Skandvig Terra PLC

THIS DOCUMENT WILL BE UNEDITABLE 1 DAY

BEFORE THE EXAM.
Notice: Any comments with talks about leaks or exam content will result in
the document being taken down. We do not suggest or promote academic
dishonesty.
If an error occurs or smth gets deleted, contact ratio#1296 on discord.
If you would like to discuss anything, press on the members list and press on the chat button at the
bottom.

http://surl.li/gocjg : case study pack

Case Study Link: May 2023 BM Case Study P1
Discord Server Link: https://discord.gg/rNN3ZqevGH
KAHOOT linked to case study
SVT video link: Business Management Pre-seen case study May 2023 examination session|
SVT| Teacher RK
Business timeline of Skandvig Terra PLC (SVT) 2
Organisational Chart 2
Stakeholders 3
Internal Stakeholders 3
External Stakeholder 4
Definitions (Alphabetized) 5
Tools and Theories (for 10 markers & 20 Markers): 12
SWOT Analysis: 13
ANSOFF Matrix 15
STEEPLE Analysis 16
PESTLE Analysis (STEEPLE) 18
Product Life Cycle 19
BCG Matrix (Market growth rate VS Relative market share) 20
Stakeholder Mapping for SVT (HL) 21
Lewin’s Force-Field(s) 22
TBL (Triple Bottom Line) 23
Fish Bone Diagram 24
Motivational Theories 25
1. Taylor’s theory 25
2. Adams’ theory of equity 25
3. Herzberg’s Theory 26
 4. Pink’s theory 27
Sample Questions 29
Unit 1: Introduction: Business Organisation & Environment 29
Unit 2: Human Resource Management 40
Unit 3: Finance & Accounts 45
Unit 4: Marketing 47
Unit 5: Operations Management 51
Other Possible Questions 54
**Unanswered Questions** 80

Business timeline of Skandvig Terra PLC (SVT)

Before 1980 - Company founded
1980s - Expanded into other business sector (desalination and household water treatment
products) (line 7)
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
(line 87)
2010 onwards - Takeover of small water filter manufacturers in both Europe and the USA (line
91)
2015 - Sales in desalination division boosted by 300% (only smaller desalination plants) (line 45)
2015 - Takeover of H4 PLC (Rival Engineering Company) (line 49)
2015 - Modernization programme and reorganisation of operations at H4 PLC (line 56)
2016 - Programmes complete at H4 PLC and employees set to work (line 73)
2018 - Board of directors approve a substantial 5 year marketing budget (line 93)
2019 - Jayne Dees goes to Sudan to teach English and gets an idea, overlooking their conditions
to get freshwater. Discusses with the Board of Directors to make low-cost, easily transportable
water purifiers for use in countries where access to potable water is limited. (line 106)
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. (line 117)
January 2021 - Winner announced (James Azuki) with a design named WF15 for the
competition to build water purifiers. (line 120)
2022 - SVT’s Engineering Division began production of the WF15 (line 126)
2022 - The smallest of the former H4 factories manufactured SVT’s first wind turbine (line 77)
2023 - Full order book for wind turbines at the H4 Factories. (line 80)
Organisational Chart
Stakeholders
1. External - Customers
2. External - People affected by CSR
3. External - WF15 creator (James Azuki)
4. External - Government Entities (ministry of water and irrigation, and others)
5. External- NGOs & Charities.
6. External - Rival engineering and water supply businesses
7. Internal - Employees at SVT
8. Internal - Shareholders of SVT (including board of directors)
9. Internal - Directors of SVT (Yannick, Ariadne, Jayne)

Internal Stakeholders
1. Yannick Pedersenb
· Director of the Fresh Water 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, easily transportable water purifiers (for
places with limited access to potable water) (line 112)
· Made her own research which is to operate water purifiers using solar power (line
113-115)
· ​Spent three months teaching English in village schools in Sudan in 2019 (line
106-107)

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

· Work three eight-hour shifts per day
· Given one-time incentive for agreeing to the new flexible-working contract

5. SVT’s Marketing Department

· Used 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, essentially an organisational culture clash (line 59)
· Since a quarter of H4 employees decided to resign, SVT’s HR organised recruitment to
fill 300 vacancies (line 66).
· Chose carefully where to advertise the vacancies and all vacancies were filled within 3
months = efficient (line 69-70)

7. Board Member
· 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 vision 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)
External Stakeholder
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; ~27% of total week (line 52)
· competitive salaries (line 53)
· no financial/ non-financial rewards/bonus offered (no other methods of
motivation 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 to leave (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

· An 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 (Alphabetized)
1. Above-the-line promotion (television, newspapers, magazines): a paid form of promotion that
is undertaken by a business by paying for communication with consumers, e.g. advertising

2. 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. (usually
more than 50%) Acquisitions are hostile.

3. Aquifer: Natural, underground water storages

4. Below-the-line promotion (social media, sales promotions): promotion that is not a directly
paid-for means of communication but based on short-term incentives to purchase, e.g. sales
promotion techniques

5. Board of Directors (BOD): elected by shareholders to make strategic future-focused decisions

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/decision making of the
company.

6. Brand Leader: To become the brand with the highest recognition and largest market share in the
market. A brand leader is a product or brand that is recognized as the most popular or dominant
within a specific market or industry. It is often the first brand that comes to mind when consumers
think of a particular product category and has a strong reputation and customer loyalty. A brand
leader typically has a large market share and is often imitated by competitors.

7. Business: An idea made to satisfy the wants and needs of customers. The 4 main types of
businesses are sole traders, partnerships, private and public limited companies.

8. 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.) Gaining raw materials

Secondary Sector: Manufacturing products

Tertiary Sector: Service

Quaternary Sector: information technology, research, and development, as well as consulting

services and education."
9. Capital Productivity/Productivity Rate: This measures how efficiently an organisation’s fixed
assets are used to generate output for the business.

10. Change: Refers to the modification or transformation in the way business is conducted as a
response to internal factors or external influences. It arises when internal and/or external factors
that influence the operations of a business do not stay the same.

11. Charities: A charity is a non-profit organisation that uses donations and funding to support a
specific cause or mission. Charities can take various forms, including foundations, religious
organisations, and community organisations. The main purpose of a charity is to serve the public
good and provide assistance to those in need, rather than to make a profit for shareholders or
owners.

12. 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.

13. Consumer: The end-users of a product. This contrasts with customers who are the buyers of the
product.

14. Contribution: Contribution per Unit = Selling Price per Unit - Variable Cost per Unit

15. 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.

16. Demand: refers to the total amount of a good or service purchased at a particular price, in a given
time period.

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

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

19. Distribution Channel: The channel of distribution refers to the means used to get a product to
the consumer.

20. Dividends: The distribution of a company's p/rofit, to its shareholders, who get a certain
percentage of the profit of the company, if the company allows this, according to their percentage
ownership.

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

22. EOS: 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.
Internal measures measure a company's efficiency of production and occur because of factors
controlled by its management team.

External EOS: pool of skilled labour, good infrastructure, growing market no. of
buyers), technological advancements. External happen because of larger changes within the
industry, so when the industry grows, the average costs of business drop

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

24. External Growth: External growth (or inorganic growth) occurs when a business grows by
collaborating with, buying up or merging with another firm. Main types include
Mergers and Acquisition
Joint ventures
Strategic alliances
Franchises

25. 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.

26. Founding: This refers to the date of the official establishment or creation of a business
organisation. The owners are called the founders or co-founders.

27. Horizontal Integration (line 32-33): a business acquires another business in the same step in the
chain of production (i.e. they have the same business activity). It increases market share and .

28. Human Resources Department: Department focused on dealing with issues regarding
employees such as hiring and organisation. Their task is to work out business's needs for
employees, given goals for strategic development.

29. Incentive Payment: A payment to the employees to stimulate greater output

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

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

32. 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.

33. 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.

34. Leadership: Leadership is the process of influencing and inspiring others to achieve
organizational goals.
 Situational Leadership: Situational leadership is a leadership style that 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."

35. Lean Production (HL ONLY): Producing goods in a manner that reduces waste output and time

36. Less-economically developed countries (LEDC): are countries with low levels of economic
development and a low standard of living for their citizens. These countries typically have a weak
industrial base, low per capita income, high levels of poverty, and a lack of basic infrastructure
and social services. LEDCs are often located in less developed regions of the world, such as
Africa, Asia, and Latin America.

37. Manufactures: This refers to the process of combining and transforming raw materials and/or
components into final goods, ready for sale to customers. SVT's Engineering Division produces
water treatment equipment and power turbines.

38. Market Research: Market Research is designed to discover and gather the opinions, beliefs and
preferences of the thinking pattern and buying habits of customers. Market research can either be
primary or secondary.

39. Market Share: measures the value of a firm's sales revenues as a percentage of the total sales
revenue in the industry. Market share can be calculated in volume (quantity) or value (monetary
value).

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

41. Marketing Budget: How much money a business allocates to spend on marketing purposes.

42. 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.

43. 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.

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

Financial methods of Motivation

1. Salaries
2. Wages
3. Commissions - Getting a certain percentage of what YOU as the employee sold
4. Performance related pay - depending on how you perform you get paid
 5. Profit-related pay
6. Fringe payments - bonus payments
7. One time incentive payments
8. Employee Share-ownership schemes

Non-financial methods of Motivation

1. Job Enrichment: Employees have full control over their jobs with little supervision
2. Job Empowerment - when an employee performs well they get recognition and can have
more say in decisions etc, may also get promotions
3. Job Rotations: Employers work in different divisions of the business
4. Job Enlargement: Employees have more tasks to do
5. Teamwork - everyone working together allows for encouragement

45. 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.

46. Non-governmental organisations (NGOs): type of non-profit organisation that operates

independently from any government. NGOs are established to serve a specific social cause or
address a particular issue, and they may focus on areas such as human rights, poverty alleviation,
environmental protection, or disaster relief. They are funded through donations, grants, and other
forms of support, rather than by government agencies.

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

48. Operational Authority: refers to the power given to an individual or a group within an
organisation to make decisions and take action related to the day-to-day operations of the
business. This authority allows the individuals or group to manage and direct the resources of the
organisation to achieve the desired goals and Objectives.

49. Order Book (Line 80): An order book shows the buy and sell prices in real-time (constantly
being updated)

50. Organization by product: refers to structuring a workforce according to the goods or services
produced or sold. Each department focuses on a different product within the organisation's overall
product portfolio

51. Outreach program: An outreach program is an initiative or effort by an organisation to reach out
to and engage with a specific target audience or community.

52. PLC: A business organisation owned by shareholders with limited liability. The shares are traded
on a public stock exchange.

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

54. Pricing Strategy: Pricing strategies are the methods and procedures companies employ to
determine the rates they charge for their goods and services.
Pricing strategies include:
Cost-plus pricing
Price discrimination
Skimming pricing
Penetration pricing
Loss leading pricing
Predatory pricing (illegal do not use)
Psychological pricing

55. Product: A broad term that refers to any physical or non physical item that is purchased by either
commercial or private customers.

56. 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."

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

58. Productivity: Refers to the level of efficiency in the production process. The more productive
resources are, the more output they generate.

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

employees.

Capital Productivity: This measures how efficiently an organisation’s fixed assets are
used to generate output for the business."

59. Quality management (HL ONLY): A set of methods used to ensure and improve quality as well
as ensure reliability.

60. 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.

61. Redundancy: when a job is no longer required so the employee doing this job becomes
redundant through no fault of their own.

62. 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).

63. Reservoir: A large tank or basin used for storing water or other liquids.
64. Sales revenue: refers to the income of a business derived from the purchase of its goods and/or
services from customers. It is calculated by multiplying the selling price of the product by the
quantity sold.

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

66. Share Price: The value of the share of a company.

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

68. Specialised Employees: Employees who are experts in a specific field

69. Stakeholders are individuals, groups or organizations that have an interest or are affected by the
operations and decisions of a business.

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

71. Subsidise - Governmental grants given to businesses which allows them to purchase raw
materials at a cheaper rate.

72. Supplies: This refers to the good or service that an organisation is willing and able to produce,
usually for commercial gain. In general, the higher the price the greater the quantity supplied as
the business can earn higher profit margins.

73. Tactical Authority (line 15): refers to the power given to an individual or group within an
organisation to make decisions and take action related to the implementation of the organisation's
strategy. This authority is focused on the intermediate-term goals of the organisation, typically
spanning several months to a few years.

74. 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.

Friendly takeover: occurs with the consent of the target company's management and
board of directors. The acquiring company and the target company work together to negotiate a
deal that is mutually beneficial to both parties.

Hostile takeover: Occurs when the acquiring company attempts to take over the target
company without the consent of its management and board of directors. The acquiring company
may make a public offer to the target company's shareholders to purchase their shares, or may
attempt to gain control of the target company through other means, such as a proxy fight."

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

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

77. Unit costs: refers to cost incurred by a company to produce/ acquire one unit of a product/
service. It is calculated by dividing total cost of production by total number of units produced.
78. Vacancies: exists when a job position becomes available, often due to resignations or growth of
an organisation.

79. Vertical Integration (line 8-9): occurs when a business grows by acquiring other businesses in
earlier or later stages in the chain of production. It is divided into backwards vertical integration
and forward vertical integration.

