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AQA AS Business Studies Case Study Thread
So, the case study for AQA Units 2 and 3 was issued today
http://www.aqa.org.uk/qual/pdf/AQA-BUS2-3-W-PM-JUN07.PDF
If you don't already know, this case study will need to be studied between now and the exam. You should be writing notes on the copy you've got, and you should get to know it in good detail. It is useful when you are revising to find some generic questions that come up alot, and try to write an answer in the context of this case study.
The subject of the case study is Smile Magazines Ltd.
The topics covered in Unit 2 are HUMAN RESOURCES and OPERATIONS MANAGEMENT.
The topics covered in Unit 3 are EXTERNAL INFLUENCES and OBJECTIVES AND STRATEGY.
I will post a more detailed guide to the case study in here later on, that we can build up ourselves, so that by exam time there should be some good preparation here. Exam technique and past questions can also be discussed in here. I will also try and get this stickied so it doesn't fall down the forum. FEEL FREE TO POST ANY INPUT YOU WANT ON THE CASE STUDY.
OK, I've prepared a little something here. I mentioned to someone last night that going through the case and looking for obvious topics mentioned was a good idea. These are all mentioned word for word in the case, and I've split them into Unit 2 and Unit 3.
Here are some other situations specific to Smile that look like they could be examined:
http://www.aqa.org.uk/qual/pdf/AQA-BUS2-3-W-PM-JUN07.PDF
If you don't already know, this case study will need to be studied between now and the exam. You should be writing notes on the copy you've got, and you should get to know it in good detail. It is useful when you are revising to find some generic questions that come up alot, and try to write an answer in the context of this case study.
The subject of the case study is Smile Magazines Ltd.
The topics covered in Unit 2 are HUMAN RESOURCES and OPERATIONS MANAGEMENT.
The topics covered in Unit 3 are EXTERNAL INFLUENCES and OBJECTIVES AND STRATEGY.
I will post a more detailed guide to the case study in here later on, that we can build up ourselves, so that by exam time there should be some good preparation here. Exam technique and past questions can also be discussed in here. I will also try and get this stickied so it doesn't fall down the forum. FEEL FREE TO POST ANY INPUT YOU WANT ON THE CASE STUDY.
OK, I've prepared a little something here. I mentioned to someone last night that going through the case and looking for obvious topics mentioned was a good idea. These are all mentioned word for word in the case, and I've split them into Unit 2 and Unit 3.
Unit 2
financial rewards
organisational structure
delegation and consultation
leadership style
efficiency
matrix management projects
kaizen group
rationalisation and delayering
hierarchy
spans of control
authoritarian
on-the-job training
off-the-job training
cell production
job enrichment
job enlargement
economies of scale
internal recruitment
quality control
quality assurance
just-in-time
motivation
overtime
loyalty
precise instructions
piecework
profit sharing
financial rewards
organisational structure
delegation and consultation
leadership style
efficiency
matrix management projects
kaizen group
rationalisation and delayering
hierarchy
spans of control
authoritarian
on-the-job training
off-the-job training
cell production
job enrichment
job enlargement
economies of scale
internal recruitment
quality control
quality assurance
just-in-time
motivation
overtime
loyalty
precise instructions
piecework
profit sharing
Unit 3
primary market research
secondary research
sole trader
private limited company
copyright
competitive market
overall aims
growth-oriented
social responsibility
community projects
ethical behaviour
profit margins
technological changes
UK or European law
recycling
minimum wage increase
credit terms
law on age discrimination
GDP growth
unemployment
inflation
interest rates
exchange rate
consumer spending
primary market research
secondary research
sole trader
private limited company
copyright
competitive market
overall aims
growth-oriented
social responsibility
community projects
ethical behaviour
profit margins
technological changes
UK or European law
recycling
minimum wage increase
credit terms
law on age discrimination
GDP growth
unemployment
inflation
interest rates
exchange rate
consumer spending
Here are some other situations specific to Smile that look like they could be examined:
aimed at students at the college
internet vs printed version
new product development
new target markets
majority of workforce younger than 30
training staff to work for competitors
relocating the printing to Spain
conflict with suppliers
conflict with community
technically inferior
suggestions box
employee of the month
management consultants
Polar's backing of Leah
majority shareholding
take advantage of low Spanish wages
extend distribution to Eire
different age range...20s and 30s
FROM TABLE 8: growth figures for 20-29 are MUCH SMALLER than adjacent columns (15-19 & 30-39)
planning the development of Smile over the next few year
internet vs printed version
new product development
new target markets
majority of workforce younger than 30
training staff to work for competitors
relocating the printing to Spain
conflict with suppliers
conflict with community
technically inferior
suggestions box
employee of the month
management consultants
Polar's backing of Leah
majority shareholding
take advantage of low Spanish wages
extend distribution to Eire
different age range...20s and 30s
FROM TABLE 8: growth figures for 20-29 are MUCH SMALLER than adjacent columns (15-19 & 30-39)
planning the development of Smile over the next few year
Scroll to see replies
HUMAN RESOURCES
SAMPLE QUESTION: Analyse the possible implications of Herzberg's Two Factor Theory for the management team at Smile Ltd. (8 marks)
Herzberg's Two Factor Theory involves hygiene factors and motivators. Hygiene factors do not motivate directly, but they will have a negative effect if absent. Money is a hygiene factor, and therefore it cannot be used on its own to motivate the workers within Smile. Jeremy and Leah have suggested job enrichment and precise instructions respectively (SEE TABLE 6). Job enrichment stops workers from being bored by giving them a wide variety of responsibilities outside of their normal routine. This acts as a motivator, as the employees are more productive when they are interested in their tasks.
Leah's suggestion of precise instructions could be seen as a hygiene factor or a motivator. Some workers like to be creative and put an individual touch to their work (NOTE CREATIVE STAFF WITHIN SMILE, EG CARTOONIST). If they are restricted by these precise instructions, then it might even act as a demotivator. However, other workers feel intimidated by excessive responsibility , and they would therefore appreciate the detailed instructions they are being given. Whether this motivates them is uncertain - if they take it for granted, then it is a hygiene factor - but if they are genuinely happier (and not just relieved) to get these instructions, then it is a motivator.
In conclusion, the management team at Smile can use Herzberg's work to help them get the right mixture of motivators and hygiene factors to motivate their workforce and therefore maximise efficiency and productivity.
The key to this question is thinking about Smile's own workforce, and what their motivational requirements might be. For example, the more creative staff like the artists and columnists will want to work without restrictions. Whereas other staff like printers, who have repetitive tasks that they are used to, might be intimidated and cynical towards any significant changes in working practice. It is important to put your own judgement on a question like this, as you may not agree with some of the points I have made. You will write a better answer talking about things that you agree with, and this will depend on which management style (Jeremy's or Leah's) you would support the most.
Examine two benefits to Smile Magazines Ltd of using internal recruitment to recruit more staff
-Should improve motivation- employees may work harder if there is the prospect of promotion
-Reduces advertising costs- No need to advertise the vacancy in expensive media forms
-Employees will know the company- The way it runs for example. The employee should settle into their new job far quicker than if someone from outside the company was being recruited.
-Smile will know the employee already- No risk of recruiting a worker who may upset the pleasant working environment that Smile currently possesses.
Leah implemented a traditional hierarchy based on functional divisions. (see fig 1) Analyse two benefits the company might experience as a result of implementing this organizational structure.
Functional divisions- This is just a posh term for departments- for example Sales and operations.
-Employees will become specialized in a particular field- For example if a worker is doing the same job in the printing department, they are going to gain a much higher level of expertise than one of the reporters actually writing the magazine. In the printing department, this leads to the risk of machinery breaking being reduced- The machine is more likely to break if someone who has never used it before is operating it, than someone who uses it every day.
-Much easier to manage- If the whole business is just one giant department, communication will be much harder; the streamlined nature of the business is lost.
Polar Plc and Leah insisted that employees received training. Discuss the benefits that Smile Magazines Ltd may have received as a result of this.
