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Skandvig Terra PLC

Case Study Link: May 2023 BM Case Study P1

Discord Server Link: https://discord.gg/rNN3ZqevGH
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Table of Contents
Table of Contents 1
Company History 2
Organisational Chart 2
Stakeholders 3
Internal Stakeholders 3
External Stakeholders 5
Definitions 5
Analyses 10
SWOT Analysis 10
ANSOFF Matrix 12
STEEPLE Analysis 12
PESTLE Analysis (STEEPLE) 14
BCG Matrix 15
Analysis of Company 15
Sample Questions 17
Unit 1: Introduction: Business Organisation & Environment 17
Unit 2: Human Resource Management 18
Unit 3: Finance & Accounts 19
Unit 4: Marketing 21
Unit 5: Operations Management 22
Possible Questions 22
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Company History
Pre 1980 - Company founded
1980 - Expanded into other business sectors
2005 to 2010 - Consumer Products Division made consistently increasing contributions to overall profits.
Share price rose by 65% and annual profits doubled. Firm increased dividends.
2010 onwards - Takeover of small water filter manufacturers
2015 - Sales in desalination division boosted by 300% (only smaller desalination plants)
2015 - Takeover of H4 PLC (Rival Engineering Company)
2015 - Modernization programme and reorganisation of operations at H4 PLC
2016 - Programmes complete at H4 PLC and employees set to work
2018 - Board of directors approve a substantial 5 year marketing budget
2019 - Jayne Dees goes to Sudan to teach English and gets an idea, overlooking their conditions to get
freshwater. Discusses with the team to make low-cost, easily transportable water purifiers for use in
countries where access to potable water is limited.
2020 - SVT launched a competition, aimed at inventors and entrepreneurs, to develop a water purifier that
met strict criteria in terms of cost, usability and longevity.
January 2021 - Winner announced (James Azuki) with a design named WF15 for the competition to build
water purifiers.
2022 - SVT’s Engineering Division began production of the WF15
2022 - The smallest of the former H4 factories manufactured SVT’s first wind turbine
2023 - Full order book for wind turbines at the H4 Factories.

Organisational Chart
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Stakeholders
1. External - Customers
2. External - People affected by CSR
3. External - WF15 creator
4. External - Government Entities (ministry of water and irrigation, and others …)
5. External - Competitors/ Rival Businesses
6. Internal - Employees at SVT
7. Internal - Shareholders of SVT
8. Internal - Directors of SVT (Yannick, Ariadne)
9. External- NGOs & Charities

Internal Stakeholders
1. Yannick Pederson
- Director of the FreshWater Division (line 17)
- Situational leadership (line 19-20)
- Fast thinker (in response to shortages of potable water due to climate change, he was able to find
alternative sources of potable water (line 15-18)
- Had clashes with Ariadne regarding the water treatment plant update delays (line 24-26)

2. Ariadne Johansen
- Director of the Engineering Division (line 22)
- Autocratic leadership, leading to delayed tasks involving the Fresh Water Division (water
treatment plants update) due to having different priorities (line 23, 24-26)

3. Jayne Dees
- Director (line 106)
- Proposed for SVT to develop low-cost water purifiers (line 112)
- Made her own research which is to operate water purifiers using solar power (line 113-115)

4. SVT Employees
A. Newly hired employees for Engineering Division
- 300 vacancies filled for highly skilled and specialised employees that can work well in team
environment (line 65 -68)
- Went through induction training including a visit to SVT’s factory in Norway (line 71)

B. Old employees
- After 10 years of employment under SVT, employees are offered 3 months paid leave to join the
Outreach Program in LEDCs (line 99)
- Employees taught in schools, dug wells, repaired infrastructure and provided training to local
people (line 101)
- Travel expenses, accommodation cost and salaries covered by SVT (line 100)
- 6000 employees took part (line 103)

C. Employees that join SVT following acquisition of H4

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- Work t––hree eight-hour shifts per day

- Given one-time incentive for agreeing to the new flexible-working contract

5. SVT’s Marketing Department

- Used secondary market research to investigate the spending patterns of low-income families in
LEDCs and their access to media. (line 134-135)

