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Applied Business - Unit 3 - 19th May 2014 - REVISION watch

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    Hello guys - i've seen that there isnt a current BUSS3 topic - so therfore I have made one.

    Hebden Carpets plc operates as a public limited company. Research the advantages and disadvantages to its stakeholders of operating in this way.

    (b) Investigate the major issues that a company may consider before deciding whether or not to undertake a large investment.

    What's your thoughts?
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    This can be the main forum if you like - if you want to pass this exam next month then heres the place to learn - any questions regarding the exam?
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    For part (b) I'm pretty sure that they'll be asking questions on the intended expansion of the business so major issues could be competitors, external factors (change in the market so the sales of Vinyl flooring could drop), shareholders are unhappy at the moment and so they could get even more unhappy if the expansion is unsuccessful.
    On the other hand, they do have a good reputation, a good distribution network as well as conducted thorough primary market research.


    I'm taking this exam too.
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    yeyy, we can discuss the exam - any revision problems etc?
    And yeah, (b) will be the last question which will be say the issues of expanding, well they have a big market competitor atm, they will have little market share expanding into europe because of more competition. Advantages would be the rep, oftenly in the public eye, revenue will increase by atleast 50% however it's risky.

    What do you think about part (a)? That'll be the first question - it'll be "expalin adv. and disadv. of a PLC"
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    Well, the disadvantages of operating as a PLC are that all information is published to the public which therefore allows competitors to view how well (or badly) Hebden Carpets are performing. The competitors could then use that to their advantage to improve their own business.
    Also, the main disadvantage is that anyone cab buy shares, this could mean that competitors buy shares for the business and so may buy out other shareholders therefore leading to a takeover.
    advantages are pretty simple: global recognition so an increase in sales, raise large amounts of capital quick.

    Not sure on the evaluation part of the 10-16 mark questions though!
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    Well theirs (a) and (b), 3 other questions (random) and 2 maths ones. So not too bad.
    (A) Is a ten marker so I want like 3 adv, 3 disadv, explainations and conclusions? What about you
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    Heres my Response the the questions:

    (a)Key Point: An advantage is that being a PLC allows them to generate vast amouts of capital by offering floats(i think) on the stock exchange market.

    Explain:Because it is PLC, they can expand their their company in which they willbe able to gain more revenue in exhange for increased porductions of their carpets

    Example:An Investment £124m is need for the construction of a new factory in order for their expantion in Poland.


    The dissadvantage of being a PLC is that they are more vunrable to a take -over

    Because if the company found itself in debt and needed a way to breakeven, they might choose to sell some of their shares to competitors, but selling a majority of their shares could result in a take-over from a competitor

    This nearly happened to Hebden Carpets as they weere nearly led to a take-over from a Chinese manufacture in 2013.

    ( i didnt answer part b, i dont really understande it yet. The problem that i having for theses questions is that im having a hard time just trying to remember the general facts of PLC's and how to anwser questions like theres properly for full marks. But my main trouble with this case study is doing the working out on the financial part of it e.g cashflow, break-even, profit/loss etc, im finding theses hard, orthough i passed GCSE Maths with a C, i still find this part hard and very confising most of the time)
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    For (a) it's 10 marks, just give like 3 adv. 3 disadv. and then explain and back it up with examples? e.g. chinese company tried to take over.

    Second (b) is easy providing you explain.

    And the maths is ok, just print off every previous question and answer them, remember the forumlas aswell as you'll get marks for that.
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    I've been told that a good response for a ten mark question includes two advantages and two disadvantages. Then for the evaluation (where I still somehow struggle for marks top marks) you have to give your opinion and back it up with further facts (so the examples from the case study).


    in the spec it says we have to know about business software and management resources. Does anyone have any ideas on what we could say about them if there were to be question on them?
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    Management resources? no idea.. let me know if you find it out?
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    Hey guys I'm taking this exam too! I've started revising long time ago and I don't find memorising the content difficult, it's just applying my knowledge to my answers. I really need to get an A in this one...Ahhhh help :eek::eek:
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    what questions do you think will come up?
    I find it hard to understand some of the questions
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    Okay, seems as if we are all pretty much in the same boat!

    I've investigated further into business software and found that it's literally just IT stuff to help with finance and accounting and just keeping a log/diary. It is less time consuming, cheaper in the long run (as you don't have to pay someone to do it manually), less room for human error (unless typing it in). Initial cost is high but running costs are manageable.
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    So for the 16 mark question, how many point's would you say?
    my teacher hasn't exactly explained how to write these 10/16 mark questions :confused:
    Do you have to P.E.E or something?
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    Question about business software is pretty simple e.g. how can Hebden use business software to help manage the business?

