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DIVA PLC

DIVA PLC . REVISION. PLC. What is a Plc? What are the main features of Plc companies? How can Plc companies gain access to money easily? Do they have limited or unlimited liability?. ANSWERS. Public Limited Company

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DIVA PLC

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  1. DIVA PLC REVISION

  2. PLC • What is a Plc? • What are the main features of Plc companies? • How can Plc companies gain access to money easily? • Do they have limited or unlimited liability?

  3. ANSWERS • Public Limited Company • Have £50,000 to start up, have to produce annual accounts, have to hold an AGM and can sell shares on the stock market. • By selling more shares. • Limited liability

  4. BUSINESS STRUCTURE • What type of structure does Diva Plc have? • What is the span of control for Joanna Diva? • How could Diva Plc change the structure of the business?

  5. ANSWERS • Hierarchical structure • 6 • They could operate without some of the additional layers such as supervisors in the production department so that it is a more lean company where communication flows freely.

  6. PRODUCTION? • How does Diva Plc make their shoes? • Name 2 features of the one production process that they use. • Do you think the purchasing manager should make use of overseas suppliers or take advantage of economies of scale? • What are economies of scale?

  7. ANSWERS • Mainly use batch production but for special orders they use job production. • Batch Production -Make lots of different types and sizes of shoes in different colours. • Economies of scale as it is quite a large company and buying in bulk will help with financial targets.

  8. HUMAN RESOURCES • What is a Trade Union? What does a Trade Union do? • Why are Health and Safety issues important? • How could Diva Plc motivate their workers? • How could Diva Plc improve communication methods in the company?

  9. ANSWERS • Trade Unions are there to support the staff, usually in pay negotiation and if there is a dispute over wrongful dismissal. • Health and safety is important as it is law and they could be sued . • Job rotation, enrichment, Maslow or McGregor. • By removing some of the layers and ensuring that communication is clear to everyone.

  10. MARKETING STRATEGIES • Looking at resource sheet 1 where do you think product I would be on the product life cycle? • Do you think that their marketing strategy is appropriate? Explain your answer. • What are the main market segments of Diva Plc?

  11. ANSWERS • In the decline area • No because it is very basic and does not allow for the company to reach other market segments. • Women over 20 and men over 40!

  12. EXPANSION • Which location would you choose for the factory shop from resource sheet 4 a and b? • Why does it concern Diva Plc that their share price is falling? • Do you think Diva Plc should move manufacturing abroad?

  13. ANSWERS • Can give any answer as long as you justify it but site B would probably be the best. • This means not that many people will wish to invest in the company in the future which could lead to cash flow problems. • No it is costly as have to find premises, new employees as well as paying redundancy to workers in the UK.

  14. RECOMMENDATIONS • Should Diva Plc open Diva retail shops in major cities in the UK? • Should they merge or amalgamate with another UK company? • What else could Diva Plc do?

  15. ANSWERS • Might enhance sales but also need to look at expanding their product range. • This might be possible but may lose the identity of the business and also eventually full ownership if the other company is larger than Diva. • Diva could look at other products and diversifying the products that they make.

  16. RESOURCE SHEET 2 • What has happened to the sales revenue? • Which section has seen the largest growth in sales revenue? • Which section has seen the largest decline in sales revenue?

  17. ANSWERS • It has increased by £6m • Internet shopping doubling the sales revenue generated. • Independent shoe shops, department stores and mail order have all seen a 5% decrease in sales revenue.

  18. RESOURCE SHEET 3 • Do you think this is a good promotional opportunity for Diva PLC? • Would you want to win on the scratch card? • What could Diva Plc have done differently to promote their products?

  19. ANSWERS • No as it is very basic and the prizes are not very good. • No as none of the prizes would appeal to younger customers. • The products could be more up to date, the competition could have better prizes and need to attract a new market segment to ensure that sales continue to increase.

  20. RESOUCES SHEET 5 • Do you think the cash flow forecast shows that setting up a factory outlet shop is a good idea? • What would happen if the set up costs were included? • Would you agree to setting up the factory outlet shop if you were on the board of directors?

  21. ANSWERS • Generally yes as it looks like they hope to generate a large profit by the end of the forecasted year. • There would be no profit being made by the end of the year. • I would want to see more financial information and break even forecasts before making a decision.

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