6. SVT’s Human Resource Department

- Met resistance following takeover of H4 since long-serving employees from H4 resist the changes
made by SVT (line 59)
- Since a quarter of H4 employees decided to resign, SVT’s HR organised recruitment to fill 300
vacancies (line 66)
- Choose carefully where to advertise the vacancies and all vacancies were filled within 3 months
(line 69-70)

7. Board Members
- Impressed by Jayne’s idea regarding water purifiers needing to be operated by solar power, be
simple to use, inexpensive and long-lasting (10 years) because it fitted well with SVT’s mission
statement. (line 114-115)
- Have not agreed on the pricing strategy of WF15 (line 127)

8. Directors
- Several believed that WF15 should be a not-for-profit operation, a minority felt that SVT should
go further and subsidise the product to make it affordable to as many people as possible. (line
127-129)
- Two directors are against subsidising the WF15, believing that it will negatively impact SVT’s
overall profitability. (line 129-130)
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External Stakeholders
1. Rival Engineering Company, H4 PLC
- Manufactures steam and gas turbines in four factories in UK (line 50)
- Originally family-owned business (line 51)
- Complete takeover by SVT’s Engineering Division in 2015 (line 49-50)

Before takeover:
- work 5 days per week from 8 to 5 (line 52)
- competitive salaries (line 53)
- no financial/ non-financial rewards offered (line 54)

After takeover:
- factories operate 24 hours every day (line 58)
- employees work 8 hours per day (three eight-hour shifts) (line 58)
- employees receive one-time incentive payments (line 60)
- employees agree to new shift pattern every 6 months (line 62)
- employees who do not want to sign contract under SVT were offered generous payments (line 63)

2. Geng PLC
- Major water supplier in UK (line 32-33)
- Acquired by SVT Fresh Water Division (line 32)

3. NGOs/Charities
- Identify projects (line 104)
- Work together with SVT to make best use of SVT employees (line 104-105)

4. Customers (Sudanese People)

- People in less economically developed countries (LEDCs) (line 97)
- Poor people that could not afford potable water and water purifiers (line 108-109)

5. James Azuki, WF15 Creator

- A university student from Tanzania (line 120-121)
- Won the competition held by SVT in search for low-cost, easily transportable water purifiers (line
120)
- His design, WF15, won the competition and SVT agreed to retain its name. (line 122)

6. World Health Organization

- Set up guidelines for potable water (line 124-125)

Definitions
1. Company → Public limited company (PLC): It is an incorporated business with limited liability and
is owned by shareholders , where shares are traded on the stock exchange.
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2. Vision Statement (1.3): A statement that defines an organisation's goals and aspirations. Outlines the
long term aspirations of a business and what it aims to achieve, usually vague , qualitative and
inspiring
Pros and Cons
Attracts skilled labour.
Attracts customers (especially if the vision statement conveys the ethical stance of the business).
Provides a decision-making framework (the vision statement is derived from it , strategic objectives are
constructed to reach it and so on….)

3. Mission Statement: a declaration of the underlying purpose of an organisation’s existence and its core
values. This statement is updated more frequently than a vision statement.

4. Regional Monopoly:Where a business controls 80% or more of market share and has barriers of entry
(such as special licensing from the government , or a high startup cost).
5. Monopoly: A market structure characterised by a single seller of a product that faces no competition
from other firms and it has substantial market power and is the price maker of the product in that
region.

6. Business Sectors (line 8): Businesses can be classified according to the stage of production that they
are engaged in
● Primary Sector: Resource Extraction (Mining, Forging etc.)
● Secondary Sector:Manufacturing or construction of products by transforming the raw materials
produced in the primary sector.
● Tertiary Sector: Sector of economy concerned with providing services
● Quaternary Sector: Sub-category of tertiary sector that involves knowledge-based activities such as
information technology, research, and development, as well as consulting services and education.

7. Acquisition: A takeover (or acquisition) occurs when a company buys a controlling interest in another
firm, i.e. it buys enough shares in the target business to hold a majority stake.

