Teachers Guide

Teachers
Guide
Contains
Time-saving photocopy masters for teachers Worksheets with answers written for individual exam specifications Sample lesson plans for adaptation Shorter case studies with more accessible language
Introduction
This Teachers Guide has been written following research amongst hundreds of teachers. 1. Worksheets reduce preparation time. 2. Lesson plans provide ideas for use of the Case Studies and also reduce preparation time. 3. Brief Cases widen the potential use of Case Studies by providing shorter versions with less complex language. These materials and more are all available on www.tt100.biz Worksheets and lesson plans can be downloaded from www.times100.biz/teachers Brief Cases are available from the Home-Page along with shorter Case Study summaries at a language level closer to the original Case Studies. All the materials have been created to be used with either online access to our website or with this guide and the A3 printed binder. Please let us have your feedback on the appropriateness of these new Case Study summaries. We hope you will find them useful and time-saving and thank you for taking the time to send us your feedback.
Contents
Brief case studies in alphabetical order Worksheets Applied Business GCSE GCSE Business Studies GNVQ Intermediate AVCE AS Business A2 Business Scottish Business management standard Scottish Business management Intermediate Scottish Business management Higher Scottish Business management advanced higher Worksheet answers Lesson plans Sources and uses of finance Stakeholders Market Planning Segmentation Decision making Product life cycle Lesson plan answers ACCA BT Dixons Gillette Hazelwood Sandwiches Kelloggs 53 54 55 56 57 58 59-61 Coca-Cola Vodafone McDonalds Argos Kraft BG Group Nissan Cadburys MFI United airlines Competition The marketing mix Franchising Business culture Budgeting Investment appraisal Operations Social responsibility SWOT analysis External factors 38 39 40 41 42 43 44 45 46 47 48-52 1-37
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SWOT Analysis
Introduction
Abbey is a bank. In the same way that a shop sells goods, Abbey sells financial products. These are products such as bank accounts, mortgages and credit cards. Abbey is part of the financial services industry. Abbeys old name was Abbey National.
Abbeys results
Abbey found the following: Its main STRENGTH was its expert knowledge of finance. This meant that it should focus on this area. Its main WEAKNESS was its size. As only the 6th largest bank, it could not offer the same range of products as bigger banks. This meant that it should offer a simpler range. The main OPPORTUNITY was to provide simpler products which customers would better understand. The main THREAT was from other banks, who might want to take over Abbey, so it needed to become stronger. As a result of this, and other research, Abbey National decided to launch a range of products that was easier to understand. It decided to make things simpler by changing: Its name to Abbey. Its product range into three simple types of mortgage (a long term loan to buy a house or other property) and savings accounts. Its communications to customers making its entire letters, brochures and so on clearer.
Market research
The financial services industry sells hundreds of products from many types of business. Abbey National offered a wide range of products but found it was making a loss on some of them. In 2003 it carried out some market research, to find out why it was making these losses and how it could improve.
SWOT analysis
Part of this market research was to carry out a SWOT analysis. This meant trying to find out what it was really good at, and what might be holding it back. SWOT stands for: Strengths Weaknesses Opportunities Threats. Strengths and Weaknesses are internal Abbey can control these. Opportunities and Threats are external. This means that they are outside Abbeys control.
Launch
It launched the new range with a big advertising and promotional campaign. It also ran a huge training programme for its staff. They could then better tell customers about the new customer-led products.
Conclusion
The financial services industry sells the products it thinks customers want. It then tries to persuade them to buy. This is called a product-led market. Abbey carried out market research to see what customers really wanted. It then provided the products. This is called a customer-led market. Abbey hopes its approach will be the more successful one.
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briefcase
What does Acas do?

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

Introduction
The Internet has quickly become very important to businesses. It allows one computer to talk to others, linking them across the world. The main way of doing this is through websites.
Amways plan
Amways plan was to provide websites for all of Europe in just two years. As far as it could, it grouped countries together to lower costs. Once the first sites were running, Amway could see that the direct sales model worked well on the web. Amway then took the best parts of the sites the bits that worked the best and used these in its new sites. The new site in the UK is called AMIVO. Over a third (and rising) of Amways UK sales are now made using this website.
What is Amway?
Amway is one of the worlds largest direct sales companies. It makes and brands its own products. It sells these to people who want to run a business selling Amway products. These people (called Independent Business Owners or IBOs) then sell them to consumers. Amway gives IBOs help and support when it is needed. Amway thought that the best way to do this, across the world and at any time of the day (24/7) was through websites. It carried out some market research to see if its IBOs would be keen to work this way. It found that many IBOs: wanted advice and information quickly wanted to work from home were go getters keen to use new technology.
Conclusion
Amway uses the web to link to its 3.3 million IBO customers all over the world. The web helps with sales, advice, transport, distribution and production. The use of the web has helped Amway with its direct sales model to compete better with other businesses that use more traditional methods.
The Amway model

Amway helps IBOs by giving them advertising and other material to help sell its products. Products are then ordered from Amway by IBOs. A website allows IBOs to get the information they need, and also to order products on-line. It also lets them work at any time of the day they want, and from where they want.
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Changing business culture and the marketing mix

Introduction
Argos is one of the UKs largest chain stores. In 1998, after poor results, it was taken over by GUS plc. The new boss, called Terry Duddy, set out to improve its performance by giving it a better image. He decided to change the business culture at Argos. Business culture means the values and beliefs shared across the organisation. In part this means what the staff think of Argos, and how well they work for it. The new culture he came up with is one that values: good customer service close teamwork managers being given more responsibility all staff showing respect for each other all staff wanting to better compete and to improve the business.
Argos keeps prices as low as possible. Place (distribution): The Argos catalogue is the main way that people find out about products. It is found in 70% of British homes. Argos also opens many new shops. People: Argos gave good training for its staff as part of the culture change. Process: As well as the usual ways to shop Argos brought out Quick Pay and Text and Take Home. Customers can text to see if an item is in stock, and collect it later. Quick Pay cuts down on queues by letting customers order and pay using credit or debit cards. Physical environment. Argos smartened up its shops.
Argos talked to staff and built good teams, who were keen to improve. To help with this, it provided support through better training. It also made more ways to be promoted and used performance targets. These are targets to reach that lead to rewards.
Conclusion
The success of the changes means that Argos now does better than the rest of the market. Between 2002 and 2003 sales grew by 13% and profits grew by 17%.
Marketing mix
As well as the change to the culture, Argos decided to change its marketing mix. This is the mix of the right product at the right price available in the right place and backed by promotion. Argos have three more parts to their mix people, process and physical environment. Each of these parts were changed:
Product: Market research showed the Argos brand was seen as boring and stuffy. Argos brought out a new logo and new slogan: Brighter Shopping. It also increased the types of product it sold. Promotion: Argos splits its market into two main groups. Those who get it who understand and like the brand, and those who dont get it. The get it group is used to help persuade the other group.
briefcase
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Business accounts and the accountants that draw them up

Introduction
ACCA stands for the Association of Chartered Certified Accountants. It is a world-wide organisation. It is the largest professional body for accountants. ACCA provides advice to its members. It also encourages them to act in a proper manner.
Accountants lay out accounts in set ways to make them easier to follow. ACCA is one of the main bodies that set down these ways, or standards.
What do accountants do?

Accountants deal with the financial information of businesses. This information is very important to those people with an interest in the business. These are called stakeholders. In a large business most figures can be found in the final accounts. These are usually drawn up at the end of a trading year. The main accounts are: Profit and loss account. This shows if the business earns more or less than it spends. If it earns more than it spends, it is making a profit. If it spends more than it earns, it is making a loss. Balance sheet. This shows what the business owns, as against what it owes. Cashflow statement. This shows if the business has enough money to keep trading.
The people in a business who make decisions can use the accounts to see: how well the business is doing now how well it might do in the future. Accountants have good knowledge of how well a business is doing. This means that they will often rise to high positions in a business.
The need for qualifications

Accountants need to be qualified to do the job well. ACCA only allows accountants who have passed their exams to join. ACCA also insists that its members are polite and behave honestly. It has a code of ethics (doing what is right) for its members to follow.
Conclusion
For many businesses, the most important part of the business is its people. ACCA makes sure that its members, accountants, are the best a business can have.
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briefcase
Liability, ownership and growth

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

Shareholders own a small part of the business (a share). They make money by having a share of the profits. They also have a say in how the business is run as each share is worth one vote at the AGM (Annual General Meeting). Shareholders may be persons or institutions (like banks or pension funds). It is usual for them to hold a number of shares.
If a body owns more than half of the shares it is called the majority shareholder and can out vote the other shareholders. Investment trusts will hold a lot of shares in a company and may even be the majority shareholder. This means they can make sure that the companies in which they own shares do not take too many risks.
Conclusion
Shareholders buy shares in order to make money from profits but they could lose their money. Investment Trusts spread the risk by buying shares in a number of companies.
Investment trusts
There is a risk involved in buying shares as their value could go up or down. People put money in an Investment Trust so that the Trust can buy shares in a number of companies. This helps to spread the risk. Most Trusts will belong to the Association of Investment Trusts (AITC) which has around 250 members.
briefcase
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Recruitment, selection and training

Introduction
A brand is often as important to a business as the product itself. The Audi Brand is well known and trusted. Audi has the image of being sporty, forward looking and up to date with new technology. To keep the Brand strong it is vital to have good, well trained staff who can support and promote the Brand.
Franchise dealers
Audi cars are sold through dealers who have bought a franchise. A franchise is the right to sell a successful brand or product. The dealer sets up an Audi Centre. Each Audi Centre has modern buildings, new showrooms and the best people. Audi Centres buy from Audi UK, who import the cars from Audi AG in Germany. Audi provides help to dealers to recruit and train the best staff to better support the Audi Brand.
Staff development and training

Development helps staff to meet their own needs, such as further education. Training helps staff to meet Audis needs, such as learning more skills. Audi makes sure that it always has the best staff by providing good development and training. This is good for Audi because it gives: Audi Centres highly skilled staff who support and promote the Audi Brand customers the benefit of knowing that they are being dealt with by expert staff employees the benefit of helping them to be better at their job.
Training
Audi Centre employees are all given the chance to train to become 'qualified' in their job role. It is very important, for instance, for technicians to keep up with new technology. The Audi Academy sets out a series of training courses so that an apprentice (at the bottom) can progress to become a master technician (at the top). To help reward the staff who do well, prizes are offered.
Conclusion
Audi can see that there are benefits in having well trained staff who are keen to do well. This way they are better able to promote and support Audi's Brand values.
Hiring staff
Audi have a thorough recruitment and selection process. Recruitment means looking in the right places to find the best staff. Selection means choosing the best staff from those who apply. Audi UK provide a recruitment service to all Audi Centres. This includes: role descriptions (what the person in the job has to do) pay advice guidelines for interviews. Audi hopes that by recruiting good staff, there will be the same good levels of customer service at all Audi Centres.
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briefcase
Business decision making

