Cambridge IGCSE And O Level Business Studies 5th Edition Karen Borrington, Peter Stimpson - Solutions

MST is a large steel-making business. Sales and profits have fallen recently. The directors are under pressure from the owners to make the business much more profitable. One director has paid a bribe to a government official to make sure MST gains a government contract. MST has closed two steel
1 Jean-Luc is the Chief Executive of a furniture factory. He promotes his business as supporting 'sustainable development', as wood is better than plastic or metal for the environment. His company's furniture is sold in many countries. Wood is bought from the cheapest sources Jean-Luc thinks it
Airbus Industries, the world's largest manufacturer of passenger aircraft, is producing a new range of planes. These planes are more efficient than the existing models in order to save fuel-they are 20 per cent more economical. They are also much quieter than earlier models. Many airlines want to
The government in Country B is planning to increase taxes. It will use the revenue raised to build more roads and airports in an attempt to reduce unemployment and increase economic growth. The rate of inflation was very high last year but it has now started to fall. ADC produces exclusive branded
1 The economy of Country A is growing rapidly. Unemployment is falling and the incomes of most consumers are rising. However, inflation increased to 8 per cent last year. Many business owners are worried that the government could increase interest rates.a Define 'inflation.b Identify two likely
The rapidly developing motorbike industry in Bangladesh could win a significant portion of the growing Asian market. Major stakeholders in the industry-manufacturers, component importers and dealers -have encouraged the government to introduce policies to help encourage local motorbike assembly. In
You are the Managing Director of the largest computer manufacturing company in your country. Your business sells products at home and in foreign markets. Materials are imported from abroad. You employ hundreds of skilled workers to develop, assemble and test the computers. Your business is planning
a Fruity Smoothies sells a wide range of branded smoothies. Explain two ways that Fruity Smoothies could create a brand image for a new fruit drink aimed at teenagers.b Fruity Smoothies is considering building a new factory to produce and sell fruit smoothies in one of the two countries shown in
a The Directors of Fruity Smoothies want to increase its market share. Explain two other aims the Directors might have for the business.b If Fruity Smoothies tries to sell its smoothies in several new countries it will have a number of problems to overcome. Consider three problems for the business
a Both Option 1 and Option 2 require capital for the expansion. Explain four suitable sources of finance the Directors of Fruity Smoothies could use.b Fruity Smoothies might take over a competitor which sells fruit smoothies. Consider how important the competitors' statement of financial position
a Explain, using examples, the difference between fixed costs and variable costs for Fruity Smoothies.b Using the information in Appendix 1, consider the two options for increasing the market share of Fruity Smoothies. Recommend which option the Directors should choose. Justify your choice using
2 The table below is an extract from the accounts of Hi Fashion Ltd. This is a private limited company that sells quality fashion clothes. It purchases from leading clothing manufacturers. It recently started offering its customers two months' credit. However, sales have been falling due to
1 The table below is an extract from the accounts of Triton Canning Ltd, a fool canning and processing business. The company sells its products to the thre main supermarket groups in the country.a Define 'capital employed.b Identify two possible reasons why revenue has increased.c Outline two
2 An extract from Penang Garages plc's latest statement of financial position is shown below. The garage company sells cars and repairs old vehicles. It has many competitors.Extract from Penang Garages plc's statement of financial positiona Define 'total equity (or shareholders' funds).b Identify
1 An extract from Acme Builders Ltd's latest statement of financial position is shown below. During the period shown the government increased interest rates the cost of borrowing money. A competitor business is for sale. The owners have asked the directors of Acme Builders if they wish to buy the
Hayley's is one of Sri Lanka's largest public limited companies. It is a very diversified business with divisions operating in agriculture, transport, consumer products and aviation. A summary of the Hayley Group statement of financial position is shown below.Discussion points 1. Suggest two
KL Co. Ltd and HK Co. Ltd are two businesses that manufacture gifts bought by tourists such as pottery and wooden carvings. The following table contains a summary of the two companies' statements of financial position for the year ending 31/10/18.a Calculate the values for x, y and z.b Identify two
Sue develops new computer games. She has developed two new games but she only has the capital to launch one of these.Game A is aimed at young children of around 6-10 years old.Game B is targeted at teenagers of around 13-18 years old.She has forecast the following financial information:a Define
1 Ikram is a hairdresser. His revenue was 10 per cent higher this year than last year. He earned revenue of $50000 last year. He charged an average of $5 for each customer last year and has not increased prices. He buys in materials such as shampoo and hairspray and has calculated that the cost is
In 2017, Sun Resorts hotel group, the large leisure group operating in Mauritius and the Maldives, announced that its net profits for the second quarter was Rs 219.4 million as compared to only 4.6 million in the same period for the previous financial year This impressive increase in profit was due