8. Narrow Span of Control: A narrow span of control means that there are fewer subordinates who are
accountable to a manager. It is therefore easier to communicate and the decision making process
doesn't take time.

9. Leadership: Leadership is the process of influencing and inspiring others to achieve organisational
goals.
● Situational Leadership: Situational leadership is a leadership style that, unlike the others above, is
not based on any single dominant approach. In essence, it is about using the right leadership style
for the right situation.
● Autocratic Leadership: An autocratic leader is one who makes all the decisions and prefers not to
delegate any responsibility. Instead, the autocratic leader (or the authoritarian) simply tells
subordinates what to do.

10. Internal Growth: Internal growth (also known as organic growth) occurs when a business grows
using its own capabilities and resources to increase the scale of its operations and sales revenue.
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11. External Growth: External growth (or inorganic growth) occurs when a business grows by
collaborating with, buying up or merging with another firm.

12. Motivation: The managerial process/aspect where intrinsic and extrinsic factors are used to increase
employees’ satisfaction as to reflect on improving their productivity.

13. Economies of Scale: Economies of scale refer to lower average costs of production as a firm operates
on a larger scale due to gains in productive efficiency. Essentially, the spreading of fixed costs across a
large number of units. EOS can be:
● Internal EOS: purchasing , operational, marketing, transportation, managerial, finance.
● External EOS: pool of skilled labour, good infrastructure, growing market no. of buyers) ,
technological advancements.

14. Flexible-Working Contract: A flexible working contract is an employment agreement that allows for
a more flexible arrangement of working hours and/or location, as opposed to a traditional 9-to-5,
in-office setup.

15. Induction Training: Induction is training done to new recruits to familiarise them with the firm's
policies as to decrease the time needed to be familiar, which impacts productivity.

16. Labour Turnover: Labour turnover measures the number of workers who leave a firm as a percentage
of the workforce, per year. It is often used to gauge the level of motivation in an organization.

17. Share Price: The value of the share of a company is called share price.

18. Market Share: Market share measures the value of a firm's sales revenues as a percentage of the total
sales revenue in the industry.

19. Marketing Budget: It’s the financial plan of expected revenue and expenditure for an organisation, or
the marketing department within an organisation.

20. Corporate Social Responsibility (CSR): It’s the conscientious consideration of ethical and
environmental practices related to business activity. A business that adopts CSR acts morally towards
its various stakeholder groups and the well-being of society as a whole.

21. Employment: Refers to the number of people of the working age who are in the workforce.

22. Board of Directors: A board of directors (BOD) is elected by shareholders to run the company on
their behalf. Directors are elected because of their skills and expertise and because shareholders do not
necessarily want to get involved in the daily running of the company.

23. Pricing Strategy: Pricing strategies are the methods and procedures companies employ to determine
the rates they charge for their goods and services.
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24. Distribution Channel: The channel of distribution refers to the means used to get a product to the
consumer.

25. Market Research: Market Research is designed to discover and gather the opinions, beliefs and
preferences of the thinking pattern and buying habits of customers.

26. Secondary Research: Involves the collection of second hand data and information that already exists.
Secondary research is a cheaper and faster method of data collection.

27. Potable Water: Water that is safe for human consumption.

28. Desalination: A process of removing salts and minerals from seawater to make it suitable for drinking
or irrigation.

29. Division (2.2): A part of a company that operates as a separate unit with its own management and
employees.

30. Director: A person responsible for managing and leading a division or department.

31. Productivity per Employee: The output of a company divided by the number of employees.

32. Source: To acquire a product or resource from a specific place.

33. Treat: To purify or process a product or resource.

34. Store: To keep a product or resource in a safe place for later use.

35. Transport: To move a product or resource from one place to another.

36. Reservoir: A large tank or basin used for storing water or other liquids.

37. Income Stream (3.7): A source of revenue for a company.

38. Market: A place or system where goods and services are bought and sold.

39. One-Time Incentive Pay: A bonus or a form of compensation for employees in exchange for going
above and beyond their normal duties

40. Takeover: When a company buys a controlling interest in another firm, i.e. it buys enough shares in
the target business to hold a majority stake.

