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Assignment Front Sheet

Qualification Unit Number and Title

Pearson BTEC Level 5 HND Diploma Business / Pearson BTEC Level 4 HNC Diploma Business

Y-601-0564 / Unit 1 / Business Environment

Student Name

Student No.

Assessor name TOM FARNSWORTH

Date of Issue Completion date Submitted on

28th October 2014 19th December 2014

19th December 2014

Assignment title Unit 1: Business Environment

Learning outcome Assessment criteria

In this assessment you will have the opportunity to present evidence that shows you are able to

Task No.

Evidence (Page no)

1 Understand the organizational purposes of businesses

1.1 Identify the purposes of different types of organization

1(a)

1.2 Describe the extent to which an organization meets the objectives of different stakeholders

1(d)

1.3 Explain the responsibilities of an organization and strategies employed to meet them

1(e)

2 Understand the nature of the national environment in which businesses operate

2.1 Explain how economic systems attempt to allocate resources effectively

1(b)

2.2 Assess the impact of fiscal and monetary policy on business organizations and their activities

2(b)

2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization

3(b)

3 Understand the behaviour of organizations in their market environment

3.1 Explain how market structures determine the pricing and output decisions of businesses

2(c)

3.2 Illustrate the way in which market forces shape organizational responses using a range of examples

1(c)

3.3 Judge how the business and cultural 2(d)

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environments shape the behaviour of a selected organization

4 Be able to assess the significance of global factors that shape national business activities

4.1 Discuss the significance of international trade to UK business organizations

3(a)

4.2 Analyse the impact of global factors on UK business organizations

2(a)

4.3 Evaluate the impact of policies of the European Union on UK business organizations

3(c)

Learner declaration

I certify that the work submitted for this assignment is my own and research sources are fully acknowledged. Student Signature: Date:

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In addition to the above PASS criteria, this assignment gives you the opportunity to submit evidence in order to achieve the following MERIT and DISTINCTION grades.

Grade Descriptor

Indicative characteristic/s Contextualisation

M1 Identify and apply strategies to find appropriate solutions

Effective judgements have been made: Complex problems with more than one variable have been explored

Rankings of contextual factors are well justified with respect to the companies and their circumstances (Tasks 1d, 2a, 2b - exceptionally good work in one or two tasks may

compensate).

M2 Select/Design and apply appropriate methods/techniques

A range of sources of information has been used AND Complex information/data has been synthesized and processed

Information from the case study and at least one of the specified web resources has been used in support of valid arguments Synthesis of complex contextual information is used to support valid arguments (Tasks 2 and 3 – exceptionally good work in either task may compensate).

M3 Present and communicate appropriate findings

The appropriate structure and approach has been used

Detailed and rigorous application of the IPO model to Premier Foods and Vodafone, with a range of relevant input and output factors identified (Task 1a)

Detailed and relevant PESTEL analysis of the global environment of Premier Foods, with at least three factors identified in each category (Task 2a)

D1 Use critical reflection to evaluate own work and justify valid conclusions

Conclusions have been arrived at through synthesis of ideas and have been justified

Exceptional sophistication in argument, for example by assessing the interaction of contextual factors themselves (eg the relationship between macroeconomic factors – any Tasks)

D2 Take responsibility for managing and organising activities

Autonomy/independence has been demonstrated

Additional relevant sources of information have been used effectively to support arguments and referenced correctly (any Tasks)

D3 Demonstrate convergent/lateral and creative thinking

Ideas have been generated and decisions taken: ANY OF •self-evaluation has taken place / •convergent and lateral thinking have been applied •problems have been solved / •innovation and creative thought have been applied / •receptiveness to new ideas is evident •effective thinking has taken place in unfamiliar contexts.