a. Using the same pattern as the typical income statement shown above, calculate the retained profits of ABC pic for the year ending 31/3/2018 from the following data (which is not in the correct order!).b. Explain why retained profit is important to ABC's future success. ($000) 280 Revenue Tax
Abbas Manufacturing produces wheels for cars. It holds high inventory levels so that one-off orders from major car manufacturers can be satisfied quickly. The world's big car manufacturers demand long credit periods from their suppliers of three months. Abbas Manufacturing has prepared the
1 Bruno manages a hotel. Most of the hotel bedrooms are occupied during the main tourist season, which lasts for seven months. The hotel's main cash outflows are the same each month but food costs and some employee costs increase when there are more tourists. Bruno plans to have the hotel
Akram owns a small farm. The income of the business varies greatly during the year. The farm makes a small profit but Akram is ambitious. He wants to take over a neighbour's farm and increase the range of crops he sells. He thinks that he needs long-term finance and plans to take out a bank loan to
1 Michelle lost her job when the sugar factory closed. She wanted to start her own business designing and making clothes. She has prepared several dress designs which she thinks are better than anything else on the market. All the main banks refused Michelle's request for a $100 loan, even though
1 a As Premium Suits grows larger it could gain from economies of scale. Explain two economies of scale the business might benefit from as it grows.b Quality is important to Sally. Consider the advantages and disadvantages of quality control and quality assurance. Recommend which method Sally
SalesRUs is a chain of clothes shops. The owners are looking for a location in the city centre for a big new shop. The existing shops sell a range of clothes for men and women at low prices and are all located in busy shopping malls. There is a lot of competition from similar shops and the Managing
1 ABC Limited produces fruit juice drinks. The fruit to produce the drinks is grown locally on nearby farms. The fruit can also be imported at a cheaper price, but the quality is not as good. When producing the fruit drink there is a lot of waste from the parts of the fruit which are not used to
LK is a private limited company and it owns and operates three cafés in a city centre. Customers expect the cafés to provide a quality service and also to be 'value for money. There has been an increasing number of customer complaints about service waiting times and food quality. The owners of LK
1 DR manufactures low-priced flip-flop shoes. It sells its flip-flop shoes through supermarkets across the country in towns and cities. We need to employ inspectors who use quality control when we manufacture the flip-flops to make sure they are good quality or our customers will not be happy, said
2 Popsquash plc is one of the world's largest makers of soft drinks. Sales have increased in recent years but profits have not. Rising fixed and variable costs have meant that higher sales revenue has not led to higher profits. The Chief Executive recently said: 'Perhaps the company is just too big
1 Sasha rents a market stall selling jewellery. She makes most of the jewellery herself but she also buys in items from large manufacturers. Her only other variable cost is the pay of her sales assistant, who receives a small payment for each item she sells. Sasha wants to expand her business and
The following cost data has been collected from two shoe manufacturing companies.a Calculate the total annual cost of manufacturing shoes for both businesses.b Calculate the average cost per unit (pair of shoesl.c Explain three reasons why the average total cost (per unit) for Company B is lower
A car manufacturer produces three models of vehicle, X, Y and Z. It has calculated the costs of these three products to be as follows:a Calculate the total variable cost of manufacturing vehicle Models Y and Z.b Calculate the total cost of manufacturing Models Y and Z.c Calculate the average cost
2 Mr Patel owns a business which manufactures wooden furniture. He uses traditional labour-intensive methods of production in the factory. Workers measure, cut and shape the wood needed for each piece of furniture. The furniture is made using job production to the exact requirements of each
1 Carlos owns a private limited company called BettaBakers Limited. It produces bread loaves and a variety of cakes which are sold in local shops. The method of production used by BettaBakers is batch production. Carlos says, 'I have been told that lean production techniques in the bakery would
Nigerian banks, for example, GT Bank, Oceanic Bank, Zenith Bank and Intercontinental Bank, have found that most Nigerians are gradually losing the desire to carry cash around and most customers prefer banks with efficient online banking facilities as they do not like to queue in branch banks.
a. Choose a business that produces a service and find out what new technology/equipment has been installed in the business over the last five years. (This will probably be computers or specialised computer software.)b. What are the advantages and disadvantages of these changes?c. How have these
a. Choose a business that manufactures a product and find out what new technology/equipment has been installed in the Operations department over the last five years.b. What are the advantages and disadvantages of these changes?c. How have these changes affected the business (for example,
Using the internet, research contactless payment methods and when they can be used. What are the advantages and disadvantages of using this method of payment both for the customer and the business?
a. What method of production is used by each of the following businesses? Explain the reasons for your choice.• Walls manufactures well-known brands of ice cream. The ice creams are sold in many different shops and other outlets, and millions are sold a year.• Alexander is a hairdresser. He
Identify the changes that have taken place in the reorganisation of the factory floor using Kaizen principles.
