairly. interactive quizzes and revision 13 . Ethical behaviour and CSR can bring benefits to a business by: ◗ attracting more people to buy a firm’s products ◗ making employees happy to work at the company and therefore stay there for longer ◗ attracting better employees who want to work for the company ◗ making more people want to buy briefcase for this study. Distribution. Goods have to be moved around the country and around the world. Ethics at work Cadbury Schweppes tries to make sure this approach covers all the areas over which it has control. of course. by making sure all its products are labelled clearly and informatively and meet the highest quality standards. This means doing what is right and fair. It makes and sells two main types of product: ◗ sweets. in Ghana it builds wells to provide clean safe water. It believes in and promotes equal opportunities.tt100. ◗ ◗ Acting in an ethical manner is important to Cadbury Schweppes. Cadbury itself. This means that it affects every area of the business. Dr Pepper. It gives them a safe and healthy workplace. Its famous brand names include Schweppes. This has helped Cadbury Schweppes to remain a successful company. It also uses as little energy as it can and keeps down the release of harmful gases into the air. chocolates and gum ◗ soft drinks. Trebor and. For instance it works to help cocoa farmers get a good price for their crop. Halls. Ethics and employment Cadbury Schweppes also looks after its employees. For example. Cadbury Schweppes works with its suppliers to try and make sure they are being ethical. It also means working to create a better quality of life for employees and their families as well as communities . This includes the firms that supply it and its own transport and production. The business makes sure that it treats all waste water to make it safe.

including Oasis. ◗ selling a new product to an existing market. 5. The matrix is a grid which sets out the choices available to businesses. Large scale surveys to collect information to see which type and design of product is likely to have the most appeal. 2. Ansoff's matrix looks like this: New product Existing product Existing product New product Existing market Market development Product development: Market penetration penetration: Product • Coca-Cola Vanilla • diet Coke New market Market development Diversification Stages Research by Coca-Cola Great Britain is carried out in five stages: 1. Market research then finds out what each segment wants. of course. New products Ansoff’s matrix is a way of identifying opportunities to expand a product range. its best seller. the company offers over 20 brands (nearly 80 products). This is called market development.using sources that have already been published. Desk research to see where there might be a gap in the market. This is an example of quantitative research. ◗ selling an existing product in a new market. perhaps by making a new flavour? Should it develop the product itself (internal growth) or buy a competitor’s product (external growth)? Market research First it looks at its market. For instance. This is called diversification. for instance bringing out different bottle sizes to attract different buyers. 4.using new data or ◗ secondary . it might look at a new product or pack size. Coca-Cola has to decide how it is going to meet this demand. Coca-Cola. This is to see exactly what might be wanted. Market research may be: ◗ primary .biz/coca_colabs briefcase Access for this study. It sells a range of products to meet a broad range of consumer needs. It divides this into slices or segments to identify different groups of consumer needs.25 litre Bottle Diversification: • Winnie the Pooh Roo Juice • Powerade 14 www. 3. for instance a new flavour like Coca-Cola Vanilla. This is going deeper into a market so it is called market penetration. Trials in a test market to see if the consumer likes the product. Detailed research using small groups of ‘typical’ consumers. interactive quizzes and revision . But how does it decide what new products to sell and who to sell them to? Deciding Once the company identifies there is a need.tt100. should it make a brand new product or extend one it already has.Developing product ranges and Ansoff’s matrix Introduction The Coca-Cola Company is the world’s leading seller of soft drinks. Existing market • Fanta Icy Lemon New market Market development: • Coca-Cola Share Size 1. ◗ selling a new product to a new market. Tracking the success of the product once it is launched. Coca-Cola identified the need for a new sports drink and launched Powerade. In Great Britain. These are: ◗ selling more of an existing product to an existing market. For instance. Sprite and. This is an example of qualitative research. This is called product development as it means making changes to a product.

It helps Corus plan more sustainable buildings. This is called ‘sustainability’. Two other factors can be added to turn ‘PEST’ into ‘PESTLE’.tt100. reduce waste and use less energy. interactive quizzes and revision briefcase 15 . Planning Corus takes account of these factors in its planning for the future. It also earns almost a third of its income from metals for construction. For example it has developed steel framed homes which are easier to build. Access www. PEST analysis Corus tries to find out what factors will affect its new products and markets. It makes sure that factors which may affect it in the future have been taken into account. The factors are: ◗ Political – government rules such as on planning ◗ Economic – the health of the economy and how likely people are to be able to afford property ◗ Social – such as changes in population trends ◗ Technology – new techniques that for this study. that more construction can take place in factories rather than on-site. Builders should try to produce what people need today without having a bad effect on what people may need in the future. It does this through a technique called PEST analysis. These are called brownfield sites ◗ more houses will be needed due to population changes ◗ there will be a shortage of land ◗ there will be a 50% increase in car journeys. Each of these factors is called ‘external’ as it is outside Corus’ control. Corus is also concerned that it should produce ‘sustainable’ buildings.Sustainability and PEST analysis Introduction Corus makes metals such as steel. PEST is made up of the first letters of the four key factors which affect demand for property. These are: ◗ Legislation – changes in the law ◗ Environmental – especially dealing with pollution and waste. Conclusion PEST-LE is a useful tool for Corus to use. Results The results show that: ◗ a sustainable building is one that limits energy use both when it is being built and when it is being used ◗ laws will make builders be more environmentally friendly ◗ new buildings will be mostly in cities and on sites where industry had been before. Some ways to achieve this are to make buildings: ◗ which use less fuel to build ◗ which use less fuel to heat and maintain ◗ that can easily be re-used once the first use is ended. For business property it builds so that customers can: ◗ easily extend the useful life of a building ◗ keep fuel costs low ◗ create better working spaces. It is keen to try and develop new products. for instance.

with technical details they might need. It has made a point of using new technology to make this as fast. outside the business it is called external. The main groups Cummins needs to reach are: ◗ customers ◗ shareholders ◗ suppliers ◗ employees ◗ any other stakeholders (people with an interest in the success of the business). it has computers linked in an intranet (like the Internet but limited and controlled within an organisation). with information for customers and other stakeholders ◗ employees.Internal and external communication using the Internet What do Cummins do? Cummins is a business that supplies other firms with parts such as engines and turbos. Communication within the business is called briefcase Access for this study. The business has built 'portals' .OEMs (the businesses that make the engines that Cummins parts go into) with in-depth technical information. The web Cummins uses the web to make its communications faster and more efficient. The main reasons for using online methods are: ◗ speed ◗ up-to-date . Cummins needs good communications because it: ◗ works with a lot of partners ◗ is spread around the world ◗ employs lots of people. For inside the firm. it uses the Internet. Communications Good communications are key to Cummins’ success. good and cheap as it can. Conclusion Cummins knows that good communication is vital to success.for the groups that need them. There are entry points for: ◗ the public. It also tells them of colleagues’ successes ◗ distributors.web page points of entry . interactive quizzes and revision .can put on new information with ease ◗ can access from all over the world ◗ easy for people to find.tt100. For outside the firm. with details for dealers selling and delivering Cummins products ◗ original equipment manufacturers . 16 www. It is in the B2B (Business to Business) sector of the economy.

As well as Dixons briefcase for this study. It carried out market research by looking at: ◗ Social ◗ Legal ◗ Economic ◗ Political and ◗ Technological problems and advantages. displaying more choices of products. Electro World This is an example of market development. to see if this would encourage more customers to buy from Dixons. PC World. Dixons has chosen two of them with its Electro World and Dixons xL ideas. Its first new store. It decided to try opening some bigger stores. Poland. many of the countries were about to join the European Union and wanted new business.tt100. Dixons found that Hungary and the Czech Republic were the best countries to grow into. Dixons found that its SLEPT analysis showed that it could grow in this new market. politically. interactive quizzes and revision 17 . opened in Budapest. Again. Access www. Dixons noticed that. For example.Applying Ansoff’s matrix and SLEPT analysis for growth What does Dixons do? Dixons is the leading seller of electrical goods in Europe. Slovakia. Market penetration 3. market research was used to find the best location. The Link. the capital of Hungary. Slovenia and the Czech Republic).from its first letters . Diversification This is called . Dixons is a business which aims to grow. UniEuro (in Italy) and Elkjøp (in Norway). the group owns a number of famous name brands such as Currys. It was so popular that a five mile long queue formed on the first day! Dixons xL Market penetration is selling more current products in existing markets. Market development New product 2. Conclusion There are different ways for a business to grow. The first Dixons xL was opened with great success in Cardiff.a SLEPT analysis. Current product Current market New market 1. called Electro World. both with success. Growth If a business wants to grow it can do so by: ◗ selling more of its current products in its current markets (1) ◗ selling new products into current markets (2) ◗ selling more of its current products into new markets (3) ◗ selling new products into new markets (4) ◗ or a combination of these. although it had a wide product range (the number of different types of product sold) its stores had not really got any bigger. Dixons saw that one new market was Eastern Europe (countries like Hungary. Product development 4. A writer called Ansoff put these choices into a table and gave them the names shown.

Using market research to develop new products Introduction Gillette is widely recognised as the manufacturer of Blades and Razors. Gillette's scientists and researchers also make sure that the company continues to be first with new ideas to gain ‘first mover’ advantage where it can. interactive quizzes and revision . This involves finding out if a good idea is technically possible and can be produced using modern technology.tt100. Gillette will also conduct 'technological research'. where the brands include: ◗ personal products such as Right Guard ◗ the Duracell brand of battery and torch products ◗ dental care products such as Oral. To cut down on the risk Gillette uses market research before launching a new product. Being first gave Gillette the chance to build up a customer base of people loyal to the brand.B and electric tooth brushes ◗ the Braun brand of electrical goods Market research The two main types of market research are: ◗ Qualitative research . are offered products which suit them whilst continuing to receive the benefit of Gillette's quality and technology within this segment. One of the main reasons for its success is that it was the first in the market . for instance. This gives what is called 'first mover' advantage. First mover Gillette’s success began when it manufactured and sold the first safety razor. 18 briefcase Access www. This will identify what people want and prefer. Gillette makes and sells products to make sure consumers get the benefits they want. From the consumer research. Gillette tries to make and market products that will appeal to each part or segment.involving larger samples and continuous data which details category developments. Conclusion Gillette's success requires ongoing and accurate market research. There are also risks to being first. but is split into parts. Market segmentation The market for shaving products is not a single for this study. Gillette's market research showed that both men and women shave.a new product. Both segments can then be split down further. Gillette also estimates likely sales and costs to see if the product will make a profit. Each slice or segment has its own special wants from a Gillette product. This leads to continuous product development to produce products which meet those needs. Consumers who prefer lower priced disposable razors. The safety razor was safer than the open-bladed 'cut-throat' razor then in use.such as working with small focus groups and ad hoc consumer surveys to look at trends/preferences ◗ Quantitative . The Gillette Company also operates in other categories.

interactive quizzes and revision briefcase 19 . This includes: ◗ good induction training (the training given when someone is first employed) the chance to take national qualifications ◗ ◗ flexible working hours ◗ on-site staff facilities such as a shop. Products Hazlewood uses market research to find out what its two main groups of customers want. It provides these to outlets including supermarkets. Conclusion Hazlewood Sandwiches keeps its lead in a growing market by investing in its plant. Hazlewood grows by investing in: ◗ products ◗ people ◗ plant.Growth through investing in products and people What does Hazlewood do? Hazlewood Sandwiches employs over 3. The higher sales came from the better range that could be made. This forecast told them that the new plant would mean higher sales but lower costs. petrol stations and airlines. IT training and a dry cleaning service. for instance for more healthy types of sandwich or new fillings. One way is to use a Profit and Loss forecast.000 people and is the world's largest producer of sandwiches. Access www. its people and its products. it can do it through buying other firms or by selling more of its own production. The groups are: ◗ retailers and other shops (such as supermarkets) ◗ the end customer who buys from the shop. Its new plant at Manton Wood in Nottinghamshire cost £25 million. Hazlewood makes and markets new products to meet changing tastes. There are a number of ways by which businesses try to decide if such investment is going to pay. gym.tt100. Hazlewood needs to keep factories and equipment (plant) up-to-date and efficient. it means they really want to do it). Lower costs per sandwich came from better methods of production and lower levels of stock held. This can be done by bringing out new products. or by selling more of the current products. People Hazlewood provides its staff with good training and facilities to keep them happy and motivated (if someone is motivated to do something. Plant Growth When a business wants to for this study.

