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OCR Business Studies F297 2016 - VGL Case Study watch

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    Hi everyone,

    Has anyone seen the pre-release case study for this year for the OCR a level in Business Studies? If so what do you think of it?

    Thanks Guys!
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     Official Rep
    Sorry you've not had any responses about this. Are you sure you’ve posted in the right place? Posting in the specific Study Help forum should help get responses.

    I'm going to quote in Tank Girl now so she can move your thread to the right place if it's needed. :yy:

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    (Original post by Tank Girl)
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    (Original post by KatieC97)
    Hi everyone,

    Has anyone seen the pre-release case study for this year for the OCR a level in Business Studies? If so what do you think of it?

    Thanks Guys!
    Hey what do you think of it? I was hoping to find extra ideas to gain extra marks
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    (Original post by KatieC97)
    Hi everyone,

    Has anyone seen the pre-release case study for this year for the OCR a level in Business Studies? If so what do you think of it?

    Thanks Guys!

    I've seen the case study, but im not too sure about how i feel about it
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    Although it may seem quite a stupid question but can anyone tell me who VGL's customers are? thanks
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    (Original post by garyshortall)
    Although it may seem quite a stupid question but can anyone tell me who VGL's customers are? thanks
    I think their customers are businesses who want waste collected. Not sure if that's right though!

    I'm thinking the questions that come up will be on whether to diversify into textiles, recommending strategies to improve liquidity, how a rise in interest rates will affect VGL, how their stakeholders will view VGL's attempts to improve its ethical reputation. They're what my teacher has said anyway, but there could be ones related to achieving objectives.

    Hope this helps!
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    But there may also be one related to their workforce effectiveness e.g. recommend and justify a strategy to improve the efficiency or performance of VGL, or how the effectiveness of the workforce will affect the achievement of their 2017 objectives, or how it will be assessed.
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    (Original post by Vickyhr98)
    I think their customers are businesses who want waste collected. Not sure if that's right though!

    I'm thinking the questions that come up will be on whether to diversify into textiles, recommending strategies to improve liquidity, how a rise in interest rates will affect VGL, how their stakeholders will view VGL's attempts to improve its ethical reputation. They're what my teacher has said anyway, but there could be ones related to achieving objectives.

    Hope this helps!
    thanks!! i still find the case study quite confusing to be honest. i think the customers are businesses and local authorities who want waste collected and then there's businesses who buy their commodities... so they have customers for both waste collection and their commodities?
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    (Original post by garyshortall)
    thanks!! i still find the case study quite confusing to be honest. i think the customers are businesses and local authorities who want waste collected and then there's businesses who buy their commodities... so they have customers for both waste collection and their commodities?
    Is that including the spot markets? I think so. But VGL is also a customer which means just a little bit more unnecessary complication
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    (Original post by Vickyhr98)
    Is that including the spot markets? I think so. But VGL is also a customer which means just a little bit more unnecessary complication
    Definitely left revision too late for this haha. the case study states that VGL's materials are commodities but then it says they sell on spot markets? can someone clear this up for me
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    It seems textile diversification is an almost definite to come up so does anyone have notes on the positives and negatives of VGL doing it OR the impact on stakeholders if they did?
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    (Original post by garyshortall)
    Definitely left revision too late for this haha. the case study states that VGL's materials are commodities but then it says they sell on spot markets? can someone clear this up for me
    I don't really understand it either, sorry
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    (Original post by garyshortall)
    It seems textile diversification is an almost definite to come up so does anyone have notes on the positives and negatives of VGL doing it OR the impact on stakeholders if they did?
    Should VGLdiversify into the textiles market? Justify your viewReasonswhy they should:They have rising profitability
    Interest cover has doubled between2014-2015 – good indication for more borrowing
    Expansion leading to economies of scale
    Will assist in achieving the objective of6% rise in turnover
    By diversifying they gain risk-bearingeconomies of scale thereby reducing the threat of competition
    Will increase their customer base
    Reasons whythey shouldn’tAre already highly geared (at 55%) – should they be think offurther increasing their debt (£80,000)
    If interest rates rise, VGL’s costs couldrise significantly, and they could regret the expansion
    Liquidity is diminishing – would theexpansion be a form of overtaking?
    Employees will need training – costs…
    Pay discrepancies between staff – conflict
    Ansoff’s matrix – new market, new product – most risky strategy onthe matrix….
    EVALUATIONHavingconsidered all of the above I believe VGL should diversify into the textilesmarket as long as, after thorough market research, the venture proves to be inkeeping with VGL’s mission statement and objectives. Quality market researchwill take time and be expensive and there is no absolute guarantee that themarket research will prove accurate and they will be able to sell the 200tonnes necessary per week to make the venture worthwhile…

