AQA Business Studies Unit 3 Thread - Thurs Jan 26th 2012

I could be wrong but i didnt think you could as there was no initial cost ... unless i missed it in the mass of text.

Initial cost was £10m, think i got 5% for ARR.
The data was provided by David, who has no financial background, so was unreliable. That's what I put anyway haha

Am I the only one that worked out payback period for the final question? The payback period for the smartphone project was 20 years so I put this as a reason against the project

Iam confused was a cash flow table given??
because in order to work either ARR or Payback dont you need the cash flow/ total net return?? pls help

for smartphone proposal= increasing market value and approach by supermarket.
against smartphone proposal= current capacity level and competition.
Would i get the marks for discussing these?

Even if you got the calculation incorrect you will only loose out on 1-2 marks as long as you applied the correct knowledge and application to your incorrect calculation

Really!? How do you know?

Iam confused was a cash flow table given??
because in order to work either ARR or Payback dont you need the cash flow/ total net return?? pls help

for smartphone proposal= increasing market value and approach by supermarket.
against smartphone proposal= current capacity level and competition.
Would i get the marks for discussing these?

Glad someone else has done the bit about capacity utilisation! makes me a bit happier now! did you talk about how the factory could hold 500,000 and that they were working at a rate of 90% and argued the fact there were projected sales of 30,000?

FAM i did better than you, why you hyping

I thought this went really well at the time, but am a little worried as I didn't use current ratio, ROCE or gearing at all in the paper.

For question 4, I put:
+ extensive marketing paid for by supermarket, potential for growth.
+ Smartphone market continually growing.
+ 45-65 demographic growing up to 30% in 2019.
+ Primary research requirements of price, appearance and brand are all met well.
+ There is enough capacity in existing factory to accomodate it (taking CU up to 96%).

- £500,000 a year is not a huge amount of profit in regards to the investment.
- Payback period of 20 years is unviable in changing market.
- Hiring lots of highly-paid young graduates may demotivate existing workers in the British base.
- Goes against the company's history and experience. Ansoff's matrix - most risk.
- Goes against primary research of 'not interested in sophisticated technology'.

Conclusion:
.Not financially viable payback period
.Too much risk for a potentially small gain
.Could follow Nokia into emerging markets with existing products instead?

did this.

I agree with you on most points but wasn't it product development according to Ansoff? as they are already in the mobile manufacturing business, and are aiming for relatively the same market just a smaller portion, i wouldn't say its diversification.