g. and externally . why and how? The IR needs to tell the public three for this study. notice boards oral . Between November 2002 and March 2004 it used: ◗ face-to-face: workshops to tell staff about key messages ◗ written: booklets. Conclusion The IR used different methods of communication to tell staff about the culture change . a medium. Each method has certain advantages: ◗ written . Communication The IR needs to communicate internally . easy and efficient.inside the organisation. the IR used all of these methods to tell staff about the organisation's culture change into a more customer-focused organisation (culture is the way of working inside a business). 20 briefcase Access www. This is to make sure every person who should be paying towards the UK's needs. emails and intranet (like an internal Internet).g. internal phone calls face-to-face . or way to send a behave in a more customer-friendly way.e.mean things can be discussed in detail ◗ online . ◗ Why it exists.g. meetings and presentations online . ◗ ◗ ◗ ◗ For internal communication it uses: written . It needs to tell them: ◗ What it is trying to achieve. This worked because there was a clear message. is doing so. by having no bias and by treating people well. So it needs good channels of communication. cheap. a telephone help line ◗ face-to-face e. It also provides advice and help to people and businesses. filling out forms on the web ◗ broadcast e.g. passed on using the right media.g.Internal and external communications The Inland Revenue (IR) is the government body which collects taxes. This is by being efficient. newsletters. It wants every person to receive what they are allowed and to pay what they owe.tt100. a poster and articles in the staff magazine ◗ intranet: to give more details and to provide feedback from the workshops ◗ electronic: CD ROMs were used in training and a video produced. adverts to tell people about tax deadlines.quick.e. Communication goes both from the IR and back to it. a visit or meeting ◗ online e.with other organisations and people. Culture change Recently. interactive quizzes and revision . statements and leaflets ◗ oral e. For external communication the IR uses: ◗ written e.g. letters.can be kept and filed ◗ oral and face-to-face . a message. and a receiver.g.e.g.g. memos. A good channel consists of a sender. which must be clear. ◗ How it is going to achieve its aims. What.e.

At every stage Kellogg’s tested the new brands with market research. First. Kellogg’s decided that it was not making enough of its Special K brand. The success of the new brands means that they are now sold all over the world. It saw that Special K’s strength could be used to launch a whole range of brand variants. The new brands have grown – creating a new market – while Special K sales have not dipped at all. A business then needs to decide if the product is to be allowed to die. gets old and dies. It decided to expand it through using the brand name to promote other. Access www. Its famous brands include Corn Flakes and Rice Krispies. For Special K. interactive quizzes and revision 21 . This was a success so it was launched in Britain in 1999. Special K Red Berries was launched. When it matures. sales grow. When it is born (‘introduced’) it grows slowly but as more people buy. products. other products have come out to compete with it. Special K Kellogg’s saw that Special K was a strong. briefcase for this study. Growing a brand To stay ahead in a market. in France.tt100. Product Life Cycle Kellogg’s also looked at where Special K was on the product life cycle. grows. or to let it decline. businesses like Kellogg’s have to make decisions about their brands. The marketing mix is the mixture of the right: ◗ product to make ◗ price to charge ◗ place to sell and ◗ promotion to make people buy. By 2003 Kellogg’s had also launched Special K Peach and Apricot in both boxes and bars. Kellogg’s found out from market research that: ◗ the product would suit new fashions for healthy foods ◗ it is able to maintain a good premium in the market because it is a strong brand ◗ it could be sold in all the places Kellogg’s products are sold ◗ a special campaign could increase sales. Marketing mix Kellogg’s looked at the marketing mix for Special K to see how it could be changed. Special K bars came out in 2001. The product life cycle is the stages a product goes through. matures. It also watched closely to make sure that the new brands were not eating into the sales of Special K. with extra promotion. They have to decide whether or not to grow a brand. mature brand that it could base other products on.Marketing mix and the product life cycle Introduction Kellogg’s is the world’s biggest producer of breakfast cereals. These are just like a living thing – the product is born.

22 briefcase Access www. It started selling just cheese but now has many brands such as Terry’s Chocolate Orange and Kenco coffee. this means they have worked out: ◗ how much money they will have ◗ what they are going to spend it for this study. They may be in Kraft’s favour such as lower than forecast costs or higher than forecast income. These differences in actual and forecast levels are called ‘variances’. or a region. A budget for a business is carried out in the same way. It looks into the future to help with planning. Conclusion Budgets are a useful tool for planning but have to be handled with care. To make the job easier. If a person has a budget for the week.tt100. Cost Centres A cost centre is any part of a business which can be separated out from the other parts. Budgets A budget is a planning tool. It has a budget for each cost centre. It then works out what costs or expenses will have to be paid. Variance Once a budget has been set. even though it is made more complex by its size.Budgeting and variances Introduction Kraft is the world’s second largest food company. Costs and income may be up or down on the forecast. Main costs Kraft’s main costs are: ◗ the raw materials used to make the products ◗ production costs such as staff and machinery ◗ marketing and advertising ◗ transport. Kraft. works out what it thinks its future income from sales will be. Use The advantages of using budgets are as: ◗ a tool for control ◗ a way to measure if targets are being reached ◗ a way to motivate staff who reach targets ◗ a way to see where costs can be cut. managers will check to see if it is on target. The biggest disadvantage is if a cost centre budget becomes more important than Kraft’s overall budget. These are called ‘favourable’ variances. the process is the same. For a giant business like Kraft. storage and distribution ◗ selling costs such as the costs of the sales team. Managers control the budget by responding to variances. or a factory. Unfavourable ones are called ‘adverse’. This is often because a manager tries to hit his own targets without regard for the targets of the business as a whole. Kraft does not try to budget for the whole business all at once. interactive quizzes and revision . This could for instance be a brand. Kraft’s success can at least be partly put down to the careful use of budgets. Kraft uses cost centres linked to where goods are produced.

Often it means new shops. As a public limited company it is owned by its shareholders. This helps it to plan. This involves building in some of Britain’s major cities such as the regeneration of Birmingham’s Bull Ring (Regeneration of an area means improving it because it has gone into decline. The project also fits in with what the government wants. cafés. Kent Thameside SLEPT analysis Land Securities tries to find out what factors will affect it in the future. The factors are: ◗ Social – such as changes in population trends that affect the demand for housing ◗ Legal – such as planning rules and laws ◗ Economic – the health of the economy affects how likely people and businesses are to be able to afford property ◗ Political – such as where governments want housing to be built ◗ Technology – new techniques affect design and costs of building. This is so that it can better target each market. One factor is the government’s wish to regenerate some urban areas. It does this through a technique called SLEPT analysis. This involves planning and building houses and flats. Land Securities buys and develops property after taking economic factors into account. Planning would not allow building on greenfield sites so the project is on a brownfield site. Its shares can be bought on the Stock Exchange. roads and housing).biz/land_secbs briefcase for this study. Housing. These are called ‘external’ factors. The Kent Thameside project is a response to increased demand for housing in the South East. Conclusion Land Securities can look at future factors using SLEPT. Organisation Land Securities is split into three main parts.Sustainability and SLEPT analysis SLEPT analysis. Brownfield sites are those that have been used for industry. It would like to regenerate city areas which have suffered from the decline of certain industries. Greenfield sites have never been built on. Market segments The development unit splits its market into slices or segments. SLEPT is made up of the first letters of the five key factors which affect its market. This has led to major projects for the business. It has two main aims: ◗ to get the best returns for its shareholders ◗ to be the leading property company in the UK. It is vital to take factors outside its control into account. The three main segments are: ◗ Central London offices. Access www. These are property: ◗ rental ◗ development ◗ management for clients. Kent Thameside is ‘mixed use’ as it involves both housing and business use. market segmentation Land Securities is the UK’s largest property company. It owns over £8 billion worth of property. ◗ ◗ Retail development. interactive quizzes and revision 23 .tt100.

A vital part of this is the PDS. ◗ Its main WEAKNESS was that there might not be enough offices (in comparison with the number of private practice offices). Opportunities and Threats are external. This meant trying to find out what the service was really good at. Some groups have.tt100. The PDS is a service that can be used by the accused at all stages from arrest to trial. been left out of some of the benefits of society. Criminal law deals with crime. Before setting up the PDS. managers had to deal with lawyers who thought their earnings potential would reduce. Chester. This means that they are outside the LSC’s control. This is called social exclusion. but the PDS is set to expand in the future. ◗ The main OPPORTUNITY was to develop quality and IT systems and to facilitate staff development. The LSC has departments to deal with both civil and criminal law. Civil law is to do with arguments between people or groups when a crime has not been committed. and what might be holding it back. Conclusion The PDS was launched in four cities where there weren’t enough good quality lawyers and where there was a need for the service. The LSC found the following: ◗ Its main STRENGTH was that the service was already established and private practice lawyers were already in place so they could be recruited into the new service. The government is trying to fight this. Strengths and Weaknesses are internal – the LSC can control these. There was also a problem with control over spending and a fear that public money might be wasted. For instance. 24 briefcase Access www. The LSC is one means of doing this.Using SWOT analysis to manage change The Legal Services Commission (LSC) was set up in 1999 and is a public sector body. It was pointed out that clients could still choose to use their own lawyers instead of the PDS. days. interactive quizzes and revision . They also had to assure lawyers that just because the PDS was government funded this did not make it unfair competition. Four further offices have since been opened in Cheltenham. in the past. the LSC has launched the Criminal Defence Service. ◗ The main THREAT was that change is often opposed. SWOT SWOT stands for: ◗ Strengths ◗ Weaknesses ◗ Opportunities ◗ Threats. Liverpool. Middlesbrough and Swansea. Managing change As with any change in business. a SWOT analysis was carried out. Public Defender Service (PDS) On the criminal side. It is still early days. it has to be managed so that people accept it. but the PDS is set to expand in the future. Darlington and Pontypridd. These were Birmingham. This means that it receives its strategic direction and funding from the for this study. Its aim is to give equal access to the law to all groups.

who makes a payment (a premium) to an insurer. The conditions for the insurance are contained in a document called a for this study. Insurance can provide security against some of these risks. Insurance Insurance involves a contract between the insured.A truly global marketplace Introduction Lloyd’s of London is the world’s oldest and best known insurance market. Access www. This insurance covers professionals such as accountants and solicitors. This insurance covers businesses against costs arising from a reduction or interruption in business. ◗ Underwriters/syndicates: the market is made up of a collection of syndicates. ◗ Commercial Combined Insurance. for example. interactive quizzes and revision briefcase 25 . employers’ liability and product liability (any claims that might arise from the use of the business’ goods or services). Examples include: ◗ Professional Indemnity Insurance. All businesses (and individuals) face risks. It is a place where buyers (brokers. Lloyd’s itself does not provide insurance. the insurer agrees to provide the insured with cover against certain risks. ◗ The Corporation of Lloyd’s: supervises the market and provides its infrastructure. ◗ Business Interruption Insurance. It can also cover business interruption. for liabilities that might arise from the advice they give or the recommendations they make in their professional capacity. For example. Businesses have a number of risks and can also insure against losses from certain events. illness or disease suffered while carrying out their work.tt100. representing the insureds) and sellers (underwriters) of insurance can come together (as they would in any other market) in order to agree sales and price. if one of the insured risks was ‘acts of terrorism’. ◗ Employers’ Liability Insurance. Insurance can provide security against some of those risks. The market is made up of the following. Lloyd’s market Lloyd’s of London is an insurance market. then businesses that suffered a loss of trade from a terrorist attack (like September 11) would be able to claim. This covers damage to premises. It provides an insurance market where businesses from all over the world can find insurance for their risks. car insurance or household insurance. caused by an insured event. it just provides the infrastructure for sales to take place. ◗ Brokers: these are the people who form the link between underwriter and insured. There are over 160 firms of Lloyd’s brokers operating in the Lloyd’s market. Types of insurance Life is full of risks. In return. equipment and stock. They act on behalf of the insured to find cover for a risk. This insurance is designed to meet claims by employees for bodily injury. Underwriters work for the syndicates to assess risks and accept or decline risks on their behalf.

