Buss1 Exam May 2014

Terrible. I knew everything before the exam but the context was too hard to apply!

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Really? i thought apart from the last question it was fairly easy compared to past papers.

What questions did you particularly struggle on?

It was the flipping case stude that made me mess up. Like I was reading it all and then it just wasnt making sense like the last few paragraphs bummed me out. Then the questions...all of them really. Like because I didnt get a good understanding of the case study I fked evrrything else up. Like my essays where full of crap..for the one about primary market research i didnt even know what to put

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Generally, I thought the exam was okayish, although I do think that it had a different feel to the previous papers, the previous papers I thought had a very consistent structure in terms of the question and the terms it used, not really the case with this one when it came to a couple of the questions such as "Ordinary Share Capital", it was suggested using this as the proposed method of finance, getting money from shares when they've just become a PLC?
Didn't seem practical to me, who would buy a share from a vintage clothing business that's just started up? Losing control of the business that fast? I did not like that question, and the two main points I focused on were the facts that using ordinary share capital doesn't have a specific payback period compared to using a bank loan, and it also did not have interest on top of it, those were the two things I could contrast with using the bank loan's example in the case study, I'm not really sure I've done well on that one or not..

Hope I can contribute to some sort of unofficial MS, correct me if I'm wrong or if I've missed anything, but they went:

> Define Market Segment (2 marks)

For this i think i put something to the tune of 'A section of the market which has certain characteristics, eg. 30-45 year olds'

> Define Franchisor (2 marks)

Again i can't remember exactly but something along the lines of 'Someone/ a company lets a franchisee sell their products and use their brand in exchange for a fee'

> Calculate Variable Cost Per Unit (4 marks) - Not sure on this one, given the Total Contribution in the question?

Like lonsdale says, i got £24 for this.


> Explain one difficulty Asha might face when protecting her new designs (5 marks)

I said that it's apparently easy for other companies to copy her design and sell at a lower price and due to the fact that it's hard to prove she's the original designer, and then said legal action will be hard and expensive so she will have difficulty protecting ideas.

> Break Even Questions - Had to calculate the new total cost after a 20,000 decrease I think? Then the new total revenue. Cant remember the specific details on this question, but these had to be drawn on the graph and labelled TC2 & TR2

It was the percentage of total costs of which were fixed, i think i got either 55% or 66.6% (debated for ages and then went with one of them, can't remember which!) The graphs were straight forward, i just took a while to get them perfectly straight which was a bit of a waste of my time i should have just done it first go to be honest!

> Terrence proposed raising the £80,000 through ordinary share capital, Explain two benefits over a bank loan - again, not too sure about the specific wording of that question. (10 marks)

I think this was a analyse question, i gave one benefit was that Terrence saved her from getting a bank loan which would have meant she would have paid about 95000 back as she had to pa 6% interest (unsure on the actual figure i put) i also said he has expertise in finance and marketing so he would help her like he has already done on reducing costs, his 40% will also mean he has the interests of making money at heart.

> Asha thought her primary market research was more useful than her secondary market research, to what extent do you agree? (15 marks)

Think i said that one advantage of her primary research was that she got an in-depth view of what kind of thing her customers preferred so could cater her designs to that, i said one way in which secondary was more useful as the statistics represents the whole market and will be more trustworthy as unlike her primary she won't get biased views from her friends ( i forgot to give my opinion in the conclusion for which i'm gonna drop marks!)

> 2014 to 2015, variable costs increased by 10%, their profit target was £85,000, do you think it is a realistic objective? - not too sure about the wording of this question either, hopefully someone can remember the stuff I didn't :P

I think i worked out that they would have made a profit of 88,000 in 2015 so that means they would make their objective but i said it's unlikely their fixed costs will definitely be reduced and also not certain that their sales will increase to 5000 so although they estimate that they will make their objective it's only an estimate and the reality may be different

What did you guys write for the question on problems with protecting the business idea? I wrote about her not being able to pay for a patent as they are expensive. Not sure if this is right though, anyone else put anything like that?

Yeah I put something like that, I said that there isn't any evidence in the case study about Asha's financial position at all, so using the information about her degree course, I said she may have just finished or may still be paying off her degree, so she might not be financially capable of funding a patent every time she brings out a new idea, on the share capital question I linked this point by saying that the money she saved on not having the interest from a bank loan, she could reinvest into the business or put towards funding patents to protect her ideas.

Did not get £24, I didn't do the second part of that question it seems, cant even remember what I put for the percentage of the total costs which were fixed...

Think I'll be alright for the last question if I said that the gap between her actual profit and target profit may have been large? I went on to say that she could use strategies to increase her profit yield by using a strategy such as diversification to attract new customers from new markets?

My second point was linked with the first point, I said that she could increase their product portfolio to give customers more variety of products to purchase and not limit their customer base by only targeting those who wanted to buy the vintage clothing, therefore again, they can yield profit from another area which further shortens the gap between their actual profit and target profit, I wasn't sure whether I did the profit calculation right you see...
my third and final paragraph the evaluation didn't go well, didn't have time to actually say I thought it was realistic, but I said that meeting the target profit objective depends on how well she can use other strategies to cover any losses in profit that could cause her not to meet the target.

That last question was not my strongest question by a long shot, I skewed my timing and rushed it but I didn't do terrible on it, the main mark loss I can see on that question would come from the poor evaluation I thought?

Apart from those I found the rest of the paper good, I liked the primary market research one because I thought it was quite clear to see that she retrieved more information from her own primary market research than her secondary as her secondary gave 2 bits of information which was the falling retail store trend, and the rising online trend which can be linked to her expanding her business as an online store could potentially be available internationally should she choose to do that.

Her primary supported that indication of a rising online trend as 87% of people were willing to buy online, also with the focus group and the large sample size she had etc etc, my evaluation decision agreed with her when she said her primary market research was more useful, although I did say that her secondary backed up her primary.

I hated the calculations. It was much harder than previous papers in my opinion. What do you guys think?

Thought the calculations were fairly straight forward

Would I loose all 15 marks marks if I calculated the profit wrong on the last question

Thought the calculations were fairly straight forward

Fair play, do you think the questions were better than previous years though?