(Turn ger “may/june 2020 paper 21 part 1 Froshtruit Juicobar (FJ) ‘Simon set up FJ in country Z. It makes fresh fruit atinks. Simon had a well paid job with a large food and drinks company but he wanted to create his own business. He left his job 6 months ago to set up FU. Simon wants to provide people with a healthy alternative to the mass produced drinks that are avaliable in most shops. ‘Simon is willing to work hard to make FJ a success. He has lots of ideas for new drinks, He has been making the drinks at his house and selling them at a market stall, He does not have enough ‘space to produce a higher output on his own. The first drinks FJ produced were made from just 2 types of fruit to keep costs down. The business has been profitable, Simon now wants to expand the business rapidly and he needs to raise $100000 to open a factory. He will need to recruit production workers. He is considering using crowd-funding instead of a bank loan to raise the necessary finance, ‘Simon wants to produce a new type of drink. He has carried out market research using three methods to help him decide which fruit drink to produce and what price to charge. He has estimated demand, costs and prices for two possible new drinks, as outlined in Appendix 3. He must decide which one FJ should produce. ‘Simon plans to open more fruit drink market stalls in busy areas of the city. He needs to recruit a manager to operate all of Fu's drink stalls. This person will need to be reliable and able to make their own decisions. Simon may have to pay to train the new manager. If these market stalls are successful, Simon can start opening market stalls in other cities. Appendix 4 Main Nows - 12 May 2020 The Government in country Z wants to promote healthy eating and drinking to make people more productive at work and also live longer. The Government plans to spend more money on providing information about healthy food and drinks. It hopes that this will encourage people to think about, what they are eating and drinking. The Governmentis also worried about slow economic growth. Ithas recently increased government spending on improving public transport and paying higher wages to public sector employees. Scanned with CamScannermay/june2020 paper 21part 2 Appendix 2 Tnroo applicants for the position of manager of the fruit drink market stalls toe Zabeen yim Expected wi Fapected 28° 156 per hour $15 per hour $10 per hour 4 years parttime work ina |15 yeats as an 6 years working as a Experience café when studying for a {assistant manager of a| manager ina restaurant in degree large shop ina mall |the aty centre 3 Allevels, Degree IS IGCSEs Quattications {Hygiene cetiicate (requied |No quafcatons _|Hydene certificate require if working wath food and it working with food and rinks) inks) Reason for [Long hours of work wih few [Wants to gaina [Wants more ofa challenge changingjob holidays promotion at work Appondix 3 Information on two possible new frit drinks. rink A rink 8 Forecast weekly demand 5000 ‘Average variable cost of ruil $100 Fixed costs per week 7 eso Seling pice $2.00 [Number of types offruitused [6 2 Likely market segment High income consumers Low income consumers Scanned with CamScannermay/june2020 paper 22 part 1 Eco Scooters ( ES makes scooters (small motorcycles) which are sold i 9 re sold in country Z. ESis a puble nich was founded 40 years ago. Ii has grown by taking over other smaler scooter manufacturers. ‘This meant that ES could use the factories and skilled employees of these other businesses. ES {s now planning to take ove! another scooter manufacturing business based ia country 2. ether Sempany ABC or company FGH, Financial information about these compares shown Appendix jelimted company Currently ES uses a flow production method with many workers and only a few machines. The \work is boring and employees have to work long hours doing the same job. However, wages are calculated by using time rate and this Is higher than the legal minimum wage. There are no other financial rewards for the workers. ES currently has 30% market share in country Z.Itis planning to export its products and has drawn tp a business plan for this expansion. This plan includes the promotion methods ESis considering for its scooters in export markets. To start exporting, ES will have to increase production. needs {o.recrutt 100 additional production workers and invest $10m in new technology production machinery. This should ensure higher output as well as higher productivity Appondix 4 Financlal Information (209) for the two companies ES is planning to take over. [ABC Company FGH Company Revenue 's100m ‘ss0om Cost of sales 350m '$160m Expenses - $40m 's2iom Retuin on Capital Emproyed [gas ste (ROCE) : Current ratio 2 3 Acid test ratio 4 15 ouctes a0 co, z2 320.49 Scanned with CamScannermay/june2020 paper 22 art 2 Appotdix2 Article In the national nowspaper ‘Main News 10 Apri 2020 ‘The economy of country Z has grown rapidly over the last 5 years and incomes are high. This has tesulted in inflation. The Gavemment is now taking action to stop inflation rising any further. ‘Unemployment has now started to increase. This has been welcomed by some businesses but not