Choose a business activity with which you are familiar, for example a restaurant, cafe or hairdresser, and identify examples of the seven types of waste which might occur. How could these types of waste be eliminated?
a Explain two ways the size of the ChocoCrocs company could be measured.b Consider the alternative ways the directors could expand ChocoCrocs. Recommend which way it should choose. Justify your answer.
a ChocoCrocs has a website which gives customers information about the products it sells. Explain two other ways that ChocoCrocs could find the internet useful to the business in the marketing of its products.b The Marketing department is one of ChocoCrocs most important departments. Consider why
1 a Appendix 1 shows large chocolate bars are in the decline stage of the product life cycle. Explain four other stages of the product life cycle.b ChocoCrocs is considering what pricing strategy to use for the crocodile-shaped children's chocolate bars. Consider three suitable pricing strategies
KKosmetics manufactures make-up for women. The company sells its products across Europe but wants to start selling to African countries. The Marketing Director says, There are a lot of opportunities in these markets but also several problems. We are reaching saturation in the European markets and
YeyYo owns a chain of cafés selling cakes, biscuits and coffee. The company wants to change its marketing strategy to increase its market share. Its traditional cafés are in small towns and its target market is local people who shop in these towns. The company does not advertise or use any sales
Yeo's is a food business which was set up in 1900 in China, originally as a small shop making soy sauce. It moved to Singapore in the 1930s and started expanding. The business now makes a variety of food and cooking products including curry sauces, pastes, noodles and drinks. Today the company
Choose a product which you think will sell very well in your country (this could be a new product or an existing product such as bottled water). Create a marketing strategy for this product by including answers to the following questions.a Who is your target market? What are the characteristics of
PP provides house cleaning products. PP sells its products only through its own website. PP does not sell any of its products to wholesalers or retailers. The owner believes that e-commerce is the future for selling all products and that in time all shops will close.a Define 'e-commerce.b Identify
JJ sells expensive handmade jewellery. The jewellery items are designed and made to the exact requirements of the customer. JJ is successfully promoted on social media networks. Jonathan, the owner of JJ, only sells through JJ's own shop. However, he is thinking of selling directly to customers
Airbnb allows people to lease or rent short-term accommodation including holiday apartments, rooms or hotel rooms. Airbnb does not own any of the accommodation. It acts as an intermediary and receives a percentage of the fee charged from both guests and owners of the accommodation for every
2 FK is a partnership and it manufactures drinking glasses. Customers pay FK to put their own designs or messages on the outside of the glass. These are often given as gifts at weddings, births or other special celebrations. FK is planning to also manufacture plain glasses for everyday use. These
1 TP manufactures expensive shoes for women. It sells its range of shoes through shops which also sell made-to-measure designer clothes for women. We need to be clear who our target market is, says the Marketing Manager. TP's Directors want to reduce costs to try to improve profitability. One
Justin Bieber is a Canadian pop/R&B singer, songwriter and actor. He was discovered in 2008 by Scooter Braun, who came across Bieber's videos on YouTube and later became his manager. Justin is very popular, particularly among younger age groups. He is preparing to go on a world tour. The tour will
For each of the following five products decide the best method of sales promotion to use. Explain your choice in each case.a A new magazine aimed at teenage boys.b A new type of pen which is very comfortable to use and does not smudge.c A company making a famous brand of football boots wants to
Choose ten products which you and your friends buy regularly. Collect examples of sales promotions that have been used for these products and explain why these methods of promotion were used.
