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Unit 3 exam

Unit 3 exam. Intro to exam skills. AQA Buss3. Exam paper is called “Strategies for Success” It counts as 25% of your A Level You will have 1 hour 45 minutes examination 80 marks Questions requiring extended answers based on an unseen case study drawing upon knowledge from AS units.

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Unit 3 exam

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  1. Unit 3 exam Intro to exam skills

  2. AQA Buss3 • Exam paper is called “Strategies for Success” • It counts as 25% of your A Level • You will have 1 hour 45 minutes examination • 80 marks • Questions requiring extended answers based on an unseen case study drawing upon knowledge from AS units.

  3. Exam style… • Only 4 questions! • To what extent (18 marks) • Analyse (10 marks) • To what extent (18 marks) • Using all the information available to you, complete the following tasks: (34 marks) • analyse the case for a company taking this strategy • analyse the case for the alternative strategy under consideration • make a justified recommendation on which option the company should choose.

  4. Reading material… This is an example of what the paper will look like…

  5. REMEMBER your exam paper has different mark layout

  6. Initial skills • Which to do 1st? Read case study of questions? • Glance at Q’s – pick out key areas being questioned…. • Read case study carefully • Use highlighters • Annotate key issues • Usually you should be able to note the positive on one side and negative issues on the other of the exam paper.

  7. Your Go Read exam paper Use highlighters Discussion to follow…

  8. Possible Exam questions… • Q1. Assess the impact of this proposed investment on the financial health of Cruise Line plc’s. Discuss whether the Finance Director is right to be concerned. (18 marks) • Q2 Evaluate the case for and against the use of team working on the Explorer ships. (18 marks) • Q3: Assuming that the company decides to go ahead with the Explorer, discuss the case for developing a marketing plan for the project. (10 marks) • Q4: Using all the information available to you: • Analyse the arguments for Cruise Line plc’s £100m new strategy • Analyse the arguments against the new strategy • Make a justified recommendation as to whether Cruise Line plc should adopt this new strategy. (34 marks) Mrs G’s adoption of new style Q

  9. 18 mark Q… For Evaluation

  10. 34 mark Q Evaluation

  11. World's largest cruise liner Oasis of the Seas – with central park, half-mile perimeter and 2,291 staff – set for first public voyage • http://news.bbc.co.uk/1/hi/world/europe/8333973.stm • http://news.bbc.co.uk/1/hi/world/americas/8380086.stm

  12. Your task Immediate reaction to the exam paper

  13. Using A3 paper… • In groups / pairs • You will be given one of the Q’s to plan your answer to …. • You will either be planning the issues FOR or AGAINST the situation • You will be asked to put forward your ideas to the rest of the class….

  14. Your task No he is wrong to be concerned Yes he is right to be concerned • Do Q 1… • Assess the impact of this proposed investment on the financial health of Cruise Line plc’s. Discuss whether the Finance Director is right to be concerned. (18 marks)

  15. Some ratios… • Current gearing is 50/150 +50 x 100 = 25% - if proposal is carried through then • 125/225+50 x 100 = 35%. • New gearing ratio would be high, especially given the high risk nature of the project. • Acid test = 38/60 = 0.63:1, but would worsen significantly if cash is drawn out to finance Explorer. • Low figure, perhaps calling into question ability to meet current commitments, especially when backed up by the Finance Director.s warning. • ROCE was 10/150 x 100 = 6.67% in 2004-05. This is very low suggesting little ability to finance Explorer from profits. • The company is a plc and could probably raise a higher proportion of the capital required through a share issue, despite low levels of profitability in recent years . the Explorer project might appeal to investors. • Leasing option.

  16. Other issues • For the project: • Once the project is established it will generate annual profits of £12 million . an ARR of 12%. • The current profit levels are unacceptable and some action is necessary. • Price competition against Cunard is difficult given the latter’s advantage in terms of economies of scale, the Explorer project avoids this so could be more profitable. • Even borrowing 75% of the funds leaves gearing at 50% . and there is no obvious reason why more than 25% of the capital cannot be raised through a share issue. • On the other hand: • Payback is lengthy at over six years. • The company has cash problems and may experience difficulty in meeting interest charges. • The length of the project makes accurate financial estimates less likely. • The project will tie up large sums of money for two years before offering any return. The interim period could be financially tough. • Leasing vessels might be a viable option.

  17. Case FOR team work Evaluate the case for and against the use of team working on the Explorer ships. (18 marks) Case Against teamwork

  18. FOR • Team working can improve employee performance by fulfilling social and ego needs. • Team working can also allow people to work to their strengths complementing one another . This could be important in providing a quality service aboard and off the Explorer ships. • A natural development of other changes that are taking place within the business such as offering offship activities led by Cruise Line plc’s staff. • A time of major change, with many new employees, might be the obvious time to implement teamworking.

  19. Against • This change may involve a change of culture and with many long-serving staff this could be difficult to implement. • It could lead to dissatisfaction amongst existing staff . labour turnover is forecast to increase. • The training budget might be considerable at a time when the company is financially weak. • The implementation of team working at the same time as the introduction of Explorer might prove too stressful for many employees. • Planning to recruit new staff with the right skills is more important in these circumstances.

  20. Analyse the arguments for Cruise Line plc’s £100m new strategyAnalyse the arguments againstthe new strategy

  21. Issues to consider • Should they be bringing out a new design or copy lead competitors? • R&D needed for new ideas is costly & could take longer than expected • Using current designs may not appeal to changing market segment • Cashflow issues • Use of CPA & time management essential • Recruitment of new staff • Labour turnover issues • Quality of research data – how accurate? • Results of research data…. • Market led planning – how upto date are current co with market? • Market research findings • Age of existing fleet • What are the company’s objectives? • short term v long term • Investment appraisal data

  22. Homework • Answer the 34 mark Q…2 lesson’s HWK… Using all the information available to you: • Analyse the arguments for Cruise Line plc’s £100m new strategy • Analyse the arguments against the new strategy • Make a justified recommendation as to whether Cruise Line plc should adopt this new strategy. (34 marks)

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