What is BG Group?
BG Group is a business in the gas industry. It is involved at every stage from looking for new sources of gas to final sales. More and more customers are turning to gas because of its clean image and reasonable cost. This means that BG Group has to find new sources of gas in new gas fields.
Investment appraisal
One way to help make decisions is by using a technique called investment appraisal. BG Group looks at how much money will be tied up in the project and for how long. It then looks at what else it could be doing with that money. It will also look at the likely rewards. It may be that just putting the money in the bank, with no risk, would get the company better rewards!
Ethics
Making ethical decisions means making the right moral choices. Sometimes this can be the hardest part of decision making. Gas may be found in places where the environment is important; or in conflict zones; or in places where locals have land rights. BG Group has ethical guidelines to help it make the right choices.
Investment decisions
To develop a new gas field is a big risk so businesses like BG Group have to be very careful. There are a lot of factors to take into account. New gas fields are: very expensive: a lot of money has to be spent on equipment and drilling very slow to pay back any money to the business. Sometimes it can be as long as five years before any money is made from a new gas field.
Conclusion
The worlds demand for energy is growing. Businesses like BG Group have to try and meet this demand. They try to make the best decisions by using experts and techniques like investment appraisal.
Experts
BG Group tries to limit the risk by using experts. These experts will try to decide if a risk taken is going to be worth the likely reward. These experts are: geologists, who decide on whether or not gas is present engineers, who decide the best ways to extract the gas experts who look at the likely health, safety and environmental risks economists, who predict things like the possible future demand for gas. (There is no point drilling for gas if nobody wants it!) Managers and experts have to weigh up risks and rewards before making any decisions.
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Marketing and segmentation

Introduction
BIC is a brand name that is known all over the world. The business sells in 167 countries and employs over 9,000 people. To compete in world markets BIC needs to focus on its best selling pens, razors and lighters. These are called power brands where BIC has the biggest lead over competitors. The BIC brand has been made stronger through new products and through advertising. England rugby captain Martin Johnson has been used and BIC has also linked up with Disney. BIC divides (or segments) its market so that it can target certain products at certain customers.
Segmentation
BIC splits its different market segments by: age, income and gender what products can be used for (e.g. the pocket lighter range was extended to include the Megalighter for barbecues) the wants and needs of the customers who buy the products. Its two key sets of customers are: the shops that it sells to the people who buy from the shops. It uses market research to see what each group wants.
Customers and the Stationery Market

BIC found that customers buy stationery for three main reasons. It targets each of these. Customers buy: for value for money e.g. a pen that does not cost too much for special benefits e.g. better pens for presents, or for their own use without thinking (impulse buying) this means good point-of-sale material is needed. BIC sells products that fit with each of these reasons. It sells products that are value for money; that are high quality and that are new and eyecatching.
Products
Its products are put into just three categories, stationery, lighters and shavers. These all carry BICs values, which are that products must be: functional designed to do their job well affordable within the right price range universal can be used by anyone in the world. Products are made in huge super-factories and then transported around the world. This means that the costs to make the products can be kept really low.
Conclusion
BIC sticks to just three types of product. It targets these at carefully defined market segments. The company is also always looking for new growth areas and new and exciting ways to change its products in order to sell more.
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briefcase
Standards and quality

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

Standards are good for both consumers and businesses. Consumers are more likely to buy products if they know that they are safe and reliable. For businesses, having standards also helps to cut costs. Standards are set to meet the needs of consumers. This is also good for business. If they meet the standards, they are also meeting consumer needs.
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briefcase
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Market segmentation and marketing mix - Gaming

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

Introduction
Businesses should try to produce what people need today without having a bad effect on what people may need in the future. This is called sustainability. For instance, if one tree is planted for each one that is cut down, this is sustainable. BT believes that this idea is linked to ethics - behaving in the right moral way. It believes that if it acts in a moral way, then sustainability will follow. It also believes that acting in a moral way will give it a good name so it is good business sense.
Stakeholders
BTs approach creates value for all of its stakeholders. These are those people or groups who have an interest in the success of BT. They include: shareholders: BT makes sure they get value from the business employees; these are looked after well and even offered shares in the company. BT reckons that one poor call-centre worker could upset its customers cutting its yearly profits by 300,000 so having happy workers is vital customers; BT carries out in-depth research to make sure these are happy. If all stakeholders are happy, then the business has a good name and society as a whole is happy.
Conclusion
BT believes that businesses should follow a moral line. If they do they will gain a good reputation. Hitting social targets will lead to added value and keep stakeholders happy. Corporate Social Responsibility refers to the actions a business can choose to take to help towards wider social or moral goals. BT produces a Social and Environmental Report to see if it is reaching these goals.
BTs approach
BT believes that its ethical approach should be present in all that it does. For instance, it has seen that those who have access to the Web are better off than those who do not. It believes that access to the Web improves peoples lives by improved access to: education entertainment and other people (social use). BT wants to make sure Web access is for all. It is making broadband, fast links, open to the whole country by 2005. It is also working to include groups who do not yet have access. This is by: bringing fast access to local areas through a scheme called Community Broadband working to provide access for special groups who do not use the Web. This may be because they are older, or have little education, or are from a different ethnic background. This is called everybodyonline and is being carried out with the charity Citizens Online.
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Ethics
Introduction
Cadbury Schweppes products are sold all over the world. It makes and sells two main types of product: sweets, chocolates and gum soft drinks. Its famous brand names include Schweppes, Dr Pepper, Halls, Trebor and, of course, Cadbury itself.
Ethics at work
Cadbury Schweppes tries to make sure this approach covers all the areas over which it has control. This includes the firms that supply it and its own transport and production.
Supply. Cadbury Schweppes works with its suppliers to try and make sure they are being ethical. For instance it works to help cocoa farmers get a good price for their crop. It also helps to improve the lives of people in countries it trades with. For example, in Ghana it builds wells to provide clean safe water. Production. The business makes sure that it treats all waste water to make it safe. It also uses as little energy as it can and keeps down the release of harmful gases into the air. Distribution. Goods have to be moved around the country and around the world. Pollution from the transport used has been reduced and drivers are trained in the most efficient ways to drive.
Acting in an ethical manner is important to Cadbury Schweppes. This means doing what is right and fair. It also means working to create a better quality of life for employees and their families as well as communities - this is called Corporate Social Responsibility (CSR). Ethical behaviour and CSR can bring benefits to a business by: attracting more people to buy a firms products making employees happy to work at the company and therefore stay there for longer attracting better employees who want to work for the company making more people want to buy shares.
Consumers
Cadbury Schweppes is also keen to be fair to its consumers, by making sure all its products are labelled clearly and informatively and meet the highest quality standards.
Ethics and employment

Cadbury Schweppes also looks after its employees. It believes in and promotes equal opportunities. It treats all its employees fairly. It gives them a safe and healthy workplace, good pay and good training.
Conclusion
Cadbury Schweppes approach to behaving ethically is a core value. This means that it affects every area of the business. This has helped Cadbury Schweppes to remain a successful company.
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Developing product ranges and Ansoffs matrix

Introduction
The Coca-Cola Company is the worlds leading seller of soft drinks. In Great Britain, the company offers over 20 brands (nearly 80 products), including Oasis, Sprite and, of course, its best seller, Coca-Cola. It sells a range of products to meet a broad range of consumer needs. But how does it decide what new products to sell and who to sell them to?
Deciding
Once the company identifies there is a need, Coca-Cola has to decide how it is going to meet this demand. For instance, should it make a brand new product or extend one it already has, perhaps by making a new flavour? Should it develop the product itself (internal growth) or buy a competitors product (external growth)?
Market research
First it looks at its market. It divides this into slices or segments to identify different groups of consumer needs. Market research then finds out what each segment wants. Market research may be: primary - using new data or secondary - using sources that have already been published.
New products
Ansoffs matrix is a way of identifying opportunities to expand a product range. The matrix is a grid which sets out the choices available to businesses. These are: selling more of an existing product to an existing market. This is going deeper into a market so it is called market penetration. selling an existing product in a new market, for instance bringing out different bottle sizes to attract different buyers. This is called market development. selling a new product to an existing market. This is called product development as it means making changes to a product, for instance a new flavour like Coca-Cola Vanilla. selling a new product to a new market. This is called diversification. Coca-Cola identified the need for a new sports drink and launched Powerade. Ansoff's matrix looks like this:
New product Existing product Existing product New product Existing market Market development Product development: Market penetration penetration: Product Coca-Cola Vanilla diet Coke New market Market development Diversification
Stages
Research by Coca-Cola Great Britain is carried out in five stages: 1. Desk research to see where there might be a gap in the market. 2. Detailed research using small groups of typical consumers. This is to see exactly what might be wanted. For instance, it might look at a new product or pack size. This is an example of qualitative research. 3. Large scale surveys to collect information to see which type and design of product is likely to have the most appeal. This is an example of quantitative research. 4. Trials in a test market to see if the consumer likes the product. 5. Tracking the success of the product once it is launched.
Existing market
Fanta Icy Lemon
New market
Market development: Coca-Cola Share Size 1.25 litre Bottle
Diversification: Winnie the Pooh Roo Juice Powerade
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Sustainability and PEST analysis

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

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

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

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

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

The Inland Revenue (IR) is the government body which collects taxes. It also provides advice and help to people and businesses. Communication goes both from the IR and back to it.
What, why and how?

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

Introduction
Kelloggs is the worlds biggest producer of breakfast cereals. Its famous brands include Corn Flakes and Rice Krispies. For Special K, Kelloggs found out from market research that: the product would suit new fashions for healthy foods it is able to maintain a good premium in the market because it is a strong brand it could be sold in all the places Kelloggs products are sold a special campaign could increase sales.
Growing a brand
To stay ahead in a market, businesses like Kelloggs have to make decisions about their brands. They have to decide whether or not to grow a brand, or to let it decline. Kelloggs decided that it was not making enough of its Special K brand. It decided to expand it through using the brand name to promote other, similar, products.
Product Life Cycle

Kelloggs also looked at where Special K was on the product life cycle. The product life cycle is the stages a product goes through. These are just like a living thing the product is born, grows, matures, gets old and dies. When it is born (introduced) it grows slowly but as more people buy, sales grow. When it matures, other products have come out to compete with it. A business then needs to decide if the product is to be allowed to die.
Marketing mix
Kelloggs looked at the marketing mix for Special K to see how it could be changed. The marketing mix is the mixture of the right: product to make price to charge place to sell and promotion to make people buy.
Special K
Kelloggs saw that Special K was a strong, mature brand that it could base other products on. It saw that Special Ks strength could be used to launch a whole range of brand variants. First, in France, Special K Red Berries was launched. This was a success so it was launched in Britain in 1999. Special K bars came out in 2001, with extra promotion. By 2003 Kelloggs had also launched Special K Peach and Apricot in both boxes and bars. The success of the new brands means that they are now sold all over the world. At every stage Kelloggs tested the new brands with market research. It also watched closely to make sure that the new brands were not eating into the sales of Special K. The new brands have grown creating a new market while Special K sales have not dipped at all.
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Budgeting and variances