41. Product Portfolio: all products produced by the firm with different product lines and ranges.
● Product Line: Group of connected products marketed under a single brand name by the same
company.
● Product Range: Refers to the different models of the product line.
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42. Recruitment: is the process by which the HR department identifies its needs and vacancies to be
filled, and begins the processes of finding most suitable candidates until the contract has been signed.

43. Brand Leader: To become the brand with the largest number of shares in the market
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Analyses
SWOT Analysis

SWOT analysis is a simple yet very useful decision-making tool. SWOT is an acronym for Strengths,
Weaknesses, Opportunities and Threats. It can be used to assess the current situation of a business
organisation. SWOT analysis considers both internal factors (strengths and weaknesses) and external
factors (opportunities and threats) that are relevant to the organisation under investigation.

Strengths
1. Regional monopoly (line 7)
2. Diversified business sectors (line 8)
3. Wide range of products offered (diversification):
strong product portfolio (line 10-14)
4. Strong financial performance and stability
5. Acquisition of Geng PLC allowing rapid growth
(line 31-33)
6. Improvement in labour productivity it (line 75)
Weaknesses
1. Dependence on a single market
2. Lack of diversification
3. Because of flexible working practices, high
employee turnover in the engineering sector.
4. Products are not suitable in countries that do not
have access to potable water
5. Internal conflict with two directors of different
departments.

7. Diversified in over 20 countries (line 5) 6. Clashes between leadership styles of different

8. Each division is headed by a director with
operational and tactical authority (line 15)
9. 2 income streams from desalination plants
around the world (line 37)
10. 15% market share of the world desalination
capacity (line 38)
11. Adaptable business allowing for quick changes
to be made.
division directors
7. Resistance from long-serving employees during
the modernization program
8. Dependence on water treatment equipment and
machinery for its water supply business
9. SVT has no distribution channel in place for
their new WF15.
10. Lack of experienced employees

12. Consumer market share price rising by 65% 11. Lack of communication
(line 97-98)
12. Stakeholder conflict
13. Organised into four divisions with effective
decision-making authority at the division level 13. CSR may cause a decrease in profits
(line 10-14)
14. High set up cost and training cost
14. Effective modernization program and
re-organization leading to economies of scale 15. Lack of distribution channels in LEDCs
(line 56-57)

15. Labour productivity improved, unit costs fallen
and labour turnover is below average (line 76)
16. Vision statement remained unchanged since the
creation of the business (line 2)
Opportunities
1. Market Growth Possibilities due to External
factors (Desalination Market doubling)
2. Introduction of low cost solar tech in LEDC’s
3. Growth potential in the global water desalination
market
4. Expansion into new countries for its desalination
business
5. Broadening its product range through
acquisitions
6. Countries’ demand for wind turbines is expected
to grow making the engineering division more
profitable.
7. Demand for wind turbines is expected to grow
8. Takeover of rival engineering company can
broaden SVT’s product range
9. Economies of scale may be achieved due to
modernization programme
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Threats
1. Economic downturns
2. Competition from new entrants in the water
supply and desalination market
3. Political and regulatory issues in different
countries
4. Climate change is affecting water sources and
demand for potable water.
5. There may be a change in government
regulations
6. Short supply of experienced employees
availability
7. The desalination market may not grow as rapidly
as projected, which can eventually lead to loss of
capital and employees.
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ANSOFF Matrix

The Ansoff matrix is an analytical tool that helps managers to choose and devise various product and
market growth strategies.

Existing product New product

Market Penetration

- SVT currently supplies potable water to

Product Development
over one million people in Norway and
to millions of households in over 20
- To broaden its product range, SVT
other countries.
completed a takeover of a rival
- SVT builds and operates water
Existing engineering company, H4 PLC, in 2015.
treatment plants to purify the water and
market H4 manufactures steam and gas
is responsible for maintaining the
turbines in four countries (line 49)
regional water supply networks in these
- Also in 2022 they made their first Wind
countries. (line 4)
Turbines ( generating electricity without
- SVT advertised to hire “highly skilled
the burning of fossil fuels) (line 79 - 80)
and specialised” employees to fill in the
place of the 300 vacancies left by the
redundancies

Diversification
Market Development
New - SVT expanded into other business
market sectors, including desalination and
household water treatment products
(line 8)

STEEPLE Analysis

STEEPLE is an acronym for the Social, Technological, Economic, Environmental, Political, Legal and
Ethical opportunities and threats of the external business environment. These factors, unlike internal ones,
affect all businesses yet are beyond the control of any individual organisation. STEEPLE analysis is central
to business strategy, such as assessing the feasibility of an overseas investment
project.