Training aims at improving current skills to make the employee more efficient at doing an existing job, or giving them extra skills enabling them to do a larger variety of jobs.
The first will improve the overall efficiency of the business- In the printing department for example, less chance of waste being created. Lowers costs, increases profits.
Second will enable workers to switch jobs every so often- Job variation- Motivates them, increases productivity, lowers costs, increases profits.
Will also enable workers to cover for absent colleagues. Saves costs, and keeps productivity relatively stable, as outside temporary cover will not have to be sourced- Temporary cover would cost money, as well as taking time to settle in, thus reducing efficiency/ productivity.
Explain two possible problems to Smile Magazines Ltd of introducing a system of quality assurance.
SAMPLE QUESTION: Analyse the possible implications of Herzberg's Two Factor Theory for the management team at Smile Ltd. (8 marks)
Herzberg's Two Factor Theory involves hygiene factors and motivators. Hygiene factors do not motivate directly, but they will have a negative effect if absent. Money is a hygiene factor, and therefore it cannot be used on its own to motivate the workers within Smile. Jeremy and Leah have suggested job enrichment and precise instructions respectively (SEE TABLE 6). Job enrichment stops workers from being bored by giving them a wide variety of responsibilities outside of their normal routine. This acts as a motivator, as the employees are more productive when they are interested in their tasks.
Leah's suggestion of precise instructions could be seen as a hygiene factor or a motivator. Some workers like to be creative and put an individual touch to their work (NOTE CREATIVE STAFF WITHIN SMILE, EG CARTOONIST). If they are restricted by these precise instructions, then it might even act as a demotivator. However, other workers feel intimidated by excessive responsibility , and they would therefore appreciate the detailed instructions they are being given. Whether this motivates them is uncertain - if they take it for granted, then it is a hygiene factor - but if they are genuinely happier (and not just relieved) to get these instructions, then it is a motivator.
In conclusion, the management team at Smile can use Herzberg's work to help them get the right mixture of motivators and hygiene factors to motivate their workforce and therefore maximise efficiency and productivity.
The key to this question is thinking about Smile's own workforce, and what their motivational requirements might be. For example, the more creative staff like the artists and columnists will want to work without restrictions. Whereas other staff like printers, who have repetitive tasks that they are used to, might be intimidated and cynical towards any significant changes in working practice. It is important to put your own judgement on a question like this, as you may not agree with some of the points I have made. You will write a better answer talking about things that you agree with, and this will depend on which management style (Jeremy's or Leah's) you would support the most.
Examine two benefits to Smile Magazines Ltd of using internal recruitment to recruit more staff
-Should improve motivation- employees may work harder if there is the prospect of promotion
-Reduces advertising costs- No need to advertise the vacancy in expensive media forms
-Employees will know the company- The way it runs for example. The employee should settle into their new job far quicker than if someone from outside the company was being recruited.
-Smile will know the employee already- No risk of recruiting a worker who may upset the pleasant working environment that Smile currently possesses.
Leah implemented a traditional hierarchy based on functional divisions. (see fig 1) Analyse two benefits the company might experience as a result of implementing this organizational structure.
Functional divisions- This is just a posh term for departments- for example Sales and operations.
-Employees will become specialized in a particular field- For example if a worker is doing the same job in the printing department, they are going to gain a much higher level of expertise than one of the reporters actually writing the magazine. In the printing department, this leads to the risk of machinery breaking being reduced- The machine is more likely to break if someone who has never used it before is operating it, than someone who uses it every day.
-Much easier to manage- If the whole business is just one giant department, communication will be much harder; the streamlined nature of the business is lost.
Polar Plc and Leah insisted that employees received training. Discuss the benefits that Smile Magazines Ltd may have received as a result of this.
Training aims at improving current skills to make the employee more efficient at doing an existing job, or giving them extra skills enabling them to do a larger variety of jobs.
The first will improve the overall efficiency of the business- In the printing department for example, less chance of waste being created. Lowers costs, increases profits.
Second will enable workers to switch jobs every so often- Job variation- Motivates them, increases productivity, lowers costs, increases profits.
Will also enable workers to cover for absent colleagues. Saves costs, and keeps productivity relatively stable, as outside temporary cover will not have to be sourced- Temporary cover would cost money, as well as taking time to settle in, thus reducing efficiency/ productivity.
Explain two possible problems to Smile Magazines Ltd of introducing a system of quality assurance.
KEY QUOTES
•
"Although Leah was not allocated any shares in the business, the agreement set out her financial rewards. These consisted of a high salary plus a very generous bonus based on profits"
•
"Whilst Jeremy encouraged delegation and consultation Leah's leadership style was more authoritarian"
•
"They kept in touch through membership of a number of matrix management projects, notably projecs on new product development and new target markets. Furthermore, each kaizen group within Smile Magazines Ltd was chaired by either Jeremy, Kate or Leah"
•
On the job training was encouraged so that the business and its staff could develop their skills furthermore each employee was required to spend a minimum of 10 days per year on off the job training at Polar Plc's training centre"
•
"In order to overcome the coordination problems arising from a wider span of control the printers adopted a form of cell production and were given total responsibility for the completion of particular sections"
•
"A further benefit of job enrichment and enlargement was noticed in the Kaizen groups that met regularly"
•
""We just cannot match the wages offered by some of our competitors" moaned Jeremy, as another key worker handed in her resignation. "We seem to be training staff to work for our competitors.""
•
One of Leah's suggestions for motivation: "Piecework payments made to those who produced the magazines. Profit-sharing for providers of news and articles and for managerial staff"
TO WHAT EXTENT WAS THE LEADERSHIP STYLE OF JEREMY AND LEAH RESPONSIBLE FOR THE SUCCESS OF SMILE MAGAZINES LTD
First off, I would describe their leadership styles.
Then, go on to say why each of these leadership styles can help the business succeed.
Then, come to a conclusion:
And an evaluation:
First off, I would describe their leadership styles.
Jeremy is democratic, which means he genuinely takes on board what workers have to say, and believes in delegation, consulation, fairness and equality.
Leah has a stricter, more autocratic leadership style, as she believes in the Taylorite methods of piecework and clear instructions. She believes in telling workers what to do without significant consultation.
Leah has a stricter, more autocratic leadership style, as she believes in the Taylorite methods of piecework and clear instructions. She believes in telling workers what to do without significant consultation.
Then, go on to say why each of these leadership styles can help the business succeed.
Jeremy's democratic, laissez-faire style of management is well suited to Smile's creative workers. For example, journalists and artists would appreciate a working environment where they are given a large amount of freedom, and they are not dictated too. Smile is more likely to receive quality work from these people in a democratic environment.
Leah's autocratic style is better suited to manual, semi-skilled workers like the printers. The job may require the printers to follow a strict routine, with strict rules, that need to be enforced by a strict manager. They may not be suited to extra responsibility, and may prefer to be given clear instructions as to what to do.
Leah's autocratic style is better suited to manual, semi-skilled workers like the printers. The job may require the printers to follow a strict routine, with strict rules, that need to be enforced by a strict manager. They may not be suited to extra responsibility, and may prefer to be given clear instructions as to what to do.
Then, come to a conclusion:
It is the combination of these two leadership styles that make Smile successful, as it is a business with two clearly different types of worker.
And an evaluation:
However, these two leadership styles are so different, that conflict may occur, which may damage the success of the company. Jeremy may not be happy with the way Leah is treating the printers, and vice versa. So the overall success depends on the relationship and tolerance between Jeremy and Leah
OPERATIONS MANAGEMENT
I'm going to use the specification for these notes, taking each topic at a time.
Productive Efficiency
This is measured by unit cost. The aim for a business is - obviously - to have as low a unit cost as possible, without compromising much on quality. For a magazine, efficiency is important in the printing department, as Smile wants to make each magazine as cheap as possible to publish. Table 3 shows the unit cost decreasing between 2004 and 2006. This is part of Leah's argument that increased efficiency caused unit costs to decrease, and therefore profits to increase.