It helps them to predict sales and growth in order to avoid future problems. ◗ They are selling a well known product. ◗ The business enjoys rapid growth. This is a product that is seen all over the world. ◗ They are their own boss. It knows the sort of people that will make a success of a business. Its success is based on selling quality products cheaply and quickly. designs and systems. A new 20 year franchise costs upwards of £ for this study. Franchiser The advantages for the franchiser include the following. This includes doing all the jobs in a McDonald’s. It served over 16 billion customers in 2002. Conclusion McDonald’s only takes on eager and dedicated franchisees. ◗ They have to complete a high level. Ray Kroc took over the business in 1955. ◗ Franchises attract people who have ideas and are willing to take risks in return for profit. Franchise A franchise is when a business sells the right to sell its products or brand to other people. ◗ They gain from McDonald’s knowledge of the market. interactive quizzes and revision . the Filet-o-Fish and drive-thrus. All McDonald’s franchisees around the world use the same branding. The two parties are: ◗ the franchisee who buys the franchise ◗ the franchiser that sells the franchise. full time training programme. Having such people on board means that McDonald’s is never short of new ideas.000. it helps them to manage staff. ◗ Further support is always on hand once the franchise is running. menus. Suppliers McDonald’s is also keen to ensure good supplies. Above all. It makes sure that franchisees are risking their own money as these are the right people to make a success of a business. There are advantages to the franchise for both partners. These are called entrepreneurs. A number of new products have been developed by franchisees including the Egg McMuffin. Suppliers are then able to share in McDonald’s success.Franchising Introduction McDonald’s is the largest food service company in the world. He saw that a quick way to grow was through franchises. ◗ The business has an income from rents (based on sales) and from people buying franchises. This helps them to really know the business. Franchisee The advantages for the franchisee include the following. 26 briefcase Access www.tt100. He based its further success on rapid growth. It develops quality standards to make sure suppliers are up to the mark. ◗ They gain from national marketing of the brand. Around 70% of McDonald’s are now franchises.

◗ new product categories. This is best if it is possible.Growth and SWOT analysis Introduction MFI is the UK’s largest seller of kitchens. Growth can also come from outside by buying other businesses. but this can be costly ◗ Profits. MFI has started selling bathrooms in the last two years. MFI bought Sofa Workshop from profits. This means going into whole new areas. interactive quizzes and revision briefcase 27 . sells them and supplies services to for this study. Access www. bedrooms and the things that go in them.tt100. This led MFI to try out the sale of sofas in test stores. ◗ refitting shops. This is called external growth. staff and distribution. This meant trying to find out what the Sofa Workshop was really good at. This could be through: ◗ new products. It decided to do this after a SWOT analysis was carried out. It had enough profits due to good management in recent years. Growth Growth can come from within the business. SWOT stands for: ◗ Strengths ◗ Weaknesses ◗ Opportunities ◗ Threats. To stay as market leader MFI needs to keep growing. For instance. This means that they are outside MFI’s control. Opportunities and Threats are external. The success of the trials led it to buy the Sofa Workshop Company in 2002. MFI aims for 20-25% of its products each year to be new ranges. It is also in a market where people only tend to buy when incomes are rising and the future looks good. ◗ Funding growth The Sofa Workshop Company Market research showed that people thought MFI sold sofas. As the number 1 in the country it is known as the market leader. It also had good resources such as first class managers. Strengths and Weaknesses are internal – MFI could control these. ◗ THREAT came from other high street competitors. ◗ WEAKNESS was that it did not have the factory space to expand. It also offered it the chance to widen its range of products. It makes them. MFI has spent money on giving many of its shops a new look. MFI looks to buy businesses that share its goals of good design at good prices. but this may not be easy ◗ Borrowing. so that it can compete. Conclusion Growth is helping MFI to stay as market leader. This is called internal growth. and what might be holding it back. Growth can be funded through: ◗ Shares. even though it didn’t. MFI’s main OPPORTUNITY was to tap into the increased fashion sense of the public. Results The Sofa Workshop’s main ◗ STRENGTH was its well known brand name.

Its brands include: Nescafé. It believes that acting in a moral way also makes good business sense as it gives Nestlé a good name. with a charity. Sustainability Businesses should try to produce what people need today without having a bad effect on what people may need in the future. Nestlé has cut down its use of water so that it does not put pressure on supplies. It has built new waste water treatment plants. Business sense Nestlé feels that businesses should always try to act in a responsible or moral way. Factors Businesses use all of the factors of production. It has also cut down on waste in its factories. Nestlé and water Water is a natural resource and so is one of the factors of production. plant and equipment ◗ Enterprise – the process of organising the above factors and of taking risks in order to make a profit. This group shares help and advice.tt100.Sustainability and water Introduction Nestlé is the largest food and drink business in the world. Nestlé will share its knowledge to help reach this aim. This is called ‘sustainability’. There is enough water on Earth to meet the needs of all but it is not always in the right place. Its brands include Vittel. This means people are more likely to want to buy from the company. Nestlé is involved in water education programmes and. Nestlé has joined with other food companies in the ‘Sustainable Agriculture Initiative’. Conclusion In 2002 a World Summit set a target to halve the number of people without access to clean water by 2015. Nestlé wants to increase access to good food across the world whilst not harming the environment. Nor is it always clean. Kit-Kat. Buitoni and Felix cat food. The biggest user of water is farming. These are: ◗ Land – natural resources such as land and water ◗ Labour – the human effort ◗ Capital – the money used to buy tools. Nestlé Waters is the world leader in bottled waters. Perrier and San Pellegrino. The basic Nestlé values include: ◗ long term progress rather than short term profit ◗ long term commitments to suppliers and customers ◗ respect for the cultures it works in ◗ always giving customers good information ◗ making sure that all staff follow the principles by making them central to the business. interactive quizzes and revision .biz/nestlebs for this study. a water tank project to bring clean water to parts of South Africa. 28 briefcase Access www.

Many started as sole traders. they have to share profits and control. The Network For Teaching Entrepreneurship UK Entrepreneurs These are people who have ideas and are willing to take risks in return for profit. people who are increasingly vital to a modern economy. This gives time to sell them. To help make sure that the business is a success. Ownership Sole traders are often in business because it offers them independence. Many famous names have started small in this way and grown to be large firms. They also carry all the responsibility for the business.tt100. the owner carries all the risk.Small business and planning Introduction NFTE helps to tell young people about the world of business. Often they will run their own business. Profit Profit is the reward for taking the risk. It is what drives enterprising people. This is called a mortgage ◗ trade credit. Over 2. Small businesses can: ◗ offer personal services (like hair cutting) ◗ respond quickly to change and new ideas ◗ run with few costs or overheads ◗ supply products to small or niche markets. This can be found through good market research. Nine out of ten businesses employ fewer than six people. A business plan should be based on good knowledge of the market. They are their own boss. it is vital to plan. Other small businesses may be partners. Business plans Starting and running a business is hard work. As a rule. they have to take all the decisions. This is where two or more people share the running of the business and the profits. This is called ‘owner’s funds’ ◗ a bank for this study. It is what is left when all costs have been taken off from all the money earned. On the down side. Why small? Britain relies on small businesses. On the minus side. This means a one person business. or a loan from a backer ◗ a bank overdraft ◗ a long term loan on a property. It helps them to start their own businesses. Two thirds of UK businesses are one person businesses. A good plan will help the entrepreneur to raise money for the business. this makes it easier to raise money. On the plus side. Some small businesses may decide to be private companies. Access www.5 million people are self employed. It is an international body. They also get all the profits from the business. Why are there so many? There are a number of reasons for them to be small. This could be through: ◗ using their own funds. This is where a supplier allows time to pay for goods. interactive quizzes and revision briefcase 29 . This means that they will have shareholders.

All the workers at Nissan can put forward ideas. TQM means that it is everyone’s job to make sure that quality is good. Training Nissan uses flow production but the quality of the labour force is still vital. the same shoes but in different sizes or colours.Production methods and quality Introduction Nissan Motor manufacturing UK (NMUK) is the largest car plant in the UK. but none is ever thought too small to put in place. Nissan use the just-in-time (JIT) system and Kaizen. It is the idea that there could always be a better way to do things. New ideas Businesses that want to stay ahead are keen to take on new ideas. ◗ Job production is when a product is made as a ‘one-off’. It is also everyone’s job to look for new and better ways of working. Quality Training is just one part of making a quality product. These ideas often come from sharing ideas in teams. It produces the range of Nissan cars from the small Micra to ‘4x4s and commercial vehicles. interactive quizzes and revision . It is sited near Sunderland in the north-east. Items like shoes and clothes are often made in batches.tt100. like a birthday cake or wedding dress. ◗ Batch production is when the product is made in sets or batches. Some of those ideas have come from Japan. It produces more cars per worker than any other plant. Sometimes improvements are large. ◗ JIT means that parts and partly finished cars arrive at the point on the production line just as they are needed. Nissan also use a system of Total Quality Management (TQM). One of the reasons for locating in Sunderland was that it had a skilled labour force. A computer on each car tells sensors at various points what is needed and when. In this way very little money is tied up in stock and storage. ◗ Kaizen is the idea of continuous improvement rather than sudden change. Nissan also fully trains its staff in all areas. Production There are a number of possible production for this study. 30 briefcase Access www. Parts are brought together and the product is built as it passes down the line. For instance. ◗ Flow production is when the product passes along a production line. This is because Nissan plan and train for quality and is happy to take new ideas on board. Conclusion NMUK is the most efficient car plant in Europe. This means that robots and computers can be used for much of the work.

OFT Sometimes businesses act in ways that make markets unfair for customers. Competition Enforcement (CE) The CE section prepares OFT guidelines. Consumer Regulation Enforcement (CRE) Markets A market is any place where buyers and sellers get together to agree a price. They will agree the amount they are willing to buy or sell and the price. You will see that there will come a point when customers and suppliers agree with each other. The OFT can then take action based on its research. The OFT has three main sections to deal with different problems. This is called a ‘cartel’ ◗ complaints made by the public or other businesses. It also spots and stops anticompetitive conduct. The CRE section makes sure that the laws which protect consumers are not being broken.tt100. It provides research and statistics for the whole of the OFT. is good for consumers and markets.Markets and Consumer Protection Introduction The Office of Fair Trading (OFT) was set up by the government. It helps markets to work well. ◗ On the other hand. interactive quizzes and revision briefcase 31 . It also checks to see what effect laws are having on markets. for instance through special offers. Access for this study. Sometimes competition is not fair. How do markets work? ◗ On the one hand. it could charge very high prices. As the price they have to pay comes down. for instance. For instance it ◗ uncovers and stops scams and unfair trading ◗ removes unfair terms from consumer contracts ◗ makes sure consumer credit is fair. a business was the only supplier to a market. Conclusion Markets tend to work well if they are left alone. The OFT has the job of stopping this from happening. Markets work well as long as neither side has the power to change the agreed price. If. customers demand products. The OFT acts on behalf of the consumer to stop such unfair practice. Fair competition. businesses supply products. looking at: ◗ mergers to make sure that the new business will not have too much power in the market ◗ businesses acting together to fix prices. they are willing to supply more. As the price they can charge goes up. Its job is to make sure that markets work fairly. Price Price Price Demand Supply e Supply Demand y Quantity Quantity x Quantity Markets and Policy Initiative (MPI) The MPI section looks at markets that do not seem to be working well. they are willing to buy more. For instance. This could be a real market or a virtual one – over the phone or the web.

Polestar provides other special services such as organising mailings for businesses.tt100. Most small printers try to compete on price.Strategy. This has had huge growth in recent years. ◗ Magazine publishers can have: ◗ special covers (such as ones that fold differently) ◗ better adverts ◗ special adverts (such as Polestar’s use of Post-it notes inside magazines) ◗ Direct mail printers can have: ◗ a personal address on the mail shot ◗ help to manage mail lists ◗ Catalogue printers can have: ◗ good photographs ◗ quality reproduction. Amongst other things. 32 briefcase Access www. It offers a wide range of printing services. They rely on Polestar to provide new or better services. Promotion This is how the business gets the message to its clients. It is split into two types: ◗ above the line is spending on mainstream advertising such as for this study. It does not sell direct to people. One instance is direct mail. New technology means that it is now much easier to set up as a printer. Promotion is of special importance. in the right place. Printing market There is a high level of competition in the printing market. Polestar competes on quality and by giving specialist services. the best machines and the best customer service. It helps to add value to each market by offering special services. Polestar aims to provide the right product. interactive quizzes and revision . competitive advantage and the promotional mix Introduction Polestar is the fourth largest printer in the world. It also plans to have the best team of staff. Adding value Polestar also needs to make sure that it is helping clients to provide a good marketing mix for their publications. This is called a strategy. It sells to other businesses. radio and posters ◗ below the line is spending on other forms of promotion such as direct mail. Polestar provides a complete service from first design to final delivery. Strategy Polestar has a long term plan in place by which it hopes to reach its goals. at the right price. it prints: ◗ magazines including the Sunday Times and Hello ◗ holiday brochures such as Cosmos ◗ catalogues such as IKEA ◗ packaging such as Nescafé labels ◗ direct mail. Marketing The marketing mix is known as the ‘4Ps’. Polestar’s plan is to make sure that most of its work comes from those markets where it can earn higher returns. Most printing firms are very small. This is known as business-to-business or B2B. Customers Polestar’s customers need to spend their money wisely to get results.