80. 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; forms the foundation for the objectives of a business, including its core values and
sense of direction, essentially guiding decision-making and setting the tone of how managers and
employees behave

81. voluntary Redundancy Payments: Compensation offered by a company to employees who

voluntarily choose to leave their jobs as a part of a redundancy program.
Tools and Theories (for 10 markers & 20 Markers):
● Motivational Theory
● Fishbone (effects of leadership style)
● Triple Bottom Line (economical, sustainable, social obligations of SVT)
● Stakeholder mapping (HL)
● Forcefield (HL)
● Investment Appraisal
● Balance Sheet & Profit/Loss Account
● CSR
● SWOT
● ANSOFF
● BCG Matrix
● STEEPLE/PESTLE - political (expanding to other countries, bureaucracy)
● Product life cycle
● Fishbone diagram
(Guys please add more tools and theories from the list above, so that we can refer to it later. I
have added a few. If the tool is discussed below, please tick it off of the list. As of now, we need
fishbone to be added asap. If anyone has a diagram or can make one, please put it up here.
Thanks)
SWOT Analysis:
SWOT analysis is a simple yet very useful decision-making tool-bg. SWOT is an acronym for
Strengths, Weaknesses, Opportunities, and Threats. It can be used to assess the current situation
of a business organization. SWOT analysis considers both internal factors (strengths and
weaknesses) and external factors (opportunities and threats) that are relevant to the organization
under investigation.
Strengths
1. Diversified in over 20 countries (line 5)
2. Regional monopoly (line 7)
3. Diversified business sectors (line 8)
4. Wide range of products offered (Water filters,
potable water, wind turbines, ): strong product
portfolio (line 10-14)
5. Organised into four divisions with effective
decision-making authority at the division level
(line 10-14)
6. Each division is headed by a director with
operational and tactical authority (line 15)
7. Strong financial performance and stability
8. Acquisition of Geng PLC allowing rapid
growth (line 31-33)
9. Two 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.
12. Effective modernization program and
re-organization leading to (line 56-57)
13. Improvement in labour productivity it → unit
costs have fallen (line 75)
14. Consumer market share price rising by 65%
(line 97-98; 88)
15. Labour turnover is below average (line 76)
16. SVT has a strong sense of CSR (its Outreach
Programme and the WF15 product) which
strengthen its brand image (line 96-100)
17. SVT could have achieved these types of EOS:
Purchasing (buying in bulks) , Technical (at
higher capacity level unit costs decreases)
Financial
Marketing Managerial
Weaknesses
1. Dependence on a single market
2. Because of flexible working practices,
high employee turnover in the engineering
division. (lines 63-64)
3. Consumer Products (division) are not
suitable in countries that have problems
with access to potable water (i.e.
LEDCs)(home water filters do not remove
bacteria or viruses) (Line 83-86)
4. Internal conflict with two directors of
different departments. (line 129)
5. Clashes between leadership styles of
different division directors (lines 24-26)
6. Resistance from long-serving employees
during the modernization program (lines
58-60)
7. Dependence on water treatment
equipment and machinery for its water
supply business.
8. Lack of experienced employees
9. Lack of communication
10. Stakeholder conflict
11. CSR may cause a decrease in profits
12. High set up cost and training cost
13. Lack of distribution channels in LEDCs
for their new WF15 (line 133)
14. The board of directors cannot agree on a
pricing strategy for WF15.(lines 126-131)
15. H4 factories operate at full capacity which
makes employees more likely to become
burnt out and demotivated and it also
raises the chances of machine breakdown
due to overuse, which will raise the
capital expenditure of SVT.
Opportunities
1. Market Growth Possibilities due to External
factors (Desalination Market doubling in the
next 10 years) (line 40)
2. Introduction of low cost solar tech in LEDC’s
(Line 114 & 123)
3. Growth potential in the global water
desalination market (lines 39-40)
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. (line 80-81)
7. Takeover of rival engineering company can
broaden SVT’s product range
8. May be achieved due to modernization
programme (line 56-57)
9. Demand for desalinated water
10. Managerial EOS, hiring someone experienced
to organise distribution (Line 132-133)
11. Takeover small firms in the US and Europe.
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. (line 15)
❓
5. There may be a change in government
regulations (lines: )
❓
6. Short supply of experienced employees
availability (lines: )
7. The desalination market may not grow as
rapidly as projected, which can eventually
lead to loss of capital and employees.
ANSOFF Matrix
The Ansoff matrix is an analytical tool that helps managers choose and devise various product
and market growth strategies.
Existing product New product

Market Penetration Product development

Existing · SVT currently supplies potable water
market to over one million people in Norway
and to millions of households in over
20 other countries. (line 4)
· SVT builds and operates water
treatment plants to purify the water
and is responsible for maintaining the
regional water supply networks in
these countries. (line 5)
· SVT advertised to hire “highly skilled
and specialised” employees to fill in
the place of the 300 vacancies left by
the redundancies (line 65-70)
· To broaden its product range, SVT
completed a takeover of a rival
engineering company, H4 PLC, in
2015 (same market UK). H4
manufactures steam and gas turbines
in four factories (line 49)
· In 2022 they made their first Wind
Turbines (line 77 - 80)

New Market Development Diversification

market
● was carried through to investigate · SVT expanded into other business
LEDC markets sectors, including desalination and
● The expansion for desalination is household water treatment products
another possibility (line 40) (line 8)
● Acquisition of Geng PLC allowed
· WF15 (new product) production for
SVT to operate in a new market (UK)
LEDCs (new market).
while providing the same product
(potable water) (line 32)
● Acquiring small manufacturers in
Europe and USA to sell the water
filters (existing product) in these new
markets (line 91)
 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.
● 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 WF15 has been planned to help LEDCs access drinking
water.
● SVT has shown corporate social responsibility in their outreach program as part of
the company’s commitment to helping people in LEDC’s.
● This helps SVT to satisfy any external pressure and build their brand image, as
well as it acts as motivation for their internal stakeholder group, employees.
Social ● One director, Jayne Dees, recommended to the board that SVT become actively
involved in developing low-cost, easily transportable water purifiers for countries
where access to potable water is limited.
● They are not discriminative
● Deals with multiple ethnicities due to operating worldwide
● Lower-income individuals in LEDCs don’t have TV (affects marketing techniques
that SVT would choose)
● Access to media, television set ownership, and newspaper/magazine purchasing
may create some marketing barriers for SVT in LEDCs. However, there may be
opportunities for social media marketing due to the high social media usage in
these countries (lines 134 – 140).
● Teaching LEDC communities English (Like Jayne went to Sudan to teach children
English)

● SVT is involved in the production of potable water, desalination, water treatment

equipment, power turbines, and home water filters, indicating its technological
advancements in the water industry.
● Delayed machinery for updating water treatment plants can be a threat
Technological ● Due to the undeveloped technology SVT’s home filters do not remove bacteria
and viruses from filtered water
● They research and develop new technologies to develop their product portfolio
● SVT treatment plants can become obsolete because of technological capabilities
improving- Yannick wants to improve machinery, while Ariadne doesn't.
 ● The global water desalination growth market is expected to double in the next 10
years, presenting the opportunities for SVT's Desalination Division.
● High demand for cruise holidays
● The company has also achieved through modernization and reorganization of its
Economic operations, which can improve its financial performance.
● Increased demand for wind turbines. (can also be ethical as wind turbines lead to
lower pollution levels)
● Possibility of subsidies and grants

● SVT's leadership styles of the directors of different divisions vary, with some
employees perceiving a more autocratic approach in the Engineering Division.
● The company's HR department faced resistance from employees during the
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.
Ethical ● SVT has also set up its Outreach Programme as part of the company’s commitment
to helping people in less economically developed countries. The programme offers
these countries free skilled labor provided by SVT employees. SVT has shown
corporate social responsibility in their outreach program as part of the company’s
commitment to helping people in LEDC’s. This helps SVT to satisfy any external
pressure and build their brand image, as well as it acts as motivation for their
internal stakeholder group, employees.

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

Political regulatory environments.
● 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 business
sectors.
● (labour laws and how it will affect SVT’s recruitment?)
Legal ● Due to the fact that the SVT filters don’t filter out bacteria and viruses from the
water, such filters won’t be allowed by the governments of several highly
economically developed nations to avoid any future health conflicts.
● Regulations to stop producing waste in desalination plants

● SVT's role in purifying water and maintaining regional water supply networks
highlights its concern for environmental sustainability. The company is committed to
sustainable operations and has a vision of “Making the world a safer place”.
Environmental ● The demand for wind turbines is expected to grow each year. (It can also be political)
● Climate change can lead to decreased water levels in rivers and wells
● If the factories are not environmentally considerate the business would be
hypocrites to their vision statement
 ● The business SVT is already an environmental business that heavily relies on the
environment specifically water

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”.

Product Life Cycle

The product life cycle refers to the stages that a product goes through from its introduction to
the market to its eventual decline and removal from the market. It helps businesses develop
strategies for each stage to maximize profitability and longevity. The stages are: introduction,
growth, maturity, decline.
1. Fresh Water division – Maturity: SVT‘s potable water product is likely in the
maturity stage as it has been supplied since the company‘s foundation and the market
is still growing. However, it is unclear whether there has been any decline in sales in
the past.

2. Desalination division – Growth (Desalination plants): Both small and large

desalination plants are likely in the growth stage since sales of the smaller plants has
increased by 300%. This increase in sales indicates that the product is still in the
growth phase since a maturity would result in a smaller but steady increase in sales.

3. Engineering Division – Introduction (Wind turbines): SVT‘s wind turbine product is

likely in the introduction stage as the company has only just begun manufacturing
them in 2022 and is only able to produce a limited number (10) per year.

4. Consumer product Division – Growth (Water filters): SVT‘s water filter product is
likely in the growth stage since the company is still acquiring smaller businesses and
aiming to become the brand leader, indicating that there is room for growth and the
product has not yet reached maturity.
BCG Matrix (Market growth rate VS Relative market share)

1. Cash Cow - Fresh Water Division: This division is the largest supplier of potable
water to nearly 200 million people around the world and has a regional monopoly in
each country in which it operates. It generates a high market share and a steady cash
flow for the company, making it a cash cow.
2. Stars - Desalination Division: The desalination division of SVT operates in 19 out of
120 countries and provides 15% of the world's desalination capacity, and the market
for desalination is growing rapidly. Therefore, this division is a star as it has a high
market growth rate and a high market share.
3. Question marks - Consumer Products Division:This division manufactures home
water filters, which are not the primary business of the company. This division has
consistently increased their contribution to SVT’s overall profits. They are increasing
their market share through internal and external growth strategies, such as takeovers
on smaller water filter manufacturers in Europe and the United States of America.
They are aiming to become the brand leader in this market.The consumer products
division has low market share and high growth potential, making it a question mark.
4. Question mark transitioning to Star- Engineering Division: The Engineering
Division of SVT is one of the industry leaders in productivity per employee. They are
big enough to complete a takeover on a rival engineering company, H4 PLC,
therefore the market share cannot be small and implies that it is large, but also does not
directly state that it is large. They also have achieved and have cut costs of
 employment, becoming more efficient and increasing their profit margin. There is also
a large demand for wind turbines which is expected to keep growing each year,
meaning there is high growth potential. Due to these reasons it can be implied that
they have high market share and high growth potential, making it a star..

Stakeholder Mapping for SVT (HL)

High Interest Low Interest

High ● Employees: SVT has a large workforce,
Power and they are critical to the success of
the company. They are likely to be
highly interested in the company's
operations, policies, and decisions.
● Shareholders: SVT is a publicly traded
company, and shareholders have a
significant financial stake in the
company's success. They are likely to
be highly interested in the company's
financial performance and future
growth prospects.
● Governments and Regulatory Bodies:
SVT operates in multiple countries, and
the company's operations are subject to
government regulations. Governments
and regulatory bodies may have a
significant impact on the company's
operations, but they may not be highly
interested in SVT's day-to-day
operations.

Low ● Local Communities: SVT provides
Power potable water to millions of people
worldwide, and these communities are
highly dependent on the company for
their daily needs. They may be highly
interested in the quality and reliability
of SVT's water supply.
● Suppliers and Vendors: SVT relies on
suppliers and vendors for raw materials
and equipment, but these stakeholders
may not have a significant impact on the
company's operations or decisions.

Stakeholder Concern Power

Customers Clean and reliable water supply High

People affected by CSR Environmental and social impact of SVT's activities High

WF15 creator Successful implementation of WF15 Low

 Government Entities Compliance with regulations and policies High

Competitors/Rival Businesses Impact on market competition Low

NGOs & Charities SVT's contribution to social and environmental causes Low

Employees at SVT Job security and fair working conditions Medium

Shareholders of SVT Return on investment High

Directors of SVT (Yannick, Ariadne) Business growth and profitability High

Suppliers SVT currently supplies potable water to over one million High
people

Lewin’s Force-Field(s)

The Lewin’s Force-Field is a decision-making tool that looks at helping or hindering forces
towards a plan. It is generally used as a tool for facilitating communication and participation
of groups. The nature of the point system (scale of 1 to 5) is somewhat arbitrary, thus there is
a lot of uncertainty and error associated with this tool; it should not be used for making final
decisions.

Forces for change (Driving Subsidization Forces against (Restraining forces)

Forces) of the WF-15

Non-financial drive for Shareholder ROI(Return on investment)

employees as they believe the is decreased, leading to less shareholder
company is socially minded. interest and loyalty. (4)
(3)

Shareholders who are socially Lesser profitability may decrease

minded are more likely to
invest as SVT is more socially
sustainable. Reputation as a
socially sustainable business is
made. (2)
propensity for future growth by
removing retained profits; opportunity
cost. (3)
 SVT’s reputation and goodwill Reputation as a socially responsible
is retained, which may company may cause organizational
contribute to contingency conflict during future mergers or joint
planning efforts. Boycotts and ventures. Additionally, may cause
pressure group influence will conflict with previous H4 employees, as
be less likely in the event of a a previously family owned business
crisis. (2) which is resistant to change. (1)

Total: 7 Total: 8

TBL (Triple Bottom Line)

The Triple Bottom Line (TBL) is a framework that evaluates a company's performance based on
three metrics: social, environmental, and economical performance.

Social Performance:

SVT's case study highlights the importance of their Corporate Social Responsibility (CSR)
program. Through the WF15 initiative, SVT has demonstrated a commitment to improving
access to clean water for people in need. This social initiative has not only had a positive
impact on the communities they serve but also on SVT's reputation as a socially responsible
organisation. Additionally, SVT has created job opportunities for local people, which is
contributing to the social development of the community.

Ecological Performance:

SVT's core business involves water treatment, which has a direct impact on the environment.
The case study highlights that SVT is using innovative technologies that aim to reduce the
environmental impact of their operations. SVT's water treatment systems are designed to be
energy-efficient, and they use eco-friendly chemicals, which reduce pollution.

Economical Performance:

SVT is a profitable organisation, and the case study highlights its successful growth in recent
years. The company's revenue has increased steadily, and its profits have allowed it to invest in
research and development to improve its technologies continually. SVT's CSR initiatives and
sustainable business practices have also contributed to its financial performance by enhancing its
reputation and attracting socially responsible investors.

Overall, SVT's TBL report highlights its commitment to balancing social, environmental, and
financial performance. The company's CSR initiatives, sustainable business practices, and
innovative technologies are contributing to its success in all three areas. By focusing on the TBL,
SVT is not only a profitable organisation but also a socially responsible and environmentally
sustainable company.

Fish Bone Diagram

This tool is used to determine the origin of a problem, or 'the causes of the causes' behind a
problem. It is a visual tool that is particularly useful in brainstorming in a group setting. Once a
problem is diagnosed, the fishbone diagram can lead to further discussions and suggestions that
can help to evaluate potential solutions.
Motivational Theories

1. Taylor’s theory

Time and piece rate - Money is the main motivator.

