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Paper1Overview:19th May2016

Standard Level Higher Level

Timing 1hour15minutes 2hours15minutes

SectionA Answertwoquestions Answertwoquestions

SectionB Answerquestion4(a,b,c,d)

Answer question4(a,b,c,d)

SectionC Answerquestion5

TodososMercados(“TM”)

• Multinational• BasedinSouthAmerica• Supermarketretailing• Marketleader• Quoted(publiccompany)• Organisationalstructure&culture(style)

KeyFeaturesoftheCaseStudybyUnit

Unit1:BusinessOrganisation&theEnvironment

Unit2:HumanResourceManagement

Unit3:FinanceandAccounts

Unit4:Marketing

Unit5:OperationsManagement

Unit1:BusinessOrganisation&theEnvironment

• Publiccompany– profitdriven• Clearvision&aims:lowestpricesinthemarket

• Intensivelycompetitivemarket• TMusesitssizetogetwhatitwants– butethically?

• Question-marksovertreatmentofsuppliers&employees

Unit1:KeyPoints/Terms

KeyTopics KeyTermsTM statusasaquotedcompanyImpact ofmultinationalsontheirlocalityImplications ofprofit-driven objectivesTM’sreputation forCSR&EthicsStakeholderconflict(employees,pressuregroups,suppliers)Growthstrategy(Ansoff)International expansion(Asia)

Public companyMultinationalCSRBusinessEthicsStakeholdersInternal&externalgrowth

Unit2:HumanResourceManagement

• A“hard”approachtoHRM;treatingemployeesasaresource,notanasset

• HRMdeterminedbyorganisationalculture• Commandandcontrolapproachtodecision-making:highlycentralised+autocraticmanagement

• Poormoraleandmotivation(Taylor,notPink)

Unit2:KeyPoints/Terms

KeyTopics KeyTermsHard approachtoHRMCentraliseddecision-makingManagement style(effectiveness,appropriateness)Employee motivation(Pink:autonomy,mastery,purpose)Organisationalculture(HLonly)Strengthofemployeerelations(HLonly)

Labour turnoverOutsourcingCentralised/decentralisedAutocratic/paternalisticDanielPink(Motivation)FWTaylor(Motivation)Powerculture

Unit3:FinanceandAccounts

• Verylittlefinancialinformationgivensofar• Expectmoreintheexampaper• Henriis“shocked”ashecalculatesfinancialratios(butwhichones?)

• Liquiditymightbeanissue– lowcurrentratio?• IsHenrishockedbyTM’sprofitability?

Unit3:KeyPoints/Terms

KeyTopics KeyTermsProfitabilityratiosLiquidityratiosEfficiency ratios(HL)Investmentappraisal(HL)

GrossprofitmarginOperatingprofitmarginCurrent ratioAcid-testratioStockturnoverratio(HL)Creditordaysratio(HL)

Unit4:Marketing

• Marketingmixdominatedbyprice– lowprices

• Corporateaimiskey– lowestpricesinthemarket.Positioning: low-costoperator

• However,productrangehasbeenexpandedsignificantlybeyondtraditionalgrocery

• Thethreatfrome-commerce– howbig?• Internationalmarketexpansion:Asia

Unit4:KeyPoints/Terms

KeyTopics KeyTermsImportance ofmarketleadershipEthicalmarketingbyTM?TherelativeimportanceofpricevproductinthemarketingmixHowotherfunctionalareassupportthemarketingmixOpportunities/threatsofenteringAsia(HL)E-commerce:opportunityorthreat

Market shareMarketingmixUSPFranchising(HL)E-commerce

Unit5:OperationsManagement

• TM’sapproachtooperations isintrinsicallylinkedtoitsstatedaim(lowestprices)andorganisationalstructure/culture

• Non-coreactivitiesoutsourced• Leanproduction:minimisewaste&stocks• Competitivebenefitsofeconomiesofscale• SurprisingthatTMhasnotalreadyexploitedopportunities frome-commerce:toolate?