Communication Because products and services are often new. For instance. These are clearly set out. Portakabin Limited is a member of the briefcase for this study. External takes place outside. These are used on notice boards. Portakabin works in both the second and third sectors. The Group use a number of methods of external communication aimed at customers.Sectors of industry and communication Introduction The Portakabin Group is a private company. The Group competes by being able to offer new products and services. External Sectors of industry An economy is as a rule split into three sectors or parts. The Group is the market leader in the UK in an area that has many competitors. ◗ A website. These are called modular buildings. Conclusion It is hard to grow in the business that the Portakabin Group is in. Its area of business is making buildings that can be built from a number of sections. fishing and mining. It also competes by giving good customer service. It provides temporary and permanent buildings. Examples are farming. This is taking raw materials from the land or sea. This is the turning of raw materials into finished goods. These tell staff of new products and special events. ◗ Roadshows.tt100. ◗ Posters. This is laid out in a special ‘customer charter’. This includes everything from window cleaning to banking. ◗ Notice boards. Internal takes place inside the company to staff or other parts of the Group. clients may want not just buildings but access ramps. Portakabin succeeds in growing by bringing out new products and services. These are: ◗ Primary. This means that good communication is vital. It makes buildings and provides services such as the hire of buildings. These must always be clear and attractive. The Group makes sure that it provides a complete service. Access www. interactive quizzes and revision 33 . This is because most competitors have been around for a long time. These include: ◗ Publications. ◗ Tertiary. These are events held in each region and are to inform parts of Europe about Portakabin. for instance with clients and other companies. It also competes with much bigger concerns in Europe. ◗ Secondary. Internal The Group use a number of methods for this: ◗ Newsletters. This can be checked to see who visits it and how many sales come about as a result. it is vital that Portakabin tell both staff and clients about them. fire alarms and other special services. This is either internal or external communication. This means ‘third’ and refers to the service sector.

Goods can be ordered online. Marketing mix Travis Perkins has grown by taking over other businesses. Travis Perkins’ mix shows how it is keen to please customers. Travis Perkins offers value for money. Travis Perkins also develops products with added value. Many products are at reduced prices.Sectors of industry and the marketing mix Introduction Travis Perkins plc sells building and plumbing supplies to all types and sizes of building businesses. For instance. Conclusion Travis Perkins’ marketing mix shows that it is trying to do its best for customers. Many products are standard. Travis Perkins has good point of sale material in branches. The key to success is to have a good marketing mix. This is to try to get buyers to purchase all their building needs at the same time. ◗ Limited – the responsibility for debt is limited to the amount of money owners put in. hammers and nails could be on display near each briefcase Access for this study. This is a mix of the right price for the right product in the right place and with good promotion. Good promotion. It offers a range of products. A business in the building trade has to make sure that both suppliers and customers have easy access and parking. ◗ ◗ The right price. Display at branches is also important. forest and farm ◗ secondary sector make products from raw materials ◗ tertiary sector provide a service. ◗ Company – is separate in law from the owners (so it can be sold. sea. It is also aware of lifestyle changes so that it has the right products in stock if fashions change. Businesses in the: ◗ primary sector extract raw materials from the earth. This is especially true when trying to get customers to buy goods which go together. 34 www. Sector Travis Perkins is in the third or tertiary business sector. Promotion also takes place through the website. for instance). excel is a programme that plans to change the way the business works. In 2003 it looked for even more progress through its excel programme. It aims to make Travis Perkins wholly customer focused. The right product. Account holders and frequent buyers are given best price deals. It also runs special offers and value deals. This is: ◗ Public – shares are on sale through the Stock Exchange. The ‘plc’ part of the name lets people know that it is a public limited company.tt100. such as pre-packed bags of sand. ◗ ◗ The right place. interactive quizzes and revision . It is also growing from within by adding new product ranges and setting up new branches.

healthcare and transport.3 million members working in public services. It has nearly 1. putting its members’ point of view. It believes that good industrial relations can be built by workers and employers being partners. hours and overtime ◗ holiday. ◗ Dealing on behalf of members is called collective bargaining. through a vote. Conclusion UNISON and all trades unions would prefer for disputes never to get this far. It also covers problems between worker and employer. ◗ Talks to come to an agreement are called negotiations. It will sit down and talk with the employer. sick pay and pension rights. a worker must have certain Contract terms in writing within two months of starting work. Unions A trade union is an organisation that acts for groups of workers. interactive quizzes and revision 35 . if they want to take further action. Disputes Rights of workers Unions protect workers’ rights. Unions may be called in to help in any dispute between a worker and an employer. These cover areas such as ◗ the job title ◗ the tasks the worker has to carry out ◗ pay. Access www. If there is a dispute between an employer and a group of workers. workers have rights laid down in their Contract of Employment. If this does not work members can be asked. By law. It was formed in 1993 when three unions briefcase for this study. Its members work in areas such as education. What workers have to do if they have a problem with the employer is covered by the grievance procedure. It fights for better pay and working conditions. As well as these legal or statutory rights. (A grievance is a complaint.) What employers have to do if they have a problem with the worker is covered by the disciplinary procedure. That action could be: ◗ a work to rule – where workers carry out only the exact tasks that they should ◗ an overtime ban ◗ strike action either of all the members or of certain groups. Workers have legal rights such as: ◗ Minimum Wage ◗ set rest periods ◗ set number of hours to work ◗ protection from unfair treatment due to race or gender (discrimination).Trades unions and contracts of employment Introduction UNISON is the UK’s biggest trade union. UNISON will try to solve it through negotiation.tt100. It has a lot more power in talks between workers and employers because it acts for a group of people. Contracts A Contract of Employment gives the working arrangements between a worker and an employer.

Social factors Travellers can always choose to travel by other means. the UK and Europe. Recent factors affecting the choice to fly or not were: ◗ the threat of SARS disease (a deadly virus spread by travellers) ◗ the threat from acts of terror. This is called. a SLEPT analysis.External factors Introduction United grew from 1927 into the second largest airline in the world. One of them is United. Responses In response to the SLEPT analysis. Changes in EU law could open up this market to others. It adapts its marketing mix to suit different countries and markets. Political factors United has to cope with decisions made both in the US. This is vital but brings higher costs. Marketing United uses marketing tools to tell travellers about these changes. ◗ Air traffic is governed by rules laid down by Aviation Authorities here and in the USA. All businesses have to take into account ◗ internal factors . interactive quizzes and revision . or not to travel at all. Legal factors Laws in the USA. Technological factors New technology means the constant need to invest in new aircraft. It has responded to these to become more successful. ◗ Just four airlines are allowed to fly direct US to Heathrow routes.that are outside their control. from its first letters. comfort and convenience. United may also suffer from: ◗ higher landing charges ◗ extra taxes on air travellers ◗ fewer flyers as a result of SARS and the Iraq war. coping well with external factors is a key issue. in Britain and in other parts of the world all affect briefcase Access for this study. For an airline. 36 www. United also has a concern for passenger safety. United has made changes so that it has: ◗ more and better routes ◗ better comfort and safety ◗ better airport lounges ◗ a special airport lounge club (the Red Carpet Club) ◗ special treatment for First and Business customers ◗ e-ticket services where no paper ticket is issued ◗ better handling of luggage. Economic factors Governments would like to force down prices on high traffic routes.that are within their control and ◗ external factors . Conclusion United has studied the external factors that affect its business. ◗ US politicians will try to protect the US market ◗ UK and EU politicians decide who can land where. The headings used are: ◗ Social ◗ Legal ◗ Economic ◗ Political ◗ Technological factors.tt100. SLEPT analysis One way in which a business can plan to deal with external issues is to look at the factors involved.

This is divided into two parts: ◗ Above the line – this is advertising in a number of different ways such as TV and posters. He is seen as not just a football player.tt100. The Beckham TV campaign shows him doing everyday things as well as demonstrating what the Vodafone live! service can do. The right place. In Japan. exciting. Good promotion. It was found that people recalled the adverts and so the brand had become better known. It also gives NECTAR reward points for every £1 spent. This is called brand migration. News about products and ideas is also sent to the press. ring tones. Brand migration The brand is so strong that Vodafone uses it when it takes over other businesses. This involves finding out what customers need and then making sure that the products on sale meet those needs. the J-Phone company was re-branded initially as J-Phone Vodafone. This is an image of being creative. Vodafone gives buyers features such as games. Market research Market research is not only used to find out what customers want. information services. but also as a family man. pictures. ◗ Below the line – this includes less obvious advertising such as instore displays and the way stores are branded. It is also used to see if things like TV campaigns have been a success. Access www. David Beckham Vodafone has an image that it wants its customers to connect with. David Beckham has this image. ◗ ◗ ◗ ◗ The right product. The marketing mix Vodafone looks to have a good marketing mix. He is also seen as a fashion icon who appeals to women. This means giving customers the features and benefits they want. This is a mix of the right product to buy in the right place at the right price and with good promotion. up-to-date and full of new ideas. before moving to the single Vodafone brand last year. bills and even video. It also wants to appeal to as wide a market as it can. Vodafone operates over 300 stores and also sells through other outlets. This makes him a perfect choice for the brand. Vodafone offers a number of price plans to suit all of its target groups. The right price. It has expert staff in the stores to help buyers. interactive quizzes and revision 37 .biz/vodafonebs briefcase for this study. The Beckham campaign has been a huge success.Marketing mix Introduction Vodafone is the biggest mobile phone business in the world. It uses marketing to promote its brand. Conclusion Vodafone uses marketing to maintain and grow its brand.

biz/coca_colabs. Coca-Cola has to make sure that its research is really . How much of a share of the market do you think Coca-Cola has? Draw a pie chart in the circle given to show what you think. 3 In the space below write down which of these stages you think is most important and why. Think of an area where either Coca-Cola or your chosen businesses could compete more and decide on a new product that they could sell.Coca-Cola and Competition Applied Business GCSE Name: Form: Date: 1 In the box below list as many types of branded soft drink as you can. I think my second business could compete better by… 5 Look at your list of products again. Now you can see who Coca-Cola is competing against. try searching something like ‘soft drinks brands’ on a UK search engine. *Coca-Cola actually has just over a quarter of the market. I think my first business could compete better by… (Did you remember branded versions of hot chocolate.tt100. You can do this on the back of the sheet if you are working on a print out.tt100.tt100. tea and coffee?) 2 Underline or highlight the brands you have written down that you think belong to Coca-Cola. You could start by looking in your Write the answers here. 38 Download these worksheets and more from worksheet or your local shop. Use the Coca-Cola Case Study to help you. What are the five stages carried out by Coca-Cola when it is researching a market? List the 5 stages here. I think the most important stage is… I think this because… 4 How do you think the businesses that you are studying on your Applied GCSE course could better compete? Look at the choices that could be made visit http://www. Give your suggested product a name and design a label for it. or using a drawing package if you have access to a computer. Look at this information at http://www. If you get stuck. Your research might be accurate and it might not*. Pictures in the Coca-Cola case study may help visit http://www.

CLEAN-CUT • SPORTY • FAMILY • CUTTING-EDGE STREET-CRED • TOUGH • ADAPTABLE • MULTI-TALENTED Price Product ATTRACTIVE • GENTLE • RESPONSIBLE • RELIABLE EXPENSIVE Promotion Place Download these worksheets and more from to help you. 4 Price Product David Beckham works with Vodafone because he has a particular image. You could use some of the words below to help you. Visit http://www. Who would you choose as the ‘face’ of your mobile phone company? Explain how your choice would help your worksheet 39 . How would your marketing mix compare with that of Vodafone? Make some suggestions in the boxes to help you. 2 In each box in the space below write down how you think Vodafone meets customers’ needs in each area. Visit http://www.Vodafone and the Marketing Mix GCSE Business Studies Name: Form: Date: 1 What is meant by the marketing mix? Write a definition in the space below. In the space below describe what you think this image is intended to be.tt100.tt100. Promotion Place 5 3 Imagine you had your own mobile phone company.