Before SVT took over H4 PLC, H4 PLC was:

● Operating 5 days per week
● Allowing a single shift from 8 a.m. to 5 p.m.
● Providing employees with competitive salaries (similar to those offered by rival
businesses)

Benefits Limitations

Autocratic leadership style leads to Disregarding any non-financial rewards

high productivity and more control

Boosts worker’s morale since they’re Employees carry out boring repetitive tasks (no
paid like others clear career path if they’re doing the same thing
then there’ll be no improvement)

Workers paid based on their results H4 PLC could also afford to lay off workers as
(Piece-rate system) productivity levels increased.

As a result of money gained workers Dissatisfied workers will start to leave: high
are encouraged to work hard and labour turnover (WORK, LIFE, BALANCE)
maximise their productivity.

2. Adams’ theory of equity

People seek fair balance between their outputs and inputs

After the acquisition:

● SVT wanted H4 PLC factories to operate 24 hours a day.

● Working all week days with three 8-hours shifts per day.
● Long- serving employees were against this change and resisted it, asking for
equity and to be fairly treated like others.
● SVT offered a one-time incentive payment to employees who agreed on a new
flexible working contract with a new shift pattern every 6 months.
 ● Significant exodus (mass departure) of employees

Benefits Limitations

Employees are motivated to gain Work motivation is disrupted.

justice

Would allow SVT to concentrate If no change happens, employees will start to leave
more on its employees and listen to (high labour turnover)
their needs

Combines both financial and Subjective: what counts as fair to the employer may
non-financial rewards not be the same as what is fair to employees.

Job satisfaction if directors are Can’t work in the autocratic leadership style of
listening to employee Ariadne Johansen who will only focus on doing the
work rather than listening to employees.

3. Herzberg’s Theory

Salary (hygiene factor): SVT offered their employees very competitive salaries that rivalled
other businesses, and they haven’t had a shortage of salaries for their employees. This lowered
the employee’s dissatisfaction, hence lowering turnover.

Job enlargement (motivator): SVT applied job enlargement in their business such as the Trip to
teach young kids in LEDCs for 3 months after 10 years of employment. This motivated workers
to continue working in the business in order to reach this trip and achieve CSR goals.

The case study said that SVT didn’t utilise other financial and non-financial ways of motivation
other than those.

Hygiene factors - factors that don’t affect motivation but if they are not present, they may
demotivate the workforce

Eg : Good Bathroom
Working conditions: Since employees would spend a huge time working due to their long
shifts; they must work in good conditions in order to lower their dissatisfaction

Motivators - factors that help staff gain job satisfaction

Recognition: giving a sense of recognition from the business to the employee would make them
feel more wanted and important rather than just workers or robots, hence giving them
recognition would help in motivating them.

Advancement: promote workers for their achievement and loyalty.

Job enlargement:

● Variety in employee’s work

● Giving them more and various goals to achieve

Work itself: since the employees would work for many hours, the job they’re doing would lose
meaning hence resulting in less motivation. So, giving a sense of purpose to the employee’s work
would help motivate them.

Achievement: working for many hours employees would also lose their sense of achievement,
which would result in less motivation. Hence giving them a sense of achievement by giving
small rewards to the employees would result in a higher sense of achievement which would
motivate them

Job empowerment: Wouldn’t be possible due to the autocratic leadership style present in the
engineering department. It can mean that their is an organization culture of power with
centralized decision making.

Benefits Limitations

It would remove any dissatisfaction and It ignores external factors such as how
motivate workers to continue working for competitors treat their employees which might
the business = lower turnover rate lead to dissatisfactions.

Higher motivation would lead higher Motivation methods can be subjective, which
efficiency means that not all employees can be satisfied or
motivated through Herzberg's methods
4. Pink’s theory

Benefits Limitations

It invokes creativity and Innovation Like in SVT, Pink's theory is more modern and those
who are older are already used to the carrot and stick
technique, so it might not work on everyone and they
will lose like how SVT lost their older workers.

It creates a self-belonging since it is an internal Some people might not even be interested in the job in
source of motivation, so they make more effort the first place and are there for money as the only
in their work rather than the bare minimum goal. In that case motivation internally might not be
what motivates them, instead they will prefer financial
rewards

It can build greater trust between the employer There may be a lack of direction in the work done,
and the employee, and within teams. hence struggle to achieve business objectives and fit
Furthermore, it can create loyalty towards the into tight time schedules.
company = less staff turnover.

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
● 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

Changes:
Factories operate 24hr high capacity utilisation, 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 an external recruitment to fill the 300 vacancies that were created.

Consumer Products Division - manufactures home water filters (lines 83)

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.

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.

Possible solution to distribute WF15 could be outsourcing.

Sample Questions
From each unit, add more if you think it will help.

Unit 1: Introduction: Business Organisation & Environment

1. State 2 internal and 2 external stakeholders of SVT [4]

- Internal stakeholders are individuals whose interest in a company comes through

a direct relationship. In the context of this case, the internal stakeholders are
employees and directors of SVT (such as Yannick Pedersen).
- External stakeholders are individuals who do not directly work with a company
but are affected by the actions and businesses of the business. An example of
external stakeholders in this case are customers, and the WF15 creators.

The right answer (because the command term is state):

- Internal: Yannick Pedersen and Ariadne Johansen
- External: customers, James Azuki

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

- Acquisition is when a business takes control over the majority stake in another
business thereby making them take over the company. It is a form of external
growth which is hostile in nature. In this case, the Fresh Water Division took
control of a company called Geng PLC. A merger on the other side is when two
or more different businesses become one entity.

3. Examine the impact of the external environment on the functioning of SVT [10]
- The external environment has a significant impact on the functioning of SVT. The
company's operations, revenue, and profits are influenced by a range of external
factors, including political, economic, social, technological, legal, and
environmental factors.
- One of the main external factors that affect SVT is climate change. The shortage
of potable water in some countries, caused by climate change, has resulted in
increased demand for water treatment plants and desalination plants. To respond
to this demand, SVT has had to find alternative sources of potable water and
invest in desalination plants. SVT's Fresh Water Division, which supplies potable
water, has had to expand in size to meet the growing demand for clean water in
various countries around the world.
- Another external factor that has impacted SVT is market competition. With the
increasing demand for water treatment and desalination plants, the competition in
the market has also increased. SVT has responded to this challenge by acquiring
 other companies, such as Geng PLC in the United Kingdom, and by expanding its
product range to include household water treatment products.
- Moreover, technological advancements have impacted SVT's operations,
particularly in the Engineering Division. The acquisition of H4 PLC and its
modernization program has enabled SVT to expand its product range and achieve
. The division manufactures equipment and machinery for SVT's water treatment
plants, and the modernization program has allowed it to operate 24/7 and increase
productivity.
- In conclusion, the external environment has a significant impact on the
functioning of SVT, and the company has responded by adapting its strategies to
meet the challenges and opportunities presented by external factors. From climate
change to market competition and technological advancements, SVT has had to
innovate and expand to continue to achieve its vision of "making the world a safer
place."

( please respond to this thread!: I think that in this answer it is more examined
how SVT adapted to the external environment on the functioning of SVT and not
the sole impact of the external environment on the functioning of SVT how the
question states) ( please correct if I'm wrong and reason why!)

4. Prepare a SWOT for SVT. [6]

- Strengths:
● Long-standing reputation as a reliable and trustworthy supplier of potable water.
● Strong market position with regional monopolies in each country where it
operates.
● Diversified product portfolio across four divisions, with a focus on water
treatment and related equipment.
● Strong leadership and decision-making capabilities within each division, enabling
quick responses to changes in the external environment.
- Weaknesses:
● Dependence on regional monopolies for revenue and market share.
● Limited geographical , with a majority of revenue coming from Norway and a few
other countries.
● Potential for conflict between different divisions and directors with different
leadership styles.
● Limited innovation and investment in emerging technologies compared to some
competitors.
- Opportunities:
● Growing global demand for potable water and water treatment solutions.
● Increasing market for desalination, with potential to expand into new markets and
increase revenue.
 ● Growing demand for household water treatment products, with potential for
expansion into new markets.
● Opportunity to invest in emerging technologies to enhance efficiency and
productivity (like the modernization program).
- Threats:
● Increased competition in the water treatment and desalination industries, with the
entry of new players and potential pricing pressure.
● Regulatory risks and political instability in some of the countries where SVT
operates.
● Dependence on natural resources and vulnerability to climate change and
environmental risks.
● Potential for supply chain disruptions and volatility in raw material prices.
5. Discuss the difference in the manner in which a non-profit organisation functions as
compared to a profitable one.[6]
- Goals: Non-profit organisations have a mission to benefit the public or a
particular cause, while for-profit organisations focus on generating profits for
shareholders or owners. NPOs' objectives can include social or environmental
causes, education, healthcare, or other charitable purposes, and their activities are
geared towards achieving these goals.
- Revenue: NPOs rely on donations, grants, and fundraising to support their
activities and programs, while for-profit organisations generate revenue from the
sale of goods or services they offer. This difference in the revenue stream means
that non-profit organisations are more accountable to their donors and funding
agencies, as opposed to for-profit entities, which are accountable to their
shareholders or owners.
- Organisational Structure: NPOs have a different organisational structure from
for-profit organisations. NPOs typically have a board of directors or trustees, who
are responsible for making decisions that align with the organisation's mission and
goals. Additionally, NPOs often rely on volunteers to carry out their programs and
activities, whereas for-profit organisations usually have paid staff members who
are responsible for carrying out the operations.
6. In the context of SVT, outline the meaning of growth [2]
- Growth is the expansion of SVT as an organisation due to an increase in the size
of its operations such as the recent acquisition of Geng PLC and the expansion
into new markets by launching new products such as low-cost, easily
transportable water purifiers. Growth can be measured in numerous ways, such as
an increase in SVT profits, market share or the number of employees.
7. Describe any 2 stakeholder conflicts being experienced by SVT. [4]
- One stakeholder conflict experienced by SVT could be with local governments or
communities in countries where they operate, who may feel that SVT's regional
 monopoly limits their choices and bargaining power. This could lead to tension
and conflict, particularly if SVT raises prices or fails to meet local expectations
regarding water quality or service provision.
- Another stakeholder conflict could be within the Engineering Division of SVT,
where there may be disagreements between employees and management
regarding changes to working patterns or conditions, such as the shift to a
24-hour, three-shift system. This conflict could result in low morale, high
turnover rates, and even industrial action, which could negatively impact the
division's productivity and profitability.
8. Examine the usefulness of a vision statement to SVT [6]
- A vision statement is an important tool for an organisation to communicate its
long-term aspirations and goals to its stakeholders. For SVT, its vision statement
"Making the world a safer place" has been in place since its founding and serves
as a guiding principle for the company's operations.
- The vision statement is useful to SVT in several ways. First, it provides a sense of
purpose and direction for the company, which can help to align the efforts of its
employees towards achieving its goals. This is particularly important for a
company like SVT, which operates in a critical industry where the provision of
safe and clean water is essential to public health and safety.
- Second, the vision statement can serve as a source of inspiration and motivation
for employees. It can help to create a shared sense of purpose and identity among
employees, which can lead to higher levels of engagement, productivity, and job
satisfaction.
- Third, the vision statement can be used to communicate SVT's values and
priorities to its stakeholders. This can help to build trust and credibility with
customers, investors, and other stakeholders who share the company's
commitment to making the world a safer place.
9. Distinguish between a vision and a mission statement. [4]
- A vision statement outlines the aspirations and goals of an organisation,
describing what it wants to achieve in the future. It provides a clear and
compelling image of the future state that the organisation aims to create.
- On the other hand, a mission statement outlines the purpose and core values of an
organisation, describing what it does and why it exists. It defines the company's
primary objectives and guides decision-making by providing a framework for
strategic planning and resource allocation.
10. With reference to SVT, distinguish between external and internal growth [4]
- External growth refers to the expansion of a company's business activities through
mergers, acquisitions, or strategic partnerships with other companies. SVT has
expanded externally by acquiring other companies in the water treatment and
desalination industries, such as Geng PLC and H4 PLC.
 - Internal growth, on the other hand, refers to the expansion of a company's
business activities through the development and expansion of its existing
operations. SVT has achieved internal growth by increasing the size and capacity
of its Fresh Water and Desalination Divisions, as well as by expanding the
product range of its Engineering and Consumer Products Divisions through
research and development.
11. Explain one method of internal and one method of external growth that SVT used [6]
- One method of internal growth that SVT used was expanding its product range
through the creation of new divisions. SVT initially specialised in producing and
delivering potable water in Norway, but in the 1980s, it expanded into other
business sectors, including desalination and household water treatment products,
by acquiring other companies. SVT also created four new divisions based on
product: The Fresh Water Division, The Desalination Division, The Engineering
Division, and The Consumer Products Division. This allowed SVT to diversify its
product offerings and increase its revenue streams without relying on external
acquisitions.
- One method of external growth that SVT used was through acquiring other
companies. SVT has grown through both internal and external growth strategies.
Its most recent acquisition was Geng PLC, a major water supplier in the United
Kingdom (UK). Acquisitions allow SVT to rapidly expand its business and
customer base, as well as to acquire expertise and resources that may not be
available in-house. This strategy has helped SVT to expand its operations
globally, supplying potable water to millions of households in over 20 countries,
and becoming one of the industry leaders in productivity per employee.