all, The demand for luxury products is ikely to fall unemployment continues to rise. Appondix 3 Email to Managing Director To: Managing Director From: Finance Director Date: 20 April 2020 Re: New laws, " ‘The Governmenthas introduced many new laws that willhave an impact on ES. These legal controls Include those affecting consumer protection, location decisions and environmental protection. We «will have to consider how each of these new laws will affect our casts and operations. Please make sute you have carried out a full analysis of what these changes will mean for ES. oucies 200 (08.9410 22 2029.19 Scanned with CamScanner7240088 > Oe Ake ul 91%e “may/june2020 paper 23 part: 1 Excel Cars (EC) tum over dynamicpapers.com EC has a good reputation for making quality cars. tis pubic ited) vaity cas. tis a pubic Kvted company based in country 2. EC sells cars in both the damestc and expot markets. It makes a range of petrol and dese! ‘218, EC 1s now planning fo stat producing electic cars EC employs 2000 skiled employees ints factry The company has a tall oxganisational stuct Senior managers often complain they have toc many tasks fo do. Recenty senior managers have ‘been delegating mare tasks ta junior managers Most models of EC ears have high sales. However, market reseateh information suggests that ‘eustomers are changing to buying more environmental friendly cars which do less har to ait {ualty, Sales of diesel ears are forecast to fall EC may need to change production methods to start producing new models of cars IEC stait fo produce an electric car model an investment of $200m willbe needed for research ‘and development. Al existing production employees wil need tobe retrained to operate new technology. “The Operations Directors considering opening a factory in one of EC's main export markets. He ‘must choose between county A and county B Information avout these countries is given in Appendx3. ‘Appendix 4 To: Managing Director From Marketing Director Date: 10 pil 2020, Re: Changing customer needs ‘We should launch a new model of car next year folowing the results of our market research. The, narkets for petrol and Giese! cats ate becoming more competitive Several new car companies ave entered these markets with new models, We need to keep our costs down and we may also treed fo consider importing cheaper components for cats. However, the Government of county 2 has increased impor tails on components for cars and on imported cats. We aeady know thatthe price of mast electic cars is much higher than the prices of most pt wre diosel cars. The markel research identified a gap the market for lower priced elecic cars “The Government is giving grants to new and esting businesses to develop electric cars so that airpolutin can be reduced in country Z. The Goverrments also providing support for business Startups because incomes are low and unemployment is high. EC has an opportunity to take advantage of customers wanting to buy product that do not harm the envionment. Some customers may be wiling to pay higher prices for elecc cars than for peti oc diesel cars because customers fee electric cars are better for he plane. ‘eucies 702 sa 23 000.10 Scanned with CamScannermay/june2020 paper, 23 cpapers.com part 2 Appendix 2 Information about two electric car models EC could produce [Electric car model 1 Electric car model 2 Selling price |s20000 | $40000 | Fixed cost per month |s4000000 | $4000000 Variable cost per car [1000 |sz0000 Forecast sales per month [1.000 500 af Appendix 3 Information about country A and country B | Country A ‘Country B } Wage rates High Low i Skills of workers | High skilled - well trained Low skilled — had litle or no training | Large market for global car producers |Low income country with low sales ot] ‘Car market with high sales of cars but not cars but rising Incomes will ead 10 | {increasing higher demand i ; ‘car manufacturers | Many ear manufacturers with many 1 located in the country | comeonent suppliers Nocarmanutacturers or suppliers | Road aretworks | Very good road network but trafic Jimproving road network with little | [congestion Is a problem traffic congestion | ‘ouckes 2020 (8 0400 23 220.19 Scanned with CamScannerMumever march2020 paper22-1 Bright Windows (BW) ‘Bob recenty set up BW, a window washing business ater he had been unemployed for7 months. Many home owners are extremely busy and find it Mhcu Yo find the time to wash the windows their houses. Increasing incomes have also led to a high demand for widow washing services. ‘The primary market research catied out by Bob belore setting up his business confemed this high demand, Bob used sampling when carrying ov a questomnare. ‘Bob sa Soe trader He Invested $2000 to get his business started and Io provide woking capa ‘He needed $250 to purchase Inddere, buckets and cleaning products He also needed vanspeot to tvavelbetween customers houses. ob decided to lease a van ata cost of $150 per month. Bob thas to pay wages fo his 2 pad-bme employees o! $300 per month each ‘Bob only has a few regular customes ang he needs o promote the business to atract more ‘customers. He I considering printing leaflets, advertising in local newspapers or just