Use the information in the Case Study http://www. Franchising gives advantages to both parties. This is because. Name the two parties to a franchise and give three possible advantages for each party.. giving the good and bad points of franchising. A franchise is.McDonald’s and Franchising GNVQ Intermediate Name: Form: Date: 1 In the space below write down what you think is meant by the term ‘franchise’. 40 Download these worksheets and more from worksheet www. what would be the most important advantage to you? Write it in the space below and give a reason for your to help you... Use the information in the Case Study http://www.tt100. If you are using a computer. you should design the leaflet on a separate .tt100.. 5 Design an advice leaflet for someone thinking of taking on a McDonald’s franchise.. If you are working on paper. 2 4 b) c) The advantages to a) b) c) are: Do you think that franchising is a good or bad way to start a business? Write your decision in the space below and say why you think to help you. The two parties are… The advantages to a) are: 3 If you were buying a franchise. I think that. you could write the text of the leaflet here and then transfer it to a DTP programme to make it look better.tt100.

Imagine you are a member of an Argos team.Argos and Business Culture AVCE Name: Form: Date: 1 All businesses have a set of values. How would you describe its culture? Is this the most appropriate culture for the business? Explain why you think this.tt100. One of the key factors in the new culture at Argos is the success of its Cadbury’s 5 Nissan 2 Suggest three more Outline a) the changes made to the culture at Argos b) the main factor that made the changes a success. What other reasons can you give for a business needing to change its culture? Business McDonalds Words to describe key features of culture Coca-Cola 4 Vodafone Look at the Argos Case Study – http://www.tt100. attitudes and beliefs that make up their ‘culture’.tt100. What would you expect to be the key features of the cultures of the following businesses? 3 Explain why Argos needed to change its culture-visit http://www. Business Words to describe key features of culture 6 Think of the business that you are worksheet 41 . 1 2 3 Download these worksheets and more from to help you. with different cultures to those you have already listed above.tt100. Explain the factors that would help your team solve problems – http://www.

000 12.tt100. Visit www. Overheads rise by just £2. whether or not this was a wise decision.tt100.Kraft and Budgeting AS Business Name: Form: Date: 1 Explain what is meant by a budget in business to help you. this successfully increases sales by 20%. but variable cost rises by 10% due to costs of the marketing campaign.000. . Define what is meant by variance. Budget Actual Variance 2 Outline the features of a typical income and expenses budget. fill in the missing figures in the table including a calculation of the variances in order to complete the variance column.500 8. by analysing the variances. 4 Using the information above. Imagine that Kraft took the following decisions about a product. 5 Look at the information you now have and decide. including the special packaging required as part of it. They decide on a price reduction of 15p. Use the information in the Case Study www. 42 Download these worksheets and more from worksheet www.tt100. Explain how a positive variance might be Price Sales Revenue Overheads Variable costs Profit 1.20 60.tt100.000 3 Kraft is interested in the ‘variances’ between its predicted and actual to help you.

Give three reasons why money today could be worth less than the promise of money in the 4 BG Group sets a discount rate to calculate the present value of future cash flows from a project (called Net Present Value or NPV). Each project is predicted to yield £380 million over its 10 year lifespan. The discounted cash flow approach allows it to predict what future returns will be worth in terms of today’s money worksheet 43 .biz/bg_group4 for help.tt100.tt100. The explanation of investment appraisal www. Suggest three factors that will be important in making these decisions.tt100. £m (x) Discount factor (y) Present Value (x*y) 2005 -250 2006 0 2007 5 2008 15 2009 20 2010 30 2011 40 2012 50 2013 90 2014 130 380 Discount factor 0. Work out the NPV for each and say which project BG Group should choose and why. 5 As an adviser to BG Group you have been asked to choose between the two projects below.£m (x) Discount factor (y) Present Value (x*y) 2005 -250 2006 100 2007 100 2008 50 2009 40 2010 30 2011 25 2012 20 2013 10 2014 5 380 Discount factor 0. Project 1 Year Returns. 2 Look at the information about the BG Group. 7 Explain what you think are the main problems in using techniques such as this to decide on investment 6 Read the Field Development paragraph at www. a business involved in exploring for new sources of natural gas. Visit www.05 Payback = NPV = 3 BG Group uses investment appraisal techniques to help it decide on projects. Explain how BG Group decides on a discount rate appraisal www.tt100. Download these worksheets and more from and explain which project is most like those of BG Group and why. each costing an initial £250 million.05 Payback = NPV = Project 2 Year Returns. Describe the factors that are especially important to the business. BG Group has set the discount rate at 5% and worked out future returns as shown.tt100.BG Group and Investment Appraisal A2 Business Name: Form: Date: 1 Businesses have to make decisions about investment in the future.

Nissan uses some new ideas that have come from Japan. 4 To be even more efficient.. Explain the main features and give an example for each type. 44 Download these worksheets and more from worksheet www. Type of Production Features Example 2 What you have just done is to provide the instructions to produce a good product. Use a word processing program if you are working on a computer.Nissan and Operations Scottish Business Management Standard Name: Form: Date: 1 Make a paper aeroplane out of a sheet of A4 paper. Instructions for making a paper aeroplane. Give one advantage and one disadvantage of this type of production.tt100. production because. Use the Nissan Case Study at www. You can do this with or without clues..tt100.. This . One disadvantage of this type of production is. write the instructions so that someone else would be able to do the same thing. 3 In the table below suggest two other possible types of production... Now. In the space below explain what type of production this to help you.. 5 Write a word search using the key words you have learned about production. In the space below give examples of two of these ideas. One advantage of this type of production is.. in the space below.

. 5 Being socially responsible means.tt100.. 3 In the space below explain why Cadbury Schweppes believes that good ethics is good business sense. View the study at http://www. low fat chocolate bar aimed at children and one for adult to help you. Acting ethically means. 4 Give examples of how Cadbury’s makes sure that its ethical approach covers the following groups: ◗ Suppliers ◗ Production 2 One of Cadbury Schweppes' targets is to act in an ethical manner and show social responsibility. or visiting the Cadbury’s website www. In the space below define what these two terms first. design two wrappers. Once you are familiar with the styles used for different ◗ Distribution Research Cadbury chocolate brands by looking in your local shop. If you have access to a computer. other than making a profit. draw the design in the space below.. you could use a design package.tt100. worksheet 45 . Download these worksheets and more from www. Read the paragraph on consumers at http://www. one for a new low sugar.tt100.cadbury. Cadbury’s believes this because.Cadbury’s and Social Responsibility Scottish Business Management Intermediate Name: Form: Date: 1 In the space below list some of the other objectives businesses may have..

Visit www. 3 Before expanding by buying other businesses. 4 Draw up a diagram showing the results of the SWOT analysis carried out by MFI. Explain what is meant by SWOT.tt100. MFI carries out intensive research. 2 For internal to help you. Still it has the aim of expanding. The Case Study gives some to help you.MFI and SWOT analysis Scottish Business Management Higher Name: Form: Date: 1 MFI is the UK’s largest retailer of kitchens. Visit . 46 Download these worksheets and more from worksheet www. Give an example for each. Part of the research is a SWOT analysis.tt100. Suggest two ways in which MFI could expand and explain what each entails. bedrooms and the things that go in them. suggest three ways in which MFI could expand. Strengths Weaknesses Opportunities Threats 5 How useful do you think SWOT is as a tool? Explain your answer.

Outline the changes that United made visit www. United used a SLEPT to help help you.tt100. 3 There are various ways that a business can assess the likely effect of external influences and plan to minimise the problems. 4 United recognised that to keep its customers happy. The examples can be found in the United Case Study. Explain what these letters stand for and give an example of a problem in each category using the table below.tt100. Download these worksheets and more from www.tt100. Define the difference between an internal and an external factor. [each letter in the table opposite should link to the appropriate paragraph in the Case worksheet 47 .] 5 Explain how United have used advertising and sales promotion to help it build its customer base and minimise the effects of external 6 Suggest ways in which United could improve other elements of the marketing mix. You should look at the introduction at www.tt100. Letter S L E P T Factor Example 2 Suggest five possible external factors or bodies that could affect an airline like United Airlines. which can be found in the Assessing the External Environment section.United Airlines and External Factors Scottish Business Management Advanced Higher Name: Form: Date: 1 Businesses have to respond to both internal factors and external factors when they are planning and operating. You will find the information here at www. it had to make changes in response to the SLEPT analysis.

as long as there is a valid justification. The worksheet also tests students’ familiarity with terms and their ability to use them in context. It is aimed at those just starting on a GCSE course but would be equally usefully for any Business student on a 14-16 course. An accurate pie chart. bills and video and the Vodafone live! service. there are no wrong answers. An Internet search on ‘top UK brands’ will bring up sites listing the leading UK brands. 3 This is an open-ended question and there are therefore no ‘right’ answers.htm and looks like the one shown. 4 5 3 It does not matter which of the stages is chosen by the student. Price Vodafone offers a number of price plans to suit all of its target groups. Place Vodafone operates 300 stores and also sells through other outlets. It has expert staff in the stores to help branding and sponsorship. Students can choose whoever they wish. based on the top ten UK brands by revenue. The label can be used for classroom display work. 2 Suggested answers 1 This is a mix of the right product to buy in the right place at the right price and with effective promotion. Again. press releases. It also introduces the idea of market research. Below the line Vodafone uses in-store . skillful and clean-cut. Suggested answers 1 A franchise is when a business sells the right to sell its products or brand to other people wanting to start in business. More guidance or examples are needed. but still ordinary enough to do the shopping. A large Ansoff chart could be put on the wall and each suggested product mounted in the correct box. the lesson following on competing through expanding either markets or products (for this you could use the Ansoff’s matrix on section 7 of the study or go on line to – www. 4 McDonald’s Worksheet Teacher notes Curriculum fit This worksheet can be used after students have learned about different types of business ownership and franchising or as an introduction to franchising. ring tones. Product Vodafone gives customers the features and benefits they want such as games. The advantages to franchisees include: ◗ being their own boss 2 48 Teacher Notes Download these worksheets and more from www. can be constructed from information at: www. Suggested answers 1 There are hundreds of different brands.tt100. Note that the soft drinks market includes such as coffee and branded waters. providing there is justification. pictures. 5 Vodafone Worksheet Teachers notes Curriculum fit This sheet is designed to test students’ knowledge and application of the concept of the marketing mix.Worksheet Teacher Notes Coca-Cola Worksheet Teacher notes Curriculum fit This sheet is designed to introduce the idea of competition and ways of competing to students. his image is successful. The two parties are the franchiser who sells the franchise and the franchisee who buys it. 4% 4% 6% 6% 9% 22% 15% 4% 2% 28% Coca-Cola Nestlé PepsiCo Kraft Foods Cadbury Schweppes Danone Sara Lee Starbucks Tchibo Red Bull 2 Promotion Above the line Vodafone uses advertising such as TV and posters. for both introduction or revision. If used after franchising has been taught. the ‘why’ should relate to the market segment(s) which they are targeting AND to the ‘image’ of the person chosen. students are more likely to be able to give answers to include some of the disadvantages of franchising. Beckham appears in many of Vodafone’s communications. information services. This is designed to make students look at the explanation of Ansoff’s matrix in the context of their own chosen business. It also gives NECTAR reward points for every £1 spent. It is suggested that the lesson before using the worksheet is on competition in general. Beckham is meant to appeal to both men and

