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CERTIFICATE IN BUSINESS MANAGEMENT
2016
Instructions to candidates
You are allowed three (3) hours to answer this question paper.
You are strongly advised to carefully read ALL the question requirements before attempting
the question.
Paper consists of SEVEN (7) questions.
Answer Question 1 – COMPULSORY.
Answer ANY THREE (3) other questions of your choice.
Answers for Question 1 should be written on the question paper itself.
Answers for other questions should be written in the answer book.
Formula sheet(s) will be provided to you as a separate hand-out.
Use of a non-programmable calculator is permitted.
Marks for each question are shown in [ ]
Write your candidate number, course name, full name and date in the spaces provided on the
front of the answer book.
Candidate No
Candidate Name
Date
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Question 1 – Compulsory
Answer ALL questions (a-h)
Using the information in the following paragraphs answer the questions below:
a) NIVEA: Product launch for men
NIVEA is an established name in high quality skin and beauty care products. NIVEA VISAGE
Young is a skincare range in the Sri Lankan market designed to enhance the skin and beauty
of the teenage consumer rather than medicated to treat skin problems. As a result to bring the
range to the market the business has put together the marketing mix effectively. For instance,
they have used distribution through high street and promotions through social networking sites.
This is to make sure that the message of NIVEA VISAGE Young reaches the right people in
the right way.
Describe the components of the marketing mix and its contribution in achieving the objectives
of NIVEA VISAGE Young range. [5 marks]
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b) Innocent: Drinks which captured the globe
Richard Reed, Jon Wright and Adam Balon founded innocent drinks in 1998. The business
was launched after selling smoothies at a music festival. Today innocent is converted to be a
multimillion global company which has an average number of retailers of over 11,000 and sells
on average 2 million smoothies per week.
Identify and explain the factors that promote entrepreneurship such as Innocent. [5 marks]
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c) Apple Inc.: Reforming the corporate structure
Apple Inc. is the American multinational which leads world in innovation with iPhone, iPad,
Mac, Apple Watch and many more. Currently Apple is organised by function, so people are
hired and promoted for their ability in that function, not for their general management skills.
Discuss two (2) advantages and two (2) disadvantages of adapting a functional organisational
structure for a multinational corporate such as Apple Inc. [5 marks]
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d) Starbucks: Managing Internationally
Starbucks sells coffee, pastries, confectionery and coffee related accessories through over
18,000 retail stores – about 13,000 in the United States and 5,000 in more than 50 countries.
The company’s managers adapted the business to local tastes – such as offering curry puffs
and meat buns in Asia where people prefer to eat something while having coffee.
State three (3) elements of the external business environment and describe its impact on
Starbucks in overseas markets. [5 marks]
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e) Hayleys: Best corporate citizen in Sri Lanka Hayleys is committed to doing what is right in its business and place a greater emphasis on
the quality of its profits. Accordingly in practice Hayleys strive to uphold the trust of their
stakeholders by being ethical and transparent in their continuing pursuit of company vision
and mission.
Briefly explain three (3) benefits of business ethics for an organisation such as Hayleys.
[5 marks]
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f) Briefly explain two (2) accounting concepts of your choice. [5 marks]
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g) Motivation at McDonalds
McDonalds is the world’s largest chain of fast food restaurants serving around 68 million
customers daily in 119 countries. The success of the company is attributed to its employees.
Accordingly, management of McDonalds believe balancing of the work and life as essential for
the employees. Therefore, they offer a range of alternative arrangements to motivate the
employees such as vacation time and holidays, anniversary splash, short Fridays, child care,
matching gift programme, educational assistance and auto and home insurance programmes.
Using a motivational theory of your choice identify two (2) motivational techniques adapted
by McDonalds. [5 marks]
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h) The following information relates to MTI PLC forecast for 2016 operations.
Finished goods inventory at the end of each month is expected to be 20% of the budgeted
sales quantity for the following month from 2016 onwards. Opening finished goods inventory
was 2,700 units on January 2016. There would be no working progress at the end of any
month.
Produce the monthly production budget for the quarter one of year 2016. [5 marks]
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[Total 40 marks]
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
January February March April May
Forecasted sales for 2016
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Answer any THREE (3) questions of your choice.
Question 2
The following information relates to SIGMA PLC for the year ended 31st December 2015.
SIGMA PLC Income Statement for the year ended 31st December 2015
$’000 $’000
Sales (all on credit) 7,200
Less :Cost of sales
Opening stocks 200
Purchases (all on credit) 2,450
Less: Closing stocks (600) (2,050)
Gross profit 5,150
Less: Expenses 1,275
Net profit 3,875
SIGMA PLC Balance Sheet for the year ended 31st December 2015
$’000 $’000
ASSETS
NON-CURRENT ASSETS
Furniture, fittings and equipment 2,150
Land and buildings 1,750
Motor vehicles 600 4,500
CURRENT ASSETS
Inventory 600
Trade receivables 875
Other receivables 325
Cash at hand and bank 950 2,750
TOTAL ASSETS 7,250
EQUITY AND LIABILITIES
Ordinary share capital 1,500
Retained earnings 3,875 5,375
LIABILITIES
NONCURRENT LIABILITIES
5% loans 725 725
CURRENT LIABILITIES
Trade payables 800
Bank overdraft 350 1,150
TOTAL LIABILITIES 1,875
TOTAL EQUITY & LIABILITIES 7,250
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Required:
a) Using examples differentiate between capital and liabilities. [4 marks]
b) Describe the importance of qualitative characteristics such as reliability and relevance for
SIGMA PLC when preparing their annual accounts [4 marks]
c) Identify two users of accounting information of SIGMA PLC and state the reason behind
their interest. [6 marks]
d) Calculate the following accounting ratios for the year 2015.
i. Net profit ratio
ii. Gearing ratio
iii. Acid test ratio
iv. Return on capital employed
v. Debtors settlement period
vi. Gross profit margin [6 marks]
[Total 20 marks]
Question 3
a) Using examples describe the fundamental skills required of a manager [10 marks]
b) Briefly explain the different roles (managerial roles) which need to be carried out by
managers. [10 marks]
[Total 20 marks]
Question 4
Using a product of your choice briefly explain the meaning of segmentation, bases of
segmentation, and the importance of segmentation for the chosen organization.
[20 marks]
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Question 5
a) Distinguish between the terms ‘vision’ and ‘mission’ [6 marks]
b) Describe the meaning, three advantages and two challenges of corporate social
responsibility initiatives for a business organization of your choice. [14 marks]
[Total 20 marks]
Question 6
You are expected to make a presentation on the title ‘Economic Systems and Business
Organisation’ to a group of undergraduates. For this purpose, you are required to make slides
with bullet points. Your slides shall include the following.
a) The main economic systems [10 marks]
i. Different economic systems and their characteristics (3 slides)
ii. Advantages and disadvantages of each economic system (2 slides)
b) Different types of business organisations [10 marks]
i. Different types of organisations and their characteristics (3 slides)
ii. Merits and challenges of each type of business organisations (2 slides)
[Total 20 marks]
Question 7
Prepare a report on the following:
a) Marketing concept versus societal marketing concept
b) Product orientation versus production orientation. [10×2 = 20 marks]
~ End of Paper ~