    Hope this helps! I'll try to compile a plan about the stakeholders essay
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    (Original post by garyshortall)
    It seems textile diversification is an almost definite to come up so does anyone have notes on the positives and negatives of VGL doing it OR the impact on stakeholders if they did?
    What impact would a diversification into the textiles market have on the stakeholders of VGL?

    Government:
    Is a way of expansion so VGL would be paying more tax
    Since more jobs will be provided, it should reduce unemployment, leading to more positive thinking about VGL and its activities - better reputation
    Has quite a few local authority/government contracts so might be an opportunity for a new contract, depending on how good their service is and their reputation

    Local Community:
    Provides more jobs in the local community which should help reduce unemployment levels
    Diversification would cost money which may make it harder for the employees to find time doing their charitable community initiatives - environment may suffer slightly as the excess profit, that would be spent on the community initiatives, would be spent on extra costs e.g. recruitment, training etc.

    Suppliers:
    Demand for new machinery and equipment will increase for suppliers within the textile industry
    Should increase their revenue, meaning that VGL may not need such long trade credit periods
    Suppliers, within the waste services industry that VGL currently provides, may face smaller orders etc. from VGL since they will be separating their income into both waste and textiles, and won't have enough money to contribute the same amount of orders for waste at the same time.

    Employees:
    Can gain new skills.
    Increases job variety (one of Herzberg's hygiene factors)
    Employees using textiles machinery should receive greater pay - financial incentive
    Could create conflict between staff due to differences in pay
    Would need extra training
    Is a large change in a business that may not be appreciated by everyone, leading to possible some workers leaving, increasing the labour turnover rate and associated costs related to recruitment & training - needs to be implemented effectively to prevent reduced workforce effectiveness e.g. absenteeism

    Shareholders:
    Should help to achieve objective of raising revenue by 6%, allowing VGL to make a greater profit, which should result in higher dividends. This should also raise share value and therefore the worth of the business.
    May be faced with lower dividends in the short term, although the high dividends they've had in the past should make up for this.
    Risks overtrading because of bad liquidity, which would reduce profits

    Financiers / Lenders
    Having rising profitability should mean they can pay off an debts faster, although costs would rise through diversification
    Their interest cover has doubled between 2014 and 2015 meaning that they should be able to borrow a loan more easily since there is a lower risk involved
    Their bad liquidity may put off banks from lending them money because bad cash flow is one of the main reasons for a business going bankrupt

    Customers:
    Would increase the range of services available to customers - can find a service that will suit a greater variety of customers, thus increasing the customer base
    May have to pay higher prices for textiles services as it is more of a niche market (price inelastic)
    Price for the waste services they currently offer should remain low because of competitors, even though VGL will have to raise higher revenue, so may have to charge higher prices later to cover costs.

    Sorry it's so long! Hope it helps a bit. Not sure whether all of the information is appropriate, but for this question you'd probably have to make a judgement on which stakeholder will be impacted the most. You could even make a judgement saying something along the lines of whether they should diversify because of how much the stakeholders will be affected, and because of how much this will influence business success,
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    (Original post by garyshortall)
    Although it may seem quite a stupid question but can anyone tell me who VGL's customers are? thanks
    ''Its customer base ranges from local authority general household ‘bin’ collections through to specialist industrial waste solutions.''