Cell Production
This involves the dividing up the production line into individual cells. Each cell is made up of workers who produce components, and these cells are managed as individual teams. It is different from flow production in that each cell may contain a number of tasks, therefore job rotation is possible. The Printing Department within Smile adopted a form of cell production in order to improve co-ordination between managers and workers. (bottom of page 4) Flow production brought about wide spans of control that made communication more difficult, so by dividing the production line into teams/cells, they can decrease the spans of control by assigning a manager to each smaller cell. For Smile, each cell was "given total responsibility for the completion of a particular section of each edition".
Kaizen Groups
Kaizen means "continuous improvement" in Japanese. Kaizen groups (or quality circles) are groups of workers that meet regularly to discuss ways of improving the production line. The case study states about Smile that "most members of staff had tremendous insight into the whole range of activities within the organisation". This arises from Kaizen groups, as matters are discussed between workers, who therefore learn about the ups and downs of other areas of the production line, increasing their knowledge of their job as a whole. For example, in a system of cell production, a cell can learn the best state to present a component to the next cell.
Discuss the advantages and disadvantages to Smile Magazines Ltd of using kaizen groups.
Kaizen groups means continuous improvement in Japaneses. These are groups that sit down with each other and look at ways of improving the production process-usually in the form of cutting out waste.
Advantages include
- Reduces cost of production by means of reducing waste- increases profit margins.
- Employees talk about the work with each other- Everyone else within the group gains an incite into that particular area of work. Understanding the overall process usually helps when trying minimizing waste.
-Employees in the group feel they are being listened to and that their thoughts/ideas count. This motivates them which again increases productivity, decreases costs, increases profits
Disadvantages include
-Takes up time. Jemery heads one of the groups which obviously takes a great deal to organize/action any ideas put forward. This time could be spent elsewhere. For example looking for new ways to exploit new potential target markets.
-Employees within the group may disagree on ways to improve. Causes tension between them, which inevitably demotivates the group.
I'm going to use the specification for these notes, taking each topic at a time.
Productive Efficiency
This is measured by unit cost. The aim for a business is - obviously - to have as low a unit cost as possible, without compromising much on quality. For a magazine, efficiency is important in the printing department, as Smile wants to make each magazine as cheap as possible to publish. Table 3 shows the unit cost decreasing between 2004 and 2006. This is part of Leah's argument that increased efficiency caused unit costs to decrease, and therefore profits to increase.
Cell Production
This involves the dividing up the production line into individual cells. Each cell is made up of workers who produce components, and these cells are managed as individual teams. It is different from flow production in that each cell may contain a number of tasks, therefore job rotation is possible. The Printing Department within Smile adopted a form of cell production in order to improve co-ordination between managers and workers. (bottom of page 4) Flow production brought about wide spans of control that made communication more difficult, so by dividing the production line into teams/cells, they can decrease the spans of control by assigning a manager to each smaller cell. For Smile, each cell was "given total responsibility for the completion of a particular section of each edition".
Kaizen Groups
Kaizen means "continuous improvement" in Japanese. Kaizen groups (or quality circles) are groups of workers that meet regularly to discuss ways of improving the production line. The case study states about Smile that "most members of staff had tremendous insight into the whole range of activities within the organisation". This arises from Kaizen groups, as matters are discussed between workers, who therefore learn about the ups and downs of other areas of the production line, increasing their knowledge of their job as a whole. For example, in a system of cell production, a cell can learn the best state to present a component to the next cell.
Discuss the advantages and disadvantages to Smile Magazines Ltd of using kaizen groups.
Kaizen groups means continuous improvement in Japaneses. These are groups that sit down with each other and look at ways of improving the production process-usually in the form of cutting out waste.
Advantages include
- Reduces cost of production by means of reducing waste- increases profit margins.
- Employees talk about the work with each other- Everyone else within the group gains an incite into that particular area of work. Understanding the overall process usually helps when trying minimizing waste.
-Employees in the group feel they are being listened to and that their thoughts/ideas count. This motivates them which again increases productivity, decreases costs, increases profits
Disadvantages include
-Takes up time. Jemery heads one of the groups which obviously takes a great deal to organize/action any ideas put forward. This time could be spent elsewhere. For example looking for new ways to exploit new potential target markets.
-Employees within the group may disagree on ways to improve. Causes tension between them, which inevitably demotivates the group.
1. Smile Magazines use CAD and CAM methods to improve efficiency in their business. Explain what each term means and give an example of how they are used in Smile. (5 marks)
CAD stands for Computer Aided Design, and involves using a computer to draw up ideas for the appearance and functionality of a product. Within Smile, this is very aesthetically based, as they want the magazine to look as attractive as possible. The Creative team would use publishing or web editing software to construct a format for the magazine that fits the bill. CAM stands for Computer Aided Manufacture, and involves the use of a computer in the actual production of a good. For Smile, this would involve the control of the printing production line with computers, which will determine which pages to print, and how many.
2. In 2002, Smile was at the height of technology with the ‘technical quality of the Internet magazine being the company’s greatest asset’. However, it had not kept pace with technological changes and had lost sales to its competitors. Identify reasons why Smile may have fallen behind with technology and explain how this may affect the business. (10 marks)
Keeping up with technological change is tied in with a business’ long term strategy. Smile had previously been focussed around the growth of the company, as Jeremy already had good computer skills, so he was producing a high quality magazine. However, in more recent times, the culture in the business has changed to a more market led approach, channelling more money into developing the content of the magazine in order to increasing market share. This means capital investment may have been neglected or overlooked.
This may have affected Smile, as the functionality of an Internet magazine is crucial. If it is slow, or hard to navigate, then people can easily go to a competing website that is easier to use. Because the market for Internet magazines specifically is very elastic, Smile cannot afford to lose customers for technical reasons. The functionality of the product is probably the first thing noticed by the consumer.
CAD stands for Computer Aided Design, and involves using a computer to draw up ideas for the appearance and functionality of a product. Within Smile, this is very aesthetically based, as they want the magazine to look as attractive as possible. The Creative team would use publishing or web editing software to construct a format for the magazine that fits the bill. CAM stands for Computer Aided Manufacture, and involves the use of a computer in the actual production of a good. For Smile, this would involve the control of the printing production line with computers, which will determine which pages to print, and how many.
2. In 2002, Smile was at the height of technology with the ‘technical quality of the Internet magazine being the company’s greatest asset’. However, it had not kept pace with technological changes and had lost sales to its competitors. Identify reasons why Smile may have fallen behind with technology and explain how this may affect the business. (10 marks)
Keeping up with technological change is tied in with a business’ long term strategy. Smile had previously been focussed around the growth of the company, as Jeremy already had good computer skills, so he was producing a high quality magazine. However, in more recent times, the culture in the business has changed to a more market led approach, channelling more money into developing the content of the magazine in order to increasing market share. This means capital investment may have been neglected or overlooked.
This may have affected Smile, as the functionality of an Internet magazine is crucial. If it is slow, or hard to navigate, then people can easily go to a competing website that is easier to use. Because the market for Internet magazines specifically is very elastic, Smile cannot afford to lose customers for technical reasons. The functionality of the product is probably the first thing noticed by the consumer.
KEY QUOTES
[*]"In the printing department, in order to overcome the co-ordination problems arising from the wider spans of control, the printers adopted a form of cell production and were given total responsibility for the completion of a particular section of each edition"
[*]"Even with Polar plc's financial backing, it was going to be difficult for Smile Magazines Ltd to match the economies of scale gained by such competitors."
[*]"The Printing Department had moved from a system of quality control to one of quality assurance, in March 2007."
[*]"The factory expected just-in-time deliveries 24 hours a day, but a growing number of suppliers argued that their contracts excluded night-time deliveries"
[*]"There was, however, some concern relating to quality. Customers considered the internet magazine to be technically inferior to its competitors."
[*]"The Polar plc experts recommended that Smile Magazines Ltd should consider Leah's proposal to relocate its Printing Department away from the UK."