For each of the following products, decide on the best advertising media to use. Explain your choice in each case.a Nike, which produces an established brand of sports shoes that is sold to teenagers as a leisure shoe, wants to become more competitive with rival companies. This product is sold in
2 Pinkor is a retail chain selling children's clothes on the market stalls and small shops that it owns. It buys most of its products from wholesalers. Rakesh, the owner, says, 'I think we should start to sell by mail order and on the internet and close some of our shops to save money.a Define
1 D&D manufactures footballs. The footballs are sold in sports shops around the world. The distribution channels D&D uses are to sell its footballs direct to retailers in some countries and through an agent in other countries. The Managing Director of D&D wants the company to start selling
2 X&Z has recently designed a new game for the Microsoft Xbox, a games console. People in many different countries have been waiting for this new game and they are willing to pay a high price to be some of the first people to play the game. The business can get back some of the development costs of
1 A&B is a private limited company. It produces a well-known branded breakfast cereal called Oatz which has a reputation for good quality. The cost of producing each box of Oatz is $1.The cereal is sold in shops at a price of $2 per box. The prices of competitors' cereals range from $1.20 to $2.10
McDonald's is a multinational company with restaurants all around the world-in 121 countries to be exact. Every country has its own customs and cultures that McDonald's recognises and respects. Menu items vary from country to country. but the company's most famous product - the Big Mac - is
What pricing strategy would most probably be used for the following products? Explain your choice in each case.a. A watch that is very similar to other watches sold in the shops.b. A new type of mobile (cell) phone that has been developed and is a lot higher quality than existing mobile phones.c. A
2 XYZ produces popular chocolate bars and sells them to supermarkets. Its best-selling brand is ChocDelight. It is wrapped in expensive packaging and is sold as a luxury chocolate product. This best-selling chocolate bar has had high and steady sales for the last five years. However, recently sales
1 ABC is a private limited company. It makes nuts and bolts, which are producer products, and they are sold to large car manufacturers. The sales of its products are at a high and steady level. The products are made to the exact specifications of the car companies and they are not sold to any other
Suggest possible ways to extend the product life cycle of the following products. State which extension strategy you would use for each product, and explain why you think it would be successful in boosting sales.a. A chocolate bar which has been sold for many years in the same packaging and has had
Select two products that have brand names. For each of the products identify:a who the customers of the product are b what it is that attracts them to the product c what brand image the manufacturer is trying to create d how the name and the packaging of the product help to reinforce the brand
Nestlé manufactures chocolate bars. One of its best-selling bars is Milkybar, which appeals to young children. On the front of the packaging there is a picture of a smiling cowboy-called the Milkybar kid. The advertising will be on television and the adverts will feature the Milkybar kid - he will
You work for a company which manufactures ice cream. You have been given the task of designing a new ice cream on a stick (a lolly) suitable for small children. Describe in detail how you would do this.
a. Choose three products that you have bought.b. Do you think they have been successful? Why?c. Try to analyse the success of each product using the criteria in the diagram above. For example, does it have a good design? Is it reliable? Is it very distinctive from other brands?
2 H&H has recently designed a new app for the iPhone. It will allow people to control electronic devices in their home when they are not there. Phone users in many different countries will be likely to want to download this app. The Managing Director wants the Marketing department to carry out
1 T&T is a small business which sells many different types of garden tools. It is well known for selling tools of high quality. Sales of its products are growing very quickly. Its Managing Director (MD) feels that market research isn't the most important factor contributing to the success of the
You have been asked to carry out some research into the feasibility of opening a new restaurant in your local area. Design your own questionnaire to carry out on friends and/or family.Complete the following steps.a Design the questionnaire.b Decide who you are going to ask.c Decide how many people
Read the case study.Pepsi manufactures fizzy drinks. It wants to start selling a new drink in your country. To help it assess the size of the market, you have been asked to find out:the size of the total population how many people there are in the age groups 1-10, 11-20 and 21-30 in your country
The following products require some primary research. Decide which type of research would be the most appropriate to use for each and why.a The possible success of a new chocolate bar.b. Whether to introduce a new style of watch which uses fashionable bright colours.c Whether to extend an existing
2 TGH is a public limited company which makes sports shoes (trainers). It makes a variety of designs for the mass market. The mass market consumers are young people who want fashionable sports shoes as well as those who play sport. The Directors recently decided to target a niche market. This is a
1 D&F Limited owns several fruit farms. The fruit is sold to large supermarkets abroad. D&F also grows coffee which is sold to companies that process and brand the coffee. The branded coffee is also then sold to large supermarkets abroad. The world price of coffee has recently dropped by 20%. There