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

SLEPT analysis; market segmentation
Land Securities is the UKs largest property company. It owns over 8 billion worth of property. As a public limited company it is owned by its shareholders. Its shares can be bought on the Stock Exchange. It has two main aims: to get the best returns for its shareholders to be the leading property company in the UK.
Retail development. This involves building in some of Britains major cities such as the regeneration of Birminghams Bull Ring (Regeneration of an area means improving it because it has gone into decline. Often it means new shops, cafs, roads and housing). Housing. This involves planning and building houses and flats.
Kent Thameside SLEPT analysis

Land Securities tries to find out what factors will affect it in the future. It is vital to take factors outside its control into account. These are called external factors. It does this through a technique called SLEPT analysis. SLEPT is made up of the first letters of the five key factors which affect its market. The factors are: Social such as changes in population trends that affect the demand for housing Legal such as planning rules and laws Economic the health of the economy affects how likely people and businesses are to be able to afford property Political such as where governments want housing to be built Technology new techniques affect design and costs of building. The Kent Thameside project is a response to increased demand for housing in the South East. Planning would not allow building on greenfield sites so the project is on a brownfield site. Greenfield sites have never been built on. Brownfield sites are those that have been used for industry. Kent Thameside is mixed use as it involves both housing and business use. The project also fits in with what the government wants. It would like to regenerate city areas which have suffered from the decline of certain industries.
Organisation
Land Securities is split into three main parts. These are property: rental development management for clients.
Market segments
The development unit splits its market into slices or segments. This is so that it can better target each market. The three main segments are: Central London offices. Land Securities buys and develops property after taking economic factors into account.
Conclusion
Land Securities can look at future factors using SLEPT. This helps it to plan. One factor is the governments wish to regenerate some urban areas. This has led to major projects for the business.
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Using SWOT analysis to manage change

The Legal Services Commission (LSC) was set up in 1999 and is a public sector body. This means that it receives its strategic direction and funding from the government. Its aim is to give equal access to the law to all groups. Some groups have, in the past, been left out of some of the benefits of society. This is called social exclusion. The government is trying to fight this. The LSC is one means of doing this. The LSC has departments to deal with both civil and criminal law. Civil law is to do with arguments between people or groups when a crime has not been committed. Criminal law deals with crime. The LSC found the following: Its main STRENGTH was that the service was already established and private practice lawyers were already in place so they could be recruited into the new service. Its main WEAKNESS was that there might not be enough offices (in comparison with the number of private practice offices). There was also a problem with control over spending and a fear that public money might be wasted. The main OPPORTUNITY was to develop quality and IT systems and to facilitate staff development. The main THREAT was that change is often opposed.
Managing change
As with any change in business, it has to be managed so that people accept it. For instance, managers had to deal with lawyers who thought their earnings potential would reduce. It was pointed out that clients could still choose to use their own lawyers instead of the PDS. They also had to assure lawyers that just because the PDS was government funded this did not make it unfair competition.
Public Defender Service (PDS)

On the criminal side, the LSC has launched the Criminal Defence Service. A vital part of this is the PDS. The PDS is a service that can be used by the accused at all stages from arrest to trial. Before setting up the PDS, a SWOT analysis was carried out. This meant trying to find out what the service was really good at, and what might be holding it back.
Conclusion
The PDS was launched in four cities where there werent enough good quality lawyers and where there was a need for the service. These were Birmingham, Liverpool, Middlesbrough and Swansea. Four further offices have since been opened in Cheltenham, Chester, Darlington and Pontypridd. It is still early days, but the PDS is set to expand in the future. days, but the PDS is set to expand in the future.
SWOT
SWOT stands for: Strengths Weaknesses Opportunities Threats. Strengths and Weaknesses are internal the LSC can control these. Opportunities and Threats are external. This means that they are outside the LSCs control.
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A truly global marketplace

Introduction
Lloyds of London is the worlds oldest and best known insurance market. It provides an insurance market where businesses from all over the world can find insurance for their risks. All businesses (and individuals) face risks. Insurance can provide security against some of those risks.
Types of insurance
Life is full of risks. Insurance can provide security against some of these risks, for example, car insurance or household insurance. Businesses have a number of risks and can also insure against losses from certain events. Examples include: Professional Indemnity Insurance. This insurance covers professionals such as accountants and solicitors, for liabilities that might arise from the advice they give or the recommendations they make in their professional capacity. Business Interruption Insurance. This insurance covers businesses against costs arising from a reduction or interruption in business, caused by an insured event. For example, if one of the insured risks was acts of terrorism, then businesses that suffered a loss of trade from a terrorist attack (like September 11) would be able to claim. Employers Liability Insurance. This insurance is designed to meet claims by employees for bodily injury, illness or disease suffered while carrying out their work. Commercial Combined Insurance. This covers damage to premises, equipment and stock. It can also cover business interruption, employers liability and product liability (any claims that might arise from the use of the business goods or services).
Insurance
Insurance involves a contract between the insured, who makes a payment (a premium) to an insurer. In return, the insurer agrees to provide the insured with cover against certain risks. The conditions for the insurance are contained in a document called a policy.
Lloyds market
Lloyds of London is an insurance market. It is a place where buyers (brokers, representing the insureds) and sellers (underwriters) of insurance can come together (as they would in any other market) in order to agree sales and price. Lloyds itself does not provide insurance, it just provides the infrastructure for sales to take place. The market is made up of the following. The Corporation of Lloyds: supervises the market and provides its infrastructure. Underwriters/syndicates: the market is made up of a collection of syndicates. Underwriters work for the syndicates to assess risks and accept or decline risks on their behalf. Brokers: these are the people who form the link between underwriter and insured. They act on behalf of the insured to find cover for a risk. There are over 160 firms of Lloyds brokers operating in the Lloyds market.
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Franchising
Introduction
McDonalds is the largest food service company in the world. It served over 16 billion customers in 2002. Its success is based on selling quality products cheaply and quickly. Ray Kroc took over the business in 1955. He based its further success on rapid growth. He saw that a quick way to grow was through franchises. Around 70% of McDonalds are now franchises.
Franchiser
The advantages for the franchiser include the following. Franchises attract people who have ideas and are willing to take risks in return for profit. These are called entrepreneurs. Having such people on board means that McDonalds is never short of new ideas. A number of new products have been developed by franchisees including the Egg McMuffin, the Filet-o-Fish and drive-thrus. The business enjoys rapid growth. The business has an income from rents (based on sales) and from people buying franchises. A new 20 year franchise costs upwards of 150,000.
Franchise
A franchise is when a business sells the right to sell its products or brand to other people. The two parties are: the franchisee who buys the franchise the franchiser that sells the franchise. All McDonalds franchisees around the world use the same branding, menus, designs and systems. There are advantages to the franchise for both partners.
Suppliers
McDonalds is also keen to ensure good supplies. It develops quality standards to make sure suppliers are up to the mark. Suppliers are then able to share in McDonalds success.
Conclusion
McDonalds only takes on eager and dedicated franchisees. It knows the sort of people that will make a success of a business. It makes sure that franchisees are risking their own money as these are the right people to make a success of a business.
Franchisee
The advantages for the franchisee include the following. They are their own boss. They are selling a well known product. This is a product that is seen all over the world. They have to complete a high level, full time training programme. This includes doing all the jobs in a McDonalds. This helps them to really know the business. Above all, it helps them to manage staff. Further support is always on hand once the franchise is running. They gain from national marketing of the brand. They gain from McDonalds knowledge of the market. It helps them to predict sales and growth in order to avoid future problems.
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Growth and SWOT analysis

Introduction
MFI is the UKs largest seller of kitchens, bedrooms and the things that go in them. It makes them, sells them and supplies services to buyers. As the number 1 in the country it is known as the market leader. To stay as market leader MFI needs to keep growing, so that it can compete.
Growth
Growth can come from within the business. This is called internal growth. This could be through: new products. MFI aims for 20-25% of its products each year to be new ranges. new product categories. This means going into whole new areas. For instance, MFI has started selling bathrooms in the last two years. refitting shops. MFI has spent money on giving many of its shops a new look. Growth can also come from outside by buying other businesses. This is called external growth. MFI looks to buy businesses that share its goals of good design at good prices. Strengths and Weaknesses are internal MFI could control these. Opportunities and Threats are external. This means that they are outside MFIs control.
Results
The Sofa Workshops main STRENGTH was its well known brand name. It also had good resources such as first class managers, staff and distribution. WEAKNESS was that it did not have the factory space to expand. It is also in a market where people only tend to buy when incomes are rising and the future looks good. MFIs main OPPORTUNITY was to tap into the increased fashion sense of the public. It also offered it the chance to widen its range of products. THREAT came from other high street competitors.
Funding growth The Sofa Workshop Company

Market research showed that people thought MFI sold sofas, even though it didnt. This led MFI to try out the sale of sofas in test stores. The success of the trials led it to buy the Sofa Workshop Company in 2002. It decided to do this after a SWOT analysis was carried out. This meant trying to find out what the Sofa Workshop was really good at, and what might be holding it back. SWOT stands for: Strengths Weaknesses Opportunities Threats. Growth can be funded through: Shares, but this may not be easy Borrowing, but this can be costly Profits. This is best if it is possible. MFI bought Sofa Workshop from profits. It had enough profits due to good management in recent years.
Conclusion
Growth is helping MFI to stay as market leader.
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Sustainability and water

Introduction
Nestl is the largest food and drink business in the world. Its brands include: Nescaf, Kit-Kat, Buitoni and Felix cat food. Nestl Waters is the world leader in bottled waters. Its brands include Vittel, Perrier and San Pellegrino.
Factors
Businesses use all of the factors of production. These are: Land natural resources such as land and water Labour the human effort Capital the money used to buy tools, plant and equipment Enterprise the process of organising the above factors and of taking risks in order to make a profit.
Business sense
Nestl feels that businesses should always try to act in a responsible or moral way. It believes that acting in a moral way also makes good business sense as it gives Nestl a good name. This means people are more likely to want to buy from the company. The basic Nestl values include: long term progress rather than short term profit long term commitments to suppliers and customers respect for the cultures it works in always giving customers good information making sure that all staff follow the principles by making them central to the business.
Nestl and water

Water is a natural resource and so is one of the factors of production. There is enough water on Earth to meet the needs of all but it is not always in the right place. Nor is it always clean. Nestl is involved in water education programmes and, with a charity, a water tank project to bring clean water to parts of South Africa. The biggest user of water is farming. Nestl has cut down its use of water so that it does not put pressure on supplies. It has built new waste water treatment plants. It has also cut down on waste in its factories.
Sustainability
Businesses should try to produce what people need today without having a bad effect on what people may need in the future. This is called sustainability. Nestl wants to increase access to good food across the world whilst not harming the environment. Nestl has joined with other food companies in the Sustainable Agriculture Initiative. This group shares help and advice.
Conclusion
In 2002 a World Summit set a target to halve the number of people without access to clean water by 2015. Nestl will share its knowledge to help reach this aim.
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Small business and planning