    Two softwares they can use:

    Database - Store information about their customers (retailers) and suppliers
    - Easier to contact suppliers about materials, costs - maybe new materials?
    - Keep information about equipment and the engineers of the equipment
    Spreadsheet - This is simple, spreadsheets are vital as it can be used for financial data e.g. Cash Flow Forecast, Profit n Loss - essential to show banks/investors that the expansion will be viable (successful)

    - The formulas on the Spreadsheet makes it much quicker and efficient to use
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    Don't say how business software will make it quicker because of typing and that because you need to apply your knowledge of the case study to the question.
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    Research task b (Investigate major issues to consider before deciding whether of not to undertake a large investment) - This is straight forward and the answers are actually the same pretty much each year.

    Possible answers:

    Recent Company Performance - Profit last year was only £12.25m despite sales of £190m (therefore not enough internal finance to fund the expansion)
    - Despite the profit being low, it shows banks/investors that the business is profitable which is important as banks/investors need to know whether they'll be repaid each month.

    Cost of expansion - How will Hebden finance it? A bank loan? Another Share issue?
    - They've already taken a big bank loan before (which is proabably why their profits was so low).
    - Board of directors are already losing control with current shareholders so having more will only make the loss of control increase.
    - Cash flow will be poor in the short term due to the amount of repayments and start up costs of the factory in Poland.

    No experience in Vinyl flooring - Remember, that they're entering a new market in Poland and distributing through Europe - two completely new markets for them. RISKY MUCH?
    - They're entering a very competitive market.

    Profits for Vinyl flooring is 50% higher than their current market - This is a significant factor which will encourage banks/investors to give money. - Shows long-term profit as they only made £12.25m in 2013.

    Some shareholders are unhappy - Some shareholders are unhappy with the financial performance and don't want to focus on the long-term plans - instead want short-term profits
    - This expansion is definitely long-term so how will they react to this?

    The second research task usually becomes the last question on the paper (the extended-answer question – 16 marks).

    The trouble with Research task b is that you will only know the actual answers when doing the question paper as you use your other questions in that paper to answer it. So make sure you nail the first half of the paper (mainly the finance questions)

    Good luck!
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    Does anyone know what we can say on management resources?

    I've noticed it's in the spec but I have no been taught anything about it and it's something I can't get my head around!
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    (Original post by hotchocolate25)
    Does anyone know what we can say on management resources?

    I've noticed it's in the spec but I have no been taught anything about it and it's something I can't get my head around!
    It's pretty simple. The question would be along the lines of 'how can hebden carpets plc use management resources to help have a successful expansion'

    There's four resources they need:

    Information Resources - They need to carry out Market Research as they're entering a new market so need to find out trends in sales, prices etc.
    - Also need the website of their suppliers and website of their competitors - Remember they're using the information resources to help make a financial forecast - so they rely on market research to help produce an accurate forecast.

    Human Resources - They need flexible, highly skilled and fully trained staff as they're entering a new market which is 'highly competitive' so therefore need to produce high quality Vinyl flooring.

    Material/Physical Resources - They need the 'specialist equipment' to manufacture the Vinyl flooring - which is very expensive e.g. PVC, wool, dyes etc.

    Financial Resources - Very significant for the expansion (obviously!)
    - May require external finance as their internal finance of £12.25m is no way near enough
    - They need to use the information resources to produce a Cash Flow Forecast which is essential in the first few months of the expansion because there will be a lot of start up costs involved - therefore need it to survive the short-term.
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    (Original post by Umeshbx)
    It's pretty simple. The question would be along the lines of 'how can hebden carpets plc use management resources to help have a successful expansion'

    There's four resources they need:

    Information Resources - They need to carry out Market Research as they're entering a new market so need to find out trends in sales, prices etc.
    - Also need the website of their suppliers and website of their competitors - Remember they're using the information resources to help make a financial forecast - so they rely on market research to help produce an accurate forecast.

    Human Resources - They need flexible, highly skilled and fully trained staff as they're entering a new market which is 'highly competitive' so therefore need to produce high quality Vinyl flooring.

    Material/Physical Resources - They need the 'specialist equipment' to manufacture the Vinyl flooring - which is very expensive e.g. PVC, wool, dyes etc.

    Financial Resources - Very significant for the expansion (obviously!)
    - May require external finance as their internal finance of £12.25m is no way near enough
    - They need to use the information resources to produce a Cash Flow Forecast which is essential in the first few months of the expansion because there will be a lot of start up costs involved - therefore need it to survive the short-term.
    thank you very much!!!! 😃
 
 
 
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