There are many other possible examples. A typical budget is ◗ time related (usually 12 months) ◗ designed and approved in advance ◗ shows expected levels of income and expenditure ◗ includes all likely capital expenses. students need to produce a business report on a medium-sized to large business. 4 The advantages to franchisers are: ◗ attracting entrepreneurs and therefore new ideas and enthusiasm ◗ rapid growth ◗ income from rents and sales of franchises 3 This is a matter of personal opinion. Students should be able to categorise different cultures and relate them to their chosen business. the ethically driven Body Shop. For many franchisees the idea of being their own boss is most important. included: ◗ better customer service ◗ more teamwork ◗ encouraging staff to take ownership of decisions ◗ respecting everybody’s contribution ◗ being more competitive. they should have been taught about the nature of business and about business objectives. The Argos Case Study can also be used later in the course as an example of the successful management of change. customer satisfaction. an adverse variance to their cost. cutting edge. The factors that help teams at Argos are that the team ◗ believes in winning ◗ believes in change ◗ looks for new opportunities ◗ encourages co-operation ◗ is well trained ◗ works in a place where success is acknowledged and rewarded. Download these worksheets and more from www. This is also a matter of personal opinion. On the whole. This relates specifically to the business being studied.tt100. 4 5 5 6 Argos Worksheet Teacher notes Curriculum fit In the ‘Business at Work’ Unit. They need to know what is meant by variance. Both objectives and the strategies and decisions taken to achieve them will be reflected in the culture of the business. it is a good way to start a business as you will have an established brand and fewer franchises fail than other start-ups. and to be able to carry out variance calculations. suffering from disappointing profits and sales. The leaflet consolidates the evidence of knowledge and understanding that students have already shown and can be used as portfolio evidence. technology 3 Businesses famous for their ‘different’ cultures include the entrepreneurial Virgin.Worksheet Teacher Notes ◗ ◗ ◗ ◗ ◗ selling a well known product training programmes support from the franchiser national marketing the franchiser’s knowledge of the market 3 Argos needed to change its culture because the business was in a state of decline when GUS plc took it over. Suggested answers 1 A budget is a statement or financial plan that sets out expected future results. brand reputation. Kraft Worksheet Teacher notes Curriculum fit Students need to have been taught the basics of budgeting before attempting this worksheet. This would still be an adverse variance as it is not in the business’s favour so would be shown with a minus sign. the entrepreneurs may prefer to make their own decisions and be independent of a franchiser. Higher order skills of judgement and evaluation can be shown in the final exercise. Before attempting this Teacher Notes 49 . A favourable variance is to the benefit of the business. to bring about a team culture. expansion Variety. the low price. fun Customer satisfaction. ethics Reliability. The variance is the difference between the projected figure and the actual figure. On the other hand. style. If costs were predicted to be £10 million and were actually £12 million then the variance would be +£2 million. The main factor in the success of the change was the way the messages were effectively communicated to the staff (as shown in the 2003 Speak Out survey of Argos employees). customer satisfaction. Suggested answers 2 1 Business McDonalds Coca-Cola Vodafone Cadbury’s Nissan 2 Words to describe key features of culture Expansion. Changes made to the culture. no frills service offered by Ryanair and the expansionist and competitive easyGroup. Technology.

the NPV on Project 2 is much higher (£76. 84p of each sale is profit before the price reduction (profit/sales revenue). projected rates of return and risk.81 0.15 +10.15 0.95 0.71 81. 69p after it. Factors include: ◗ Very capital intensive ◗ long lead times from the start of a project and the receipt of revenues ◗ Governments have a stake in the gas exploration industry and tax and contract structures are complex. although these are re-defined in the worksheet to help them. 2 3 4 50 Teacher Notes Download these worksheets and more from www.95 0.58 23.74 0. Suggested answers 1 Important factors include interest rates.70 0.000 Actual 1.04 Present Value (x*y) -250 0.000 10.86 16.84m). once costs are taken into account. BG Group Worksheet Teacher notes Curriculum fit Students need to have been taught the basics of investment appraisal before embarking on this sheet.tt100. However.86 0.000 12.00 4.21 18.63 Discount factor payback 2010 NPV = Present Value (x*y) -250 95. Project 2 is therefore the better choice.74 0.e. This is therefore linked to interest rates. it begins to look like a poor marketing decision as total profit has decreased due to the extra marketing expenditure.38 13.Worksheet Teacher Notes 4 Price Sales Revenue Overheads Variable costs Profit Budget 1.92 59.05 60.40 34.93 0. because it begins to produce revenue much earlier in its life It also reaches payback earlier (2010 as opposed to 2013).90 .84 It is essential that variances are shown correctly as adverse or favourable by using positive or negative signs or brackets for adverse variances.20 50.70 0. inflation.000 63.77 0.87 32.00 90.63 3.500 8.04m as opposed to £12. government policy. international currency fluctuations.29 23.86 0. also using this Case Study.000 8.05 12. 5 Initially the growth in sales and sales revenue makes this look like a good marketing decision. Lessons following the use of the worksheet could develop the concept of decision trees.000 -2.51 12. NPV and opportunity cost. They should be familiar with terms such as discount factors.77 0.66 0.000 +3.25 42.000 60.90 0.63 Discount factor payback 2013 NPV = Project 2 Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 £m (x) -250 100 100 50 40 30 25 20 10 5 380 Discount factor (y) 1 0.81 0. the project could fail). Even though both projects produce similar returns.97 6. in a bank) ◗ the promise of money might not be fulfilled (i.500 -800 -300 5 Answers are as shown below.700 variance -0.000 42.66 0. Project 1 Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 £m (x) -250 0 5 15 20 30 40 50 90 130 380 Discount factor (y) 1 0. BG Group estimates what its investors could get from a risk free investment such as a bank deposit.800 41. For example a reduction in costs is favourable (positive) whilst a reduction in profits is adverse (negative). The profitability of each item has also reduced.g.21 29. Possible reasons: ◗ Inflation may lower the spending power of money ◗ money could be earning interest safely (e.05 76.

the role of operations and running an organisation. needs high skill levels. survival. JIT means that parts arrive efficiently just as they are needed (Just In Time). 2 3 Suggested answers 1 The instructions can be used back in class. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 3 4 Payback NPV = JIT and Kaizen. made to order. Being socially responsible means not causing harm to people or places by a company's operations. ethical behaviour and social responsibility.05 2 This represents job production because it is a ‘one-off’ product. NB. growth. The sheet can be used as an introduction to these concepts or as consolidation of knowledge. The discount factor of 0. Each batch can use the same production facilities but will be different e. Cadbury’s Worksheet Teacher notes Curriculum fit This worksheet helps towards learning in the early part of the qualification when looking at Business Objectives. It is focussed on explaining the difficult terms of ethics. different colours or sizes Flow Products pass along a continuous Cars production line. use the maker’s skills. 7 Nissan Worksheet Teacher notes Curriculum fit This sheet is designed to introduce the student to the three main types of production that could take place in the operations area of a business. Cadbury’s believes this because it helps the company’s reputation by: ◗ attracting customers ◗ leading to happier staff ◗ attracting better workers ◗ encouraging people to buy shares. This worksheet focuses on both the different methods of production and on the new Japanese ideas used by Nissan to make production even more efficient. production is slow. social responsibility. Formulae required are shown below. The process is broken down so that parts are brought together and the product is constructed as it passes down the line. One disadvantage of this type of production is that (any from) standard sizes not possible. Example Type of Production Features Batch Products are made in sets or Shoes batches. Suggested answers 1 Suggestions should Teacher Notes 51 . The main problems are: ◗ Accuracy of predicted returns ◗ accuracy of discount factor ◗ length of project adding to uncertainty ◗ initial outlay/costs may not all be in Year 1. made to measure. Kaizen is the idea of gradual but continuous improvement where everyone in a business is responsible for trying to find ways to make even the smallest improvement.05 is in cell D13 a Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 b £m (x) -250 0 5 15 20 30 40 50 90 130 =SUM(B3:B11) c Discount factor (y) 1 =C2-(C2*$D$13) =C3-(C3*$D$13) =C4-(C4*$D$13) =C5-(C5*$D$13) =C6-(C6*$D$13) =C7-(C7*$D$13) =C8-(C8*$D$13) =C9-(C9*$D$13) =C10-(C10*$D$13) Discount factor d Present Value (x*y) =B2*C2 =B3*C3 =B4*C4 =B5*C5 =B6*C6 =B7*C7 =B8*C8 =B9*C9 =B10*C10 =B11*C11 0.g. The final exercise is focussed on responsible marketing. Acting ethically means doing what is right or fair. Students should swap instructions with a classmate. One advantage of this type of production is that (any from) goods are hand made. provision of a service. specially made.tt100. The word search can also be used with a partner in class. Download these worksheets and more from www. =SUM(D2:D11) 5 6 Project 1 is closer to BG Group type projects as it has a long payback time and it is some time before revenues come on stream. Students do not need to have been taught these terms before doing the worksheet as explanations are contained in the Case Study.Worksheet Teacher Notes Students could be encouraged to enter the figures into a spreadsheet. expensive. Unit 1 includes producing goods and services. The accuracy of the instructions can be gauged by how easily and accurately the partner can construct the aeroplane.

seat leg room 4 5 6 This is a matter of opinion and should be rewarded on the basis of reasoned judgement. stylish and visually appealing. The sheet thus also covers elements of strategic decision making and the marketing . MFI expanded into the sale of bathrooms. Ideas could include: ◗ Price – special price deals. SWOT is only one of the many tools that can be used to help in decision making. It helps to improve the countries it works in.Worksheet Teacher Notes 4 ◗ ◗ ◗ Suppliers. Distribution. an external factor is one that is outside its control. This is open ended but should include suggestions for Price . external factors are those which the business cannot control. Sofa Workshop’s management. Externally means acquiring new businesses already operating in the area into which they wish to expand. includes SWOT as a tool for helping analyse a situation and make decisions about it. acts of terrorism Rules and regulations increase costs. United Airlines Worksheet Teacher notes Curriculum fit This sheet is designed to test students’ knowledge and application of how businesses respond to external factors that are beyond their control. It is in a market that is only buoyant if the economy is good Threats The presence of competitors. 5 You might want to offer a prize (a chocolate bar!) for the best design. MFI Worksheet Teacher notes Curriculum fit Unit 3. no prior knowledge is required apart from the difference between internal and external expansion as all the other information needed is either on the sheet or in the Case Study. 3 2 Technological Rapidly advancing technologies. These designs can be used as part of a wall display. two-for-one tickets.tt100. Opportunities The increased market in home fashion goods. United Airlines had to file for protection from bankruptcy in the US but fought back with an improved marketing mix. Specific UK promotions include a frequent flyer newsletter and discounts to travel agents. Cadbury’s makes sure cocoa farmers get a good price. For example. MFI can refit retail outlets. 5 Weaknesses Sofa Workshop is short on factory space for expansion. It fits into the ‘Business Issues’ section of ‘The Current Business Environment’. SWOT stands for the internal Strengths and Weaknesses of a business or proposition and the external Opportunities and Threats. It keeps down the release of harmful gases. resources and expertise. The chance to broaden product ranges. The worksheet may be used as an introduction to SWOT. 52 Teacher Notes Download these worksheets and more from www. Cadbury’s treats all its waste water. Cadbury’s keeps pollution down. more destinations ◗ Product – better luggage handling facilities. MFI can enter new product categories. Internally means investing back in the business to expand or improve existing assets. distribution of Heathrow slots 2 Suggested answers 1 MFI could expand internally or externally. They can also be used as part of your teaching of marketing. Internal factors are those that can be affected by the business. You may wish to encourage students to further research external factors through a PEST analysis. The business makes sure that 20-25% of its products are new every year and has expanded into bedrooms and storage. on board entertainment. Production. Possible factors include: ◗ September 11th ◗ Aviation regulators ◗ Air Transport Users Council ◗ National governments ◗ Consumer bodies Letter Factor S L E P T Social Legal Economic Political Example SARS epidemic. Advertising has been designed to target particular groups through appropriate media such as radio and television. world events US politicians keen to protect internal US Carriers. It has made stores more welcoming. The possibility of rivals entering the market. MFI can develop and sell new products. It trains its drivers to drive efficiently. Decision making in Business. Suggested answers 1 An internal factor is one that is within the control of the business. better facilities at airports. additional taxes. It uses as little energy as possible. early/late booking benefits ◗ Place – better access to airports. customer expectations 3 4 Changes made by United included: ◗ Developed a better route structure ◗ Set new standards for comfort and safety ◗ Developed the Star Alliance network ◗ Created the Red Carpet Club for the benefit of members ◗ Offered better airport facilities for first and business passengers. anti-trust laws could encourage competition Higher landing charges. Strengths Sofa Workshop’s brand name. Place (distribution) and Product.