    It's on the first page of the case study
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    (Original post by garyshortall)
    Definitely left revision too late for this haha. the case study states that VGL's materials are commodities but then it says they sell on spot markets? can someone clear this up for me
    ''Second is selling the processed material on to national and international markets. For example, baled waste paper might be sold to the UK pulping industry or exported. Because it is a commodity, the price of recycled products varies according to global market conditions. VGL operates a policy of selling most of its product on international spot markets.''

    This is the definition of a commodity:
    Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards. So this refers to the nature of the recycled products they are selling.

    The fact that they sell most of this product on international spot markets simply means that they are sold current market price (the way in which it is sold as opposed to other methods such as direct selling to manufacturers)
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    (Original post by vickyhr98)
    what impact would a diversification into the textiles market have on the stakeholders of vgl?

    Government:
    Is a way of expansion so vgl would be paying more tax
    since more jobs will be provided, it should reduce unemployment, leading to more positive thinking about vgl and its activities - better reputation
    has quite a few local authority/government contracts so might be an opportunity for a new contract, depending on how good their service is and their reputation

    local community:
    Provides more jobs in the local community which should help reduce unemployment levels
    diversification would cost money which may make it harder for the employees to find time doing their charitable community initiatives - environment may suffer slightly as the excess profit, that would be spent on the community initiatives, would be spent on extra costs e.g. Recruitment, training etc.

    Suppliers:
    Demand for new machinery and equipment will increase for suppliers within the textile industry
    should increase their revenue, meaning that vgl may not need such long trade credit periods
    suppliers, within the waste services industry that vgl currently provides, may face smaller orders etc. From vgl since they will be separating their income into both waste and textiles, and won't have enough money to contribute the same amount of orders for waste at the same time.

    Employees:
    Can gain new skills.
    Increases job variety (one of herzberg's hygiene factors)
    employees using textiles machinery should receive greater pay - financial incentive
    could create conflict between staff due to differences in pay
    would need extra training
    is a large change in a business that may not be appreciated by everyone, leading to possible some workers leaving, increasing the labour turnover rate and associated costs related to recruitment & training - needs to be implemented effectively to prevent reduced workforce effectiveness e.g. Absenteeism

    shareholders:
    Should help to achieve objective of raising revenue by 6%, allowing vgl to make a greater profit, which should result in higher dividends. This should also raise share value and therefore the worth of the business.
    May be faced with lower dividends in the short term, although the high dividends they've had in the past should make up for this.
    Risks overtrading because of bad liquidity, which would reduce profits

    financiers / lenders
    having rising profitability should mean they can pay off an debts faster, although costs would rise through diversification
    their interest cover has doubled between 2014 and 2015 meaning that they should be able to borrow a loan more easily since there is a lower risk involved
    their bad liquidity may put off banks from lending them money because bad cash flow is one of the main reasons for a business going bankrupt

    customers:
    Would increase the range of services available to customers - can find a service that will suit a greater variety of customers, thus increasing the customer base
    may have to pay higher prices for textiles services as it is more of a niche market (price inelastic)
    price for the waste services they currently offer should remain low because of competitors, even though vgl will have to raise higher revenue, so may have to charge higher prices later to cover costs.

    Sorry it's so long! Hope it helps a bit. Not sure whether all of the information is appropriate, but for this question you'd probably have to make a judgement on which stakeholder will be impacted the most. You could even make a judgement saying something along the lines of whether they should diversify because of how much the stakeholders will be affected, and because of how much this will influence business success,


    thank you so much
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    Anyone have an incline to what the questions will be? Any plans would be really helpful also
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    have you seen the APT pack? it has all the predicted questions
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    (Original post by deebaby)
    have you seen the APT pack? it has all the predicted questions
    is there anyway you can post them in here please?
 
 
 
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