Introduction
NFTE helps to tell young people about the world of business. It helps them to start their own businesses. It is an international body.
The Network For Teaching Entrepreneurship
UK
Entrepreneurs
These are people who have ideas and are willing to take risks in return for profit. Often they will run their own business. Many famous names have started small in this way and grown to be large firms. Many started as sole traders. This means a one person business.
Ownership
Sole traders are often in business because it offers them independence. They are their own boss. They also get all the profits from the business. On the down side, they have to take all the decisions. They also carry all the responsibility for the business. Other small businesses may be partners. This is where two or more people share the running of the business and the profits. Some small businesses may decide to be private companies. This means that they will have shareholders. On the plus side, this makes it easier to raise money. On the minus side, they have to share profits and control.
Business plans
Starting and running a business is hard work. As a rule, the owner carries all the risk. To help make sure that the business is a success, it is vital to plan. A business plan should be based on good knowledge of the market. This can be found through good market research. A good plan will help the entrepreneur to raise money for the business. This could be through: using their own funds. This is called owners funds a bank loan, or a loan from a backer a bank overdraft a long term loan on a property. This is called a mortgage trade credit. This is where a supplier allows time to pay for goods. This gives time to sell them.
Profit
Profit is the reward for taking the risk. It is what is left when all costs have been taken off from all the money earned. It is what drives enterprising people, people who are increasingly vital to a modern economy.
Why small?
Britain relies on small businesses. Two thirds of UK businesses are one person businesses. Over 2.5 million people are self employed. Nine out of ten businesses employ fewer than six people. Why are there so many? There are a number of reasons for them to be small. Small businesses can: offer personal services (like hair cutting) respond quickly to change and new ideas run with few costs or overheads supply products to small or niche markets.
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Production methods and quality

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

Introduction
The Office of Fair Trading (OFT) was set up by the government. Its job is to make sure that markets work fairly.
OFT
Sometimes businesses act in ways that make markets unfair for customers. The OFT has the job of stopping this from happening. The OFT has three main sections to deal with different problems.
Competition Enforcement (CE)

The CE section prepares OFT guidelines. It also spots and stops anticompetitive conduct. For instance, looking at: mergers to make sure that the new business will not have too much power in the market businesses acting together to fix prices. This is called a cartel complaints made by the public or other businesses.
Consumer Regulation Enforcement (CRE) Markets

A market is any place where buyers and sellers get together to agree a price. This could be a real market or a virtual one over the phone or the web. How do markets work? On the one hand, businesses supply products. As the price they can charge goes up, they are willing to supply more. On the other hand, customers demand products. As the price they have to pay comes down, they are willing to buy more. You will see that there will come a point when customers and suppliers agree with each other. They will agree the amount they are willing to buy or sell and the price. Markets work well as long as neither side has the power to change the agreed price. The CRE section makes sure that the laws which protect consumers are not being broken. For instance it uncovers and stops scams and unfair trading removes unfair terms from consumer contracts makes sure consumer credit is fair.
Price
Price
Price
Demand
Supply
e
Supply Demand
Quantity
Quantity
x Quantity
Markets and Policy Initiative (MPI)

The MPI section looks at markets that do not seem to be working well. It provides research and statistics for the whole of the OFT. The OFT can then take action based on its research. It also checks to see what effect laws are having on markets.
Conclusion
Markets tend to work well if they are left alone. Fair competition, for instance through special offers, is good for consumers and markets. Sometimes competition is not fair. If, for instance, a business was the only supplier to a market, it could charge very high prices. The OFT acts on behalf of the consumer to stop such unfair practice. It helps markets to work well.
Access www.tt100.biz/oftbs
briefcase
31
Strategy, competitive advantage and the promotional mix

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

Introduction
The Portakabin Group is a private company. It provides temporary and permanent buildings. Portakabin Limited is a member of the Group. Its area of business is making buildings that can be built from a number of sections. These are called modular buildings. The Group is the market leader in the UK in an area that has many competitors. It also competes with much bigger concerns in Europe. The Group competes by being able to offer new products and services.
Internal
The Group use a number of methods for this: Newsletters. These tell staff of new products and special events. Notice boards. These are clearly set out. Posters. These are used on notice boards. Roadshows. These are events held in each region and are to inform parts of Europe about Portakabin.
External Sectors of industry

An economy is as a rule split into three sectors or parts. These are: Primary. This is taking raw materials from the land or sea. Examples are farming, fishing and mining. Secondary. This is the turning of raw materials into finished goods. Tertiary. This means third and refers to the service sector. This includes everything from window cleaning to banking. Portakabin works in both the second and third sectors. It makes buildings and provides services such as the hire of buildings. The Group makes sure that it provides a complete service. For instance, clients may want not just buildings but access ramps, fire alarms and other special services. It also competes by giving good customer service. This is laid out in a special customer charter. The Group use a number of methods of external communication aimed at customers. These include: Publications. These must always be clear and attractive. A website. This can be checked to see who visits it and how many sales come about as a result.
Conclusion
It is hard to grow in the business that the Portakabin Group is in. This is because most competitors have been around for a long time. Portakabin succeeds in growing by bringing out new products and services.
Communication
Because products and services are often new, it is vital that Portakabin tell both staff and clients about them. This means that good communication is vital. This is either internal or external communication. Internal takes place inside the company to staff or other parts of the Group. External takes place outside, for instance with clients and other companies.
Access www.tt100.biz/portakabinbs briefcase

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Sectors of industry and the marketing mix

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

Introduction
UNISON is the UKs biggest trade union. It was formed in 1993 when three unions merged. Its members work in areas such as education, healthcare and transport. It has nearly 1.3 million members working in public services.
Unions
A trade union is an organisation that acts for groups of workers. It fights for better pay and working conditions. It has a lot more power in talks between workers and employers because it acts for a group of people. Talks to come to an agreement are called negotiations. Dealing on behalf of members is called collective bargaining. Unions may be called in to help in any dispute between a worker and an employer.
Contracts
A Contract of Employment gives the working arrangements between a worker and an employer. By law, a worker must have certain Contract terms in writing within two months of starting work. These cover areas such as the job title the tasks the worker has to carry out pay, hours and overtime holiday, sick pay and pension rights. It also covers problems between worker and employer. What workers have to do if they have a problem with the employer is covered by the grievance procedure. (A grievance is a complaint.) What employers have to do if they have a problem with the worker is covered by the disciplinary procedure.
Disputes Rights of workers

Unions protect workers rights. Workers have legal rights such as: Minimum Wage set rest periods set number of hours to work protection from unfair treatment due to race or gender (discrimination). As well as these legal or statutory rights, workers have rights laid down in their Contract of Employment. If there is a dispute between an employer and a group of workers, UNISON will try to solve it through negotiation. It will sit down and talk with the employer, putting its members point of view. If this does not work members can be asked, through a vote, if they want to take further action. That action could be: a work to rule where workers carry out only the exact tasks that they should an overtime ban strike action either of all the members or of certain groups.
Conclusion
UNISON and all trades unions would prefer for disputes never to get this far. It believes that good industrial relations can be built by workers and employers being partners.
Access www.tt100.biz/unisonbs briefcase for this study, interactive quizzes and revision
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External factors
Introduction
United grew from 1927 into the second largest airline in the world. All businesses have to take into account internal factors - that are within their control and external factors - that are outside their control. For an airline, coping well with external factors is a key issue.
Economic factors
Governments would like to force down prices on high traffic routes. United may also suffer from: higher landing charges extra taxes on air travellers fewer flyers as a result of SARS and the Iraq war.
Political factors
United has to cope with decisions made both in the US, the UK and Europe. US politicians will try to protect the US market UK and EU politicians decide who can land where.
Technological factors
New technology means the constant need to invest in new aircraft. United also has a concern for passenger safety, comfort and convenience.
SLEPT analysis
One way in which a business can plan to deal with external issues is to look at the factors involved. The headings used are: Social Legal Economic Political Technological factors. This is called, from its first letters, a SLEPT analysis.
Responses
In response to the SLEPT analysis, United has made changes so that it has: more and better routes better comfort and safety better airport lounges a special airport lounge club (the Red Carpet Club) special treatment for First and Business customers e-ticket services where no paper ticket is issued better handling of luggage.
Social factors
Travellers can always choose to travel by other means, or not to travel at all. Recent factors affecting the choice to fly or not were: the threat of SARS disease (a deadly virus spread by travellers) the threat from acts of terror.
Marketing
United uses marketing tools to tell travellers about these changes. It adapts its marketing mix to suit different countries and markets.
Conclusion
United has studied the external factors that affect its business. It has responded to these to become more successful.
Legal factors
Laws in the USA, in Britain and in other parts of the world all affect United. Air traffic is governed by rules laid down by Aviation Authorities here and in the USA. This is vital but brings higher costs. Just four airlines are allowed to fly direct US to Heathrow routes. One of them is United. Changes in EU law could open up this market to others.
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www.tt100.biz/u_airlinesbs briefcase Access for this study, interactive quizzes and revision
Marketing mix
Introduction
Vodafone is the biggest mobile phone business in the world. It uses marketing to promote its brand. This involves finding out what customers need and then making sure that the products on sale meet those needs.
Market research
Market research is not only used to find out what customers want. It is also used to see if things like TV campaigns have been a success. It was found that people recalled the adverts and so the brand had become better known.
The marketing mix

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

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

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

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

AVCE
Name: Form: Date:
All businesses have a set of values, attitudes and beliefs that make up their culture. What would you expect to be the key features of the cultures of the following businesses?
Explain why Argos needed to change its culture-visit http://www.tt100.biz/argos1 to help you. What other reasons can you give for a business needing to change its culture?
Business McDonalds
Words to describe key features of culture
Coca-Cola 4 Vodafone Look at the Argos Case Study http://www.tt100.biz/argos2 Outline a) the changes made to the culture at Argos b) the main factor that made the changes a success. One of the key factors in the new culture at Argos is the success of its teams. Imagine you are a member of an Argos team. Explain the factors that would help your team solve problems http://www.tt100.biz/argos3
Cadburys
Nissan
Suggest three more businesses, with different cultures to those you have already listed above.
Business
Words to describe key features of culture 6 Think of the business that you are studying. How would you describe its culture? Is this the most appropriate culture for the business? Explain why you think this.
worksheet
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Kraft and Budgeting

AS Business
Name: Form: Date:
Explain what is meant by a budget in business terms. Use the information in the Case Study www.tt100.biz/kraft2 to help you.
Imagine that Kraft took the following decisions about a product. They decide on a price reduction of 15p; this successfully increases sales by 20%. Overheads rise by just 2,000, but variable cost rises by 10% due to costs of the marketing campaign, including the special packaging required as part of it. 4 Using the information above, fill in the missing figures in the table including a calculation of the variances in order to complete the variance column. Budget Actual Variance
Outline the features of a typical income and expenses budget. www.tt100.biz/kraft3
Price Sales Revenue Overheads Variable costs Profit
1.20 60,000
12,500 8,000
Kraft is interested in the variances between its predicted and actual figures. Visit www.tt100.biz/kraft4 to help you. Define what is meant by variance. Explain how a positive variance might be adverse.
Look at the information you now have and decide, by analysing the variances, whether or not this was a wise decision.
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worksheet
BG Group and Investment Appraisal