You will also be looking at the accounting profession and how it maintains standards e. To be properly qualified. How are professional bodies like ACCA able to ensure that their members are of a high standard? What are ‘common accounting standards’? • • • profit and loss account balance sheet cash flow statement. the types of information produced and the roles of accountants. There are many areas of accounting. i. To make decisions these groups must have information. It has responsibility for defining best practice and supporting its members.g. accountants must have passed examinations that make them eligible for one of the professional accounting bodies such as ACCA.tt100.g. verifying financial statements iii. i. You will then consider the various groups that might be interested in a firm’s financial position. 2. an outline of the cash movement in a business in a given period ii. List five groups of stakeholders in a business that use accounts and in each case explain one purpose that they would use accounts for. Explain how accountants can help a firm to become more successful. a comparison of the income and outgoings of a business in a given period iii. advising managers on the financial position of a company iii. Homework 1. a snapshot of what the business owns and owes on a particular date. 3. ACCA which is the Association of Chartered Certified Accountants. as financial managers of public limited companies iv. advising companies on how best to manage their debts. as auditors of the accounts of large companies ii. To gain the trust of different groups bodies such as ACCA must maintain standards. as management advisors in the voluntary sector v. Review (2 minutes) Financial data is useful to many groups . Download these lesson plans and more from www. Learning objectives ◗ ◗ ◗ ◗ to understand the need for accountants to understand the role of accountants to understand types of financial data produced and to whom it is of interest to understand the need to maintain standards and how this is done within the profession. Student task: working in pairs think about what might each of these groups be most interested in. helping businesses to raise and manage funds v. Qualified accountants can specialise in many areas. In which of the following roles are you likely to find accountants working? i.Sources and use of finance Overview A look at the role of accountants within business Why is it important for accounts to be set out in a standard format? The role of accountants is varied. as directors and chief executives of large multinational companies. The Role of An Accountant (20 minutes) Many different stakeholders will be interested in the accountants of a firm although they may be looking at different aspects of the accounts. cash and size of the business. a balance sheet and a cash flow statement. they will be interested in profits. providing information that informs management decision making lesson plan 53 . This can be used to review progress and assess new projects. How might audited financial statements be used to assess the performance of a business? (give two examples of information in these statements that might be used to assess performance). To do this it is essential that ACCA ensures accountants maintain a high standard.e.they are likely to be involved in all financial matters. Complete the worksheet on this case study. Typically firms will produce the profit and loss account. Analyse the value of accounts to different stakeholder groups. Independent accountants called auditors check much of the information produced by accountants. Student tasks: in pairs consider the significance of the Enron and WorldCom scandals for the accounting profession. the need to measure and assess a firm’s financial position. The need for qualified accountants (15 minutes) Introduction (3 minutes) Introduce the idea of accounting. and to deal with short term financial problems ii. Match the following descriptions with the different types of accountancy specialisms listed below: • taxation • insolvency • corporate finance • auditing • management accounting. This information can be used to assess how the business is doing and help assess how it might do in the future. assessing the tax liability and tax payments of a business. Match up the following accounts with the descriptions given below: ACCA and standards ACCA aims to be " a leader of the global accountancy profession".

How does customer satisfaction and employee satisfaction enable BT to create value for its shareholders? Employees (12 minutes) Employees are a very important stakeholder group to an organisation such as BT and an important element of its success. Stakeholders and sustainability (15 minutes) What is a stakeholder in an organisation? Review (1 minute) BT is a well known large company within the UK. BT is one of the UK’s best known companies which operates globally. Customer satisfaction (12 minutes) Ask students what factors are likely to affect customers’ satisfaction with BT’s service? Put ideas on the board and then compare these with the chart provided in the case. to receive a dividend job security and wages corporation tax good quality products regular orders and payment. its own shareholders benefit. How does BT know whether its employees are satisfied or not? Why is it important for BT to create satisfied employees? How has BT encouraged its employees to take on an even greater stake in the company? BT’s approach ( 5 minutes) BT’s approach is built around 4 key principles. ii. (Brundtland Report 1987). employees shareholders suppliers customers government. Learning objectives ◗ ◗ to understand social responsibility and its ability to contribute to an organisation’s success. What is needed is to actually undertake these activities with integrity and this will generate more profits for the business. Sustainable development means "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". BT has developed an approach to business sustainability based on moral principles. iv.tt100. iii. Student task: students to read section 2 and make notes on these four . v. Homework Complete the worksheet on this case study. Can you identify the ‘stake’ of the following individuals and groups in an organisation: • • • • • i. 54 Download these lesson plans and more from lesson plan www.Stakeholders Overview This case focuses on BT’s approach to social responsibility and why this may be regarded as an essential element of business success. This case study focuses on BT and its approach to sustainable development. download from the link below. Introduction (5 minutes) Introduce the lesson: you will look at BT and its approach to social responsibility. they believe that simply claiming social responsibility is not enough if it is not underpinned by moral principles and is often ignored or even not believed by the community. You will consider the importance of this approach and the interrelationship between different stakeholders. It accepts it has an important role to play within society and that it has responsibilities to its stakeholder groups. It believes that by meeting different stakeholder needs. Then students can read section 4 and make notes on the way that stakeholder groups can interrelate positively. to appreciate BT’s commitment to social responsibility and sustainable development.

whether it is based on the right understanding of customers.g. download from the link below. PCWorld Business. Overseas (20 minutes) As part of its growth strategy Dixons has expanded abroad. new product development and diversification). even then it cannot guarantee success as there are so many factors that can change. Using the Ansoff matrix analyse the strategy of Dixons (e. What is a Dixon’s xL? What factors have influenced Dixons in deciding what products to sell in its xL stores? Why have Dixons decided to fill the new stores with existing product lines rather than to develop a totally new market concept? What are likely to be the key factors determining the success of a new Dixons xL? (e.g. (social.Market planning Overview A case study of Dixon’s growth strategy.g. business after all is dynamic. It employs 30. whether they are accepted.tt100. In particular you have analysed overseas markets as international expansion has been a crucial element of Dixons approach. In this lesson you have considered the activities of the Dixons Group and its approach to growth. market development. Dixons is Europe’s leading specialist electrical retailer. Download these lesson plans and more from www. right product lines. Students to read section 5 and summarise the key features of Dixons xL including. This is why firms must keep developing their offerings. In terms of Ansoff’s product matrix why is it that Dixons market plans need to focus more on markets than on products? Discuss with students the value of setting objectives (e. how competitors react). Review (3 minutes) Dixons has grown very successfully in recent years. whether it is executed well e. relate Dixons activities to market penetration. Dixons (15 minutes) Students to read section 1 and write out ◗ the group’s promise ◗ the objectives of Dixons. How would you expect Dixons to evaluate the success of its current market plans for the xL format and ElectroWorld stores? Introduction (2 minutes) Introduce the lesson: In this lesson you will look at the Dixons Group and examine its strategy of growth. may motivate and provide a means of reviewing progress but depends on how they are introduced. what they are and whether they are the right ones). political and technological) analysis. how well it is planned. legal economic. to do this it needs to analyse market conditions. You will consider why it wants to grow. Its UK retail brands include: Dixons. PCWorld. UniEuro and Electro World. how it gathers the information it needs to target markets and issues involving overseas growth. You have looked at SLEPT analysis and considered its usefulness.000 people and has 1. How does Dixons growth strategy involve both the developing of existing products and the growth of new markets? Explain how market planning at Dixons involves both market penetration and market development. Currys. may provide direction. how they are set. Homework 1. A key part of its approach is based around effective market research. Companies need to keep developing to meet customer expectations and competitor action. SLEPT analysis is an aid to decision making but still has to be used and implemented correctly. It can do this using a SLEPT. Complete the worksheet on this case study. Student task What aspects of Eastern Europe markets encouraged Dixons to grow their business there? Learning objectives Developing (22 minutes) ◗ ◗ ◗ ◗ to identify the existing portfolio of businesses owned by Dixons to understand the importance of market research to Dixons to examine the external environment in countries targeted by Dixons to understand the reasoning behind the launch of Dixons lesson plan 55 . The Link and abroad its brands include PC City.440 stores across Europe. 2.

the power of the brand name. Segmentation (28 minutes) In 2002 more than 1. 2. i. Lastly you will look at Gillette’s vision and how this affects its strategy. competitors’ actions).Segmentation Overview Gillette is a leading player in the shaving market. What is meant by market segmentation? 56 Download these lesson plans and more from lesson plan www. Introduction (10 minutes) Introduce the lesson: you will examine the strategy of Gillette and its approach to new product might it gather information? What type of information might it gather? Gather ideas on the board and distinguish between qualitative (working with focus groups) and quantitative research (using a questionnaire with a large representative sample) could also distinguish between primary-first hand data – and secondary research. Gillette continues to recognise the importance of "being ahead in the field".tt100. and advertising likely to differ according to the segment? Review (2 minutes) Gillette is a market leader in the shaving market. Sensor Xcel v.7 billion men over 15 years old removed hair daily with over 80% using a blade and a razor. Sensor 3 Disposable. It is able to develop products quickly and by innovating remains a market leader. This case study examines its strategy to success focused on developing new products and getting them to the market quickly. How are elements of the marketing mix such as price.that uses information already collected. Blue II iii. Discuss with students how Gillette might do this .biz/teachers . Agilite iv. the effectiveness of the marketing mix. Examine the factors that you think will determine the success of a new product from Gillette (e. Market research (10 minutes) Before launching a new product Gillette undertakes market research. Match each of the following Gillette razors with the appropriate segment: • premium shaving system • super premium disposable • premium disposable. download from the link below. MACH3 ii. See section 2 for a list of the products where it was the first in the market. You will consider the segments within the market and the way Gillette serves these markets. Since then Gillette has launched a large number of razors and has always been quick to get a new product to the market. Mr King C Gillette devised and marketed the first safety razor in 1901. It targets different segments of the market and adopts a global strategy. Student task What are Gillette’s four core business areas? Homework 1 Complete the worksheet on this case study. What are the three segments that Gillette has identified in the male shaving market? How does identifying segments of the market help Gillette to make decisions about the razors to target at each segment? Learning objectives ◗ ◗ ◗ to understand the different segments in the shaving market to analyse the market research Gillette might undertake before launching a new product to analyse Gillette’s vision.g.

Complete the worksheet on this case study. Student task: Students to read section 5 and explain the difference between sales and profit.g. and a key decision that was made by Hazlewood Foods? How did the decisions that you have outlined involve major investments in resources? To what extent do such decisions involve an element of risk? Profit and loss forecast (10 minutes) A decision to invest will depend a great deal on the expected profits. reduce wastage) explain the factors that might have influenced the Board of Directors' decision to proceed with the investment. debentures). shares. It is a huge operation using 7 million loaves and 244 million prawns. profits. So it is important to understand the market.Decision making Objectives This case study considers the issues involved in a decision to develop a new state of the art factory. Recent investments by Hazlewood include the purchase of Breadwinner Download these lesson plans and more from www. The case highlights the importance if understanding the market and its trends and highlights various segments within the sandwich market.g. Markets (5 minutes) Before investing in this factory the company would have looked at a number of factors. Student task Read section 7 and identify the retailers that Hazelwood sells to. expected levels of demand. Review (1 minutes) You have examined the decision by Hazelwood Sandwiches to invest in a new factory taking into account factors such as the cost and the people issues.g. Introduction (10 minutes) Introduce the lesson: you will be looking at the decision by Hazelwood Sandwiches to invest in a new factory thinking about the factors that the firm would have taken into account before going ahead with the project. Investment (19 minutes) All firms have to make decisions about where to invest. ◗ ◗ explain the ways in which the new factory might reduce the average cost of a sandwich (e. Using the profit and loss chart shown in the case study explain how this would lead to greater profits for Hazlewood Foods? Investing in products (5 minutes) To stay ahead of the competition a firm has to know what its customers want. 2. It has invested £25 million in this factory. Hazelwood Sandwiches is the largest company within Greencore’s Chilled Foods Division. expected profits. volume produced. Examine two ways in which Hazlewood Sandwiches might increase its profits on its sandwiches (e. Homework 1. quality of sandwiches).000 work at Manton Wood.g. It employs 3. working patterns. 3. Hazlewood Sandwiches used customer research to find out the needs of retailers and suppliers. (e. expected rates of return). It includes a study of investment appraisal. Explain two ways in which Hazlewood Sandwiches might have raised the finance to invest in its new factory (e. How does making the decision to invest £25 million in the Manton Wood factory help Hazlewood Foods to lead the UK chilled sandwich market? In making the investment decision to develop the new factory at Manton Wood what sorts of investment considerations would Hazlewood have examined? In making the decision to invest in Manton Wood why would the payback period be important? Learning objectives ◗ ◗ ◗ to distinguish between market value and market volume to analyse the sandwich market to understand the issues facing Hazelwood when investing in a new factory at Worksop. Worksop.g. lesson plan 57 . including the market and likely demand. major multiples. charge higher price or cut costs).g. Student task: Ask students to read section 3 and then write answers to the following questions: ◗ state two ways in which market size can be measured (e. loans. lifestyles. Identify a key decision that was made by the Greencore Group.000 people of whom 2. Sandwiches in London in 1998 and a £25m investment in the Manton Wood factory in Worksop with a weekly production capacity of 3 million sandwiches. bakers) ◗ explain why demand for sandwiches is growing (e.tt100. Its mission is "to lead the UK chilled sandwich market" Hazelwood Sandwiches has developed a new state of the art factory at Manton Wood. value) ◗ how big is the UK sandwich market? (£3bn) ◗ what are the major segments of the sandwich market? (café/sandwich bar.