● SVT has a vision statement of "Making the world a safer place" and has been able
to supply potable water to over 1 million people in Norway and millions of
households in 20 other countries. Its regional monopoly in each country where it
operates shows its strong market position.
Social
● SVT displays a consistent commitment to improving its outreach in LEDCs,
providing employees with a paid career break to attend workshops and do
community service abroad. Also, the W15 has been planned to help LEDCs access
drinking water.
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● SVT is involved in the production of potable water, desalination, water treatment

equipment, power turbines, and home water filters, indicating its technological
Technological advancements in the water industry.
● Delayed machinery for updating water treatment plants can be a threat
● SVT’s modernization programme for reorganisation of labour.

● The global water desalination growth market is expected to double in the next 10
years, presenting the opportunities for SVT's Desalination Division.
Economic ● High demand for cruise holidays
● The company has also achieved economies of scale through modernization and
reorganization of its operations, which can improve its financial performance.

● SVT's leadership styles of the directors of different divisions vary, 21 with some
employees perceiving a more autocratic approach in the Engineering Division.
● The company's HR department faced resistance from employees during the
Ethical
modernization and reorganisation of the operations of a rival engineering company,
but offered incentives to those who agreed to sign a flexible-working contract or
generous payments to those who left.

● SVT operates in multiple countries, potentially exposed to different political and

regulatory environments.
Political
● The company's regional monopoly in each country could be subject to political
influence.

● SVT's operations and acquisitions may be subject to national and international laws
and regulations related to water supply and treatment, desalination, and other
Legal
business sectors.
● (labour laws and how it will affect SVT’s recruitment?)

● SVT's role in purifying water and maintaining regional water supply networks
highlights its concern for environmental sustainability. The company is committed
Environmental to sustainable operations and has a vision of “Making the world a safer place”.
● The demand for wind turbines is expected to grow each year as a. (It can also be
political)
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PESTLE Analysis (STEEPLE)

Political
● SVT operates in multiple countries and therefore is subject to the regulations and policies of each
country it operates in.
● The company operates in a monopoly position in each country which could lead to government
intervention.
● The demand for desalination is increasing globally and is subject to government support for the growth
of this industry.

Economic
● The demand for potable water is increasing globally and presents an opportunity for the Fresh Water
Division.
● The market for desalination is rapidly growing and presents an opportunity for the Desalination
Division.
● The Engineering Division is subject to competition from other manufacturing companies and cost
control pressures.

Social
● The company’s vision “Making the world a safer place” reflects its commitment to social
responsibility.
● The company is a major supplier of potable water to over one million people and millions of
households.
● The different leadership styles of the divisional directors could affect employee motivation and
performance.

Technological
● The company is involved in the desalination and water treatment industries, both of which are subject
to technological advancements and innovation.
● The Engineering Division is involved in the manufacture of equipment for water treatment and power
turbines, which could be subject to technological advancements.

Legal
● The company operates in multiple countries, each with its own legal requirements and regulations.
● The company’s monopoly position in each country could be subject to antitrust legislation.

Environmental
● SVT operates in the water treatment and desalination industries, which have an impact on the
environment.
● The company is committed to sustainable operations and has a vision of “Making the world a safer
place”.
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BCG Matrix
Analysis of Company
SVT currently supplies potable water to over one million people in Norway and to millions of households
in over 20 other countries.
SVT is a public multinational limited company (PLC MNC).

SVT is organised into four divisions based on product.