relying on ‘social media. He has io decide which met\od of promation to use. He hopes his regular customers wil el ei ends about BW’s excelent services. Ite promotion is successful he wil need 19 ‘ensure is employees can meet this higher demand, ‘Appendix ‘Text message from one BW employee nother BWV employe Employve 12 [the working with Bab, thes a good boss. am happy he asks us what ‘wo think 10 not want towork for anyone ose Dut would xe to work ‘more hours. Crone Ny lastemployer eonetatust) Peto} Preece Pieter Picea vesnc emg oes en ovacsae apenas Scanned with CamScannereee Eee March2020 paper22 part*2° p [average numberof customers permonth [225 ‘Appendix 2 ‘Artlo nthe national newspaper Han News 10Fetrusy 2020 ‘Should window washing become more enekonmentay fend? “The mosteflectve products used fo wath wedows conta chemicals whieh damage the ‘enveenment However, these product rece De me then to wash windows by £0. any window washing businesses use plat Bottles as containers for al their cleaning products Mostof these totes eannat be refiled or reycied ‘Washing windows can use alot ot water which reduces the amount of water avntabie for other uses Recently anew machine as been developed for washing windows which very efficent ‘and recyeles the water uses, Each machine costs $1060. “Te Government i being encouraged by enstonmental pressure groups tirroduce egal cons ‘over ie window washing industry. ouaeszn9 ween ams BLANK PAGE Scanned with CamScanner? oct/nov2020 paper21 part-1 Gemma's Jowels (Gu) Gemma set up Gd as a soe trader 5 years ago h country Z. She started by seting tings and bracelets {rom a rented shop. She used her own savings to start the business. The fest year was successtul. After iis frst year Gemma decided fo expand by eting more expensive tems of Jewellery Gemma thinks itis importan to set clear business ebjectwes. She wants her business loincrease sales by 10% each year and to increase market share. ake {As the business grew Gemma needed mote finance for a computer, Inventory and working capital to avold Iquidity problems. She decked to convert the business 10a private limited company and sell shares to members of her famiy. Germma stil onns more than 0% of the shares in GJ. 12019, Gemma purchased a franchise from Beoutynise Jewelery This means GJis now only able to sel Beavtywise products in ts shop. GJ has to purchase a ofits inventory from Beautywise and in addlton pay 20% of gross proft 1o Beautywise. More detals about the franchise are inthe advertisementin Appendix 1. Gemma has developed a website so customers can order online. Customers can also download ‘a mobile (cel) phone app to view and order jewellery Gemma plans to open a second shop as a Beautywise franchise in a nearby town. She has to decide which method of sales promotion to use. GJ needs lo recruit a managar for the new shop. ‘The manager wil be responsible for operating he shop and making most of the decisions about which itoms of inventory to buy. The manager wil also need to ensure excellent customer service is provided and thatthe new employees are matwated and working efficent. ‘Appondix 4 ‘Advortlsomont for Boautywiso Jowollery Franchiso Bocomo a franchisee to soll Beautywiso Jowollory and improve your chancos of succossl! What we offer you: + Be the only shop in your area that set's Beaulywise jewellery + Beaulywise will advertise nationally on television and in newspapers: + Help and advice on decoration of the shop and training for employees and the franchisee + Ethically sourced jewellery imported especially for Beautywise + The franchise fee is just $50000 per year! ‘ ovcies.2c20 11,o4s9_21-2020.110 Scanned with CamScanneroct/nov2020 paper21 part -2 Appendix 2 Extornal factors affocting the Jewollery markot In country Z Nowspaper article. Daily Ne The demand for jewellery in country Z Is ihely to be affected by some recent changes. Consumers are becoming more aware of the ethical issues involved in jewellery production in some countries, The eachange rate of the currency of country 2 is Ikely to depreciate over the nex! 12 months, The Governments planning changes to tax rates which might reduce the effects ofthe current economic. boom ‘Appondix3 Information on three possible locations for the now shop [Annual costs Town A Town B Town C '$45000 per year for § | $35000 per year for 10 |$20000 per year for 15 eer years years years Wages and salaries _|$80000 '$70000 '$60000 [Heating and lighting _|$5000 '$5000 '$3000 [Estimated gross prot |$400000 's200000 '$200000 Note: Franchise fee is $50000 per year and 20% of gross profi is paid to Beautywise. ‘ouctes 2020 11,0450_21.2020.1.10 Scanned with CamScanner> oct/nov2020 paper22 Coll Covers (CC) part-1 Aisha worked for several years for a company that repars mobile (cell) phones in country Z. She had always wanted to be her own boss and decided to leave her jobto setup CC to produce covers formoblle phones. She went into partnership with her brother, Aruna. He worked as an Operations, Manager for a company producing children's dothes, ‘The sources of finance for the business were $1000 o! savings from each partner and a bank Joan of $10000. CC was also given a government