A2 Business
Name: Form: Date:
Businesses have to make decisions about investment in the future. Suggest three factors that will be important in making these decisions.
Look at the information about the BG Group, a business involved in exploring for new sources of natural gas. Describe the factors that are especially important to the business. Visit www.tt100.biz/bg_group4 for help.
Project 1 Year Returns. m (x) Discount factor (y) Present Value (x*y) 2005 -250 2006 0 2007 5 2008 15 2009 20 2010 30 2011 40 2012 50 2013 90 2014 130 380 Discount factor 0.05 Payback = NPV = Project 2 Year Returns.m (x) Discount factor (y) Present Value (x*y) 2005 -250 2006 100 2007 100 2008 50 2009 40 2010 30 2011 25 2012 20 2013 10 2014 5 380 Discount factor 0.05 Payback = NPV =
BG Group uses investment appraisal techniques to help it decide on projects. The discounted cash flow approach allows it to predict what future returns will be worth in terms of todays money values. Give three reasons why money today could be worth less than the promise of money in the future. The explanation of investment appraisal www.tt100.biz/bg_group5
BG Group sets a discount rate to calculate the present value of future cash flows from a project (called Net Present Value or NPV). Explain how BG Group decides on a discount rate appraisal www.tt100.biz/bg_group5
Read the Field Development paragraph at www.tt100.biz/bg_group4 and explain which project is most like those of BG Group and why.
As an adviser to BG Group you have been asked to choose between the two projects below, each costing an initial 250 million. Each project is predicted to yield 380 million over its 10 year lifespan. BG Group has set the discount rate at 5% and worked out future returns as shown. Work out the NPV for each and say which project BG Group should choose and why.
Explain what you think are the main problems in using techniques such as this to decide on investment appraisal.
worksheet
43
Nissan and Operations

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

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

Scottish Business Management Higher
Name: Form: Date:
MFI is the UKs largest retailer of kitchens, bedrooms and the things that go in them. Still it has the aim of expanding. Suggest two ways in which MFI could expand and explain what each entails.
For internal expansion, suggest three ways in which MFI could expand. Give an example for each. The Case Study gives some examples. Visit www.tt100.biz/mfi3 to help you.
Before expanding by buying other businesses, MFI carries out intensive research. Part of the research is a SWOT analysis. Explain what is meant by SWOT.
Draw up a diagram showing the results of the SWOT analysis carried out by MFI. Visit www.tt100.biz/mfi5 to help you. Strengths Weaknesses
Opportunities
Threats
How useful do you think SWOT is as a tool? Explain your answer.
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worksheet
United Airlines and External Factors

Scottish Business Management Advanced Higher
Name: Form: Date:
Businesses have to respond to both internal factors and external factors when they are planning and operating. Define the difference between an internal and an external factor.
Letter S L E P T
Factor
Example
Suggest five possible external factors or bodies that could affect an airline like United Airlines. You should look at the introduction at www.tt100.biz/u_airlines1to help you.
United recognised that to keep its customers happy, it had to make changes in response to the SLEPT analysis. Outline the changes that United made visit www.tt100.biz/u_airlines3 to help you.
There are various ways that a business can assess the likely effect of external influences and plan to minimise the problems. United used a SLEPT analysis. Explain what these letters stand for and give an example of a problem in each category using the table below. The examples can be found in the United Case Study. [each letter in the table opposite should link to the appropriate paragraph in the Case Study, which can be found in the Assessing the External Environment section.]
Explain how United have used advertising and sales promotion to help it build its customer base and minimise the effects of external factors. You will find the information here at www.tt100.biz/u_airlines5
Suggest ways in which United could improve other elements of the marketing mix.
worksheet
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Worksheet Teacher Notes

Coca-Cola Worksheet Teacher notes
Curriculum fit
This sheet is designed to introduce the idea of competition and ways of competing to students. It also introduces the idea of market research. It is suggested that the lesson before using the worksheet is on competition in general; the lesson following on competing through expanding either markets or products (for this you could use the Ansoffs matrix on section 7 of the study or go on line to www.tt100.biz/coca_cola7. 2
Suggested answers
1 This is a mix of the right product to buy in the right place at the right price and with effective promotion. Price Vodafone offers a number of price plans to suit all of its target groups. It also gives NECTAR reward points for every 1 spent. Product Vodafone gives customers the features and benefits they want such as games, pictures, ring tones, information services, bills and video and the Vodafone live! service. Place Vodafone operates 300 stores and also sells through other outlets. It has expert staff in the stores to help buyers.
Suggested answers
1 There are hundreds of different brands. An Internet search on top UK brands will bring up sites listing the leading UK brands. An accurate pie chart, based on the top ten UK brands by revenue, can be constructed from information at: www.mindadvertising.com/sectors/sector_softdrinks.htm and looks like the one shown. Note that the soft drinks market includes such as coffee and branded waters.
4% 4% 6% 6% 9% 22% 15% 4% 2% 28% Coca-Cola Nestl PepsiCo Kraft Foods Cadbury Schweppes Danone Sara Lee Starbucks Tchibo Red Bull
Promotion Above the line Vodafone uses advertising such as TV and posters. Below the line Vodafone uses in-store displays, press releases, branding and sponsorship. Beckham appears in many of Vodafones communications.
This is an open-ended question and there are therefore no right answers. Beckham is meant to appeal to both men and women; his image is successful, skillful and clean-cut, but still ordinary enough to do the shopping. Students can choose whoever they wish; the why should relate to the market segment(s) which they are targeting AND to the image of the person chosen.
5 3 It does not matter which of the stages is chosen by the student, as long as there is a valid justification. This is designed to make students look at the explanation of Ansoffs matrix in the context of their own chosen business. Again, there are no wrong answers, providing there is justification. More guidance or examples are needed. The label can be used for classroom display work. A large Ansoff chart could be put on the wall and each suggested product mounted in the correct box.
McDonalds Worksheet Teacher notes

Curriculum fit
This worksheet can be used after students have learned about different types of business ownership and franchising or as an introduction to franchising. If used after franchising has been taught, students are more likely to be able to give answers to include some of the disadvantages of franchising. The worksheet also tests students familiarity with terms and their ability to use them in context.
Vodafone Worksheet Teachers notes

Curriculum fit
This sheet is designed to test students knowledge and application of the concept of the marketing mix. It is aimed at those just starting on a GCSE course but would be equally usefully for any Business student on a 14-16 course, for both introduction or revision.
Suggested answers
1 A franchise is when a business sells the right to sell its products or brand to other people wanting to start in business. The two parties are the franchiser who sells the franchise and the franchisee who buys it. The advantages to franchisees include: being their own boss
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Teacher Notes

selling a well known product training programmes support from the franchiser national marketing the franchisers knowledge of the market 3 Argos needed to change its culture because the business was in a state of decline when GUS plc took it over, suffering from disappointing profits and sales. Changes made to the culture, to bring about a team culture, included: better customer service more teamwork encouraging staff to take ownership of decisions respecting everybodys contribution being more competitive. The main factor in the success of the change was the way the messages were effectively communicated to the staff (as shown in the 2003 Speak Out survey of Argos employees). The factors that help teams at Argos are that the team believes in winning believes in change looks for new opportunities encourages co-operation is well trained works in a place where success is acknowledged and rewarded. This relates specifically to the business being studied.
The advantages to franchisers are: attracting entrepreneurs and therefore new ideas and enthusiasm rapid growth income from rents and sales of franchises 3 This is a matter of personal opinion. For many franchisees the idea of being their own boss is most important. This is also a matter of personal opinion. On the whole, it is a good way to start a business as you will have an established brand and fewer franchises fail than other start-ups. On the other hand, the entrepreneurs may prefer to make their own decisions and be independent of a franchiser. The leaflet consolidates the evidence of knowledge and understanding that students have already shown and can be used as portfolio evidence.
Argos Worksheet Teacher notes

Curriculum fit
In the Business at Work Unit, students need to produce a business report on a medium-sized to large business. Before attempting this worksheet, they should have been taught about the nature of business and about business objectives. Both objectives and the strategies and decisions taken to achieve them will be reflected in the culture of the business. Students should be able to categorise different cultures and relate them to their chosen business. The Argos Case Study can also be used later in the course as an example of the successful management of change.
Kraft Worksheet Teacher notes

Curriculum fit
Students need to have been taught the basics of budgeting before attempting this worksheet. They need to know what is meant by variance, and to be able to carry out variance calculations. Higher order skills of judgement and evaluation can be shown in the final exercise.
Suggested answers
1 A budget is a statement or financial plan that sets out expected future results. A typical budget is time related (usually 12 months) designed and approved in advance shows expected levels of income and expenditure includes all likely capital expenses. The variance is the difference between the projected figure and the actual figure. A favourable variance is to the benefit of the business, an adverse variance to their cost. If costs were predicted to be 10 million and were actually 12 million then the variance would be +2 million. This would still be an adverse variance as it is not in the businesss favour so would be shown with a minus sign.
Suggested answers
2 1 Business McDonalds Coca-Cola Vodafone Cadburys Nissan 2 Words to describe key features of culture Expansion, customer satisfaction, fun Customer satisfaction, brand reputation, Technology, cutting edge, expansion Variety, customer satisfaction, ethics Reliability, style, technology 3
Businesses famous for their different cultures include the entrepreneurial Virgin, the ethically driven Body Shop, the low price, no frills service offered by Ryanair and the expansionist and competitive easyGroup. There are many other possible examples.
Teacher Notes
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4 Price Sales Revenue Overheads Variable costs Profit Budget 1.20 50,000 60,000 10,000 8,000 42,000 Actual 1.05 60,000 63,000 12,500 8,800 41,700 variance -0.15 +10,000 +3,000 -2,500 -800 -300 5 Answers are as shown below. Even though both projects produce similar returns, the NPV on Project 2 is much higher (76.04m as opposed to 12.84m), because it begins to produce revenue much earlier in its life It also reaches payback earlier (2010 as opposed to 2013). Project 2 is therefore the better choice. Project 1 Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 m (x) -250 0 5 15 20 30 40 50 90 130 380 Discount factor (y) 1 0.95 0.90 0.86 0.81 0.77 0.74 0.70 0.66 0.63 Discount factor payback 2013 NPV = Project 2 Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 m (x) -250 100 100 50 40 30 25 20 10 5 380 Discount factor (y) 1 0.95 0.90 0.86 0.81 0.77 0.74 0.70 0.66 0.63 Discount factor payback 2010 NPV = Present Value (x*y) -250 95.00 90.25 42.87 32.58 23.21 18.38 13.97 6.63 3.15 0.05 76.04 Present Value (x*y) -250 0.00 4.51 12.86 16.29 23.21 29.40 34.92 59.71 81.93 0.05 12.84
It is essential that variances are shown correctly as adverse or favourable by using positive or negative signs or brackets for adverse variances. For example a reduction in costs is favourable (positive) whilst a reduction in profits is adverse (negative). 5 Initially the growth in sales and sales revenue makes this look like a good marketing decision. However, once costs are taken into account, it begins to look like a poor marketing decision as total profit has decreased due to the extra marketing expenditure. The profitability of each item has also reduced, 84p of each sale is profit before the price reduction (profit/sales revenue), 69p after it.
BG Group Worksheet Teacher notes