[*]"In the printing department, in order to overcome the co-ordination problems arising from the wider spans of control, the printers adopted a form of cell production and were given total responsibility for the completion of a particular section of each edition"
[*]"Even with Polar plc's financial backing, it was going to be difficult for Smile Magazines Ltd to match the economies of scale gained by such competitors."
[*]"The Printing Department had moved from a system of quality control to one of quality assurance, in March 2007."
[*]"The factory expected just-in-time deliveries 24 hours a day, but a growing number of suppliers argued that their contracts excluded night-time deliveries"
[*]"There was, however, some concern relating to quality. Customers considered the internet magazine to be technically inferior to its competitors."
[*]"The Polar plc experts recommended that Smile Magazines Ltd should consider Leah's proposal to relocate its Printing Department away from the UK."
QUALITY CONTROL AND QUALITY ASSURANCE
A quality product is one that fully meets customer needs. A poor quality product incurs costs of scrapping/reworking, returns and reputational damage.
Much of Smile's previous success is based on a reputation for high quality magazines. This enabled Smile to ADD VALUE and develop BRAND LOYALTY through repeat subscriptions.
However, recent lack of investment in technology has led to Smile falling behind in terms of quality, and therefore reputation
---------------------------------------------------------------------
Within Smile, the Printing department has SWITCHED from a system of QUALITY CONTROL to a system of QUALITY ASSURANCE.
For Smile, there were a number of teething problems with the new quality assurance system. This is partly due to the TRAINING COSTS hat were incurred. The printers' argument was that better machinery would produce better products.
Results of transition from QC to QA (see Table 4), transition occurred in March.
Wastage Rate --> peaks in March due to teething problems, but now has started to adapt
Deliveries On Time --> record high, 98% consistently Apr to May
Retailer Satisfation --> up from 7.4/10 under QC, to 8.5/10 under QA.
Print Quality --> Steady at 5.5, but way below benchmarked industry mean of 8.0.
Quality Control
ADV = specialist department
DIS = not very thorough, expensive?
Quality Assurance
ADV = focus on prevention, delegation possible (motivator?)
DIS = training and other short term costs
---------------------------------------------------------------------
Total Quality Management (TQM) is a philosophy of self-checking and zero defects. For Smile, this can be linked in with cell production.
Cell 1 acts as a customer and monitors the quality of supplies and components. Each successive cell acts as a customer to the previous one, eliminating defects from every stage.
ISO 9000 (also called BS 7570) is a certification that businesses receive if they meet the relevant quality criteria. It involves a firm documenting their procedures and producing a manual. Hence it can be very bureaucratic. Despite this, it does carry some marketing value.
A quality product is one that fully meets customer needs. A poor quality product incurs costs of scrapping/reworking, returns and reputational damage.
Much of Smile's previous success is based on a reputation for high quality magazines. This enabled Smile to ADD VALUE and develop BRAND LOYALTY through repeat subscriptions.
However, recent lack of investment in technology has led to Smile falling behind in terms of quality, and therefore reputation
---------------------------------------------------------------------
Within Smile, the Printing department has SWITCHED from a system of QUALITY CONTROL to a system of QUALITY ASSURANCE.
For Smile, there were a number of teething problems with the new quality assurance system. This is partly due to the TRAINING COSTS hat were incurred. The printers' argument was that better machinery would produce better products.
Results of transition from QC to QA (see Table 4), transition occurred in March.
Wastage Rate --> peaks in March due to teething problems, but now has started to adapt
Deliveries On Time --> record high, 98% consistently Apr to May
Retailer Satisfation --> up from 7.4/10 under QC, to 8.5/10 under QA.
Print Quality --> Steady at 5.5, but way below benchmarked industry mean of 8.0.
Quality Control
ADV = specialist department
DIS = not very thorough, expensive?
Quality Assurance
ADV = focus on prevention, delegation possible (motivator?)
DIS = training and other short term costs
---------------------------------------------------------------------
Total Quality Management (TQM) is a philosophy of self-checking and zero defects. For Smile, this can be linked in with cell production.
Cell 1 acts as a customer and monitors the quality of supplies and components. Each successive cell acts as a customer to the previous one, eliminating defects from every stage.
ISO 9000 (also called BS 7570) is a certification that businesses receive if they meet the relevant quality criteria. It involves a firm documenting their procedures and producing a manual. Hence it can be very bureaucratic. Despite this, it does carry some marketing value.
EXTERNAL INFLUENCES
Economics: Some Definitions, and Implications
From Table 7:
Economics: Some Definitions, and Implications
From Table 7:
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EXCHANGE RATES
One thing I noticed when reading through the case study was to do with their future plans for increasing distribution to Eire. According to the last table (the one with all the inflation rates, interest rates etc), it says that the strength of the pound against the Euro is going to increase. This is very relevant to Eire as in Eire they use the Euro. So the increase in the strength of the pound may mean that their prices will be less competitive to retailers (remember they are manufacturers - for the printed magazine that is, whereas the internet magazine is more of a direct service) as the retailers will have to pay more euros for the same number of pounds that it is being sold for by Smile Magazines.
This is one point you could make when answering a question about the implications of expanding distribution to Eire.
You could also relate exchange rates to buying materials abroad and their possible plans on relocating printing to Spain.
Also if you're unsure about this area - i.e. the strength of a currency and its relation to importing and exporting, then you should be able to look it up in the text book for AQA AS Business Studies.
Use SPICED to remember how the currency affects imports and exports.
S trong
P ound
I mports
C heap
E xports
D ear
One thing I noticed when reading through the case study was to do with their future plans for increasing distribution to Eire. According to the last table (the one with all the inflation rates, interest rates etc), it says that the strength of the pound against the Euro is going to increase. This is very relevant to Eire as in Eire they use the Euro. So the increase in the strength of the pound may mean that their prices will be less competitive to retailers (remember they are manufacturers - for the printed magazine that is, whereas the internet magazine is more of a direct service) as the retailers will have to pay more euros for the same number of pounds that it is being sold for by Smile Magazines.
This is one point you could make when answering a question about the implications of expanding distribution to Eire.
You could also relate exchange rates to buying materials abroad and their possible plans on relocating printing to Spain.
Also if you're unsure about this area - i.e. the strength of a currency and its relation to importing and exporting, then you should be able to look it up in the text book for AQA AS Business Studies.
Use SPICED to remember how the currency affects imports and exports.
S trong
P ound
I mports
C heap
E xports
D ear
KEY QUOTES
[*]"The internet magazine market was competitive, with many small firms. (price elastic?)
[*]However, the UK printed magazine market was dominated by two very large firms who shared over 50% of the market (duopoly)
[*]Customers considered it to be technically inferior to its competitors, lacking some of the special effects and computer wizardry being used by rival internet magazines. (technological change)
[*]Polar plc was always aware of proposed changes in UK or European law and would always advise Leah on any potential difficulties arising as a result of new laws. The UK government was discussing stricter regulation of recycling and recycled materials and Leah recognised that these proposed new laws would lead to a considerable increase in the costs of production.
[*]The minimum wage in Spain was less than half that of the UK.
[*]Jeremy, Kate and Sam refused to consider this option, maintaining that the business should remain loyal to its workforce and suppliers.
[*]Real growth in consumer spending: 2007 = 3.8%; 2008 = 3.6%; 2009 = 3.5% (RATE of growth is falling - ie. spending IS rising, but more slowly)
[*]"The internet magazine market was competitive, with many small firms. (price elastic?)
[*]However, the UK printed magazine market was dominated by two very large firms who shared over 50% of the market (duopoly)
[*]Customers considered it to be technically inferior to its competitors, lacking some of the special effects and computer wizardry being used by rival internet magazines. (technological change)
[*]Polar plc was always aware of proposed changes in UK or European law and would always advise Leah on any potential difficulties arising as a result of new laws. The UK government was discussing stricter regulation of recycling and recycled materials and Leah recognised that these proposed new laws would lead to a considerable increase in the costs of production.
[*]The minimum wage in Spain was less than half that of the UK.