(Please correct me if I am wrong, but the answer doesn’t refer to SVT’s internal
growth because it mentioned ‘acquiring other companies’ in the same paragraph.
Shouldn’t it be external growth?)
12. Using the Ansoff matrix examine the growth strategies being considered by SVT. [8]
- Market Penetration - This strategy involves increasing market share in existing
markets with existing products. SVT has already achieved a regional monopoly in
each country it operates, and the Fresh Water Division supplies potable water to
nearly 200 million people around the world. To increase market penetration, SVT
can focus on expanding its operations in the existing countries and targeting new
areas within those countries to increase the number of people it serves. SVT has
also acquired Geng PLC, a major water supplier in the United Kingdom, to
expand its operations.
- Market Development - This strategy involves introducing existing products to
new markets. SVT already supplies water treatment plants to over 20 countries.
To expand further, SVT can identify new countries with high demand for water
 treatment plants and enter those markets. Additionally, SVT can focus on building
more desalination plants in countries with limited freshwater resources.
- Product Development - This strategy involves introducing new products to
existing markets. SVT's Engineering Division manufactures water treatment
equipment and power turbines. To pursue this strategy, SVT can invest in
developing new and innovative water treatment equipment and machinery that
can improve the efficiency of its operations. Additionally, the Consumer Products
Division can focus on developing new household water filters with improved
technology.
- Diversification - This strategy involves introducing new products to new markets.
SVT has already diversified into the desalination and household water treatment
product sectors. To further diversify, SVT can consider expanding into related
industries such as renewable energy, wastewater treatment, or infrastructure
development.
13. Examine the implications of acquiring a UK-based company Geng PLC a water supply
company.[6]
- The acquisition of Geng PLC, a major water supplier in the United Kingdom, by
Skandvig Terra PLC (SVT) has several implications. First, it increases SVT's
market share in the UK's water supply industry, which can lead to increased
revenue and profitability. Second, SVT can leverage Geng PLC's existing
infrastructure, knowledge, and expertise to expand its operations in the UK and
improve its service offerings. Third, the acquisition may lead to job losses in
Geng PLC or changes in employment contracts, which can have implications for
employee morale and public relations. Fourth, the acquisition may attract
regulatory scrutiny, particularly in terms of potential monopoly and antitrust
issues, which may require divestitures or other measures to ensure fair
competition. Finally, the acquisition may require significant investment in
integrating Geng PLC’s operations into SVT's existing infrastructure and
management, which can be costly and time-consuming.
14. Examine the implications of taking over H4 PLC, a rival engineering company. [6]
- The takeover of H4 PLC by Skandvig Terra PLC (SVT) has several implications.
First, SVT has expanded its product range to include steam and gas turbines,
which are used to produce electricity. This acquisition provides SVT with a new
income stream, as well as the ability to manufacture and supply its own turbines
for use in its water treatment plants.
- Second, the takeover enabled SVT to achieve by modernising H4's operations and
integrating them into SVT's existing operations. This allowed SVT to improve
efficiency, reduce costs, and increase productivity, which could ultimately result
in higher profits.
 - Third, the modernization program required a change in the shift patterns of H4's
employees, which was met with resistance from some long-serving employees.
SVT offered incentives for employees to sign new flexible-working contracts, but
a significant number of employees chose to leave the company instead. This could
result in a loss of experience and expertise, as well as potential disruption to
operations in the short-term.
- Fourth, SVT faced challenges in filling the 300 vacancies that were created as a
result of the exodus of former H4 employees. Highly skilled and specialized
employees were in short supply in the UK, which could have implications for
future recruitment and retention of talent.
15. Analyse the implications of SVT being a multinational corporation.[6]
- SVT being a multinational corporation has several implications. On the one hand,
it allows the company to diversify its business portfolio, access new markets, and
benefit from it. On the other hand, being multinational also exposes the company
to a variety of risks, such as currency fluctuations, political instability, and
regulatory differences between countries.
- One advantage of being a multinational corporation is the ability to access new
markets. For example, SVT's expansion into other countries has allowed the
company to supply potable water to millions of households and diversify its
revenue streams. Moreover, being multinational allows SVT to benefit by
centralizing certain functions, such as research and development, production, and
marketing, which can lead to cost savings.
- However, being multinational also exposes the company to several risks, such as
currency fluctuations, political instability, and regulatory differences between
countries. For example, if the currency of a country where SVT operates
devalues, the company's revenues will decrease. Similarly, political instability in a
country could lead to a disruption in SVT's operations and a loss of revenue.
Finally, regulatory differences between countries can create challenges for SVT in
terms of compliance and adapting to local laws.
- In conclusion, while being a multinational corporation has several advantages,
such as diversify business portfolio and access new markets, it also exposes the
company to risks for instance: currency fluctuations, political instability, and
regulatory differences between countries. SVT needs to carefully manage these
risks to ensure its long-term success.
16. With reference to Jayne, discuss the qualities that an intrapreneur must have.[4]
- Jayne, the director of the Consumer Products Division, is an example of an
intrapreneur within Skandvig Terra PLC. An intrapreneur is someone who
operates within an existing organisation and brings a spirit of entrepreneurship to
their work.
 - To be a successful intrapreneur, one must possess several key qualities. Jayne, for
example, has demonstrated the following qualities:
- Creativity and innovation - She has developed a new home water filter product
that has resulted in significant revenue growth for the Consumer Products
Division. She has also developed a sustainable packaging initiative that has
reduced the division's carbon footprint.
- Risk-taking - Jayne took a risk by investing in the development of the new home
water filter product. She also advocated for the sustainable packaging initiative,
despite potential resistance from other stakeholders.
17. Evaluate SVT’s outreach programme.[8]
- SVT's Outreach Programme is an initiative that aims to benefit society by offering
free skilled labour to less economically developed countries (LEDCs). It is a
long-term commitment that offers SVT employees a chance to participate in the
program after ten years of continuous employment. This CSR initiative by SVT
has several strengths and weaknesses, which are as follows:
- Strengths:
● SVT's Outreach Programme has helped several LEDCs by offering skilled
labor to various projects such as teaching in schools, repairing
infrastructure, and providing training to local people.
● The program offers a three-month paid career break to SVT employees,
which can help employees develop new skills, gain new perspectives, and
increase their job satisfaction.
● The initiative has a positive impact on the company's reputation, as it is
seen as a socially responsible company that cares about society.
- Weaknesses:
● The program only offers skilled labour, which may not be the most
effective solution for the problems faced by LEDCs. Other solutions such
as providing funding, resources, or developing local businesses may be
more effective.
● The program is limited to SVT employees who have completed ten years of
continuous employment, which may exclude employees who have valuable
skills or experiences that could benefit the program.
● The program may create a dependency on foreign aid, which may hinder
the development of local businesses and economies in LEDCs.
18. Examine the scope of a PPP model (not for profit) for an organisation like SVT for the
new product WF15. [6]
- A PPP model, or Public-Private Partnership model, is a type of collaboration
between the public and private sectors to achieve a common goal, usually a public
service or infrastructure project. However, in the case of a not-for-profit
 organisation like SVT, the scope of a PPP model for the new product WF15 may
differ from a for-profit organisation.
- The following are some potential scopes of a PPP model for SVT and WF15:
- Collaboration with government agencies: SVT could partner with government
agencies to develop and distribute WF15 to low-income or underserved
communities, as a public service. The government agency could provide funding
or other resources to help SVT achieve this goal.
- Partnership with other non-profit organisations: SVT could partner with other
non-profit organisations that share similar values and mission to help distribute
WF15 to communities that could benefit from it.
- Collaborating with private sector companies: Even though SVT is a not-for-profit
organisation, it could still partner with private sector companies to develop WF15.
The private sector company could provide resources and expertise to help SVT
develop and distribute WF15.
- Fundraising and grants: SVT could also use a PPP model to raise funds and apply
for grants to help fund the development and distribution of WF15. SVT could
partner with foundations and other philanthropic organisations to raise funds and
apply for grants.
- Crowdfunding: SVT could also use a crowdfunding model to develop and
distribute WF15. Crowdfunding allows individuals to contribute small amounts of
money to help fund a project. This could help SVT reach a wider audience and
raise funds more quickly.
- Overall, the scope of a PPP model for SVT and WF15 would involve
collaborations and partnerships with government agencies, other non-profit
organisations, private sector companies, and fundraising and grant opportunities.
The focus would be on providing WF15 to communities that could benefit from it,
rather than generating profits for SVT.
19. State two features of a family-owned business as a form of business ownership (line 51).
[2]
- Family control: Family-owned businesses are controlled by a family or a small
group of families who have ownership and management control. This means that
the business decisions are often made by family members or close relatives.
- Long-term focus: Family-owned businesses are often focused on long-term
success and sustainability, rather than short-term gains. This is because the family
has a vested interest in ensuring the success of the business for future generations,
and may prioritise reinvesting profits back into the business instead of taking
them out as dividends.
20. Identify two features of non-governmental organisations (NGOs) (line 104). [2]
- Non-profit: NGOs are typically non-profit organisations that do not distribute
profits to owners or shareholders, but instead use their resources to pursue
 specific social or environmental objectives. They are often focused on advocacy,
education, and/or service delivery to address societal issues.
- Independent: NGOs are independent of government control and are typically run
by a board of directors or trustees who are responsible for setting organisational
strategy and ensuring that the organisation's activities align with its mission and
values. This independence allows NGOs to operate flexibly and respond quickly
to changing circumstances.
21. Identify two features of charities (line 104). [2]
- Charities are organisations that are tax-exempt under the law because they are
dedicated to charitable purposes that provide a public benefit. This means that
charities are exempt from paying taxes on any income or donations that they
receive. This tax-exempt status is granted by the government in recognition of the
public benefit provided by charities.
- One way that charities are able to raise funds is through donations from the
public. Charities often rely on the generosity of individuals and businesses to
support their activities. They may use various fundraising methods, such as direct
mail, online donations, fundraising events, and corporate sponsorships, to raise
funds from the public.
22. Explain two advantages and one disadvantage for SVT to be a PLC (line 1). [6]
- Advantages:
- Increased access to capital: As a PLC, SVT can raise large amounts of capital by
issuing shares to the public. This provides the company with greater financial
resources to invest in its operations, expand its business, and fund research and
development activities.
- Limited liability: Shareholders of a PLC have limited liability, which means that
their personal assets are protected if the company faces financial difficulties. This
makes investing in SVT more attractive to potential shareholders, as they can
invest without the risk of losing more than the value of their investment.
- Disadvantage:
- Increased regulatory requirements: As a publicly traded company, SVT is subject
to various regulatory requirements, such as those related to financial reporting,
disclosure of information, and corporate governance. Compliance with these
regulations can be time-consuming and expensive, which can increase the
company's administrative costs and reduce profitability.
23. Distinguish between STV’s aims (line 93) and objectives (line 74). [4]
- In the context of the given text, the aims of Skandvig Terra PLC (STV) refer to
the long-term goals or the overall vision of the company, as stated in its vision
statement: "Making the world a safer place". Aims are broad and aspirational and
may not be measurable.
 - On the other hand, the objectives of STV are specific, measurable, achievable,
relevant, and time-bound targets that the company sets to achieve its aims. For
example, the objective of the Fresh Water Division is to supply potable water to
nearly 200 million people around the world. Objectives are more focused and help
the company to track its progres hu
- s towards achieving its long-term goals or aims.
24. Describe how SVT's Outreach Programme in LEDCs helps to fulfil its corporate social
responsibility (CSR) (lines 95 - 115). [4]
- The SVT's Outreach Programme in LEDCs helps to fulfil its corporate social
responsibility (CSR) in several ways. Firstly, the programme aims to provide
access to education and healthcare to underprivileged communities, which aligns
with SVT's CSR goals of promoting social and economic development. For
example, the programme has set up schools in remote areas of Africa, providing
education to children who would otherwise have no access to it. This helps to
promote literacy and knowledge, which are important for economic growth and
sustainable development.
- Secondly, the programme also focuses on promoting sustainable development
through the use of renewable energy sources. This aligns with SVT's CSR goals
of reducing environmental impact and promoting sustainable business practices.
For instance, the programme has installed solar panels in several villages in
Sudan, providing access to clean and sustainable energy. This helps to reduce the
dependence on fossil fuels and promotes sustainable development.
25. Explain the importance of corporate social responsibility (CSR) for SVT. [6]
- Corporate social responsibility (CSR) is becoming increasingly important for
companies like SVT, as it allows them to demonstrate their commitment to social
and environmental issues beyond their core business activities. This is particularly
important given the heightened awareness of the impact that companies have on
the environment, society, and the economy.
- In terms of the text, SVT's CSR initiatives are important for several reasons.
Firstly, they help to improve the company's reputation and enhance its brand
image. By engaging in socially responsible activities, SVT can demonstrate that it
is a company that cares about more than just profit, and is committed to making a
positive contribution to society.
- Secondly, CSR initiatives can help to attract and retain talent. Employees are
increasingly looking for employers who share their values and are committed to
making a positive impact on the world. By demonstrating a strong commitment to
CSR, SVT can attract employees who are motivated by these values, and help to
retain existing employees who are looking for a sense of purpose beyond their
job.
 - Thirdly, CSR initiatives can help to mitigate risk and reduce costs. For example,
by implementing environmentally-friendly practices, SVT can reduce its carbon
footprint and minimise the risk of regulatory fines or reputational damage from
negative environmental impacts. Similarly, by promoting diversity and inclusion,
SVT can reduce the risk of discrimination claims and promote a more inclusive
workplace culture.
- Overall, CSR is an important aspect of SVT's business strategy, as it allows the
company to demonstrate its commitment to social and environmental issues,
attract and retain talent, and reduce risk and costs. By embracing CSR, SVT can
not only improve its bottom line, but also contribute to the greater good of
society.
26. Using the case study, explain two strengths and one weakness of SVT. [6]
- Two strengths of SVT are:
1. Monopoly in Regional Water Supply Networks - SVT has a regional
monopoly in each country in which it operates, providing it with
significant competitive advantages. This ensures that the company is the
sole provider of potable water to its customers, allowing it to set prices
and control the market. This also eliminates the need for competition,
providing SVT with a stable revenue stream. For instance, SVT's Fresh
Water Division supplies potable water to over 1 million people in Norway
and millions of households in over 20 other countries, giving it a dominant
market position.
2. Diversified Business Portfolio - SVT has diversified its business portfolio
by expanding into other business sectors, such as desalination and
household water treatment products, through the acquisition of other
companies. This has enabled the company to increase its sources of
revenue and spread its risks across different sectors. For example, the
Desalination Division of SVT provides two income streams by
manufacturing and operating desalination plants worldwide, and by
producing smaller desalination plants for installation on seagoing vessels.
This has enabled the company to be less vulnerable to market
fluctuations.
- One weakness of SVT is:
1. Resistance to Change - One weakness of SVT is its employee's resistance
to change, particularly in terms of shifting to a new working schedule.
This was evident when the company took over H4 and attempted to
modernize its operations by introducing a 24/7 shift pattern, but met
resistance from a significant number of long-serving employees. This
resistance could have led to a loss of productivity and hampered the
company's efforts to achieve its goals. Although the company overcame
 this resistance by offering a one-time incentive payment to employees who
agreed to sign a new flexible-working contract, it still resulted in a
significant exodus of employees who refused to sign the new contract,
leaving the company with 300 vacancies to fill.
- Overall, despite this weakness, SVT's strengths of having a regional monopoly in
its market and a diversified business portfolio have enabled it to be successful in
providing potable water and related products to customers around the world.