In which section of the Marketing department-Sales, Market Research, Promotion or Distribution-do each of the following people work?a Anya spends most of her time in other countries showing the product to people who buy inventory for large retail groups.b Mohamed spends his time arranging for
3 a The Lakeview Restaurant is located near to several restaurants which are competitors. Explain one advantage and one disadvantage to the business of being located near to competitors.b Consider the advantages and disadvantages of the two options for the restaurant business to expand. Recommend
2 a The Lakeview Restaurant is expanding. Explain two reasons why an organisation chart would be helpful to the management of the restaurant.b The restaurant needs to communicate with its suppliers to order its weekly food ingredients. Consider the advantages and disadvantages of using email,
1 a Explain two reasons why well-motivated employees are important for the restaurant.b Chris and Abdul have advertised a job vacancy for a restaurant manager. Looking at Appendix 2, compare the two job applicants in Appendix 1 and decide whom you would choose to employ. Justify the reasons for
2 SEP manufactures electrical appliances such as cookers and heaters. One of Phil's responsibilities as Marketing Manager at SEP is to communicate with thousands of customers in many countries. Some of these customers are wholesalers but many are individual consumers who have bought products
1 Manuel is HR Manager for a large bank. His responsibilities include internal communication with individual workers and groups of workers. Sometimes he wants to send a message to all 15 000 workers employed by the bank. Some workers complain that unless they spend time reading notices or email
Sanchez is a successful business leader. He started his own business, STC, importing tea and coffee five years ago. He now employs 45 people-30 in his country and 15 in countries that produce the tea and coffee. As he is very busy he holds few meetings with his workers. He emails his managers daily
Which communication method might be most appropriate for the following messages?Justify your answer in each case.a There should be no smoking in the staff canteen.b The management want to instruct all employees on how the new computer system works.c Details of the business's sales figures for the
Sales were below target at the Co-operative Retail Store. The manager was very concerned about this. She decided to write to every worker, about 30 in all, to warn them of the problem of falling sales and how jobs were now at risk. In the letter she asked for ideas on how to increase sales. Workers
a Suggest three more examples of external communication from a business or from your school or college.b Give details of the message to be sent and the method you think should be used to send it.c Justify why you have chosen these communication methods.
a. Suggest three more examples of internal communication within a business or your school or college.b For each example, give details of the message to be sent and the method you think should be used to send it.c Justify why you have chosen these communication methods.
2 Mr Patel owns an insurance company. He advises clients and arranges insurance policies for customers, who pay a fee for his services. He employs ten well-qualified workers who offer a high level of customer service. His business needs to recruit an extra five well-qualified workers and will need
1 Sarah owns a business which manufactures musical instruments. There has been an increase in sales and profits over the last two years but there has been a fall in demand for some products. She employs 50 skilled production workers. She wants to recruit five more factory workers to make pianos but
Coca-Cola aims to help its employees (called 'associates') realise their full potential. It is committed to extending education and training programmes to all associates at all levels of the organisation and in all of the countries it operates in.Coca-Cola University (CCU) is the company's
Consider the way in which Gowri Kumaran was treated by her employer.She applied for a job as machine operator in a television assembly factory. The employer offered her the job and said that her contract of employment would be sent to her after one month's trial. After one month, Gowri received her
a An international construction company has just won a contract to build a dam in an African country. How might the Human Resources department recruit the following workers for the contract?• Experienced engineers• Labourers b An international airline is expanding its operations in South
2 The following organisation chart is for PPB Ltd. It is a private limited company which owns and operates a chain of supermarkets. The organisational chart shows the hierarchical structure of the business.a Define 'hierarchical structure'.b Identify the span of control for the:• Operations
1 Sasha owns a business which produces office furniture. She employs 100 workers in the Operations department and 15 workers in the offices. Sasha believes in a democratic leadership style. Sasha says that being a good manager is very important to the success of the business. Very few workers leave
When Cosy Corner convenience store started it was small and Bill Murray, the sole owner, knew all the employees by name. He used a management style which involved asking the workers what they thought about his decisions and encouraged them to tell him their ideas about the business. The business
The Cosy Corner Convenience Store is owned and managed by Bill Murray. It is a sole trader business. Bill has no employees. He works a long day - 12 hours, usually. As he works alone in the business he has to do all the jobs which are involved in running a busy convenience store. Here is a list of
2 Sasha is a hotel manager. She has 30 employees and they are divided into teams working in the following departments: kitchen; restaurant; hotel reception; housekeeping (room cleaning). Two of the hotel receptionists have been trained by Sasha in some aspects of hotel management. A modern hotel

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Cambridge IGCSE And O Level Business Studies 5th Edition Karen Borrington, Peter Stimpson - Solutions

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