[*]Jeremy, Kate and Sam refused to consider this option, maintaining that the business should remain loyal to its workforce and suppliers.
[*]Real growth in consumer spending: 2007 = 3.8%; 2008 = 3.6%; 2009 = 3.5% (RATE of growth is falling - ie. spending IS rising, but more slowly)
OBJECTIVES AND STRATEGY
Some facts about the original direction of the magazine:
In the early days of the magazine, Jeremy operated as a SOLE TRADER, which means he owns and controls 100% of the business. This is useful for Jeremy as it allows him to shape the magazine to exactly what he wants, something which is important in the early days of the business, as it ensures that Jeremy stays interested in the project. However, there are some drawbacks of being a sole trader, including UNLIMITED LIABILITY (if he goes into debt then his personal wealth is at risk of repossession) and an overload of responsibility could reduce the capacity of the business to grow.
This leads nicely into the next part of the story. Jeremy's business being acquired by Polar Plc.
The magazine was acquired by Polar Plc after Jeremy had written some articles in a local newspaper about his magazine. These articles spread to a regional scale, and were picked up by Polar, who asked whether they could invest. And so Smile Magazines Ltd was born.
Smile Magazines Ltd operated as a PRIVATE LIMITED COMPANY, which means that the business is now a separate legal entity. This means that if the business goes under, then only the capital invested into the company can be repossessed. This is LIMITED LIABILITY. Another characteristic of this type of company is that shares are not available to the public. Only people that are invited to can take part ownership of the firm. The drawbacks of this are that control and ownership are often split, with the day to day running of the firm being delegated to someone with no shares (in this case, the CEO Leah White, who has no ownership). This is a drawback as conflicts of interest can occur, and the business may start to go in a different direction to what Jeremy originally wanted. This is known as the DIVORCE OF OWNERSHIP AND CONTROL. Also, if the business needed to grow further, capital would once again run out, as share availability is limited.
1. Outline 2 possible reasons why Jeremy decided to start his business using a website. (8 marks)
- Jeremy didn't have the resources available to him to print his own magazine in sufficient quantities. (This is actually quoted in Section A, Paragraph 3).
- Jeremy already had the computer skills to start up an internet magazine, and therefore no training costs were incurred. (Again, this is quoted)
- (A more market-led answer) Jeremy was aiming the magazine at a college audience. College students tend to use the internet alot, and therefore have plenty of time to access the website. Also, due to financial constraints, students may not want to pay for the unestablished, embryonic school magazine.
The last point is the more impressive of those three possibilities. A magazine is set up from a market orientation, and therefore you may think outside the box by explaining why Jeremy might be better off using the internet, and isn't just forced to.
2. Explain how the market research undertaken by Jermey was beneficial for the business. (6 marks)
- Market research allowed Jeremy to find out what his target age group liked in a magazine, and therefore what would be most popular, attracting the most hits on the website, and attracting more lucrative advertisers, thus making more profit.
Quite a short answer to this one, it is worth 6 marks, so make sure you explain fully how the business (i.e. the profits) would benefit. This ensures that you have answered the question exactly, and not made assumptions.
3. Analyse one strength and one weakness in Jeremy, Kate's and Sam's decision to give up 52% of the business to Polar Plc. (8 marks)
- STRENGTH: Lots of capital input coming from Polar.
- STRENGTH: Enterprise experience from a floated company. THEREFORE possibility of attracting more investment from companies following Polar.
- WEAKNESS: Giving away control of long term strategy.
- WEAKNESS: Handing over control to a soft-drinks company, not a publisher, lack of experience within the market.
I hope I've read the question right there. Above are the +/- of Polar's 52% investment. I assume that's what is meant my "the +/- of Sam and Kate's decision". Correct me if I'm wrong.
Analyse two benefits of SWOT analysis as a method of helping Jeremy & Leah come to a decision over the future of the business. (8 marks)
Some facts about the original direction of the magazine:
•
Original strategy was to start up an internet magazine aimed at teenagers.
•
After doing some market research, Jeremy concluded that he would use all of the aspects rated Highly amongst 15-19 year olds.
•
These were music, fashion, sport, celebrities, puzzles and computer games. Therefore, there was no underlying theme.
•
Boys tended to read one half of the magazine, and girls tended to read the other half.
•
Jeremy made money by selling advertising space in the magazine.
In the early days of the magazine, Jeremy operated as a SOLE TRADER, which means he owns and controls 100% of the business. This is useful for Jeremy as it allows him to shape the magazine to exactly what he wants, something which is important in the early days of the business, as it ensures that Jeremy stays interested in the project. However, there are some drawbacks of being a sole trader, including UNLIMITED LIABILITY (if he goes into debt then his personal wealth is at risk of repossession) and an overload of responsibility could reduce the capacity of the business to grow.
Outline 2 reasons why Jeremy might have started out as a sole trader? (6 marks)
A sole trader is a form of business ownership whereby one person has 100% ownership and 100% control over the business. A sole proprietorship is very cheap and very easy to set up, as there is little capital requirement and not many legal/bureaucratic issues to sort out. Jeremy was still in school doing A-levels when he started his business selling ad-space in the magazine, and therefore didn't have much money or time available. Therefore to set up as a sole trader is probably the only thing he could have done with the resources available to him.
This answer might be sufficient, as lack of money/lack of time may be counted as two reasons. Other reasons are a bit vague, but maybe:
- Jeremy needed all the money he could make as a student.
- Jeremy wanted full control over the magazine in its early days.
A sole trader is a form of business ownership whereby one person has 100% ownership and 100% control over the business. A sole proprietorship is very cheap and very easy to set up, as there is little capital requirement and not many legal/bureaucratic issues to sort out. Jeremy was still in school doing A-levels when he started his business selling ad-space in the magazine, and therefore didn't have much money or time available. Therefore to set up as a sole trader is probably the only thing he could have done with the resources available to him.
This answer might be sufficient, as lack of money/lack of time may be counted as two reasons. Other reasons are a bit vague, but maybe:
- Jeremy needed all the money he could make as a student.
- Jeremy wanted full control over the magazine in its early days.
This leads nicely into the next part of the story. Jeremy's business being acquired by Polar Plc.
The magazine was acquired by Polar Plc after Jeremy had written some articles in a local newspaper about his magazine. These articles spread to a regional scale, and were picked up by Polar, who asked whether they could invest. And so Smile Magazines Ltd was born.
Smile Magazines Ltd operated as a PRIVATE LIMITED COMPANY, which means that the business is now a separate legal entity. This means that if the business goes under, then only the capital invested into the company can be repossessed. This is LIMITED LIABILITY. Another characteristic of this type of company is that shares are not available to the public. Only people that are invited to can take part ownership of the firm. The drawbacks of this are that control and ownership are often split, with the day to day running of the firm being delegated to someone with no shares (in this case, the CEO Leah White, who has no ownership). This is a drawback as conflicts of interest can occur, and the business may start to go in a different direction to what Jeremy originally wanted. This is known as the DIVORCE OF OWNERSHIP AND CONTROL. Also, if the business needed to grow further, capital would once again run out, as share availability is limited.
- Jeremy didn't have the resources available to him to print his own magazine in sufficient quantities. (This is actually quoted in Section A, Paragraph 3).
- Jeremy already had the computer skills to start up an internet magazine, and therefore no training costs were incurred. (Again, this is quoted)
- (A more market-led answer) Jeremy was aiming the magazine at a college audience. College students tend to use the internet alot, and therefore have plenty of time to access the website. Also, due to financial constraints, students may not want to pay for the unestablished, embryonic school magazine.
The last point is the more impressive of those three possibilities. A magazine is set up from a market orientation, and therefore you may think outside the box by explaining why Jeremy might be better off using the internet, and isn't just forced to.
2. Explain how the market research undertaken by Jermey was beneficial for the business. (6 marks)
- Market research allowed Jeremy to find out what his target age group liked in a magazine, and therefore what would be most popular, attracting the most hits on the website, and attracting more lucrative advertisers, thus making more profit.