27. Describe how SVT's external growth strategy may help it to become the brand leader in
Europe and the US (lines 91 - 92). [4]
- Increased market share: By acquiring other companies, SVT can increase its
market share and expand its customer base. This can help the company to
establish a stronger foothold in the markets where it operates and gain a
competitive advantage over its rivals.
- Diversification of product portfolio: Through acquisitions, SVT can expand its
product offerings and diversify its portfolio, allowing it to cater to a wider range
of customer needs and preferences. This can help the company to attract more
customers and strengthen its position in the market.
28. Explain two advantages and one disadvantage of external growth strategies of SVT’s
Fresh Water Division (lines 27 - 33). [6]
- Advantages:
- Increased market share: External growth through acquisitions or
partnerships with other water companies can help SVT's Fresh Water
Division gain access to new markets and increase its market share. This
can help the division to achieve economies of scale, reduce costs and
increase profitability.
- Diversification: By acquiring other water companies or investing in new
water projects, SVT's Fresh Water Division can diversify its product range
and reduce its reliance on any one market or product. This can help to
reduce the impact of market fluctuations and provide the division with
more stable revenue streams.
- Disadvantage:
- Integration challenges: Acquiring or partnering with other companies can
lead to integration challenges, including issues with culture, management
styles, and communication. These challenges can be time-consuming and
costly to overcome, and may distract the division from its core business
activities.
29. Explain two possible reasons for SVT's decision to take over H4 PLC in 2015 (lines 49 -
50). [6]
 - Diversification: SVT's Engineering Division was primarily focused on
manufacturing water treatment equipment and power turbines. By acquiring H4
PLC, SVT diversified its product range and gained access to H4's expertise in
manufacturing steam and gas turbines. This would allow SVT to expand its
operations and potentially increase its revenue streams, especially in the area of
electricity production.
- Economies of scale: SVT's takeover of H4 PLC allowed it to achieve economies
of scale in the manufacturing process. By combining the operations of both
companies, SVT could increase production efficiency, reduce costs, and improve
overall profitability. Additionally, by modernizing H4's factories and
implementing a new shift pattern, SVT could maximize the use of its assets and
increase production capacity.
30. Outline two STEEPLE factors that influence SVT’s growth strategies [4]
- Environmental: Climate change and increasing global temperatures are leading to
changes in the availability of potable water in many parts of the world. This is
likely to increase demand for SVT's products and services, particularly in areas
where water scarcity is becoming a pressing issue. SVT could respond by
expanding its operations in areas experiencing water shortages, or by investing in
research and development to develop new, more efficient water treatment
technologies.
- Political: As a provider of critical infrastructure, SVT is likely to be affected by
political decisions related to water management and regulation. Changes in
government policies or regulations, particularly in regions where SVT has a
regional monopoly, could have a significant impact on the company's growth
prospects. For example, new regulations could make it more difficult for SVT to
expand its operations in certain countries, or could require the company to make
significant investments in new technologies or infrastructure to meet new
standards.
31. Explain two possible types of EOS for SVT as a large multinational company [6]
a. There are the cost-saving advantages that businesses can enjoy by enlarging the
scale of its output. Examples of possible EOS for SVT include:
- Technical : Being a large business, SVT can afford to invest in sophisticated and
innovative technologies to increase scales of output, thereby reducing the per unit
cost of production. H4 PLC’s factories also operate 24/7, using modernised
operations, which again helps the company to achieve technical .
- Financial : Large businesses like SVT are usually able to borrow more money and
at a lower cost (interest rate change). This is because they are more ‘credit
worthy’. For example, SVT represents lower risk for a financial lender, such as a
commercial bank, because it is an established multinational company with
 operations in 21 countries and is profitable so can benefit from more favourable
rates of borrowing.
- Marketing : Large businesses like SVT can spread their advertising and
substantial marketing budgets over a large volume of output as well as purchasing
their stocks/inventory in bulk, at discounted prices, e.g, electric pumps, pressure
gauges, hoses, and osmosis system (water filtration system).
Unit 2: Human Resource Management
1. Explain the importance of the human resource management (HRM) department [6]
a. Human resource management refers to the business function or department
responsible to all aspects of personnel in an organisation.
- A division where HRM is important is in terms of Human resource planning.
This is the management process of forecasting an organization's future demand
for, and supply of, human resources in order to ensure that it has the optimal
number of employees with the right skills in the right place at the right time.
Given the large scale of operations, including employees at Geng PLC and H4
PLC, this function is vital at ensuring the company operates efficiently.
- Another area where it is important is for the training and development of
employees. They provide adequate and relevant training. This training can have a
positive impact on staff motivation and productivity because confident and
competent employees lead to greater job satisfaction and higher levels of output.
At SVT this includes training employees so that they feel sufficiently upskilled to
transition to new work systems and processes, such as the innovative technologies
introduced at the company to enhance the speed and quality of production lines.
- The HRM department is also responsible for managing organisational change as
well as the potential resistance to change that often comes with this. This includes
communicating the purpose and benefits of change and developing improved
communications channels. This can help to prevent conflict within the workplace,
such as the mass exodus of highly experienced employees when H4 PLC was
taken over by SVT.

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

- Financial (extrinsic) motivators:
1. Salary increase or bonus
2. Commission or profit-sharing
3. Stock options or equity in the company
4. Employee benefits such as health insurance or retirement plans
5. Paid time off or vacation days
6. Expense accounts or reimbursement for work-related expenses
7. Tuition reimbursement or professional development opportunities
8. Performance-based bonuses or incentives
9. Travel allowances or company-paid trips
10. Signing bonuses or relocation assistance
- Non-financial (intrinsic) motivators:
1. Recognition and praise for a job well done
2. Opportunities for personal growth and development
3. Autonomy and decision-making authority
 4. Feeling of accomplishment or job satisfaction
5. Meaningful work that aligns with personal values
6. Positive work environment and company culture
7. Opportunities for creativity and innovation
8. Flexibility in work schedule or location
9. Collaborative work environment and teamwork
10. Feeling of making a difference or contributing to a greater cause.
11. Job enlargement, job rotation, job enrichment, empowerment and training.

3. Outline one monetary incentive and one non-monetary incentive to motivate employees
at SVT. [2]
- In the case study, SVT offered a one-time incentive payment to employees who
agreed to sign a new flexible-working contract in the Engineering Division. This
was a monetary incentive that motivated some employees to accept the new
contract and work a different shift pattern. This shows that monetary incentives
can be effective in motivating employees to take specific actions.
- One non-monetary incentive that SVT could use to motivate employees is
recognition and praise for good performance. This could include public
recognition in company-wide meetings, emails from senior management, or
awards for outstanding performance. This type of incentive can be particularly
effective for employees who are motivated by a sense of achievement or
recognition, rather than purely financial rewards.
4. Compare and contrast the leadership style of Yannick and Ariadne. [6]
- Yannick and Ariadne have different leadership styles. Yannick has a situational
leadership style, which is adaptive and flexible, while Ariadne's style is perceived
by some employees as autocratic. Yannick is able to respond quickly to
unexpected changes in the external environment, such as finding alternative
sources of potable water in response to climate change. On the other hand,
Ariadne's leadership style has led to the Engineering Division being one of the
industry leaders in productivity per employee. However, Yannick has clashed with
Ariadne on several occasions because machinery needed to update water
treatment plants has been delayed due to Ariadne having different priorities.
- In summary, Yannick's situational leadership style works well in a division that
has to respond quickly to unexpected changes, while Ariadne's autocratic
leadership style has led to high productivity but may hinder collaboration and
adaptability in response to changes.
5. Examine the effectiveness of the leadership style displayed by Yannick [4]
- Yannick’s situational leadership style
- Can respond to the uncertain situation
- Quick decision making
 - Enhances team performance.
- Creates a better work environment for the team members.

6. Explain 2 reasons for which SVT’s employees in the engineering division may have
resisted change [4]
1. Fear of job loss: SVT was looking to appoint highly skilled and specialised
employees, and these skills were in short supply in the UK. If SVT had decided to
automate some of its processes or outsource jobs to other countries, employees
may have been concerned about job losses or redundancies. This fear could have
made them resistant to change.
2. Lack of training: The new employee induction training included a visit to SVT's
flagship factory in Norway, which utilises innovative technologies to enhance the
speed and quality of production. However, if the changes required new skills or
knowledge that employees were not familiar with, they may have been resistant to
change due to a lack of training or support. They may have felt overwhelmed or
unsure of how to adapt to the new processes, which could have led to resistance.
7. Examine the effectiveness of the leadership style displayed by Ariadne [4]
a. Many employees view her as an autocratic leader. Advantages of this can include:
Quick decision making because Adriane makes all decisions within SVT’s
Engineering division. Another advantage is that all expectations and
communications are clear, productivity may be high. After all, the Engineering
Division is an industry leader in terms of productivity per employee. However
there are some disadvantages, one can be the demotivational effects because
employees are not empowered to make autonomous decisions. There also might
be a lack of trust within the team as communication is top-down and one way
only. Therefore, highly skilled and experienced team members of the Engineering
Division may feel there is a lack of trust in them when making important
decisions.

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

9. With reference to SVT, describe two steps in recruiting employees. [4]
- Identification - defining the job description, basic roles, responsibilities,
necessities etc needed to fulfil the job.
- Selection - Analysing and reading different applicants CVs etc and deciding
which candidate is best suited for the job described.
10. Define Induction training. [2]
- 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.
11. Explain two advantages of induction training towards SVT employees [4]
- Faster Adjustment: Induction training helps new employees to adjust to their new
work environment and job role more quickly. This can be achieved by introducing
employees to the company culture, policies, and procedures, as well as the
expectations and responsibilities of their job. For example, SVT's HR department
arranged for new employees hired to fill vacancies created by the exodus of
former employees from H4 to undergo induction training that included a visit to
SVT's flagship factory in Norway. This helped new employees to familiarise
themselves with the company's culture and innovative technologies used in
production, making it easier for them to adjust to their new roles.
- Improved Job Satisfaction: Induction training can also contribute to job
satisfaction, as it helps employees to feel confident and prepared for their job.
This can reduce stress and anxiety, leading to a more positive work experience.
For instance, SVT offered a one-time incentive payment to employees who agreed
to sign a new flexible-working contract, which would include accepting a new
 shift pattern every six months. This not only helped the company to overcome
resistance to the new shift pattern but also helped employees who accepted the
contract to feel more satisfied with their job, as they were able to adapt to the new
working hours while receiving additional financial incentives.
12. Explain the factors leading to low labour turnover in the engineering division. [4]
- Svt’s lack of financial and non-financial rewards towards their employees. SVT could
highly benefit from giving their employees fringe benefits and rewards such as
accommodation and health care benefits. This can largely increase the motivation of the
employees which results in lack of low labour turnover. Due to their new flexible work
contract, which requires employees to shift their working pattern every six months, this
caused many older employees to leave the company due to lack of consistency and
structure in their work schedule and in the organisation.
13. Explain how SVT could overcome high labour turnover [4]
- High labour turnover can be difficult to overcome as it can create a bad image for
the firm
- SVT can overcome high labour turnover by advertising the jobs in areas that have
the type of workers that they need, for example on online platforms such as
LinkedIn.
- Implementing motivation theories such as job enlargement and job enrichment.
Job enlargement is basically giving workers variety in what they do, and job
enrichment is giving employees more challenging and complex tasks so that they
can reach their full potential. This leads SVT to overcome high labour turnover as
it gives the employees a higher sense of responsibility and confidence when it
comes to being trusted with responsibilities and decision making for the company.
14. How did the flexible work-time contract affect SVT positively? [4]
- SVT has to pay less for resources. Due to flexible work time contracts
- The company has to spend less money on infrastructure as the employees just
come and go according to their preference. Due to employees having flexible
work-time contracts, they are more motivated as they can work according to their
time comfort and preference. This is highly motivating as the employees will put
in higher efforts into their work, as they will be working when they are highly
energised and motivated. Another way that the contract affected SVT positively is
that, due to the fact that the older employees left the company, this created an
opportunity for SVT to recruit and hire new and younger employees with a higher
and newer skill set, which will allow new ideas to come into the company. This
will be highly beneficial for the company in the long run.
15. Examine the reasons why employees at H4 PLC were resistant to change. [8] HL
- The reason for resistance to change at H4 PLC was due to the older employees'
self interest. They preferred the old working timing and they worried about how
 this change would affect them opposed to the beneficial change in the
organisation that caused a resistance to change.
- Change often brings uncertainty and unpredictability, which can be unsettling for
employees who are used to a certain routine or way of doing things.
16. Explain 2 benefits to SVT of having flexible working contracts . [4]
- Improved employee retention: Offering flexible working contracts can help SVT
to retain valuable employees who may have other commitments, such as caring
for children or elderly relatives. By offering flexible working arrangements, SVT
can demonstrate that it values its employees and is willing to accommodate their
needs, which can help to improve employee morale and reduce turnover.
- Increased productivity: Flexible working contracts can also lead to increased
productivity, as employees may be able to work more efficiently when they have
greater control over their work schedule. For example, if an employee is able to
work from home, they may be able to avoid a long commute and use that time to
focus on work instead. This can lead to higher levels of job satisfaction and better
performance.

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

18. Explain any 2 potential external forms of recruitment adopted by the HR department of
the engineering division. [6]
- Job fairs: Job fairs are events where employers can meet potential candidates and
provide information about job opportunities. The HR department of the
engineering division could attend job fairs to attract candidates with the necessary
skills and experience for open positions. This approach can be particularly
effective for entry-level positions or positions that require specific technical skills.
- Social media: Social media platforms such as LinkedIn, Twitter, and Facebook
can be used to advertise job openings and attract potential candidates. The HR
department of the engineering division could use social media to reach a wider
audience and target candidates with specific skills or experience. Social media can
also be used to build relationships with potential candidates and create a talent
pool for future recruitment needs.

