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
toCSRðicsGrowingimpactofpressure
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]
APossibleQuestion forSectionC
Usinginformationfromthecasestudyandtheadditionalstimulusabove,recommendwhichoption1or2isbestforachievingTM’sobjectiveofmarketleadershipinChinawithin10years.
[20marks]
FiveEssential Concepts toFocusonforTM
• Importanceofmarketleadership• Operatingefficientlytosupportalow-costoperation
• Actingethicallyandwithsocialresponsibility
• Employeemotivationinacentralisedstructurewithautocraticmanagement
• Opportunitiesandthreatsofinternationalexpansion(HL)