Fresh Water Division - supplies potable water CASH COW
● to nearly 200 million people around the world so gg
● has increased in size through both internal and external growth strategies
● acquisition of Geng PLC, a major water supplier (UK)

Desalination Division - constructs and operates desalination plants STAR

● The division provides 15% of the world’s desalination capacity (fast growing market that will double
in 10 years)
● SVT currently operates desalination plants in 19 of the 120 countries that use such plants
● Smaller desalination plants - increase in the demand for cruise holidays (last 20 years) boosted sales of
these plants by 300% since 2015.

Engineering Division - manufactures water treatment equipment and power turbines

● completed a takeover of a rival engineering company, H4 PLC, in 2015 (broaden product range)
- H4’s board of directors had been reluctant to embrace change
- employees were paid competitive salaries
- company never made use of any other financial or non-financial methods of motivation
● SVT undertook a modernization programme and reorganisation of the operations of H4’s UK
factories, achieving economies of scale

Changes:
Factories operate 24hr, every day, with three eight-hour shifts per day (resistance from HR)

To overcome resistance - SVT offered a one-time incentive payment - (inc. accepting a new shift pattern
every six months)
Employees who did not want to sign were offered payments to leave (voluntary redundancy)

Quarter of the employees (average age of 61) turned down the flexible-working contract and left the
company, because they are skilled and well experienced labour, which might negatively affect H4. As a
result of this significant exodus of former employees from H4, SVT’s HR department organised
recruitment to fill the 300 vacancies that were created.

Consumer Products Division - manufactures home water filters

Each division is headed by a director with operational and tactical authority
Yannick has a situational leadership style.
Ariadne’s (engineering division) has an autocratic leadership style.
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Yannick has clashed with Ariadne - he feels that the machinery needed to update water treatment plants has
been delayed due to Ariadne's having different priorities.
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Sample Questions
Unit 1: Introduction: Business Organisation & Environment
1. State 2 internal and 2 external stakeholders of SVT [4]

2. Describe the difference between acquisition and merger [4]

3. Examine the impact of the external environment on the functioning of SVT [10]

4. Prepare a SWOT for SVT. [6]

5. Discuss the difference in the manner in which a nonprofit organisation functions as compared to
a profitable one.[6]

6. Describe any 2 stakeholder conflicts being experienced by SVT. [4]

7. Examine the usefulness of a mission statement to SVT [6]

8. Examine the usefulness of a vision statement to SVT [6]

9. Distinguish between a vision and a mission statement. [4]

10. Examine the CSR policy of SVT

11. With reference to SVT, distinguish between external and internal growth [4]

12. Explain one method of internal and one method of external growth that SVT used [6]

13. Using the Ansoff matrix examine the growth strategies being considered by SVT. [8]

14. Examine the implications of acquiring a UK-based company Geng PLC a water supply
company.[6]

15. Examine the implications of taking over H4 PLC, a rival engineering company. [6]

16. Evaluate the implications of SVT being a multinational corporation. [6]

17. With reference to Jayne, discuss the qualities that an intrapreneur must have. [4]

18. Evaluate SVT’s outreach programme. [8]

19. Examine the scope of a PPP model (not for profit) for an organisation like SVT for the new
product WF15. [6]
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Unit 2: Human Resource Management

1. Give/list examples of financial (extrinsic) and non-financial (intrinsic) motivators.

2. Outline one monetary incentive and one non-monetary incentive to motivate employees at SVT.
[2]

3. Compare and contrast the leadership style of Yannick and Ariadne. [6]

4. Examine the effectiveness of the leadership style displayed by Yannick [4]

5. Explain 2 reasons for which SVT’s employees in the engineering division may have resisted
change [4]

6. Examine the effectiveness of the leadership style displayed by Ariadne [4]

7. Draw the organisational chart of SVT . [4]

8. Explain the factors leading to low employee turnover in the engineering division. [4]

9. How did the flexible work-time contract affect SVT positively? [4]

10. Examine the reasons why employees at H4 PLC were resistant to change. [8] HL

11. Explain 2 benefits to SVT of having flexible working contracts . [4]

12. Using the Handy Shamrock model, prepare an organisational structure for SVT. [6]

13. Explain any 2 external forms of recruitment adopted by the HR department of the engineering
division. [6]

14. Using any two relevant motivational theories examine the reasons behind employee turnover in
the engineering department of SVT. [6]