Quite a short answer to this one, it is worth 6 marks, so make sure you explain fully how the business (i.e. the profits) would benefit. This ensures that you have answered the question exactly, and not made assumptions.
3. Analyse one strength and one weakness in Jeremy, Kate's and Sam's decision to give up 52% of the business to Polar Plc. (8 marks)
- STRENGTH: Lots of capital input coming from Polar.
- STRENGTH: Enterprise experience from a floated company. THEREFORE possibility of attracting more investment from companies following Polar.
- WEAKNESS: Giving away control of long term strategy.
- WEAKNESS: Handing over control to a soft-drinks company, not a publisher, lack of experience within the market.
I hope I've read the question right there. Above are the +/- of Polar's 52% investment. I assume that's what is meant my "the +/- of Sam and Kate's decision". Correct me if I'm wrong.
•
Jeremy and Leah can analyse INTERNAL factors affecting the business (S&W)
•
This means they can identify which are the key weaknesses to take action on in the future. Example: appraisal of employees identifies which training is required for the future.
•
They can use their strengths as an example for weaker areas to learn from - could refer to Kaizen continuous improvement, different areas of the business discussing and learning from eachother's experiences.
•
Jeremy and Leah can also analyse EXTERNAL factors affecting the business (O&T)
•
This means they could identify any gaps in the market that could be exploited in the future.
•
They can prepare for any economic changes happening in the future. Example: if there were changes in the rate of EMA, or the demand for temporary employment, this would affect the income of Smile's target market.
•
They can prepare for any social changes happening in the future. Examples might be: the material they publish is affected by publicity for healthy eating, reading books or publicity against violence in games/movies.
1. Leah wants to introduce aims that emphasis ‘social responsibility’. What does this mean? (3 marks)
Social responsibility involves a business’ requirement to consider all of their stakeholders, and not just satisfying directors. These stakeholders could include the local community, the environment and the employees. For Smile, this could mean using recycled paper, and considering the social effects of the proposed outsourcing of production to Spain.
2. Jeremy and Leah have conflicting views about whether to adopt a ‘shareholder concept’ or a ‘stakeholder concept’. Explain these terms and suggest two aims that would be suitable to the magazine for each concept. (10 marks)
The shareholder concept is a view of business whereby all the emphasis is based around the satisfaction of the company’s owners. Essentially this means maximising profit without considering any costs that might fall on others with a vested interest in the business (e.g. employees). Leah has proposed “piecework payments made to those who produced the magazines”. This would form part of the shareholder concept as she is trying to keep workers in constant production, without absenteeism, outputting as much as they possibly can. This is a way of maximising profits, and therefore satisfying shareholders. A fairly autocratic management style is also adopted by Leah. This would fit with the shareholder concept as workers are kept on the straight and narrow, so they become experts in what they do, increasing the efficiency of production, and therefore profits.
The stakeholder concept involves a bit more than this. A business with this philosophy will consider all those involved in the business in any way. This can include employees, suppliers and the local community. Jeremy’s proposals of job enrichment and employee of the month are designed as a more indirect, laissez-faire method of motivation. Keeping employees happy is an important part of the stakeholder concept, as employees are stakeholders, and so according to Jeremy, Smile should do all it can to satisfy the workers.
Social responsibility involves a business’ requirement to consider all of their stakeholders, and not just satisfying directors. These stakeholders could include the local community, the environment and the employees. For Smile, this could mean using recycled paper, and considering the social effects of the proposed outsourcing of production to Spain.
2. Jeremy and Leah have conflicting views about whether to adopt a ‘shareholder concept’ or a ‘stakeholder concept’. Explain these terms and suggest two aims that would be suitable to the magazine for each concept. (10 marks)
The shareholder concept is a view of business whereby all the emphasis is based around the satisfaction of the company’s owners. Essentially this means maximising profit without considering any costs that might fall on others with a vested interest in the business (e.g. employees). Leah has proposed “piecework payments made to those who produced the magazines”. This would form part of the shareholder concept as she is trying to keep workers in constant production, without absenteeism, outputting as much as they possibly can. This is a way of maximising profits, and therefore satisfying shareholders. A fairly autocratic management style is also adopted by Leah. This would fit with the shareholder concept as workers are kept on the straight and narrow, so they become experts in what they do, increasing the efficiency of production, and therefore profits.
The stakeholder concept involves a bit more than this. A business with this philosophy will consider all those involved in the business in any way. This can include employees, suppliers and the local community. Jeremy’s proposals of job enrichment and employee of the month are designed as a more indirect, laissez-faire method of motivation. Keeping employees happy is an important part of the stakeholder concept, as employees are stakeholders, and so according to Jeremy, Smile should do all it can to satisfy the workers.
Discuss the possible opportunities and threats facing Smile Magazines as they consider their development in the next few years. (15 marks)
Opportunities and threats are external occurrences that affect a business's strategic decisions. For Smile, the future is not looking particularly good, especially if Jeremy and Leah do nothing to change the direction they are heading. The company's list of suppliers is narrowing due to the factory's 24 hour delivery expectations. This is a threat that Smile is causing itself, as they will find it more difficult to improve productive efficiency. Stricter regulations on recycled materials threaten to increase costs, again this is a threat for Smile's efficiency.
Smile's main opportunity is their chance to move to Spain in order to keep up with competitors cost-wise. This will escape the threat of UK legislation, but in the short term it may not change their relationship with suppliers, as cultural and communication problems will become more of an issue in Spain. The opportunity to move into new markets has recently emerged, as Leah and Jeremy are investigationg the possibility of diversifying - bringing out magazines for different age ranges. Smile's long term strategy is based around this, and is likely to involve the establishment of a new a reliable relationship with suppliers of the new factory in Spain.
In conclusion, the weaknesses of lower quality and lower efficiency can be quite short term if they are spotted early, and solved by implementing a strategy based on the long run opportunities for the business, ie. the relocation.
Opportunities and threats are external occurrences that affect a business's strategic decisions. For Smile, the future is not looking particularly good, especially if Jeremy and Leah do nothing to change the direction they are heading. The company's list of suppliers is narrowing due to the factory's 24 hour delivery expectations. This is a threat that Smile is causing itself, as they will find it more difficult to improve productive efficiency. Stricter regulations on recycled materials threaten to increase costs, again this is a threat for Smile's efficiency.
Smile's main opportunity is their chance to move to Spain in order to keep up with competitors cost-wise. This will escape the threat of UK legislation, but in the short term it may not change their relationship with suppliers, as cultural and communication problems will become more of an issue in Spain. The opportunity to move into new markets has recently emerged, as Leah and Jeremy are investigationg the possibility of diversifying - bringing out magazines for different age ranges. Smile's long term strategy is based around this, and is likely to involve the establishment of a new a reliable relationship with suppliers of the new factory in Spain.
In conclusion, the weaknesses of lower quality and lower efficiency can be quite short term if they are spotted early, and solved by implementing a strategy based on the long run opportunities for the business, ie. the relocation.
EXAM TECHNIQUE
There are always some generic questions that might come up in the exam, and because in the case study there are (quite obvious) hints at specific topics, we can pretty much guess what they might ask us. Here are ten questions I came up with (Unit 2 in blue, Unit 3 in red)
1. Explain how any why the organisational structure of Smile Magazines Ltd changed since the beginning.
2. What were the advantages and disadvantages of Jeremy operating as a sole trader in the magazine's early days?
3. Explain the differences in business format between Smile Magazines LTD and Polar PLC.
4. Explain what type of organisational structure the company used in Figure 1.
5. Explain why Leah's authoritarian management style might discourage delegation and consultation within the business.
6. Explain how an increase in efficiency might have decreased unit cost as shown in Table 3. Explain how this might increase profits.
7. Explain how the structure of Smile Magazines Ltd might change after adopting a system of matrix management projects.
8. Explain how Kaizen groups, cell production and job enlargement can increase motivation within the printing department.