19. Using any two relevant motivational theories examine the reasons behind employee
turnover in the engineering department of SVT. [6]
-
20. Explain the importance of induction training to an organisation like SVT . [4]
- Induction training is a type of training that an employee receives when first starting a job,
this is a type of on the job training. Induction training is important for the employee as it
teaches them the workings of the organisation and the company’s organisation culture.
21. Examine the one-time incentive scheme adopted by SVT for their engineering division.
[6]
22. Apply Daniel Pink's theory to SVT. [6] Describe one advantage and one disadvantage of
high staff turnover resulting from SVT’s modernization programme for H4 PLC (lines 56
- 64). [4]
23. With reference to SVT, describe two functions of the human resources department (line
59). [4]
24. Explain the suitability of SVT's organisational structure by product (line 10). [6 or 8]
25. Describe how SVT's Outreach Programme may impact the motivation of its employees.
[4]
26. Explain two financial and one non-financial methods that H4 PLC could have used to
keep its employees motivated (lines 54 - 55). [6]
27. With reference to SVT, distinguish between charities and non-governmental organisations
(NGOs) [4]
- A charity is a non-profit organisation set up to provide help and raise money or
aid for those in need. Charities typically rely on donations to fund their
operations. Charities are typically focused on providing direct.
28. Using appropriate motivational theory, explain the factors that affect the level of
motivation at SVT. [6]
29. Outline two possible sources of conflict between Ariadne and Yannick (HL only). [4]
30. Explain the reasons for resistance to change by some of H4 PLC's employees after the
takeover by SVT in 2015 (HL only). [6]
Unit 3: Finance & Accounts
1. Evaluate any two sources of finance available to a profitable organisation like SVT. [6]
- Bank Loans: A bank loan is a traditional source of financing that allows a
company to borrow a sum of money from a bank and pay it baczk with interest
over a set period of time. This type of financing is usually used for long-term
investments, such as purchasing new equipment or expanding operations. SVT
can use bank loans to finance its expansion plans, including building new water
treatment plants or acquiring new companies. One advantage of bank loans is that
they usually offer lower interest rates compared to other forms of financing, such
as issuing bonds. However, the disadvantage is that the company must have a
good credit history and may be required to provide collateral or a personal
guarantee.
- Equity Financing: Equity financing involves selling shares of a company to
investors in exchange for capital. This type of financing can be used to fund a
variety of business activities, such as research and development, marketing, and
expansion. One advantage of equity financing is that the company does not have
to pay back the capital or interest, as investors receive a share of ownership in the
company instead. This can be a great way for SVT to raise large sums of money
without taking on debt or risking bankruptcy. However, the disadvantage is that
the company will need to share control and profits with its investors, which can
lead to conflicts of interest and a loss of autonomy.
- In conclusion, bank loans and equity financing are two viable sources of financing
for a profitable organisation like SVT. Each option has its own advantages and
disadvantages, and the choice ultimately depends on the company's specific needs
and financial situation.

2. Examine any 2 sources of finance available to them for launching WF15. [6]
- Equity financing: SVT could consider issuing new shares in order to raise the
required capital for the launch of WF15. This would involve selling ownership in
the company to new investors in exchange for cash. Equity financing has the
advantage of not creating any debt obligations for the company, which can be
attractive to investors who are concerned about a company's debt level.
Additionally, if SVT is able to successfully launch WF15 and generate profits, the
value of the company could increase, leading to capital gains for shareholders.
However, equity financing can dilute the ownership stake of existing
shareholders, which may lead to a decrease in the value of their shares.
- Bank loan: SVT could also consider obtaining a bank loan to finance the launch
of WF15. This would involve borrowing a fixed amount of money from a bank,
with a set repayment schedule and interest rate. Bank loans have the advantage of
providing a fixed source of financing, which can help with budgeting and
 planning. Additionally, the interest paid on the loan is tax deductible, which can
reduce SVT's tax burden. However, bank loans also create a debt obligation for
the company, which can be a burden if the launch of WF15 is not successful and
the company is unable to generate sufficient profits to make the loan payments.
- Overall, both equity financing and bank loans have their advantages and
disadvantages. SVT should carefully consider its financial needs, the potential
risks and rewards of each financing option, and its ability to repay any debt before
making a decision.

3. Outline one fixed cost and one variable cost for SVT. [2]
- One fixed cost for SVT could be the salaries and benefits of their executive team.
This cost remains the same regardless of the level of production or sales.
- One variable cost for SVT could be the cost of raw materials, such as chemicals
and energy, used in the water treatment and desalination processes. This cost will
vary depending on the level of production or sales.
4. Explain subsidy as a source of finance. [4]
- A subsidy is financial assistance provided by the government or a public authority
to support a specific activity or industry. It is a form of financial support given to
businesses, organisations, or individuals to help them offset their costs or increase
their revenue.
- In terms of finance, a subsidy can be seen as a source of funding because it
provides financial resources to the recipient. For instance, a government may
provide a subsidy to a business to help it start or expand its operations, or to
encourage the development of a new technology or product.
- Subsidies can take various forms, such as cash payments, tax exemptions, loan
guarantees, or direct funding. They can also be targeted towards specific
industries or groups of people, such as farmers, small businesses, or low-income
households.
- From the perspective of the recipient, subsidies can be a valuable source of
finance because they can help reduce the cost of production, increase revenue, or
provide access to capital that might otherwise be unavailable.
5. Describe two suitable sources of finance for SVT's WF15 project in LEDCs (lines 126 -
131). [4]
- One source of finance SVT can be the retained earnings SVT has developed over
the years of being a PLC, through the profits and share capital they obtain. This
internal source of finance will not pose threat to SVT, as no external factors will
affect the financial inflow and outflow throughout their sourcing for WF15.
- Another source includes government grants and/or subsidies as the government
can directly assist SVT in raising finance for initiation for the WF15 project. This
could also pose threats to SVT through reporting requirements and other
 legalities, as the requirements to submit reports can be time consuming as well as
inaccuracy would lead to several problems within the financial calculations and
the trust within the organization.
6. Outline how SVT benefits from a fall in its unit costs (line 75). [3]
- As the cost per unit decreases, SVT gains economies of scale. Economies of scale allows
SVT to grow in the market and make their product more efficient and developed in the
market. It allows them to generate more revenue.
7. Explain the importance of the substantial marketing budget that the directors have
approved for the Consumer Products Division (lines 93 - 94). (HL only) [6]
Unit 4: Marketing
1. Define market share. [2]
The percentage of all sales in a market that is held by a business
Measured in terms of volume and value
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 [6]
Cost plus - This pricing strategy adds a fixed amount (mark-up) to the actual cost
of producing the water purifier. Hence, SVT would first determine the cost of the
purifiers and then add a fixed mark-up to the cost of the purifiers in order to determine
the selling price. This piece would then be applied when selling the purifiers in less
economically developed countries. By setting the price in this way, SVT can ensure that it
is earning a profit while still offering a competitive price to their customers. THis would
address the issue of two of the SVT directors who are against subsidizing the WF15
water purifiers and making other stakeholders in the business unhappy, such as
shareholders who may receive lower dividends.
Loss leader pricing - This could be an effective way for SVT to increase sales of
the WF15 water purifiers, particularly in low-income countries. This pricing strategy
involves selling the product at a very low price, even at a loss, in order to attract
customers and increase sales of other products. In the case of selling water purifiers in
low-income countries, SVT could absorb all of this as a loss as part of its corporate social
responsibility program by offering a basic, low-cost water purifier at a significantly
reduced price. Although the business would make a loss on the sale of the WF15 water
purifier, it is what several directors want, i.e the product to be a non-for-profit operation.
4. Explain one advantage and one disadvantage if SVT adopts a low-price strategy for the
WF15 water purifiers [4]
- As pointed out by Jayne Deez, a low-pricing strategy aligns well with SVTs long
standing vision statement (which has remained the same since its founding).
Doing so will make these water purifiers more accessible to the many low-income
individuals and households in LEDCs.
- Due to the perception associated with low prices, SVT may deter some customers
who are more concerned about the quality of healthcare products and devices.
This can have a negative impact on the demand for the WF15, even in
low-income economies and despite the product meeting quality standards set by
the WHO.
5. Prepare a suitable promotional mix for WF15 as a product. [6]
- Advertising: This could involve creating ads for print, online, and broadcast
media. The ads should highlight the benefits of using the portable water purifier,
such as clean and safe drinking water on-the-go.
 - Public relations: This could involve generating positive publicity for the portable
water purifier through media coverage, social media, and influencer marketing.
The focus should be on creating awareness of the product and its benefits.
- Direct marketing: This could involve reaching out to potential customers directly
through email, mail, or social media. The messaging should be tailored to the
target audience and emphasise the convenience and affordability of the portable
water purifier.
6. Examine the channel of distribution that SVT can adopt for WF15. [6]
- Wholesaler and retailer
- Directly
- Ecommerce
- Adv and Dis
7. What is the importance of branding for SVT? [4]
- What is branding? Why branding is important customer loyalty brand awareness.
These are few ways that branding is important
8. What type of advertising is recommended for SVT to recruit specialised and highly skilled
employees? [6]
- 1. Online advertising: SVT can use online job boards and social media platforms
to advertise job vacancies. This can help reach a wider audience and attract
candidates who are actively looking for job opportunities.
- 2. Referral programs: SVT can also use referral programs to encourage current
employees to refer qualified candidates for job vacancies. This can help attract
candidates who are already familiar with the company culture and values.
- 3. Industry events: SVT can participate in industry events and job fairs to promote
job vacancies and attract candidates who are interested in working in the water
supply industry. This can help reach a targeted audience and attract candidates
who are passionate about the industry.
9. Recommend a form of marketing for the WF15 according to the results of their secondary
market research conducted. [4]
10. Suggest a New marketing Mix for WF15 [10]
- WF15 is a household water filter produced by Skandvig Terra PLC's Consumer
Products Division. The marketing mix, also known as the 4Ps, comprises product,
price, promotion, and place.
- Product:
- The WF15 is a high-quality, durable water filter that removes contaminants from
household water, making it safe to drink. Skandvig Terra PLC's Consumer
Products Division can improve the product by introducing new filter technology
that removes more types of contaminants, making it more appealing to customers
who are health-conscious. They can also introduce new colours and designs to
make it more attractive to customers.
 - Price:
- Pricing is a crucial component of the marketing mix. Skandvig Terra PLC's
Consumer Products Division can price the WF15 competitively to make it more
accessible to customers. They can also offer discounts and promotions, such as a
buy-one-get-one-free offer or a free filter with the purchase of a WF15.
- Promotion:
- Promotion is how a company communicates the benefits and features of its
product to potential customers. Skandvig Terra PLC's Consumer Products
Division can promote the WF15 through social media platforms, such as
Facebook and Instagram, to reach a wider audience. They can also collaborate
with social media influencers to endorse the product. The company can also
advertise the product on television, radio, and billboards.
- Place:
- The WF15 is currently sold through online retailers and select physical stores.
Skandvig Terra PLC's Consumer Products Division can expand the product's
distribution by partnering with more retailers to increase its availability. They can
also create a direct-to-consumer website to sell the WF15 and offer free shipping
to customers who purchase the product online.
- In conclusion, Skandvig Terra PLC's Consumer Products Division can improve
the marketing mix of the WF15 by introducing new filter technology, pricing it
competitively, promoting it through various platforms, and expanding its
distribution.
11. Explain how sales forecasting calculations can help SVT's Desalination Division to
benefit from the growing opportunity in the demand for cruise holidays (lines 43 - 45).
(HL only) [6]
- Sales forecasting allows a company to forecast the sales it will make in the
coming months or even years. This is typically done to help with managing
production, and output produced.
- In the case of SVT and their desalination division, it will help them in regards to
productivity efficiency, due to the desalination market growing rapidly and
demand increasing. Moreover it will improve their budgeting as the desalination
division can estimate how much will be needed each month to be able to achieve
the needed amount of plants per year.
12. Describe the significance of first hand data collected by Jayne Dees in Sudan (line 107 -
111). [4]
- The first-hand data collected by Jayne Dees in Sudan is significant for SVT
because it provides valuable insights into the water supply challenges faced by
people in developing countries. By experiencing the challenges firsthand, Jayne
Dees was able to identify the need for low-cost, easily transportable water
purifiers that can be used in countries where access to potable water is limited.
 This information can help SVT develop new products and services that are
tailored to the needs of customers in developing countries. Additionally, the
first-hand data collected by Jayne Dees can also help raise awareness about the
water supply challenges faced by people in developing countries and encourage
more companies to invest in sustainable solutions.
13. Outline two advantages for SVT's Consumer Products Division being a brand leader (line
92). [4]
- One advantage for SVT's Consumer Products Division being a brand leader is
increased brand recognition and customer loyalty. This can lead to increased sales
and market share, as customers are more likely to choose a well-known and
trusted brand over competitors. In the case of SVT's WF15 product, being a brand
leader could help establish the product as a trusted and reliable source of clean
drinking water, which could be especially important in areas where access to
clean water is limited.
- Another advantage of being a brand leader is the ability to charge premium prices
for products. Customers are often willing to pay more for products from a
well-known and trusted brand, which can lead to higher profit margins for the
company. In the case of SVT's WF15 product, being a brand leader could allow
the company to charge a premium price for the product, which could help offset
the costs of developing and distributing the product in LEDCs.
14. Explain two benefits and one disadvantage for SVT having regional monopoly power in
the countries in which it operates (line 7). [6]
- One benefit of SVT having regional monopoly power in the countries in which it
operates is that it allows the company to have greater control over the market.
This can lead to increased profits and a more stable business environment. For
example, SVT's regional monopoly in Norway allows the company to have
greater control over the water supply market, which can help ensure a steady
stream of revenue for the company.
- Another benefit of having regional monopoly power is that it can lead to greater
efficiency and economies of scale. By having a monopoly, SVT can invest in
infrastructure and technology that can help improve the efficiency of its
operations. This can lead to lower costs and higher profits for the company. For
example, SVT's regional monopoly in Norway allows the company to invest in
water treatment plants and regional water supply networks, which can help
improve the efficiency of its operations.
- One disadvantage of having regional monopoly power is that it can lead to a lack
of competition, which can stifle innovation and lead to higher prices for
consumers. Without competition, SVT may have less incentive to invest in new
technologies or improve its products and services. Additionally, without
 competition, consumers may have fewer options and may be forced to pay higher
prices for water supply services.
15. Recommend a suitable distribution channel for the WF15. [4]
- A distribution channel that is suitable for WF15 are wholesalers, this allows for
the producers to not have to focus on marketing but rather producing the product.
Moreover there are lower transaction costs as the wholesalers are the customers
and are the ones buying the products.
16. Describe the importance of effective distribution channels for SVT to distribute consumer
products in LEDCs
- - Distribution channels describe how the final good or service, such as the WF15
water purifier, passes from the producer to consumers in LEDCs (the end users).
They enable the company to get products from the manufacturer to the end
consumer.
- - Distribution channels are even more important in less economically developed
countries as they often face exceptional challenges including inferior
infrastructural, communication, and transportation networks (such as road and rail
systems).
- - Effective distribution channels are necessary to ensure that SVT products are
delivered efficiently and safely in a timely manner. This can also provide SVT
with a competitive advantage by giving the business a presence in LEDCs, not
necessarily for a profit but an improved corporate image for supporting
low-income in LEDCs.