Evaluation of conclusions based on strengths and weaknesses of data about the business environment (evaluation of source, collection method etc – any Tasks)

OR Appropriate recommendations made for improvement of analysis techniques or business models (any Tasks)

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Assignment Brief

Unit Number and title Y-601-0546 / Unit 1 / Business Environment

Qualification Pearson BTEC Level 5 HND Diploma Business / Pearson BTEC Level 4 HNC Diploma Business

Start Date 28th October 2014

Deadline 19th December 2014

Assessor Tom Farnsworth

Assignment title Unit 1: Business Environment

Purpose of this assignment The purpose of this assignment is to explore the immediate, general and international/global environment of UK companies. In order to do this, you are presented with some factual case study material below. The case study concerns two UK PLCs – Premier Foods, a fast-moving consumer goods (FMCG) corporation behind many of the UK’s recognizable food brands; and Vodafone Group, a multinational telecommunications corporation. You will be required to answer specific questions about these corporations, their relationship, and their relationship to their environment. This will give you the opportunity to apply in practice many of the techniques for environmental appraisal that we have covered in class, including (but not limited to) PESTEL and IPO analysis. While you are given many of the facts you will need about these two companies and their environment in the case study below, you are encouraged to seek further information from the following sources: Company websites: http://www.premierfoods.co.uk/ http://www.vodafone.co.uk/ Business environment websites: http://www.ons.gov.uk/ons/index.html http://www.bankofengland.co.uk/statistics/Pages/default.aspx http://www.eubusiness.com/topics/eulaw/summaries This list is not exhaustive and there are many other sources of information which you may wish to investigate. Your assignment is split into three sections, all of which contain several questions. The overall word limit for the assignment is 3,000.

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Premier Foods PLC is a food company headquartered in St Albans, Hertfordshire, and listed on

the UK stock exchange (PFD.L). The company is one of Britain's largest branded food

producers. It is possible to find cakes, convenience meals, ready-made cooking sauces,

desserts, flavourings and seasonings made by Premier Foods in nearly every British kitchen. In

economic terms, Premier Foods belongs to the fast-moving consumer goods (FMCG) sector of

the UK economy.

Figure 1. Some of the recognizable UK brands owned by Premier Foods.

The Grocery division of Premier Foods is by far its largest, and it includes both branded and

non-branded products in five core categories: cakes, flavourings and seasonings, desserts,

cooking sauces, and accompaniments/easy eating.

Premier Foods refers to the core of its business as its ‘Power Brands’ - these are the brands

which the company regards as having the highest strategic growth potential. These brands

include: Ambrosia custard and rice pudding; Batchelors soups; pasta, rice and noodles; Bisto

and OXO stocks and gravies; the Sharwoods and Loyd Grossman cooking sauces range; and

Mr. Kipling cakes. In addition, Premier Foods designates some of its brands as ‘support brands’

– these include: Angel Delight whipped dessert, Atora suet, Be-Ro flour, Bird’s custard,

Homepride cooking sauces, Lyons cakes, Marvel powdered milk, McDougalls home baking

range, Paxo stuffing mixes, Saxa salt, and Smash instant potato.

While Premier Foods operates primarily as a manufacturer of food brands that it owns, the

company also has a long-standing licence with US-based Mondelez PLC to produce Cadbury

branded cake products. In April 2014, Premier Foods reached an agreement with The Gores

Group, a private investment firm, to operate its bread business as a stand-alone joint venture,

trading as Hovis Ltd. This agreement has helped to release new investment to upgrade the

operational infrastructure of the bread business, and also to reinvigorate the Hovis bread brand.

Premier Foods retains a 49% equity stake in Hovis Ltd.

Premier Foods lists its current strategic priorities as:

• Building lasting relationships with consumers through understanding their needs and shopping

preferences

• Creating brands people love through investing in quality, innovation and marketing

• Striving to be a preferred partner with all of our customers, whichever channel they serve

• Significantly lowering our costs by reducing complexity in our business

• Developing a winning team culture amongst our people as we grow the Company

• Ensuring we deliver sustainability in everything we do. (Premier Foods, 2014).

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Figure 2. Strategic priorities for Premier Foods (Premier Foods, 2014)

Figure 3. Five-year share price and trade volume for Premier Foods (PFD.L). Source: LSE.co.uk

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Over the last 10 years, Premier Foods has expanded, acquiring several new brands and

businesses. In 2014, the directors of the company felt that it had started to become a victim of

its own success, and it was decided that the strategic focus of the business should shift from

expansion and acquisition to consolidation and efficiency, cutting costs and boosting marketing

support. As a large organization with several different sites throughout the UK, efficient

communications were seen as a major priority. 'Communication and collaboration are a vital part

of our future' said Mark Vickery, Group Information Systems and Change Director. Until 2014,

Premier Foods had separate suppliers for its fixed, mobile, and wireless Internet communication

systems. In total, the company had seven different telecommunications suppliers across its

businesses, which impacted on cost and management time. The plan was to consolidate this to

a single supplier, cutting costs and creating a strategic partnership in the process.