Curriculum fit
Students need to have been taught the basics of investment appraisal before embarking on this sheet. They should be familiar with terms such as discount factors, NPV and opportunity cost, although these are re-defined in the worksheet to help them. Lessons following the use of the worksheet could develop the concept of decision trees, also using this Case Study.
Suggested answers
1 Important factors include interest rates, government policy, inflation, international currency fluctuations, projected rates of return and risk. Factors include: Very capital intensive long lead times from the start of a project and the receipt of revenues Governments have a stake in the gas exploration industry and tax and contract structures are complex. Possible reasons: Inflation may lower the spending power of money money could be earning interest safely (e.g. in a bank) the promise of money might not be fulfilled (i.e. the project could fail). BG Group estimates what its investors could get from a risk free investment such as a bank deposit. This is therefore linked to interest rates.
50
Teacher Notes

Students could be encouraged to enter the figures into a spreadsheet. Formulae required are shown below. NB. The discount factor of 0.05 is in cell D13 a Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 b m (x) -250 0 5 15 20 30 40 50 90 130 =SUM(B3:B11) c Discount factor (y) 1 =C2-(C2*$D$13) =C3-(C3*$D$13) =C4-(C4*$D$13) =C5-(C5*$D$13) =C6-(C6*$D$13) =C7-(C7*$D$13) =C8-(C8*$D$13) =C9-(C9*$D$13) =C10-(C10*$D$13) Discount factor d Present Value (x*y) =B2*C2 =B3*C3 =B4*C4 =B5*C5 =B6*C6 =B7*C7 =B8*C8 =B9*C9 =B10*C10 =B11*C11 0.05 2 This represents job production because it is a one-off product. One advantage of this type of production is that (any from) goods are hand made, specially made, made to measure, made to order, use the makers skills. One disadvantage of this type of production is that (any from) standard sizes not possible, production is slow, expensive, needs high skill levels. Example Type of Production Features Batch Products are made in sets or Shoes batches. Each batch can use the same production facilities but will be different e.g. different colours or sizes Flow Products pass along a continuous Cars production line. The process is broken down so that parts are brought together and the product is constructed as it passes down the line.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Payback NPV =
JIT and Kaizen. JIT means that parts arrive efficiently just as they are needed (Just In Time). Kaizen is the idea of gradual but continuous improvement where everyone in a business is responsible for trying to find ways to make even the smallest improvement. The word search can also be used with a partner in class.
=SUM(D2:D11) 5
Project 1 is closer to BG Group type projects as it has a long payback time and it is some time before revenues come on stream. The main problems are: Accuracy of predicted returns accuracy of discount factor length of project adding to uncertainty initial outlay/costs may not all be in Year 1.
Cadburys Worksheet Teacher notes

Curriculum fit
This worksheet helps towards learning in the early part of the qualification when looking at Business Objectives. It is focussed on explaining the difficult terms of ethics, ethical behaviour and social responsibility. Students do not need to have been taught these terms before doing the worksheet as explanations are contained in the Case Study. The final exercise is focussed on responsible marketing.
Nissan Worksheet Teacher notes

Curriculum fit
This sheet is designed to introduce the student to the three main types of production that could take place in the operations area of a business. Unit 1 includes producing goods and services, the role of operations and running an organisation. This worksheet focuses on both the different methods of production and on the new Japanese ideas used by Nissan to make production even more efficient. The sheet can be used as an introduction to these concepts or as consolidation of knowledge.
Suggested answers
1 Suggestions should include, survival, growth, social responsibility, provision of a service. Acting ethically means doing what is right or fair. Being socially responsible means not causing harm to people or places by a company's operations. Cadburys believes this because it helps the companys reputation by: attracting customers leading to happier staff attracting better workers encouraging people to buy shares.
Suggested answers
1 The instructions can be used back in class. Students should swap instructions with a classmate. The accuracy of the instructions can be gauged by how easily and accurately the partner can construct the aeroplane.
Teacher Notes
51

4
Suppliers. Cadburys makes sure cocoa farmers get a good price. It helps to improve the countries it works in. Production. Cadburys treats all its waste water. It uses as little energy as possible. It keeps down the release of harmful gases. Distribution. Cadburys keeps pollution down. It trains its drivers to drive efficiently.
United Airlines Worksheet Teacher notes

Curriculum fit
This sheet is designed to test students knowledge and application of how businesses respond to external factors that are beyond their control. It fits into the Business Issues section of The Current Business Environment. United Airlines had to file for protection from bankruptcy in the US but fought back with an improved marketing mix. The sheet thus also covers elements of strategic decision making and the marketing mix.
You might want to offer a prize (a chocolate bar!) for the best design. These designs can be used as part of a wall display. They can also be used as part of your teaching of marketing.
MFI Worksheet Teacher notes

Curriculum fit
Unit 3, Decision making in Business, includes SWOT as a tool for helping analyse a situation and make decisions about it. The worksheet may be used as an introduction to SWOT; no prior knowledge is required apart from the difference between internal and external expansion as all the other information needed is either on the sheet or in the Case Study.
Suggested answers
1 An internal factor is one that is within the control of the business, an external factor is one that is outside its control. Possible factors include: September 11th Aviation regulators Air Transport Users Council National governments Consumer bodies Letter Factor S L E P T Social Legal Economic Political Example SARS epidemic, acts of terrorism Rules and regulations increase costs, anti-trust laws could encourage competition Higher landing charges, additional taxes, world events US politicians keen to protect internal US Carriers, distribution of Heathrow slots
Suggested answers
1 MFI could expand internally or externally. Internally means investing back in the business to expand or improve existing assets. Externally means acquiring new businesses already operating in the area into which they wish to expand. MFI can develop and sell new products. The business makes sure that 20-25% of its products are new every year and has expanded into bedrooms and storage. MFI can enter new product categories. For example, MFI expanded into the sale of bathrooms. MFI can refit retail outlets. It has made stores more welcoming, stylish and visually appealing. SWOT stands for the internal Strengths and Weaknesses of a business or proposition and the external Opportunities and Threats. Internal factors are those that can be affected by the business; external factors are those which the business cannot control. You may wish to encourage students to further research external factors through a PEST analysis. Strengths Sofa Workshops brand name, resources and expertise. Sofa Workshops management. Opportunities The increased market in home fashion goods. The chance to broaden product ranges. 5 Weaknesses Sofa Workshop is short on factory space for expansion. It is in a market that is only buoyant if the economy is good Threats The presence of competitors. The possibility of rivals entering the market.
Technological Rapidly advancing technologies, customer expectations
Changes made by United included: Developed a better route structure Set new standards for comfort and safety Developed the Star Alliance network Created the Red Carpet Club for the benefit of members Offered better airport facilities for first and business passengers. Advertising has been designed to target particular groups through appropriate media such as radio and television. Specific UK promotions include a frequent flyer newsletter and discounts to travel agents. This is open ended but should include suggestions for Price , Place (distribution) and Product. Ideas could include: Price special price deals; two-for-one tickets; early/late booking benefits Place better access to airports; better facilities at airports; more destinations Product better luggage handling facilities; on board entertainment; seat leg room
This is a matter of opinion and should be rewarded on the basis of reasoned judgement. SWOT is only one of the many tools that can be used to help in decision making.
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Teacher Notes
Sources and use of finance

Overview
A look at the role of accountants within business Why is it important for accounts to be set out in a standard format? The role of accountants is varied- they are likely to be involved in all financial matters. In which of the following roles are you likely to find accountants working? i. as auditors of the accounts of large companies ii. advising managers on the financial position of a company iii. as financial managers of public limited companies iv. as management advisors in the voluntary sector v. as directors and chief executives of large multinational companies.
Learning objectives

to understand the need for accountants to understand the role of accountants to understand types of financial data produced and to whom it is of interest to understand the need to maintain standards and how this is done within the profession.
The need for qualified accountants (15 minutes) Introduction (3 minutes)

Introduce the idea of accounting; the need to measure and assess a firms financial position. You will then consider the various groups that might be interested in a firms financial position, the types of information produced and the roles of accountants. You will also be looking at the accounting profession and how it maintains standards e.g. ACCA which is the Association of Chartered Certified Accountants. It has responsibility for defining best practice and supporting its members. To be properly qualified, accountants must have passed examinations that make them eligible for one of the professional accounting bodies such as ACCA. Qualified accountants can specialise in many areas. Match the following descriptions with the different types of accountancy specialisms listed below: taxation insolvency corporate finance auditing management accounting. i. advising companies on how best to manage their debts, and to deal with short term financial problems ii. verifying financial statements iii. providing information that informs management decision making iv. helping businesses to raise and manage funds v. assessing the tax liability and tax payments of a business.
The Role of An Accountant (20 minutes)

Many different stakeholders will be interested in the accountants of a firm although they may be looking at different aspects of the accounts. List five groups of stakeholders in a business that use accounts and in each case explain one purpose that they would use accounts for. Student task: working in pairs think about what might each of these groups be most interested in. To make decisions these groups must have information. Independent accountants called auditors check much of the information produced by accountants. Typically firms will produce the profit and loss account, a balance sheet and a cash flow statement. Match up the following accounts with the descriptions given below:
ACCA and standards

ACCA aims to be " a leader of the global accountancy profession". To do this it is essential that ACCA ensures accountants maintain a high standard. How are professional bodies like ACCA able to ensure that their members are of a high standard? What are common accounting standards?
profit and loss account balance sheet cash flow statement.
Student tasks: in pairs consider the significance of the Enron and WorldCom scandals for the accounting profession.
i. an outline of the cash movement in a business in a given period ii. a comparison of the income and outgoings of a business in a given period iii. a snapshot of what the business owns and owes on a particular date. This information can be used to assess how the business is doing and help assess how it might do in the future. How might audited financial statements be used to assess the performance of a business? (give two examples of information in these statements that might be used to assess performance).
Review (2 minutes)
Financial data is useful to many groups - e.g. they will be interested in profits, cash and size of the business. This can be used to review progress and assess new projects. There are many areas of accounting. To gain the trust of different groups bodies such as ACCA must maintain standards.
Homework
1. Analyse the value of accounts to different stakeholder groups. 2. Complete the worksheet on this case study. 3. Explain how accountants can help a firm to become more successful.
Download these lesson plans and more from
lesson plan
53
Stakeholders
Overview
This case focuses on BTs approach to social responsibility and why this may be regarded as an essential element of business success. Can you identify the stake of the following individuals and groups in an organisation: i. ii. iii. iv. v. employees shareholders suppliers customers government. to receive a dividend job security and wages corporation tax good quality products regular orders and payment.
Learning objectives

to understand social responsibility and its ability to contribute to an organisations success. to appreciate BTs commitment to social responsibility and sustainable development.
Introduction (5 minutes)
Introduce the lesson: you will look at BT and its approach to social responsibility. You will consider the importance of this approach and the interrelationship between different stakeholders. This case study focuses on BT and its approach to sustainable development. BT is one of the UKs best known companies which operates globally. Sustainable development means "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". (Brundtland Report 1987). BT has developed an approach to business sustainability based on moral principles, they believe that simply claiming social responsibility is not enough if it is not underpinned by moral principles and is often ignored or even not believed by the community. What is needed is to actually undertake these activities with integrity and this will generate more profits for the business.
Then students can read section 4 and make notes on the way that stakeholder groups can interrelate positively.
Customer satisfaction (12 minutes)