15. Explain the importance of induction training to an organisation like SVT . [4]

16. Examine the one-time incentive scheme adopted by SVT for their engineering division. [6]

17. Apply Daniel Pink's theory to SVT. [6]

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Unit 3: Finance & Accounts

1. Evaluate any two sources of finance available to a profitable organization like SVT. 6 marks

2. Examine any 2 sources of finance available to them for launching WF15. [6]

3. Outline one fixed cost and one variable cost for SVT. [2]

4. Explain the revenue and capital expenditure for SVT . [4]

5. Explain subsidy as a source of finance . [4]

Q.1 Between 2005 and 2010, SVT’s Consumer products division made consistently increasing
contributions to the SVT's overall profits. In the same time period, SVT’s share price rose by 65%.
Enabling the company to increase its dividends every year.

For the manufacturing unit of consumer water filters consider the following details.
Particulars 2005 2010

Units sold 50,000 ?

Selling price per unit $150 Increase by $32

Total variable cost $30,00,000 Increase by 10%

Fixed cost $15,30,000 Increase by 2,00,500

The increase in profit is directly proportional to its increase in share price.

1. Find out the following and show your working clearly:
A. Contribution per unit for 2005 and 2010. [4]

B. Break-even point for 2005 and 2010 [4]

C. Margin of safety for 2005 and 2010 [4]

D. Find the number of units sold for the year 2010. [6]

E. Draw a fully labelled diagram for the year 2005. [6]

2. Define
A. Dividends

B. Share price

C. Market share
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D. Cost of sales

Q.2 SVT’s consumer product division has a separate division manufacturing and sales of water filters.
Following are the details of their cash flow.
● Sales unit for the month of Jan is 3000 units
● Sales unit increases by 10% every month as compared to the previous one.
● Selling price of each purifier is $100 throughout the year.
● SVT also charges $10 as compulsory installation fees.
● SVT pays wages of $20,000 in total per month.
● The manufacturing machine needed a repair in the month of March, which amounted to
$3000.
● Rent is to be paid every second month with an increase of 20%. Initial rent paid was $5000.
● Fuel charges were $2000 at the beginning which increased by $100 every month.
● Opening balance at the beginning was $20,000.
● Cost of goods sold is $46 per unit out of which only 50% is paid in cash.

Prepare the cash flow statement for the first 4 months of the year.
SVT’s accounting cycle is from January – December.

A. State the reason for the increase in the expense every month.

B. How can the use of cash flow be beneficial to SVT?

C. The company is offered a cash discount to pay other expenses in cash. Based on the above cash
flow suggest whether they should opt for the given option. (Justify your answer)
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Unit 4: Marketing
1. Define market share. [2]

2. Explain the usefulness of secondary data as a method of research. [6]

3. Explain any 2 pricing strategies that SVT can adopt for WF15 [4]

4. Prepare a suitable promotional mix for WF 15 as a product. [6]

5. Prepare a marketing mix for WF15 as a product. [8]

6. Examine the channel of distribution that SVT can adopt for WF15. [6]

7. What is the importance of branding for SVT [4]

8. What type of advertising is recommended for SVT to recruit specialised and highly skilled
employees? [6]

9. Recommend a suitable distribution channel for the WF15. [4]

10. Recommend a form of marketing for the WF15 according to the results of their secondary
market research. [4]
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Unit 5: Operations Management

1. Define labour productivity, capital productivity capital utilisation HL

2. Examine the impact of implementing sustainability on SVT [10]

3. Explain how SVT is environmentally and socially sustainable. [6]

4. Explain whether the low cost purifier identified for the LDCs is being adaptively creative or
innovative. [4]

5. Explain and evaluate the implications of the modernisation programme and reorganisation of
the operations of H4’s UK factories. [10]

Possible Questions
Difference between takeover and acquisition line 49
Internal VS external motivation factors line 55
Internal VS external growth