Premier Foods selected Vodafone as its exclusive provider of integrated communications.

Vodafone Group PLC is a British telecommunications company headquartered in London with

its registered office in Newbury, Berkshire and a listing on the London stock exchange (VOD.L).

It is the world's second-largest mobile telecommunications company measured by both

customer base and 2013 revenue, with 434 million subscribers around the world as of March

2014. Unlike Premier Foods, Vodafone is a truly multinational enterprise, owning and operating

networks in 21 different countries, with partner networks in over 40 additional countries. Its

Global Enterprise Division provides telecoms and IT services to corporate clients in over 65

countries.

Vickery estimates that the Vodafone solution will deliver telecommunications cost savings of

between 20 and 25% to Premier Foods. The savings come from balancing charges across the

mobile and fixed telecommunications networks, streamlining the supply chain, and reducing the

costs of management and billing. 'It's one supplier with which to collaborate’ says Vickery.

From an infrastructure perspective, having one supplier makes it easier to integrate new

acquisitions, dispose of other parts of the business or to deal with unplanned market changes.

For example, in April 2014 Premier Foods reached an agreement with The Gores Group, a

private investment firm, to operate its bread business as a stand-alone joint venture trading as

Hovis Limited. The new technology contributed to a smooth transition. As the Premier Foods

group supports its various brands into the future, this ‘Ready Business’ mentality will be vital.

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Task 1: The immediate/contextual environment (LO 1.1, 1.2, 1.3, 2.1, 3.2, M1,M3,D1,D2,D3)

You are a management consultant hired by Vodafone. Your task is to assess the main risks and

benefits involved in a five-year partnership with Premier Foods. In order to do this, you need to

understand more about what your new client does, and what its immediate business

environment is like.

(a) Produce separate input-process-output (IPO) analyses for Premier Foods and for Vodafone. (1.1) (b) Considering inputs, which of the two companies would be more likely to thrive in a centrally-planned economy and which in a market economy? (2.1) (c) Considering the output side of Premier Foods, is the company’s customer environment more

or less uncertain than ten years ago? Why? (3.2)

(d) Identify the stakeholders in Premier Foods’ business, and plot them on a power/interest grid. (1.2) (e) How well is Premier Foods currently discharging its responsibilities to its different stakeholders? (1.3) (Max 1,250 words)

Task 2: The general business environment (LO 2.2, 3.1, 3.3, 4.2, M1,M2,M3,D1,D2,D3)

Having gained a clearer idea of Premier Foods’ immediate business environment, you now need to turn your attention to the general environment and how it might affect your new client.

(a) Focusing purely on the global environment, produce a PESTEL analysis of Premier Foods’ business environment. Within each category, rank the different environmental factors according to importance, and justify your rankings (4.2). Now focusing purely on the national environment:

(b) Consider exactly how the following macroeconomic factors affect Premier Foods’ business: unemployment rate, CPI inflation, RPI inflation, exchange rates, interest rate. Rank them in order of importance, and justify your rankings. (2.2) (c) What are the social and cultural factors affecting consumers which lie behind Premier Foods’ decision to split its business into ‘Power Brands’ and ‘support brands’? (3.1) (d) Is Premier Foods’ current strategy to stop growing its business by buying up other businesses, and to concentrate instead on consolidation and organic growth, the right one? (3.3) (Max 1,000 words)

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Task 3: The international legal and regulatory environment (LO 2.3, 4.1, 4.3, M2, D1,D2,

D3)

As you are finalizing your report, you receive news that the UK government has announced an

immediate referendum on EU membership, with polls showing a 62% majority in favour of

leaving the EU entirely (British exit, or ‘Brexit’).

(a) Will this be good or bad news for Premier Foods in terms of the company’s inputs? What

about its outputs? Refer to your IPO analysis in Task 1 (a) (4.1)

(b) Which of our two companies, Premier Foods and Vodafone, might have more to lose by the UK being outside of the European Economic Area (EEA)? (2.3) (c) Which of our two companies, Premier Foods and Vodafone, might have more to lose by the UK being outside of a common regulatory framework for business? (4.3) (Max 750 words)

Evidence Checklist

Summary of evidence Evidence presented

Task 1 Answers to questions 1(a) through 1(e) given (maximum 1,250 words).