Learning objectives ◗ ◗ ◗ to understand the product life cycle to understand the value of market research to examine extension strategies. At what stages of this product life cycle is it most important to inject marketing activity? Student task Working in teams consider "How might marketing vary at different stages of the product life cycle?" Put students’ ideas on the board for notes. For example they may try to increase the usage of their products. Marketing research (10 minutes) Market research is often undertaken before marketing decisions are made. Review (1 minute) You have considered the stages of the product life cycle ( but remember the duration of these stages and the shape of the product life cycle will vary from product to product). Student task What are the other functions of a business apart from marketing and production? Explain how these might be affected by marketing activities. Is it possible to continually extend a brand to increase the life cycle of a product? 58 Download these lesson plans and more from lesson plan www.tt100. Extension strategies (17 minutes) When sales start to slow up or even decline firms may use extension strategies to boost them again. 2. The case focuses on Kellogg’s Special K brand and considers how the marketing of this has changed over time. why was it important to check that the two products were not competing in a major way? Homework 1.Product lifecycle Overview A case study focusing on the development of Kellogg’s Special K brand Student task Working in teams discuss how Kellogg’s might undertake market research to decide whether to inject new growth into Special K. the number of occasions they are used or the numbers of users. You have considered how Kellogg’s revived Special K and the factors it might have taken into account before deciding whether to go ahead. Marketing is not static – it must be developed as market conditions and customer expectations change. How did the development of Special K Peach and Apricot extend the brand still further? What was the significance of the Special K bar in injecting further dynamism to the product life cycle. Then you will consider the decline stage and how firms such as Kellogg’s may react to this. Marketing and other functions (10 minutes) A business is made up of different functions. The decisions in one area affect the activities of other parts of the business. and Special K bars destroy the market for the original Special K product in the UK? How has the extension of the Special K Brand been a global success story? Product life cycle (10 minutes) The product life cycle shows the typical stages that a product goes through in its life. Why did Kellogg’s engage in marketing research before deciding how to inject new growth into Special K? Special K Red Berries is a variant of Special K.they are interrelated. Explain how the product life cycle may vary between products. What are the main stages in the conventional life cycle of a product? Marketing activity will change in nature at different times of the product life cycle to meet the different objectives at different times. Special K Peach and . Why was it important to create marketing plans for Special K that fitted with production plans? Introduction (2 minutes) Introduction to the lesson: you will look at the product life cycle and how marketing may change at different stages. Did the development of variants – Special K Red Berries.

Dixons approach to this is to group together a range of its leading stores together in an xL store. BT offers employees the option to buy shares at a discounted rate – enabling them to become shareholders as well. They are then able to monitor changes in employee satisfaction over time. Highly motivated employees work hard for the company. Users of accounts will use the financial statements to assess performance by examining aspects such as profitability (has it improved?). generating more profit. BT employees are likely to be stakeholders in a number of ways. For example a poorly motivated call centre adviser could cost the company £300. i shareholders ii employees iii government iv customers v suppliers. 2 employees Inland Revenue suppliers large trade customers 3 2 profit and loss (ii) balance sheet (iii) cash flow statement (i). Not only are they employees. taxation (v) insolvency (i) corporate finance (iv) auditing (ii) management accounting (iii). BT carries out an employee satisfaction survey with its employees checking on how they feel about working conditions and the working environment. enabling BT to pay higher dividends. but they are customers. This will lead to higher sales for BT at lower cost per unit of output. buying more answers 59 . 7 8 2 Download these lesson plans and more from www. an individual needs to be able to work with accounts at the required level. 4 3 5 4 6 5 6 Dixons Market planning Answers 1 Dixons market plans are concerned with developing existing products in the new xL formats.tt100. Examples of standards that ACCA insists on are: ◗ accuracy in presenting accounting information ◗ its members are qualified to an appropriate level ◗ work is carried out in an ethical way ◗ accounts are set out in accordance with company law and generally accepted accounting standards. If customers are satisfied with BT’s service they will stay loyal to the company. and members of communities in which BT operates. this is particularly important in a company where many employees have direct contact with the public. At the same time it is developing new markets in Eastern Europe through the ElectroWorld store format. Accounts need to be set out in a standard format so that they can be read easily by people with some knowledge of accounts. Professional bodies like ACCA set rigorous exams so that to be a qualified accountant. If employees are satisfied with BT as their employer they will work harder for the company. and to take the right steps to make sure that employees are happy and motivated. and whether the debts of the company are decreasing or rising.000 a year. and the state of the balance sheet to see how profitable the business is. to assess the security of their jobs and the case for making a wage claim to assess the tax liability of the business to check that the business is solvent enough to pay for goods supplied on credit to assess the financial state of the business in order to make sure that they will continue to receive supplies. Additionally. as well as opening up new markets in eastern Europe. They should not be laid out in highly individual ways because this would lead to confusion.Answers Association of Chartered Certified Accountants Sources and use of finance Answers 1 shareholders to identify how well run their business is and to assess profits. and comparisons could not be made between one set of accounts and another. You will find accountants in all of these roles. 1 BT Sustainability Stakeholders Answers A stakeholder is a person or organisation who has an interest (a stake) in how a business is run and managed. The case study shows the problems that could be caused by employee dissatisfaction. Market penetration involves selling further into an existing market. and causing a rise in the share price.

A substantial rise in sales brings in more sales revenue. The longer you have to wait to make a profit. etc. because financial resources can always be used in an alternative way. sophisticated electrical goods. This would not have been possible unless Greencore had generated profits over a number of years. and demand may change for other reasons. All investment decisions involve an element of risk.g. The longer a project takes to payback the bigger risk the investor is taking. torches.tt100. There would be little point in developing a new xL concept from scratch i. given the size of the market in different locations. how long the investment would take to pay back and whether the investment meets targets for returns. premium shaving system 2. the less valuable that profit is in terms of what you can do with the money now – because the investment is tied up. £25m).e. In order to purchase Hazlewood. is the chosen size of xL stores the best one. For long term success it needs to be able to see that profit margins are increasing on the new formats. Hazlewood would examine the size of the investment (i. The concept is all about providing consumers with greater choice and convenience at lower prices. what the return would be on the investment. The Manton Wood factory involved a major capital investment in the latest technology. and investments typically take a number of years to pay back. CD players and the other electrical goods that Dixons specialises in. etc) oral care and electrical appliances. 6 2 7 3 Gillette Segmentation Answers 1 Personal grooming. etc. In the meantime the market may alter. The factory would lead to a fall in costs so this would be beneficial. Greencore would have had to make a strong bid to buy a majority shareholding in the company. There is always an alternative investment that should be considered. the overall result is an increase in profit which is worked out by: Sales Revenue – Costs = Profit. The quicker profits flow in. Super premium disposable – v. Advertising will also focus on the extended benefits and the luxury and quality of premium products. They have found out what sells well in existing stores and what new types of products consumers are seeking in order to develop an appropriate blend for the xL stores. Living standards are rising and consumers are looking for well made. super premium disposable 3. Dixons have researched customer demands and retail trends. Premium disposable – ii. competitors come in with new products. the sooner they can be used to make further profits. which it then sells on. and a major decision by Hazlewood Foods was to expand into the Manton Wood factory. 4 6 5 Hazlewood Sandwiches Decision making Answers A major decision made by Greencore was to purchase Hazlewood Foods. is the marketing mix appropriate. selling into markets. which triples production for Hazlewood. Dixons will need to track consumer awareness of its new stores. It is an extremely large plant. premium disposable.e. It is also necessary to evaluate the details of the market plans – e. each of which consists of consumers with different characteristics and hence different needs and requirements. Market segmentation is the process of dividing overall markets into separate segments. portable power (batteries. bringing in totally new product lines. 4 5 2 6 3 7 4 60 Download these lesson plans and more from answers www. i. 1 5 Premium shaving systems – i and iv. The three segments in the male shaving market are: 1. Gillette is able to use market research to identify the features and benefits that are being sought by consumers in each of the relevant segments. They are then able to create the products and the marketing mix appropriate to the segment. Premium segments will command premium prices based on the extra benefits offered. Important aspects of Eastern European markets that encouraged Dixons were changing lifestyles whereby consumers were starting to demand washing machines. Costs would then need to be taken away from this. requiring millions of pounds of investment. It therefore needs to focus its market plans on what it does best. as well as key indicators such as sales and profit per square foot. and iii. It is also a very modern and up-to-date factory enabling high quality production .Answers 3 Dixons is a retailer buying manufactured goods. Therefore Dixons simply needed to examine what already works well in their existing stores and then to group it together in the new outlets.e.

because it is important not to confuse consumers. but at a pace that is compatible with consumer awareness and understanding of product benefits. 3. based on the huge popularity resulting from the marketing. and marketers must decide whether to support a declining brand or let it die a natural death. Building on the success of Special K and Special K Red answers 61 . It is important to inject new life into mature markets on a regular basis. Notes 4 5 6 Download these lesson plans and more from www. During the growth stage. but this is less important because a dynamic brand does a lot of its own marketing. to increase consumption and to broaden the appeal of the range. 2 introduction to the market. Kellogg’s would simply be competing in its own market. the concept has been extended on a global scale requiring a substantial increase in manufacturing capacity in the UK and elsewhere. However. The launch of Special K variants helped to build the market for the original Special K product in the UK. Kellogg’s carried out market research to identify further ways of extending the range so as to give consumers greater satisfaction. When a product is first introduced to the market it is necessary to engage in a lot of busy marketing activity such as television advertising and promotions. The purpose of bringing in Special K Red Berries was to extend the existing brand rather than to replace it. If for example half of the consumers of Special K had switched over to Special K Red Berries and there had been little overall growth in consumption. Consumers became a lot more interested and aware of the product and its benefits as a healthy cereal. However. 8 7 Because Special K is a popular product with a lot of consumer appeal it makes good marketing sense to find as many possible ways of building the range to grow the market. marketers must be careful not to overload the market with variants at any one time. The research enabled Kellogg’s to identify consumer perceptions of the brand and what developments consumers would favour. Armed with this consumer and market focused knowledge. it is important to support the brand. It is likely that too many variants would start to compete with each other in a significant way. Special K enabled Kellogg’s to be alert to current consumer trends such as social trends and changes in technology. 2. Kellogg’s was best placed to inject growth into the product life cycle.Answers Kellogg’s Product lifecycle Answers 1 The main life cycle stages are: 1.tt100. It was important to test that this would not happen. Kellogg’s had to be sure that they had the production capacity on a global scale to deliver the proposed product modifications on the scale required. to let consumers know about the existence and benefits of the product. The range of variants therefore acted as complements to Special K rather than as substitutes. A mature product may need a facelift. and hence sales and revenues. 4. 9 3 10 Creating new variants of a brand injects new life into it and helps to extend the overall market. The Special K bar is seen as a healthy snack with an important role to play in a diet and health conscious world. It is always necessary to make sure that market plans are feasible in terms of the resources and production capacity of an organisation. However. the growth of the products sales the mature stage in product sales eventual decline. Initially Kellogg’s was able to extend its Special K brand in France and the UK. It is a variant of Special K that is consumed at different occasions during the day rather than just at breakfast time. marketers should not become complacent and they may seek to inject new life into the brand to prolong the growth stage and put off the onset of maturity.