17. Describe two suitable pricing strategies that SVT can use for the WF15 water purifier. [4]
- Loss leader pricing: This strategy involves setting a low price for a product to
attract customers and increase sales volume, even if it means selling the product at
a loss. SVT can use this strategy for the WF15 water purifier to encourage
customers to try the product and establish a loyal customer base. Once customers
are familiar with the product and its benefits, SVT can introduce complementary
products or services at a higher price point to offset the losses.
- Price discrimination: This strategy involves setting different prices for the same
product based on the customer's willingness to pay. SVT can use this strategy for
the WF15 water purifier by offering different pricing tiers based on the customer's
income level or geographic location. For example, SVT can offer a lower price for
customers in low-income areas or countries, while charging a higher price for
customers in high-income areas or countries.
18. Outline how SVT can benefit from levels of social media usage fast approaching the
levels seen in advanced economies (line 138). [4]
- Increased brand awareness. With more people using social media, businesses
have the opportunity to reach a wider audience and increase their brand
 awareness. By using social media platforms such as Facebook, Twitter, LinkedIn,
and Instagram, businesses can create a strong online presence and engage with
their target audience.
- Better customer service. Social media provides businesses with an additional
channel for providing customer service. Customers can use social media to ask
questions or report issues, and businesses can respond quickly and efficiently,
improving the overall customer experience.
19. Suggest two possible pricing strategies that SVT can adopt for its WF15.
a. Price discrimination: SVT can charge different prices to different countries. For
instance, it can charge cheaper prices for LEDCs for them to afford it and slightly
higher prices for MEDCs to make a profit.
b. Cost-plus pricing: SVT can calculate the average unit cost of producing a
WF15 and a percentage markup. This ensures that WF15 covers its costs and
recoups its R&D costs. However, using cost-plus pricing may not appeal to the
market as it may be too expensive for LEDCs.
20. Discuss the two marketing strategies that SVT can use? [4?]
- 1. Differentiation strategy: This strategy involves creating a unique product or
service that stands out from competitors. SVT can differentiate its products by
highlighting their quality, reliability, and environmental sustainability. For
example, SVT can promote its WF15 product as a high-quality water filter that is
easy to use and maintain, and that provides clean and safe drinking water. This
can help differentiate the product from competitors and attract customers who are
looking for a reliable and effective water filter.
- 2. Cost leadership strategy: This strategy involves offering products or services at
a lower cost than competitors. SVT can use this strategy to attract price-sensitive
customers who are looking for affordable water supply solutions. For example,
SVT can offer its desalination services at a lower cost than competitors by
investing in more efficient technology and infrastructure. This can help attract
customers who are looking for affordable and reliable water supply solutions.

Unit 5: Operations Management

1. Define labour productivity, capacity utilisation HL
- Labour productivity:It is a measure of the efficiency of a firm’s workers by
calculating output per worker. It is an indicator of the current level of skills and
motivation of the workforce.
- Capacity Utlization: It measures a firm’s existing level of outpuut as a proportion
of its potential output. High capacity utlization means that the firm is producing
close to its productive capcity/

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

 - 1. Improved reputation: By implementing sustainable practices, SVT can
improve its reputation as a socially responsible company. This can help attract
customers who are looking for environmentally friendly products and services,
and can also help attract investors who are interested in socially responsible
companies.
- 2. Cost savings: Implementing sustainable practices can also lead to cost savings
for SVT. For example, by investing in more energy-efficient technology and
infrastructure, SVT can reduce its energy consumption and lower its operating
costs. Additionally, by reducing waste and improving resource efficiency, SVT
can also reduce its material and disposal costs.
- 3. Regulatory compliance: Implementing sustainable practices can also help
SVT comply with environmental regulations and avoid fines and penalties. By
reducing its environmental impact, SVT can also reduce its exposure to legal and
reputational risks.
- 4. Innovation: Implementing sustainable practices can also drive innovation and
help SVT develop new products and services. For example, by investing in
research and development, SVT can develop new technologies and solutions that
are more environmentally friendly and efficient.
- 5. Competitive advantage: Finally, implementing sustainable practices can also
provide SVT with a competitive advantage. By offering environmentally friendly
products and services, SVT can differentiate itself from competitors and attract
customers who are looking for sustainable solutions. Additionally, by reducing its
environmental impact, SVT can also improve its long-term sustainability and
resilience.
3. Explain how SVT is environmentally and socially sustainable. [6]
- 1. Environmental sustainability: SVT's Desalination Division manufactures and
operates desalination plants around the world, providing a sustainable source of
clean water. Additionally, SVT invests in research and development to develop
new technologies and solutions that are more environmentally friendly and
efficient. By reducing its environmental impact, SVT can improve its long-term
sustainability and resilience.
- 2. Social sustainability: SVT is committed to improving access to clean water and
sanitation in developing countries. For example, SVT developed the WF15 water
purifier, which is a low-cost, easily transportable water purifier that can be used in
countries where access to potable water is limited. Additionally, SVT invests in
education and training programs to help local communities develop the skills and
knowledge needed to maintain and operate water treatment facilities. By
promoting social sustainability, SVT can help improve the quality of life for
people in developing countries.
 - 3. Corporate social responsibility: SVT is committed to being a socially
responsible company. This includes investing in sustainable practices, promoting
diversity and inclusion, and supporting local communities. By being a responsible
corporate citizen, SVT can improve its reputation and attract customers and
investors who are interested in socially responsible companies.

4. Explain whether the low cost purifier identified for the LEDCs is being adaptively
creative or innovative. [4]
- The low-cost purifier identified for the LEDCs is both adaptively creative and
innovative. It is adaptively creative because it is a new solution that has been
developed in response to the specific needs and challenges faced by people in
LEDCs. It is innovative because it uses new technology and design to create a
product that is both effective and affordable. By combining adaptively creative
and innovative approaches, SVT has developed a product that can help improve
access to clean water in LEDCs and promote sustainable development.
5. Explain and evaluate the implications of the modernisation programme and
reorganisation of the operations of H4’s UK factories. [10]
- The modernisation programme and reorganisation of the operations of H4's UK
factories had several implications, both positive and negative.
- Positive implications:
- 1. The modernisation programme helped in upgrading the technology and
equipment used in the factories, which increased the efficiency and
productivity of the factories. The case study mentions that the
modernisation programme involved the installation of new machinery and
equipment, which helped in reducing the lead time and increasing the
production capacity of the factories. This resulted in increased efficiency
and productivity of the factories, which helped the company to remain
competitive in the market.
- 2. The reorganisation of operations helped in streamlining the production
process, which reduced the lead time and improved the quality of the
products. The case study mentions that the reorganisation of operations
involved the implementation of a new production system, which helped in
reducing the lead time and improving the quality of the products. This
resulted in increased customer satisfaction and improved the reputation of
the company.
- Negative implications:
- 1. The modernisation programme and reorganisation of operations
required a significant investment, which increased the financial burden on
the company. This resulted in increased debt and reduced the profitability
of the company in the short term.
 - 2. The modernisation programme and reorganisation of operations
required the employees to adapt to new technology and processes, which
may have caused some resistance and disruption in the short term. The
case study mentions that the modernisation programme and reorganisation
of operations required the employees to adapt to new technology and
processes, which may have caused some resistance and disruption in the
short term. This resulted in reduced employee morale and increased
turnover rate in the short term.
- In conclusion, the modernisation programme and reorganisation of operations had
a positive impact on the performance of H4's UK factories, which helped the
company to remain competitive in the market. However, the investment required
and the short-term disruption caused by the changes were some of the negative
implications that need to be considered.
6. Describe the importance of ecological sustainability for SVT's operations. [4]
- 1. Comply with environmental regulations and avoid penalties.
- 2. Meet the expectations of its stakeholders, including customers, investors, and
employees.
- 3. Reduce its environmental impact and contribute to the protection of the
environment.
- 4. Improve its reputation and competitiveness in the market.
7. Describe the importance of social sustainability for SVT's operations. [4]
- 1. Reputation: Social sustainability can help to enhance SVT's reputation as a
responsible and ethical company that cares about the well-being of people and
communities.
- 2. Stakeholder engagement: Social sustainability can help to engage stakeholders,
including employees, customers, and local communities, in SVT's operations and
decision-making processes, which can lead to better outcomes for all parties
involved.
8. Describe the importance of economic sustainability for SVT's operations. [4]
- 1. Financial performance: Economic sustainability is critical for SVT's financial
performance and profitability. By maintaining a strong financial position, SVT
can invest in research and development, expand its operations, and pursue new
business opportunities.
- 2. Innovation: Economic sustainability can drive innovation by encouraging SVT
to develop new products and services that meet the needs of customers and
address emerging market trends.
- 3. Job creation: Economic sustainability can contribute to job creation by enabling
SVT to expand its operations and hire more employees.
 9. Outline how meeting quality standards set by institutions such as the World Health
Organization (lines 123 - 125) is important for SVT's launch of the WF15 water purifier.
[4]
- 1. Credibility: Meeting quality standards set by reputable institutions such as the
WHO can enhance the credibility of SVT's products and services, which can help
to build trust with customers and stakeholders.
- 2. Compliance: Meeting quality standards is often a legal requirement, and failure
to comply can result in legal and financial penalties.
- 3. Safety: Meeting quality standards can help to ensure that SVT's products are
safe for human consumption and do not pose any health risks.
- 4. Market access: Meeting quality standards can help to ensure that SVT's
products meet the requirements of different markets and can be sold in different
countries, which can help to expand SVT's customer base and increase revenue.
10. Water contamination (lines 84 - 86) is an ever-present threat to SVT. Describe one
advantage and one disadvantage for SVT's Fresh Water Division having a contingency
plan. (HL only) [4]
- One advantage of SVT's Fresh Water Division having a contingency plan for
water contamination is that it can help to minimise the impact of a contamination
event on the company's operations and reputation. By having a plan in place, SVT
can respond quickly and effectively to a contamination event, which can help to
reduce the severity of the impact and prevent further damage. One disadvantage
of having a contingency plan is that it can be costly to develop and implement.
Developing a contingency plan requires resources, including time, money, and
personnel, which can be a burden on the company's finances and operations.
Additionally, implementing a contingency plan can require ongoing maintenance
and training, which can also be costly.

Other Possible Questions

1. Explain one feature of a public limited company (PLC) (line 1)

A company’s shares are publicly traded on a stock exchange. Through this the Public
Limited Company can raise capital by selling its shares to the public, as there is a large
pool of investors.
2. Explain one advantage and one disadvantage of being a PLC to SVT (line 1)
Advantage: SVT can raise its capital by issuing and selling its shares to the pool of
investors. It also allows SVT to access a range of funding options, such as issuing new
shares or borrowing against assets.
Dis-Advantage: As it is a PLC and numerous shares are issued to the public, the
ownership of SVT will be more dispersed, and the original founders of SVT could
possibly lose control over the business and its management and decision-making.
3. Explain one advantage and one disadvantage of a vision statement to SVT (line 2)
 A: SVT management as well as employees would be driven by the motivation through
the vision statement SVT has, which gives them an overall idea as to what their vision is,
hence making aims.
D/A: The major disadvantage to SVT’s vision statement is its vague goal of “Making the
world a safer place”. Numerous factors would have to be considered in order to achieve
this vision statement’s aim, and may add to arising uncertainties within the employees
and higher management. This in turn would negatively affect SVT and make it difficult
for the PLC to achieve its goals.
4. Distinguish between a mission and vision statement (line 2)
MISSION: A statement of the business’s core aims, phrased in a way to motivate
employees and to stimulate interest by outside groups.
VISION: A statement of what the organization would like to achieve in the long term.
5. Discuss the effect of the acquisition to SVT (line 9)
1. SVT’s market share could possibly increase and can gain a competitive advantage
in the growing vast market. Revenue and profit could increase.
2. Newer products and markets will be accessed in turn of SVT’s acquisition of
other companies. This is seen in the case study where SVT’s takeover and
expansion into other markets, such as the desalination market, and creating
household water treatment products.
3. SVT’s acquisition of other companies results in an increase of economies of scale.
As it combines its existing and new resources and products for an increase in
reachability to these new markets. Cost savings and efficiency are one of the few
outcomes of the acquisition.
4. Cultural clashes and other factors can arise between SVT and the other company,
in this case Geng PLC. The cultures followed and adhered to will differ from that
followed in SVT’s, which could lead to resistivity and reluctance to change.
6. Difference between takeover and acquisition (line 49)
SVT took over its rival H4, essentially meaning that they bought the company, this is
seen as a “hostile takeover”, an acquisition on the other hand would mean that SVT only
bought a portion of H4 and not entirely.
7. Internal VS external motivation factors (line 55)
Financial motivation looks at paying the employees competitive salaries, this typically
means that their salaries are increased, encouraging them to work harder.
The one time incentive payment made, encourages and motivates the workers to continue
working at SVT.
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, enabling the company to increase its dividends every
year.

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

Particulars 2005 2010

Maximum capacity 300,000 320,000

Units sold 50,000 y

Selling price per unit $150 Increase by $32 ($182)

Total variable cost $3,000,000 Increase by 10%

(3,300,000)

Fixed cost $1,530,000 Increase by 200,500

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]

(2005) Contribution Per Unit = Price Per Unit - variable cost per unit
= ($150) - [3,000,000 (TVC) /50,000 (Units)]
= ($150) - ($60)
= $90

(2010) Contribution Per Unit = Price Per Unit - variable cost per unit
= ($182) - [3,300,000 (TVC) / y]
=

TR = P x Q sold
TR = P x y
TR = idk
 2. Break-even point for 2005 and 2010 [4]

(2005)
Break even level of output = FC/(P-VC per unit) = 1,530,000 / 90 = 17,000 quantity

17 000 x 150 = 2,550,000$

Break even = (quantity = 170,000 ; price = 25,500,000$)

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

Maximum capacity - Break even level of output

(2005) 300,000 - 170,000 = 130,000

(2010) 320,000 -

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

2. Define
A. Dividends
The distribution of company’s earnings to shareholders, the value is determined by the board of
directors
2. Share price
Refers to the value in the company’s stock
3. Market share
Measures the value of the firm’s sales revenue as a percentage of the total sales revenue in that industry

4. 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 for
their first months of operation.
● Sales unit for the month of January 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. Received immediately.
● SVT also charges $10 as compulsory installation fees. Received immediately.
● SVT pays wages of $50,000 in January. Wages increase in line with sales unit increases.
● The manufacturing machine needed a repair in the month of March, which amounted to
$30,000.
● Rent is to be paid in January and then every second month. $50,000 per payment.
● New equipment was bought in January for $200,000.
● Other costs are $20,000 per 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. The rest is paid one
month later on credit.