Task 2 Answers to questions 2(a) through 2(d) given (maximum 1,000 words).

Task 3 Answers to questions 3(a) through 2(c) given (maximum 750 words).

Additional information

In-text referencing and bibliography supplied (Harvard system)

Important Plagiarism, collusion and non-compliance with assessment regulations are offences

under the awarding body regulations and where suspected will be thoroughly investigated under official procedures.

Penalties may be imposed depending on the severity of the offence, as per the awarding body guidance.

Appropriate citations of source documents are essential when presenting written/word processed work and it is crucial that you quote the books, journals, websites etc. that you used whilst you carried out desk research.

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Additional guideline to students

Qualification Pearson BTEC Level 5 HND Diploma Business / Pearson BTEC Level 4 HNC Diploma Business

Assessor Name

Tom Farnsworth

Unit Number and title

Y 601-0546 / Unit 1 / Business Environment

Student Name

Student No.

Assignment part

Learning outcome

To achieve the criteria the evidence must show that the student is able to:

Achieved? (tick)

1 (a) 1.1 Produce two IPO diagrams (one for Premier Foods, one for Vodafone) with transformed and transforming inputs, processes, and outputs correctly labelled

1 (b) 2.1 Explain the relative advantages and disadvantages of central planning vs. market economies for Premier Foods and Vodafone

1 (c) 3.2 Identify reasons conducing towards and away from stability in the demand side of Premier Foods’ market

1 (d) 1.2 Produce a matrix with power and interest axes showing the identity of Premier Foods’ stakeholders

1 (e) 1.3 Discuss the responsibilities of Premier Foods to its stakeholders, and how these are being discharged

2 (a) 4.2 Produce a balanced PESTEL analysis of Premier Foods’ global environment. At least two factors required per PESTEL category.

2 (b) 2.2 Evaluate the relative importance of unemployment, CPI and RPI inflation, exchange rates and interest rate to Premier Foods’ business

2 (c) 3.1 Identify social and cultural consumer factors behind Premier Foods’ categorization of its brands into Power Brands and supporting brands

2 (d) 3.3 Identify and explain demand side factors behind Premier Foods’ recent change to a consolidation strategy

3 (a) 4.1 Evaluate the supply and demand side impacts on Premier Foods of the UK leaving the EU

3 (b) 2.3 Evaluate the relative impact (good and bad) on Premier Foods and Vodafone of the UK leaving the European Economic Area

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3 (c) 4.3 Evaluate the relative impact (good and bad) on Premier Foods and Vodafone of the UK leaving the EU regulatory framework

Achievement Summary

Qualification Pearson BTEC Level 5 HND Diploma Business / Pearson BTEC Level 4 HNC Diploma Business

Assessor Name

Tom Farnsworth

Unit Number and title

Y 601-0546 / Unit 1 / Business Environment

Student Name

Student No.

Criteria Reference

To achieve the criteria the evidence must show that the student is able to:

Achieved? (tick)

LO1

1.1 Identify the purposes of different types of organization

1.2 Describe the extent to which an organization meets the objectives of different stakeholders

1.3 Explain the responsibilities of an organization and strategies employed to meet them

LO2

2.1 Explain how economic systems attempt to allocate resources effectively

2.2 Assess the impact of fiscal and monetary policy on business organizations and their activities

2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization

LO3

3.1 Explain how market structures determine the pricing and output decisions of businesses

3.2 Illustrate the way in which market forces shape organizational responses using a range of examples

3.3 Judge how the business and cultural environments shape the behaviour of a selected organization

LO4

4.1 Discuss the significance of international trade to UK business organizations

4.2 Analyse the impact of global factors on UK business organizations

4.3 Evaluate the impact of policies of the European Union on UK business organizations

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Grade Descriptor Achieved? (tick)

Grade descriptor Achieved? (tick)

M1 Indentify and apply strategies to find appropriate solutions

D1 Use critical reflection to evaluate own work and justify valid conclusions

M2 Select/Design and apply appropriate methods/techniques

D2 Take responsibility for managing and organising activities

M3 Present and communicate appropriate findings

D3 Demonstrate convergent/lateral and creative thinking

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Assignment Feedback

Formative Feedback: Assessor to Student

Action Plan

Summative feedback

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Feedback: Student to Assessor

Assessor

Signature

Date

Student

Signature

Date