Ask students what factors are likely to affect customers satisfaction with BTs service? Put ideas on the board and then compare these with the chart provided in the case. How does customer satisfaction and employee satisfaction enable BT to create value for its shareholders?
Employees (12 minutes)

Employees are a very important stakeholder group to an organisation such as BT and an important element of its success. How does BT know whether its employees are satisfied or not? Why is it important for BT to create satisfied employees? How has BT encouraged its employees to take on an even greater stake in the company?
BTs approach ( 5 minutes)

BTs approach is built around 4 key principles. Student task: students to read section 2 and make notes on these four areas. Stakeholders and sustainability (15 minutes) What is a stakeholder in an organisation?
Review (1 minute)
BT is a well known large company within the UK. It accepts it has an important role to play within society and that it has responsibilities to its stakeholder groups. It believes that by meeting different stakeholder needs, its own shareholders benefit.
Homework
Complete the worksheet on this case study, download from the link below.
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lesson plan
Market planning
Overview
A case study of Dixons growth strategy.
Student task
What aspects of Eastern Europe markets encouraged Dixons to grow their business there?
Learning objectives Developing (22 minutes)

to identify the existing portfolio of businesses owned by Dixons to understand the importance of market research to Dixons to examine the external environment in countries targeted by Dixons to understand the reasoning behind the launch of Dixons xL. Companies need to keep developing to meet customer expectations and competitor action. Students to read section 5 and summarise the key features of Dixons xL including. What is a Dixons xL? What factors have influenced Dixons in deciding what products to sell in its xL stores? Why have Dixons decided to fill the new stores with existing product lines rather than to develop a totally new market concept? What are likely to be the key factors determining the success of a new Dixons xL? (e.g. how well it is planned, whether it is executed well e.g. right product lines, whether it is based on the right understanding of customers, how competitors react). How would you expect Dixons to evaluate the success of its current market plans for the xL format and ElectroWorld stores?
Introduce the lesson: In this lesson you will look at the Dixons Group and examine its strategy of growth. You will consider why it wants to grow, how it gathers the information it needs to target markets and issues involving overseas growth. Dixons is Europes leading specialist electrical retailer. It employs 30,000 people and has 1,440 stores across Europe. A key part of its approach is based around effective market research. Its UK retail brands include: Dixons, Currys, PCWorld, PCWorld Business, The Link and abroad its brands include PC City, UniEuro and Electro World.
Dixons (15 minutes)

Students to read section 1 and write out the groups promise the objectives of Dixons. How does Dixons growth strategy involve both the developing of existing products and the growth of new markets? Explain how market planning at Dixons involves both market penetration and market development. In terms of Ansoffs product matrix why is it that Dixons market plans need to focus more on markets than on products? Discuss with students the value of setting objectives (e.g. may provide direction, may motivate and provide a means of reviewing progress but depends on how they are introduced, how they are set, whether they are accepted, what they are and whether they are the right ones).
Review (3 minutes)
Dixons has grown very successfully in recent years. In this lesson you have considered the activities of the Dixons Group and its approach to growth. In particular you have analysed overseas markets as international expansion has been a crucial element of Dixons approach. You have looked at SLEPT analysis and considered its usefulness. SLEPT analysis is an aid to decision making but still has to be used and implemented correctly; even then it cannot guarantee success as there are so many factors that can change, business after all is dynamic. This is why firms must keep developing their offerings.
Homework
1. Complete the worksheet on this case study, download from the link below. 2. Using the Ansoff matrix analyse the strategy of Dixons (e.g. relate Dixons activities to market penetration, market development, new product development and diversification).
Overseas (20 minutes)

As part of its growth strategy Dixons has expanded abroad, to do this it needs to analyse market conditions. It can do this using a SLEPT, (social, legal economic, political and technological) analysis.
lesson plan
55
Segmentation
Overview
Gillette is a leading player in the shaving market. This case study examines its strategy to success focused on developing new products and getting them to the market quickly. What are the three segments that Gillette has identified in the male shaving market?
How does identifying segments of the market help Gillette to make decisions about the razors to target at each segment?
Learning objectives

to understand the different segments in the shaving market to analyse the market research Gillette might undertake before launching a new product to analyse Gillettes vision. Match each of the following Gillette razors with the appropriate segment: premium shaving system super premium disposable premium disposable. i. MACH3 ii. Blue II iii. Agilite iv. Sensor Xcel v. Sensor 3 Disposable.

Introduce the lesson: you will examine the strategy of Gillette and its approach to new product development. You will consider the segments within the market and the way Gillette serves these markets. Lastly you will look at Gillettes vision and how this affects its strategy. Mr King C Gillette devised and marketed the first safety razor in 1901. Since then Gillette has launched a large number of razors and has always been quick to get a new product to the market. See section 2 for a list of the products where it was the first in the market. Gillette continues to recognise the importance of "being ahead in the field".
How are elements of the marketing mix such as price, and advertising likely to differ according to the segment?
Review (2 minutes)
Gillette is a market leader in the shaving market. It targets different segments of the market and adopts a global strategy. It is able to develop products quickly and by innovating remains a market leader.
Student task
What are Gillettes four core business areas?
Homework
1 Complete the worksheet on this case study, download from the link below. 2. Examine the factors that you think will determine the success of a new product from Gillette (e.g. the power of the brand name, the effectiveness of the marketing mix, competitors actions).
Market research (10 minutes)

Before launching a new product Gillette undertakes market research. Discuss with students how Gillette might do this - how might it gather information? What type of information might it gather? Gather ideas on the board and distinguish between qualitative (working with focus groups) and quantitative research (using a questionnaire with a large representative sample) could also distinguish between primary-first hand data and secondary research- that uses information already collected.
Segmentation (28 minutes)

In 2002 more than 1.7 billion men over 15 years old removed hair daily with over 80% using a blade and a razor. What is meant by market segmentation?
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lesson plan
Decision making
Objectives
This case study considers the issues involved in a decision to develop a new state of the art factory. It includes a study of investment appraisal. Sandwiches in London in 1998 and a 25m investment in the Manton Wood factory in Worksop with a weekly production capacity of 3 million sandwiches. How does making the decision to invest 25 million in the Manton Wood factory help Hazlewood Foods to lead the UK chilled sandwich market? In making the investment decision to develop the new factory at Manton Wood what sorts of investment considerations would Hazlewood have examined? In making the decision to invest in Manton Wood why would the payback period be important?
Learning objectives

to distinguish between market value and market volume to analyse the sandwich market to understand the issues facing Hazelwood when investing in a new factory at Worksop.

Introduce the lesson: you will be looking at the decision by Hazelwood Sandwiches to invest in a new factory thinking about the factors that the firm would have taken into account before going ahead with the project. Hazelwood Sandwiches is the largest company within Greencores Chilled Foods Division. It employs 3,000 people of whom 2,000 work at Manton Wood. Its mission is "to lead the UK chilled sandwich market" Hazelwood Sandwiches has developed a new state of the art factory at Manton Wood, Worksop. It has invested 25 million in this factory. It is a huge operation using 7 million loaves and 244 million prawns. Identify a key decision that was made by the Greencore Group, and a key decision that was made by Hazlewood Foods? How did the decisions that you have outlined involve major investments in resources? To what extent do such decisions involve an element of risk?
Profit and loss forecast (10 minutes)

A decision to invest will depend a great deal on the expected profits. Student task: Students to read section 5 and explain the difference between sales and profit.
explain the ways in which the new factory might reduce the average cost of a sandwich (e.g. volume produced, reduce wastage) explain the factors that might have influenced the Board of Directors' decision to proceed with the investment. (e.g. expected profits, expected levels of demand, expected rates of return).
Using the profit and loss chart shown in the case study explain how this would lead to greater profits for Hazlewood Foods?
Investing in products (5 minutes)

To stay ahead of the competition a firm has to know what its customers want. Hazlewood Sandwiches used customer research to find out the needs of retailers and suppliers.
Markets (5 minutes)
Before investing in this factory the company would have looked at a number of factors, including the market and likely demand. So it is important to understand the market. Student task: Ask students to read section 3 and then write answers to the following questions: state two ways in which market size can be measured (e.g. volume; value) how big is the UK sandwich market? (3bn) what are the major segments of the sandwich market? (caf/sandwich bar; major multiples; bakers) explain why demand for sandwiches is growing (e.g. lifestyles, working patterns, quality of sandwiches).
Student task
Read section 7 and identify the retailers that Hazelwood sells to.
Review (1 minutes)
You have examined the decision by Hazelwood Sandwiches to invest in a new factory taking into account factors such as the cost and the people issues. The case highlights the importance if understanding the market and its trends and highlights various segments within the sandwich market.
Homework
1. Complete the worksheet on this case study. 2. Explain two ways in which Hazlewood Sandwiches might have raised the finance to invest in its new factory (e.g. profits, loans, shares, debentures). 3. Examine two ways in which Hazlewood Sandwiches might increase its profits on its sandwiches (e.g. charge higher price or cut costs).
Investment (19 minutes)

All firms have to make decisions about where to invest. Recent investments by Hazlewood include the purchase of Breadwinner
lesson plan
57
Product lifecycle
Overview
A case study focusing on the development of Kelloggs Special K brand
Student task
Working in teams discuss how Kelloggs might undertake market research to decide whether to inject new growth into Special K.
Learning objectives

to understand the product life cycle to understand the value of market research to examine extension strategies.
Marketing and other functions (10 minutes)

A business is made up of different functions. The decisions in one area affect the activities of other parts of the business- they are interrelated. Why was it important to create marketing plans for Special K that fitted with production plans?
Introduction to the lesson: you will look at the product life cycle and how marketing may change at different stages. Then you will consider the decline stage and how firms such as Kelloggs may react to this. The case focuses on Kelloggs Special K brand and considers how the marketing of this has changed over time. Marketing is not static it must be developed as market conditions and customer expectations change.
Student task
What are the other functions of a business apart from marketing and production? Explain how these might be affected by marketing activities.
Extension strategies (17 minutes)

When sales start to slow up or even decline firms may use extension strategies to boost them again. For example they may try to increase the usage of their products, the number of occasions they are used or the numbers of users. How did the development of Special K Peach and Apricot extend the brand still further? What was the significance of the Special K bar in injecting further dynamism to the product life cycle. Did the development of variants Special K Red Berries, Special K Peach and Apricot, and Special K bars destroy the market for the original Special K product in the UK? How has the extension of the Special K Brand been a global success story?
Product life cycle (10 minutes)