9. Explain how the price elasticity of demand varies between the 20-29 age group and the 30-39 age group.
10. Evaluate whether Jeremy's or Leah's proposals to increase motivation would be more effective.
There are always some generic questions that might come up in the exam, and because in the case study there are (quite obvious) hints at specific topics, we can pretty much guess what they might ask us. Here are ten questions I came up with (Unit 2 in blue, Unit 3 in red)
1. Explain how any why the organisational structure of Smile Magazines Ltd changed since the beginning.
2. What were the advantages and disadvantages of Jeremy operating as a sole trader in the magazine's early days?
3. Explain the differences in business format between Smile Magazines LTD and Polar PLC.
4. Explain what type of organisational structure the company used in Figure 1.
5. Explain why Leah's authoritarian management style might discourage delegation and consultation within the business.
6. Explain how an increase in efficiency might have decreased unit cost as shown in Table 3. Explain how this might increase profits.
7. Explain how the structure of Smile Magazines Ltd might change after adopting a system of matrix management projects.
8. Explain how Kaizen groups, cell production and job enlargement can increase motivation within the printing department.
9. Explain how the price elasticity of demand varies between the 20-29 age group and the 30-39 age group.
10. Evaluate whether Jeremy's or Leah's proposals to increase motivation would be more effective.
AaaDdd
The following pages are designed to help teachers and students as they prepare for the Unit 2 and 3 AQA examinations. The pages have been put together by practising teachers and examiners who are currently delivering the course. The pages are not an exhaustive guide but do offer an excellent insight into key topic areas relevant to the forthcoming examinations. It is highly recommended that students make use of the web links to the Times 100 website (www.tt100.biz) as this will offer excellent analytical material and background reading of relevant core topic areas, which is a distinct recommendation of chief examiners. (Page references quoted relate to The Times 100 edition 11)
As a reminder.
• 28% of the marks are for case study application (application marks)
• 28% of the marks are for knowledge (content marks)
• 24% of the marks are for analysis (analysis marks)
• Evaluation is worth the least marks but will be required
Knowledge
This is shown through precise, short definitions at the very start of your answer. This should be about the topic given in the question. An example:
Explain two possible benefits that XYZ Ltd might have gained from adopting simultaneous engineering.
‘Simultaneous engineering is doing two or more parts of a project at the same time so that the whole thing is completed more quickly.’
Application
This is about relating your answers to the scenario. This is not just using names. You really need to use facts and figures about the business, its’ product and its’ market.
To begin to deconstruct the scenario look at it at 3 levels:
• The business itself (is it large, small, financially strong, strong product portfolio?)
• The product (is it price elastic, is it of high quality, what is its USP?)
• The market (is it a seasonal product, how is the stock controlled, is it growing, stable, national, international?)
How to apply
• Read the text carefully
• Identify a few points that distinguish this particular business
• Use these points in developing your answers
• Don’t just rely on names of people and the business (as a general rule, if you can cover up SMILE MAGAZINE LTD in your answer and apply the name of any business, you have not used application properly)
E.g. Tesco
• Refer to scale – UK’s biggest retailer
• They have a growth target
• They are expanding overseas in various ways
• Have 30% of the market and is on the verge on being investigated by the Competition Commission
• Because of this they are now expanding internationally
Analysis
• Analysis is building your argument using theory – this suggests you should use big, chunky paragraphs. Analysis would not come through in a short paragraph; this is an indication to the examiner that you may not have fully analysed the scenario.
To help support this area there are a number of links to Times 100 case studies, which show the theory in operation with real businesses. Examiners encourage students to make such comparisons and award marks for those who do so. Ensure you follow the links and gain a wider understanding of key topic areas.
Evaluation
• This is about weighing up evidence to reach a judgement. This is a skill that must be practiced and cannot be done by stock sentences
• You are being asked to evaluate when the command word in the question is any of:
o Discuss…
o To what extent…
o Evaluate… (obviously)
• In both papers, there will be 2 evaluative questions, both 15 marks so be prepared for them
• BUT! Don’t give evaluation when you’ve not been asked to – it’s just not worth wasting the time.
How to evaluate:
• In a 15 mark question when analysis and evaluation is required, use an approach of 3 big paragraphs, e.g. one paragraph one side of the argument (i.e. for cell production at SMILE MAGAZINE LTD), one paragraph the other side of the argument (i.e. against cell production at SMILE MAGAZINE LTD) and the final paragraph to evaluate and make a judgement.
• To make a judgement decide on the stronger of the two arguments, e.g. maintaining or reducing prices, and support your judgement using ‘because…’. This is a key way to show the examiner you are evaluating
• Judgement can come from identifying the most important of several factors to SMILE MAGAZINE LTD.
The requirements of the 15 mark questions:
o Identify the relevant factors and develop 2/3 points well
o Retain a clear focus on the context of the case
o Provide in depth analysis of the factors you have identified
o Give a judgement based on the arguments that have made and that answer the question
Tips for structure:
• Start every answer with a definition of the topic being assessed e.g. economies of scale, motivation, etc. 2 marks are available for a good definition. Definitions should be short and precise and should only be one sentence. Don’t make them too wordy.
• Don’t rewrite the question - just get on with answering the question – remember time is of the essence: one mark per minute.
• Your answers are rewarded for quality not quantity. This means you should write 2 or 3 things in detail, e.g. two advantages of break even.
• Make sure your answer is relevant to the question being asked. If it’s not you are wasting time and not earning marks. After each paragraph, reread the question to check you are addressing the question properly. A short, more focused answer is far better than a long and vague answer. One good argument is better than two weak ones – this is the Golden Rule!
• Think ‘Why’ after you write each sentence to further advance your argument. ‘Economies of scale are advantages that businesses can benefit from operating on a large scale.’ WHY? Advantages lead to a reduction to average or unit costs, achieving optimum production.’
• Be selective in your use of theory
o Don’t write everything you know about a subject, theory must be relevant to the question
o In big mark questions, you can relate any other topics in the specification that you feel are relevant, e.g. objectives and strategy and people/motivation
• If you make a judgement support it. ‘I think SMILE MAGAZINE LTD should take the contract.’ WHY? Analyse two reasons why this firm uses JIT – ‘JIT is good for the firm because it reduces the need for working capital.’ WHY? ‘This is because capital that would have been invested in stock is now made available.’ Examine causes, consequences and relationships.
Revision advice:
• Cover every part of the specification
• Start with making sure you know definitions for the terms within it – this is for every area: People in Organisations, Operations Management, External Influences and Objectives & Strategy
• Do this by using the spec or using the case. This will help you to get to know the case study even better. Sort the terms into the four topic areas. Make sure you know the relevance of each term to the case.
• Use past papers from the AQA website. You should choose questions but use them in the context of the SMILE MAGAZINE LTD case study.
About the exam:
• Only 60 minutes, 53 marks – one mark per minute, 5 minutes for reading.
• Be confident, stick to time management, you don’t want to run out of time on a big mark question towards the end of the exam
• Use the rest of the time for reading and thinking. Take this time to think before you write; this will lead to better, more focused answers.
• How much you write in the exam is not important, but quality is.
As a reminder.
• 28% of the marks are for case study application (application marks)
• 28% of the marks are for knowledge (content marks)
• 24% of the marks are for analysis (analysis marks)
• Evaluation is worth the least marks but will be required
Knowledge
This is shown through precise, short definitions at the very start of your answer. This should be about the topic given in the question. An example:
Explain two possible benefits that XYZ Ltd might have gained from adopting simultaneous engineering.
‘Simultaneous engineering is doing two or more parts of a project at the same time so that the whole thing is completed more quickly.’
Application
This is about relating your answers to the scenario. This is not just using names. You really need to use facts and figures about the business, its’ product and its’ market.
To begin to deconstruct the scenario look at it at 3 levels:
• The business itself (is it large, small, financially strong, strong product portfolio?)
• The product (is it price elastic, is it of high quality, what is its USP?)
• The market (is it a seasonal product, how is the stock controlled, is it growing, stable, national, international?)