Unit5:KeyPoints/Terms

KeyTopics KeyTermsImportance ofefficientoperationsforTM(lowpricestrategy)RoleofleanproductioninsupportingbusinessaimUsing outsourcingtocutcostofsales

Labour productivityCustomisedproductionLeanproductionJust-in-timeOutsourcing

SWOTAnalysisforTM

STRENGTHS WEAKNESSESHighlyefficient

Significant scale&powerGlobalreach(MNC)

Hardapproach toHRMDemotivated/demoralized

workforceLowpricestrategy

OPPORTUNITIES THREATSAsia:growingmiddle classExpandfurtherintoservicesMarketpenetrationinexisting

markets

E-commerceCustomisedproductionReputation:CSR/Ethics

PESTAnalysisforTM

POLITICAL ECONOMICMultinational– manydifferent

environmentsEU(France)– compliancewith

employmentlawkey

Multinational– riskspreadExposuretoeconomicweakness

inEurozone (France)

SOCIAL TECHNOLOGICALQuestionsaboutTM’sapproach

toCSR&ethicsGrowingimpactofpressure

groups

E-commerce– threatoropportunity?

AnsoffMatrixforTM

MARKETPENETRATION PRODUCTDEVELOPMENTNew storesinexistingTMcountries(e.g.France)

Expandingcoregroceryproductrange

Expanding intootherconsumerproductcategories(e.g.office

supplies)Enteringservicesmarket(banking,pharmacy)

MARKET DEVELOPMENT DIVERSIFICATIONOpening TMhypermarketsinnewgeographicalterritories

(Asia)Franchising(failedinitially)

Essential ExamTechnique:CommandWordsforAO1

AO1:DemonstrateKnowledgeandUnderstanding

DEFINE

DESCRIBE

OUTLINE

STATE

EXAMPLEQUESTION

WithreferencetoTM,outline twokeyfeaturesofoperatingasapubliclimitedcompany [4marks,AO1,SL/HL]

Essential ExamTechnique:CommandWordsforAO2

AO2:DemonstrateApplicationandAnalysis

APPLY

COMMENT

DEMONSTRATE

DISTINGUISH

EXPLAIN

INTERPRET

SUGGEST

EXAMPLEQUESTION

InthecontextofTM,distinguish betweenastatedmainaimandamissionstatement[4marks,AO2,SL/HL]

Essential ExamTechnique:CommandWordsforAO3

AO3:DemonstrateSynthesisandEvaluation

COMPARE

COMPARE&CONTRAST

CONTRAST

DISCUSS

EVALUATE

EXAMINE

JUSTIFY

RECOMMEND

TOWHATEXTENT

EXAMPLEQUESTION

Discuss theimpactofamultinationalcompanylikeTMonahostcountrylikeFrance[6marks,AO3,

SL/HL]

Essential ExamTechnique:CommandWordsforAO4

AO4:DemonstrateaVarietyofAppropriateSkills

ANNOTATE

CALCULATE

COMPLETE

CONSTRUCT

DETERMINE

DRAW

IDENTIFY

LABEL

PLOT

PREPARE

EXAMPLEQUESTION

CompleteaPESTLEanalysisforTM

highlightingkeyissuesfacingthebusiness.[6marks,AO4,SL/HL]

SomePossible SectionAQuestions

Answer two questions from this section.1. (a) With reference to TM, outline two key features of operating as a publiclimited company. [4 marks](b) Complete a PESTLE analysis for TM highlighting key issues facing thebusiness. [6 marks]2. (a) With reference to TM, outline two differences in the way that servicesand goods are marketed. [4 marks](b) With reference to TM, compare and contrast the motivational theoriesof Taylor and Pink. [6 marks]3. (a) Explain two benefits of having a high market share in the markets inwhich TM operates [4 marks](b) Analyse the importance of efficient operations management for TM. [6 marks]

TypicalStructureforSectionB

APossibleQuestion forSectionC

Usinginformationfromthecasestudyandtheadditionalstimulusabove,recommendwhichoption1or2isbestforachievingTM’sobjectiveofmarketleadershipinChinawithin10years.

[20marks]

FiveEssential Concepts toFocusonforTM

• Importanceofmarketleadership• Operatingefficientlytosupportalow-costoperation

• Actingethicallyandwithsocialresponsibility

• Employeemotivationinacentralisedstructurewithautocraticmanagement

• Opportunitiesandthreatsofinternationalexpansion(HL)

tutor2u

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