The product life cycle shows the typical stages that a product goes through in its life. What are the main stages in the conventional life cycle of a product? Marketing activity will change in nature at different times of the product life cycle to meet the different objectives at different times. At what stages of this product life cycle is it most important to inject marketing activity?
Student task
Working in teams consider "How might marketing vary at different stages of the product life cycle?" Put students ideas on the board for notes.
Review (1 minute)
You have considered the stages of the product life cycle ( but remember the duration of these stages and the shape of the product life cycle will vary from product to product). You have considered how Kelloggs revived Special K and the factors it might have taken into account before deciding whether to go ahead.
Marketing research (10 minutes)

Market research is often undertaken before marketing decisions are made. Why did Kelloggs engage in marketing research before deciding how to inject new growth into Special K? Special K Red Berries is a variant of Special K, why was it important to check that the two products were not competing in a major way?
Homework
1. Explain how the product life cycle may vary between products. 2. Is it possible to continually extend a brand to increase the life cycle of a product?
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lesson plan
Answers
Association of Chartered Certified Accountants
Sources and use of finance Answers
1 shareholders to identify how well run their business is and to assess profits, and the state of the balance sheet to see how profitable the business is, to assess the security of their jobs and the case for making a wage claim to assess the tax liability of the business to check that the business is solvent enough to pay for goods supplied on credit to assess the financial state of the business in order to make sure that they will continue to receive supplies. 1
BT Sustainability
Stakeholders Answers
A stakeholder is a person or organisation who has an interest (a stake) in how a business is run and managed. i shareholders ii employees iii government iv customers v suppliers. If customers are satisfied with BTs service they will stay loyal to the company, buying more services. If employees are satisfied with BT as their employer they will work harder for the company. This will lead to higher sales for BT at lower cost per unit of output, generating more profit, enabling BT to pay higher dividends, and causing a rise in the share price. BT carries out an employee satisfaction survey with its employees checking on how they feel about working conditions and the working environment. They are then able to monitor changes in employee satisfaction over time, and to take the right steps to make sure that employees are happy and motivated. The case study shows the problems that could be caused by employee dissatisfaction. For example a poorly motivated call centre adviser could cost the company 300,000 a year. Highly motivated employees work hard for the company, this is particularly important in a company where many employees have direct contact with the public. BT employees are likely to be stakeholders in a number of ways. Not only are they employees, but they are customers, and members of communities in which BT operates. Additionally, BT offers employees the option to buy shares at a discounted rate enabling them to become shareholders as well.
employees
Inland Revenue suppliers large trade customers
profit and loss (ii) balance sheet (iii) cash flow statement (i). Users of accounts will use the financial statements to assess performance by examining aspects such as profitability (has it improved?), and whether the debts of the company are decreasing or rising. Accounts need to be set out in a standard format so that they can be read easily by people with some knowledge of accounts. They should not be laid out in highly individual ways because this would lead to confusion, and comparisons could not be made between one set of accounts and another. You will find accountants in all of these roles. taxation (v) insolvency (i) corporate finance (iv) auditing (ii) management accounting (iii). Professional bodies like ACCA set rigorous exams so that to be a qualified accountant, an individual needs to be able to work with accounts at the required level. Examples of standards that ACCA insists on are: accuracy in presenting accounting information its members are qualified to an appropriate level work is carried out in an ethical way accounts are set out in accordance with company law and generally accepted accounting standards.
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Dixons
Market planning Answers
1 Dixons market plans are concerned with developing existing products in the new xL formats, as well as opening up new markets in eastern Europe. Market penetration involves selling further into an existing market. Dixons approach to this is to group together a range of its leading stores together in an xL store. At the same time it is developing new markets in Eastern Europe through the ElectroWorld store format.
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3 Dixons is a retailer buying manufactured goods, which it then sells on. It therefore needs to focus its market plans on what it does best, i.e. selling into markets. Important aspects of Eastern European markets that encouraged Dixons were changing lifestyles whereby consumers were starting to demand washing machines, CD players and the other electrical goods that Dixons specialises in. Living standards are rising and consumers are looking for well made, sophisticated electrical goods. Dixons have researched customer demands and retail trends. They have found out what sells well in existing stores and what new types of products consumers are seeking in order to develop an appropriate blend for the xL stores. There would be little point in developing a new xL concept from scratch i.e. bringing in totally new product lines. The concept is all about providing consumers with greater choice and convenience at lower prices. Therefore Dixons simply needed to examine what already works well in their existing stores and then to group it together in the new outlets. Dixons will need to track consumer awareness of its new stores, as well as key indicators such as sales and profit per square foot. For long term success it needs to be able to see that profit margins are increasing on the new formats, because financial resources can always be used in an alternative way. It is also necessary to evaluate the details of the market plans e.g. is the chosen size of xL stores the best one, given the size of the market in different locations, is the marketing mix appropriate, etc. 1 5 Premium shaving systems i and iv. Super premium disposable v. Premium disposable ii, and iii. Premium segments will command premium prices based on the extra benefits offered. Advertising will also focus on the extended benefits and the luxury and quality of premium products.
Hazlewood Sandwiches
Decision making Answers
A major decision made by Greencore was to purchase Hazlewood Foods, and a major decision by Hazlewood Foods was to expand into the Manton Wood factory. In order to purchase Hazlewood, Greencore would have had to make a strong bid to buy a majority shareholding in the company. This would not have been possible unless Greencore had generated profits over a number of years. The Manton Wood factory involved a major capital investment in the latest technology, requiring millions of pounds of investment. All investment decisions involve an element of risk. There is always an alternative investment that should be considered, and investments typically take a number of years to pay back. In the meantime the market may alter, competitors come in with new products, and demand may change for other reasons. It is an extremely large plant, which triples production for Hazlewood. It is also a very modern and up-to-date factory enabling high quality production methods. Hazlewood would examine the size of the investment (i.e. 25m), what the return would be on the investment, how long the investment would take to pay back and whether the investment meets targets for returns, etc. The longer a project takes to payback the bigger risk the investor is taking. The longer you have to wait to make a profit, the less valuable that profit is in terms of what you can do with the money now because the investment is tied up. The quicker profits flow in, the sooner they can be used to make further profits. A substantial rise in sales brings in more sales revenue. Costs would then need to be taken away from this. The factory would lead to a fall in costs so this would be beneficial, the overall result is an increase in profit which is worked out by: Sales Revenue Costs = Profit.
Gillette
Segmentation Answers
1 Personal grooming, portable power (batteries, torches, etc) oral care and electrical appliances. Market segmentation is the process of dividing overall markets into separate segments, each of which consists of consumers with different characteristics and hence different needs and requirements. The three segments in the male shaving market are: 1. premium shaving system 2. super premium disposable 3. premium disposable. Gillette is able to use market research to identify the features and benefits that are being sought by consumers in each of the relevant segments. They are then able to create the products and the marketing mix appropriate to the segment.
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Kelloggs
Product lifecycle Answers
1 The main life cycle stages are: 1. 2. 3. 4. 2 introduction to the market, the growth of the products sales the mature stage in product sales eventual decline. 8 7 Because Special K is a popular product with a lot of consumer appeal it makes good marketing sense to find as many possible ways of building the range to grow the market, and hence sales and revenues. The Special K bar is seen as a healthy snack with an important role to play in a diet and health conscious world. It is a variant of Special K that is consumed at different occasions during the day rather than just at breakfast time. The launch of Special K variants helped to build the market for the original Special K product in the UK. Consumers became a lot more interested and aware of the product and its benefits as a healthy cereal. The range of variants therefore acted as complements to Special K rather than as substitutes. Initially Kelloggs was able to extend its Special K brand in France and the UK. However, based on the huge popularity resulting from the marketing, the concept has been extended on a global scale requiring a substantial increase in manufacturing capacity in the UK and elsewhere.
When a product is first introduced to the market it is necessary to engage in a lot of busy marketing activity such as television advertising and promotions, to let consumers know about the existence and benefits of the product. During the growth stage, it is important to support the brand, but this is less important because a dynamic brand does a lot of its own marketing. However, marketers should not become complacent and they may seek to inject new life into the brand to prolong the growth stage and put off the onset of maturity. A mature product may need a facelift, and marketers must decide whether to support a declining brand or let it die a natural death. Special K enabled Kelloggs to be alert to current consumer trends such as social trends and changes in technology. The research enabled Kelloggs to identify consumer perceptions of the brand and what developments consumers would favour. Armed with this consumer and market focused knowledge, Kelloggs was best placed to inject growth into the product life cycle. The purpose of bringing in Special K Red Berries was to extend the existing brand rather than to replace it. If for example half of the consumers of Special K had switched over to Special K Red Berries and there had been little overall growth in consumption, Kelloggs would simply be competing in its own market. It was important to test that this would not happen. Kelloggs had to be sure that they had the production capacity on a global scale to deliver the proposed product modifications on the scale required. It is always necessary to make sure that market plans are feasible in terms of the resources and production capacity of an organisation. Building on the success of Special K and Special K Red Berries, Kelloggs carried out market research to identify further ways of extending the range so as to give consumers greater satisfaction, to increase consumption and to broaden the appeal of the range.
10 Creating new variants of a brand injects new life into it and helps to extend the overall market. However, marketers must be careful not to overload the market with variants at any one time, because it is important not to confuse consumers. It is important to inject new life into mature markets on a regular basis, but at a pace that is compatible with consumer awareness and understanding of product benefits. It is likely that too many variants would start to compete with each other in a significant way.
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What does Acas do?

Not able to sort it out with the employer

Acas is sent a copy of the application

Using the Internet to meet customer needs

The Amway model

Changing business culture and the marketing mix

Business accounts and the accountants that draw them up

What do accountants do?

The need for qualifications

Liability, ownership and growth

Why own shares?

Recruitment, selection and training

Staff development and training

Business decision making

Marketing and segmentation

Customers and the Stationery Market

Standards and quality

Why have standards?

Market segmentation and marketing mix - Gaming

Sustainable development and stakeholder value

Ethics and employment

Developing product ranges and Ansoffs matrix

Fanta Icy Lemon

Market development: Coca-Cola Share Size 1.25 litre Bottle

Diversification: Winnie the Pooh Roo Juice Powerade

Sustainability and PEST analysis

Internal and external communication using the Internet

Applying Ansoffs matrix and SLEPT analysis for growth

Using market research to develop new products

Growth through investing in products and people

Internal and external communications

What, why and how?

Marketing mix and the product life cycle

Product Life Cycle

Budgeting and variances

Sustainability and SLEPT analysis

Kent Thameside SLEPT analysis

Using SWOT analysis to manage change

Public Defender Service (PDS)

A truly global marketplace

Growth and SWOT analysis

Funding growth The Sofa Workshop Company

Sustainability and water

Nestl and water

Small business and planning

The Network For Teaching Entrepreneurship

Production methods and quality

Markets and Consumer Protection

Competition Enforcement (CE)

Consumer Regulation Enforcement (CRE) Markets

Markets and Policy Initiative (MPI)

Strategy, competitive advantage and the promotional mix

Sectors of industry and communication

External Sectors of industry

Access www.tt100.biz/portakabinbs briefcase

Sectors of industry and the marketing mix

Trades unions and contracts of employment

Disputes Rights of workers

The marketing mix

Coca-Cola and Competition

I think this because

I think my second business could compete better by

*Coca-Cola actually has just over a quarter of the market.