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

jan feb march april

Opening 20 000 -39000 104100 183510

Inflows
Sales 300 000 330 000 363 000 399 300
Installation 30 000 33 000 36 300 39 930
Total Inflows 330 000 363 000 399 300 439 230

Outflows
Wages 50 000 55000 60 500 66 550
Repair 30 000
Equipment 200 000
Rent 50 000 50 000
Other costs 20 000 20 000 20 000 20 000

COGS 69 000 144900 159390 175329

Total Outflows 389000 219900 319890 261879

 Net Cash Flow -59000 143100 79410 187351

Closing -39000 104100 183510 370861

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

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

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)

Topics that the Case Study Covers (important topics to study)

● Innovation
● CSR
● HR
● Globalisation
● Operations
● Marketing
● Marketing mix
● External & Internal Growth
● Stakeholder conflict
● Leadership styles
● Motivation
● Conflict resolution
● Organisational structure
● Acquisition/Takeover
● Diversification
● Market research
● Sources of income
● Vision and mission statement
● Balance sheet
● Budgeting (HL)

https://www.scribd.com/document/625598037/ib-business-management-case-study-may-2023-sv
t-key-terms?secret_password=de0ELmrYAkKpEJK0q3ym#fullscreen&from_embed
Here is a link for some key terms…

Mock Paper 1 SL
Credit: saif
Mock Paper 1 SL Answers
1. (a) Describe one advantage and one disadvantage of SVT being a public limited company
[4]
- Advantages:
1. Increased access to capital: As a PLC, SVT can raise large amounts of capital by
issuing shares to the public. This provides the company with greater financial
resources to invest in its operations, expand its business, and fund research
and development activities.
2. Limited liability: Shareholders of a PLC have limited liability, which means that
their personal assets are protected if the company faces financial difficulties. This
makes investing in SVT more attractive to potential shareholders, as they can
invest without the risk of losing more than the value of their investment.
- Disadvantage:
1. Increased regulatory requirements: As a publicly traded company, SVT is subject
to various regulatory requirements, such as those related to financial reporting,
disclosure of information, and corporate governance. Compliance with these
regulations can be time-consuming and expensive, which can increase the
company's administrative costs and reduce profitability.

(b) Explain possible Economies of Scale that may apply to SVT. [6]
1. Explain two possible types of for SVT as a large multinational company [6]

The cost-saving advantages that businesses can enjoy by enlarging the scale of its output.
Examples of possible for SVT include:

- Technical: Being a large business, SVT can afford to invest in sophisticated and
innovative technologies to increase scales of output, thereby reducing the per unit cost of
production. H4 PLC’s factories also operate 24/7, using modernised operations, which
again helps the company to achieve technical goals .
- Financial: Large businesses like SVT are usually able to borrow more money and at a
lower cost (interest rate change). This is because they are more ‘credit worthy’. For
example, SVT represents lower risk for a financial lender, such as a commercial bank,
because it is an established multinational company with operations in 21 countries and is
profitable so can benefit from more favourable rates of borrowing.
- Marketing: Large businesses like SVT can spread their advertising and substantial
marketing budgets over a large volume of output as well as purchasing their
stocks/inventory in bulk, at discounted prices, e.g, electric pumps, pressure gauges, hoses,
and osmosis system (water filtration system)

3. (a) With reference to SVT, explain one advantage and one disadvantage of an
organizational structure based on product. [4]

With reference to Skandvig Terra PLC (SVT), one advantage of an organizational

structure based on product is that it allows for a clear division of responsibilities and expertise
within the company. This is because each division can focus on its specific product and develop
expertise in handling it. As a result, coordination problems that may arise under functional
departmentation can be reduced.

On the other hand, one disadvantage of an organizational structure based on product is

that it can lead to a loss of central control over each separate division. This is because each
division may focus more on its own goals rather than the overall goals of the organization. This
can result in duplication of functions and resources, leading to higher costs and less top
management control.

(b) Explain how internal and external growth have helped SVT to grow. [6]

1. Explain one method of internal and one method of external growth that SVT used [6]
- One method of internal growth that SVT used was expanding its product range
through the creation of new divisions. SVT initially specialised in producing and
delivering potable water in Norway, but in the 1980s, it expanded into other
business sectors, including desalination and household water treatment products,
by acquiring other companies. SVT also created four new divisions based on
product: The Fresh Water Division, The Desalination Division, The Engineering
Division, and The Consumer Products Division. This allowed SVT to diversify its
product offerings and increase its revenue streams without relying on external
acquisitions.
- One method of external growth that SVT used was through acquiring other
companies. SVT has grown through both internal and external growth strategies.
Its most recent acquisition was Geng PLC, a major water supplier in the United
Kingdom (UK). Acquisitions allow SVT to rapidly expand its business and
customer base, as well as to acquire expertise and resources that may not be
available in-house. This strategy has helped SVT to expand its operations
globally, supplying potable water to millions of households in over 20 countries,
and becoming one of the industry leaders in productivity per employee.

SVT decided to produce the portable water purifiers “WF15” within the consumer
products division. The board of directors finally decided to set a cost plus (mark up)
pricing strategy for the “WF15”. Sales of household filters have exceeded forecasts and
reached 10,000 filters for the year. All profits have been reinvested into developing the
portable water purifier. The portable water purifier “WF15” is now fully developed and
tested. The price and costs of the water purifiers once production has begun are estimated
in the following table (Table 1)

The water portable purifiers will be first sold in Sudan. “Sudan Clean Water” (SCW) is a
nationwide not-for-profit organization established by wealthy Sudanese that live abroad.
SCW’s objective is to provide clean potable water to all areas of Sudan. SVT is considering
forming a joint venture for the sales and distribution of the portable water purifiers
“WF15”in Sudan. SCW will have the majority ownership in the joint venture and will
provide its expertise and local knowledge to help solve the sales and distribution of the
purifiers in Sudan. SCW will sell and distribute “WF15” through volunteers that are
present in all areas of Sudan. The volunteers will also train the locals on how to use the
product. SCW will also provide senior managers for the human resources and marketing of
the joint venture while SVT will be responsible for the production of the water purifiers.
SCW will promote “WF15” through social media and sponsorships of local football events.
However, SVT’s board of directors are worried about the success of the joint venture and
the brand image of the portable water purifiers although this joint venture is an
opportunity to make a real change to access to potable water in Sudan especially in rural
remote areas.

4. (a) Define two characteristics of a not-for-profit organization. [2]

Non-distribution constraint: Any surplus revenues generated by the organization must be

reinvested in the organization to further its mission rather than being distributed to owners or
shareholders as profits.

Tax-exempt status: Not-for-profit organizations are often exempt from paying certain
taxes because they provide a public benefit.
Their purpose is to help the society and not seek for profits. Its to help the community
which may result in a positive change in the society.

Estimated cost and price data for WF15 (Table 1)

Fixed costs: $30,000 per year

Variable costs: $2.1 per item

Price: $2.5 per item

(b) (i) Using the information in above, calculate the break-even output for the portable
water purifiers “WF15” (show all your working). [2]

fixed cost/unit contribution

Unit contribution = 2.5-2.1

30000/(2.5-2.1) = 75000

(ii) Comment on the usefulness of break-even analysis to SVT. [6]

Break-even analysis can be useful for SVT when considering the WF15 project by
helping the company determine the minimum sales volume needed to cover the costs of
production. This information can assist in setting sales targets and guiding pricing strategies. By
calculating the break-even point, SVT can gain a clearer understanding of the financial feasibility
of the project and make more informed decisions on product pricing.
 However, there are limitations to break-even analysis in this context. The case study
suggests that SVT's board of directors is contemplating a not-for-profit or even a subsidized
pricing strategy for the WF15. In such scenarios, break-even analysis may be less relevant as the
primary goal is to maximize social impact rather than profit. The focus on corporate social
responsibility (CSR) and the need to make the WF15 affordable for those in LEDCs may lead the
company to prioritize other factors over profitability.

Moreover, break-even analysis assumes a linear relationship between costs and revenues,
which may not hold true for the WF15, given the unique market conditions in less economically
developed countries (LEDCs). Factors such as fluctuating demand, variable production costs,
and potential government interventions can complicate the break-even calculation and limit its
accuracy.

In conclusion, while break-even analysis can provide some insights into the financial
viability of the WF15 project, its usefulness may be limited given SVT's potential focus on social
impact and the complexities of operating in LEDCs.

(c) Recommend whether SVT should enter into a joint venture with SCW. [10]

Advantages

1. Access to new markets: Sudan is a large and growing market with a population of over
40 million people. SCW has a strong presence in Sudan and has developed relationships
with key stakeholders, including the government, NGOs, and local communities. This
would give SVT access to a new market that it would not be able to access on its own.
2. Shared risk and costs: A joint venture would allow SVT to share the risks and costs of
entering the Sudanese market. SCW would be responsible for the sales and distribution of
the water purifiers, which would free up SVT to focus on its core competency of
manufacturing.
3. Access to local knowledge and expertise: SCW has a deep understanding of the
Sudanese market and its challenges. This would be invaluable to SVT, which would be
entering the market for the first time.
4. Positive brand image: A joint venture with SCW would be seen as a positive move by
SVT. It would demonstrate its commitment to social responsibility and its desire to make
a difference in the world.

Disadvantages

1. Loss of control: SCW would have a majority ownership in the joint venture, which
would give it more control over the business. This could be a disadvantage for SVT, as it
would not be able to make decisions without the approval of SCW.
2. Potential for conflict: There is always the potential for conflict between joint venture
partners, especially when they have different goals and objectives. This could be a
problem for SVT and SCW, as they have different missions and values.
3. Financial risk: A joint venture is a financial risk for both partners. If the joint venture is
not successful, both partners could lose money.

Recommendation
 I recommend that SVT should enter into a joint venture with SCW. The potential benefits
of the joint venture outweigh the risks. SVT would gain access to a new market, shared risk and
costs, access to local knowledge and expertise, and a positive brand image. While there is always
the potential for conflict between joint venture partners, I believe that SVT and SCW can
overcome this challenge by working together and communicating effectively.

However, it is important for SVT to carefully consider the risks of the joint venture
before making a decision. SVT should ensure that it has a clear understanding of the terms of the
joint venture agreement and that it has a plan in place to manage the risks. SVT should also make
sure that it has a good understanding of SCW's business practices and its financial situation.
**Unanswered Questions**

(Someone please answer these ‘likely’ questions at the earliest)

1. Evaluate two external recruitment methods that SVT may have used to overcome the 300
job vacancies following the merger with H4 PLC. [4 marks]

- SVT may have advertised the job vacancies on various job portals and platforms such
as Linkedin. This method is effective in reaching a large pool of potential candidates.
They can also be targeted to specific job roles, experience levels, and geographic
locations to ensure the right candidates are reached. (SVT wanted to appoint employees
who worked well in a team environment, and were highly skilled and specialised)
However, this method can be expensive, time-consuming, and may attract a large number
of unsuitable candidates, requiring significant time and effort to filter through the
applications.
- Campus Recruitment: This method involves visiting college campuses and career fairs
to attract students and recent graduates who are seeking employment opportunities. This
allows SVT to target specific majors and skill sets and can provide a large pool of
potential candidates. However, this method may not attract experienced professionals.

2. Describe two steps of the recruitment that apply to SVT in its external recruitment
process [4 marks]

- Conducting a job analysis, which involves scrutinising the different components

of a job, such as the routine tasks and responsibilities of the post holder, and what
the job entails (under its modernization programme). This also helps to verify the
skills required to do the job, which is significant as SVT wanted to employ only
highly skilled and specialised employees.
- Person specification, which is a document that profiles the ideal candidate, such
as the qualifications and experiences sought by the employee. For example, SVT
wanted to appoint employees who worked well within a team environment.
- After that it is important for the company to consider if they want to recruit
Internally or Externally.
- Then the company conducts job interviews.
- And finally the shortlist people.

3. State two methods of internal growth for SVT [4 marks]

- Expanding their product line by developing new and innovative water filter
products.
 - Increasing their market share by expanding their distribution channels and
entering new markets.

4. Explain two advantages of internal growth for SVT [4 marks]

- Increased control: Internal growth allows SVT to maintain control over its
operations and decision-making processes. By expanding its business through
internal means, SVT can ensure that its growth is aligned with its strategic
objectives and values. This can help the company maintain its competitive
advantage and achieve long-term success.
- Reduced risk: Internal growth can also be less risky than external growth
strategies, such as mergers and acquisitions. By expanding its business through
internal means, SVT can avoid the potential risks and uncertainties associated
with external growth, such as cultural differences, integration challenges, and
regulatory issues. This can help the company maintain its financial stability and
minimize its exposure to external risks.

5. Explain two benefits for H4 PLC of labour turnover being consistently below the national
average (line 75). [4 marks]

- Cost Savings: A low labour turnover saves costs related to recruitment, training, and
onboarding new employees. By retaining employees, H4 PLC can avoid these costs and
allocate those resources to other areas of the business.
- Increased Productivity: When employees leave, it can cause disruption and reduce
productivity, particularly if key skills or knowledge are lost. In contrast, when employees
stay with the company, they become more familiar with its systems, procedures, and
culture, which can lead to increased efficiency and productivity. This can be particularly
beneficial for H4 PLC, as it operates in a highly competitive industry where productivity
is a key driver of success.

6. Outline two disadvantage of an increase in labour turnover (lines 65 - 66) for SVT. [4
marks]

- Cost of recruitment and training: SVT incurs increased short-term costs associated
with recruiting and training new employees to replace them. These costs can be
significant, especially since SVT seeks to recruit and train highly specialised staff.
- The new employees may take some time to become fully productive, which can result in
a temporary loss of efficiency and productivity.
- Loss of experienced employees: An increase in labour turnover can lead to a loss of
experienced and skilled employees. These employees may have built up knowledge and
expertise in the company, which may be difficult to replace, and can have a negative
 impact on overall productivity.

7. Explain one benefit and one cost to SVT of using financial methods of motivation to
reward employees (lines 54 - 55). [4 marks]

- H4 employees were paid competitive salaries, which is a financial method of motivation

that can encourage employees to stay with a company. It makes it less likely for
employees to seek employment elsewhere, which can reduce employee turnover and
recruitment costs for SVT.
- However, only using financial methods of motivation assumes that workers are
primarily motivated by financial incentives. It ignores the social and psychological
aspects of work and treats workers like machines, which can be demotivating to
employees (Herzberg’s theory) and lead to decreased morale and engagement. Employees
may feel undervalued and unappreciated, which can lead to increased turnover and
difficulty in attracting and retaining skilled employees.

8. Describe two features of a takeover [4 marks].

A takeover is 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.
- Change in ownership: A takeover involves a change in ownership of the target
company.
- Strategic intent: The acquiring company may seek to gain access to new markets,
technologies, or resources, or to expand its operations and increase its market share.
Takeovers can also be motivated by a desire to eliminate competition or to achieve cost
savings through economies of scale.