grant to help the new business get started. CC leased a factory, bought some equipment and had to pay some expenses before the business had tegular cash inflows CC's current product is a range of standardised phone covers which are sold in the mass market. ‘These are sold using a competitive pricing method through mobile phone shops. CC employs 10 skilled production workers who are paid just above the legal minimum wage. These workers have been trained how to operate the equipment and work as a team on the production line. During the producton process there is alot of waste plastic produced and CC sends this to landfill sites. The business has just completed its second year of trading. CC is about to launch a new range of individual personalised phone covers. Itwill need to recruit 2 additional production workers. Aruna knows that the marketing mix for this new product may have tobe diferent to the marketing mix used for the standardised products. The new product will be aimed at a niche market of high income consumers between the ages of 18 to 25. There are few ‘other competitors in this market at present Appondix 1 Nowspapor articlo In Main News ‘Country Z has been in a recession but the economy is now growing rapidly and unemployment is faling With higher incomes the majority of people now own amobile phone. This makes ‘communication easier. Mobile banking is becoming more popular andit is used by a large percentage ‘of the population. ouctesz020 19_0480.22.2020.1.10 Scanned with CamScannerDo you want to protect your phone from damage? Then buy a phone cover from CC, Your phone will never be damaged If you use one of cur high quality covers!! We offer a range of standardised covers at compettive prices. The CC range has many diferent ‘colours and designs so you will stand out from the crowd. Appondix 3 ‘Summary of CC's financlal information from the ond of the second yoar of trading ($) Revenue 800000] [Cost of sales 400.000 | (Gross profit 400000 Expenses 250000 Profit fe 150000) (Current Assets: 200¢0 (of which: Inventory 5000) [Current fabitties 15000] ucies 2009 19,0480, 22.2070.1.10 Scanned with CamScannerSS .....aQg nn 8:54 BOm O 8 Ai ll 95% OH Ties document has 4 pages (nk pay oct/nov2020 paper23_"“"" part1 ‘Agrleultural Diggers (AD) [AD manufactures agic/tural equipment in country. twas setup asa family armed private ited company 20 years ago. The drectors wanted to expand the business and needed add tonal capa. “Therefore, 10 years ago they decided to convert AD o a publ mites company This rested in the family losing overall canto! othe company. ‘AD'S agricural equipment incudeschggers, ploughs and tractors. This equinment fs mainly sold In country Z through specastagricutura shops that only sellt farmers. The dtectrs of AD wont to further expand by exporting to ather countries, Ths wil requiea age capa investment of '$20m to expand the factory so that ovput ean belneeaseaby 20%. When AD was a private limited company il used telained profit to finance expansion However, now itis a pubic lites company itis Becoming moce cicult use retained preft ADs shareholders and directors atten have erent eas about how profs should be distibuted [AD is able to charge high prices for is pcoduts as thas an excetent reputation fr reliable, high {quality equipment. AD has Wade stals atte rain agrcutural shows in country Zt wil need 10 find ways to gain a good repuation in over countries and raise awareness of is nice market ‘products, AD wil also need 10 adapt is products to meet the needs of farmers in ether counties where erops an sols are deren to those in county Z |AD employs ony skiled workers ints factory. They receive high pay as the dirctors fea hot \velhmotivated employees are essential fo maintaining high productivity in the factory. This eles reduce reruttment and waning costs because few employees leave ‘Appondix 1 Organisational chart for AD Managing Director Markeing Doctor Operations Direcior Human Resources, —_‘Financa recor | Diroctor | Sales Purchasing . Factory manager ‘Administration Financial Aecounts manager manager. manager ‘manager | Sales statt Assistant Production : Assistant 8) 0 workers ) (100) oes, 23 300.119, ceyeuesze09 Scanned with CamScanneroct/nov.2020 Paper23 Parts2 Main Nows article Country Z is a developed country with low and stable economic growth rates. A large percentage of its GDP comes from agricultural and mining output. However, country Z stil imports many food products, There has been a recent announcement from the government in country Z that the rate Of inflation has increased from 5% to 10%, As aresuit of the tise in the rate of infation, interest rates have also increased. Smaller businesses are most likely to be atfected as larger businesses can often agree lower interest rates with their banks. Many farmers are not happy with this Increase in interest rates as they oflen use bank loans when buying equipment Appondix 3 Summary of AD's financial Information from its last threo years of trading | 2019 2018 2017 Revenue '$100m eon 's60m {Gross Profit s20m 20m st5m Profit sém sim ‘som [Current ratio 15 2 3 Acid test ratio 1 1.25 2 ovceszn29 11,0489 29,390.10 Scanned with CamScanner