How to apply
• Read the text carefully
• Identify a few points that distinguish this particular business
• Use these points in developing your answers
• Don’t just rely on names of people and the business (as a general rule, if you can cover up SMILE MAGAZINE LTD in your answer and apply the name of any business, you have not used application properly)
E.g. Tesco
• Refer to scale – UK’s biggest retailer
• They have a growth target
• They are expanding overseas in various ways
• Have 30% of the market and is on the verge on being investigated by the Competition Commission
• Because of this they are now expanding internationally
Analysis
• Analysis is building your argument using theory – this suggests you should use big, chunky paragraphs. Analysis would not come through in a short paragraph; this is an indication to the examiner that you may not have fully analysed the scenario.
To help support this area there are a number of links to Times 100 case studies, which show the theory in operation with real businesses. Examiners encourage students to make such comparisons and award marks for those who do so. Ensure you follow the links and gain a wider understanding of key topic areas.
Evaluation
• This is about weighing up evidence to reach a judgement. This is a skill that must be practiced and cannot be done by stock sentences
• You are being asked to evaluate when the command word in the question is any of:
o Discuss…
o To what extent…
o Evaluate… (obviously)
• In both papers, there will be 2 evaluative questions, both 15 marks so be prepared for them
• BUT! Don’t give evaluation when you’ve not been asked to – it’s just not worth wasting the time.
How to evaluate:
• In a 15 mark question when analysis and evaluation is required, use an approach of 3 big paragraphs, e.g. one paragraph one side of the argument (i.e. for cell production at SMILE MAGAZINE LTD), one paragraph the other side of the argument (i.e. against cell production at SMILE MAGAZINE LTD) and the final paragraph to evaluate and make a judgement.
• To make a judgement decide on the stronger of the two arguments, e.g. maintaining or reducing prices, and support your judgement using ‘because…’. This is a key way to show the examiner you are evaluating
• Judgement can come from identifying the most important of several factors to SMILE MAGAZINE LTD.
The requirements of the 15 mark questions:
o Identify the relevant factors and develop 2/3 points well
o Retain a clear focus on the context of the case
o Provide in depth analysis of the factors you have identified
o Give a judgement based on the arguments that have made and that answer the question
Tips for structure:
• Start every answer with a definition of the topic being assessed e.g. economies of scale, motivation, etc. 2 marks are available for a good definition. Definitions should be short and precise and should only be one sentence. Don’t make them too wordy.
• Don’t rewrite the question - just get on with answering the question – remember time is of the essence: one mark per minute.
• Your answers are rewarded for quality not quantity. This means you should write 2 or 3 things in detail, e.g. two advantages of break even.
• Make sure your answer is relevant to the question being asked. If it’s not you are wasting time and not earning marks. After each paragraph, reread the question to check you are addressing the question properly. A short, more focused answer is far better than a long and vague answer. One good argument is better than two weak ones – this is the Golden Rule!
• Think ‘Why’ after you write each sentence to further advance your argument. ‘Economies of scale are advantages that businesses can benefit from operating on a large scale.’ WHY? Advantages lead to a reduction to average or unit costs, achieving optimum production.’
• Be selective in your use of theory
o Don’t write everything you know about a subject, theory must be relevant to the question
o In big mark questions, you can relate any other topics in the specification that you feel are relevant, e.g. objectives and strategy and people/motivation
• If you make a judgement support it. ‘I think SMILE MAGAZINE LTD should take the contract.’ WHY? Analyse two reasons why this firm uses JIT – ‘JIT is good for the firm because it reduces the need for working capital.’ WHY? ‘This is because capital that would have been invested in stock is now made available.’ Examine causes, consequences and relationships.
Revision advice:
• Cover every part of the specification
• Start with making sure you know definitions for the terms within it – this is for every area: People in Organisations, Operations Management, External Influences and Objectives & Strategy
• Do this by using the spec or using the case. This will help you to get to know the case study even better. Sort the terms into the four topic areas. Make sure you know the relevance of each term to the case.
• Use past papers from the AQA website. You should choose questions but use them in the context of the SMILE MAGAZINE LTD case study.
About the exam:
• Only 60 minutes, 53 marks – one mark per minute, 5 minutes for reading.
• Be confident, stick to time management, you don’t want to run out of time on a big mark question towards the end of the exam
• Use the rest of the time for reading and thinking. Take this time to think before you write; this will lead to better, more focused answers.
• How much you write in the exam is not important, but quality is.
Hello children, i'm hoping to go over the case study during Easter as my teacher has given us a booklet that outlines where everything in the case study matches the spec - so if anyone wants to know something just ask.
I remember doing that last year and now i have to do it again, i hate doing retakes.
I remember doing that last year and now i have to do it again, i hate doing retakes.
Thanks RJA...any more help 2 come? im really finding it hard with the case study as i am worried about june and the exams! :-(
nat
nat
Sorry for the delays guys - I have been bogged down with Maths.
I have typed up a HR sample answer on Herzberg if you scroll up a bit. There is also a [huge] page scanned from a revision guide about preparation for the exam using the case study.
BTW, if there are any specific topics that you are struggling with, post them and I'll type up some more relevant material
I have typed up a HR sample answer on Herzberg if you scroll up a bit. There is also a [huge] page scanned from a revision guide about preparation for the exam using the case study.
BTW, if there are any specific topics that you are struggling with, post them and I'll type up some more relevant material
Hey guys....great working going on here!
the tables are what im really finding hard! anyone got any good analysis of them and the implications for Smile Magazines Ltd of what the tables show???
Thanks to everyone for all these notes and help!
nat :-)
the tables are what im really finding hard! anyone got any good analysis of them and the implications for Smile Magazines Ltd of what the tables show???
Thanks to everyone for all these notes and help!
nat :-)
Daniboi
Outline 2 reasons why Jeremy might have started out as a sole trader? (6 marks)
I have just answered your question, and put it in the Objectives and Strategy post
Outline 2 reasons why Jeremy might have started out as a sole trader? (6 marks)
A sole trader is a form of business ownership whereby one person has 100% ownership and 100% control over the business. A sole proprietorship is very cheap and very easy to set up, as there is little capital requirement and not many legal/bureaucratic issues to sort out. Jeremy was still in school doing A-levels when he started his business selling ad-space in the magazine, and therefore didn't have much money or time available. Therefore to set up as a sole trader is probably the only thing he could have done with the resources available to him.
This answer might be sufficient, as lack of money/lack of time may be counted as two reasons. Other reasons are a bit vague, but maybe:
- Jeremy needed all the money he could make as a student.
- Jeremy wanted full control over the magazine in its early days.
A sole trader is a form of business ownership whereby one person has 100% ownership and 100% control over the business. A sole proprietorship is very cheap and very easy to set up, as there is little capital requirement and not many legal/bureaucratic issues to sort out. Jeremy was still in school doing A-levels when he started his business selling ad-space in the magazine, and therefore didn't have much money or time available. Therefore to set up as a sole trader is probably the only thing he could have done with the resources available to him.
This answer might be sufficient, as lack of money/lack of time may be counted as two reasons. Other reasons are a bit vague, but maybe:
- Jeremy needed all the money he could make as a student.
- Jeremy wanted full control over the magazine in its early days.
nat_the_star789
Hey guys....great working going on here!
the tables are what im really finding hard! anyone got any good analysis of them and the implications for Smile Magazines Ltd of what the tables show???
Thanks to everyone for all these notes and help!
nat :-)
the tables are what im really finding hard! anyone got any good analysis of them and the implications for Smile Magazines Ltd of what the tables show???
Thanks to everyone for all these notes and help!
nat :-)
Any particular table?
Table 1 = Market Research
Table 2 = Share Distribution
Figure 1 = Organisational Structure
Table 3 = Productive Efficiency
Table 4 = Quality Control
Table 5 = Sales Volume
Table 6 = Motivational Propositions
Table 7 = The UK Macroeconomy
Table 8 = Consumer Spending
If it's the last two you're struggling on (the economics ones) I am planning on doing some notes in this thread alongside my AS Economics revision later this week
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