OCR Business studies F297 - SHL Pre- Release 2014/2015

What points would you include in the question evaluating the critical path?

Does anyone know how you would answer a question on exchange rates?/what points would you put?

what points would you make on the question:

Should shl pursue aggressive growth through the sales of its franchises? justify your view.

I'd just like to say thanks for everyones posts and answers. It hs really helped me!! Good luck to you all

Hey, Can someone please help with the exchange rates?

Just simply refer how a change in exchange rates would affect the achievability of SHL's objectives. An increase would make it harder for foreign business' and customers to do business with SHL. As our currency was worth more than theirs, it would cost them more to change their currency, how much of an impact this would cause would be solely down to how big of a rise in the exchange rate itself. This would manifest itself as SHL being less able to achieve its objective of having 10% of its sales from exports. It could also affect how easy the 2016 revenue target of £70 million would be to achieve.
If SHL purchased a stake in Mardidi, then any profits they make would be worth less to a UK company like SHL as it would cost more to exchange from USD to GBP. Although a positive is the fact that the $5 million USD investment would now be easier for SHL to gather, as it would make purchasing dollars cheaper if your using GBP. This would reduce the risk associated with the purchase and would reduce potential opportunity costs. Obviously reducing risk helps SHL achieve their objective to reduce their risk.
It would also be easier for SHL to work with foreign manufacturers and suppliers as it would now be cheaper for us to buy their native currencies.
If the exchange rate went down then the reverse of the things i mentioned would happen with the opposite affects.
Main point is the affect on SHL would solely depend on how big of a change happened in the exchange rates.
Although its worthwhile to mention I doubt the question would be specific to exchange rates, I would say it would be interest rates, and you would then be able to explain why interest rates would affect exchange rates and state the + and - of such changes.

Why do you think the question on macroeconomics will be interest rates and not exchange rates?

Because there has never been a question on exchange rates. There has been questions, when you can mention exchange rates but never solely that. I think it would be too hard to answer a 18 mark question solely on exchange rates, because I don't think there is enough points you can make to be able to properly evaluate to achieve level 4. Interest Rates came up last year, so id say neither are going to come up.