Paper 1 Sample Questions Flashcards
State 2 internal and 2 external stakeholders of SVT [4]
The right answer (because the command term is state):
Internal: Yannick Pedersen and Ariadne Johansen
External: customers, James Azuki
Describe the difference between acquisition and merger [4]
Acquisition is when a business takes control over another business. It is a form of external growth. In this case, the Fresh Water Division took control of a company called Geng PLC. A merger on the other side is when two or more different businesses become one entity.
Examine the impact of the external environment on the functioning of SVT [10]
The external environment has a significant impact on the functioning of SVT. The company’s operations, revenue, and profits are influenced by a range of external factors, including political, economic, social, technological, legal, and environmental factors.
One of the main external factors that affect SVT is climate change. The shortage of potable water in some countries, caused by climate change, has resulted in increased demand for water treatment plants and desalination plants. To respond to this demand, SVT has had to find alternative sources of potable water and invest in desalination plants. SVT’s Fresh Water Division, which supplies potable water, has had to expand in size to meet the growing demand for clean water in various countries around the world.
Another external factor that has impacted SVT is market competition. With the increasing demand for water treatment and desalination plants, the competition in the market has also increased. SVT has responded to this challenge by acquiring other companies, such as Geng PLC in the United Kingdom, and by expanding its product range to include household water treatment products.
Moreover, technological advancements have impacted SVT’s operations, particularly in the Engineering Division. The acquisition of H4 PLC and its modernization program has enabled SVT to expand its product range and achieve . The division manufactures equipment and machinery for SVT’s water treatment plants, and the modernization program has allowed it to operate 24/7 and increase productivity.
In conclusion, the external environment has a significant impact on the functioning of SVT, and the company has responded by adapting its strategies to meet the challenges and opportunities presented by external factors. From climate change to market competition and technological advancements, SVT has had to innovate and expand to continue to achieve its vision of “making the world a safer place.”
Prepare strengths for swot
Strengths:
Long-standing reputation as a reliable and trustworthy supplier of potable water.
Strong market position with regional monopolies in each country where it operates.
Diversified product portfolio across four divisions, with a focus on water treatment and related equipment.
Strong leadership and decision-making capabilities within each division, enabling quick responses to changes in the external environment.
Prepare weaknesses for swot
Weaknesses:
Dependence on regional monopolies for revenue and market share.
Limited geographical , with a majority of revenue coming from Norway and a few other countries.
Potential for conflict between different divisions and directors with different leadership styles.
Limited innovation and investment in emerging technologies compared to some competitors.
Prepare opportunities for swot
Opportunities:
Growing global demand for potable water and water treatment solutions.
Increasing market for desalination, with potential to expand into new markets and increase revenue.
Growing demand for household water treatment products, with potential for expansion into new markets.
Opportunity to invest in emerging technologies to enhance efficiency and productivity (like the modernization program).
Prepare threats for swot
Threats:
Increased competition in the water treatment and desalination industries, with the entry of new players and potential pricing pressure.
Regulatory risks and political instability in some of the countries where SVT operates.
Dependence on natural resources and vulnerability to climate change and environmental risks.
Potential for supply chain disruptions and volatility in raw material prices.
Discuss the difference in the manner in which a non-profit organisation functions as compared to a profitable one.[6]
Goals: Non-profit organisations have a mission to benefit the public or a particular cause, while for-profit organisations focus on generating profits for shareholders or owners. NPOs’ objectives can include social or environmental causes, education, healthcare, or other charitable purposes, and their activities are geared towards achieving these goals.
Revenue: NPOs rely on donations, grants, and fundraising to support their activities and programs, while for-profit organisations generate revenue from the sale of goods or services they offer. This difference in the revenue stream means that non-profit organisations are more accountable to their donors and funding agencies, as opposed to for-profit entities, which are accountable to their shareholders or owners.
Organisational Structure: NPOs have a different organisational structure from for-profit organisations. NPOs typically have a board of directors or trustees, who are responsible for making decisions that align with the organisation’s mission and goals. Additionally, NPOs often rely on volunteers to carry out their programs and activities, whereas for-profit organisations usually have paid staff members who are responsible for carrying out the operations.
In the context of SVT, outline the meaning of growth [2]
Growth is the expansion of SVT as an organisation due to an increase in the size of its operations such as the recent acquisition of Geng PLC and the expansion into new markets by launching new products such as low-cost, easily transportable water purifiers. Growth can be measured in numerous ways, such as an increase in SVT profits, market share or the number of employees.
Describe any 2 stakeholder conflicts being experienced by SVT. [4]
One stakeholder conflict experienced by SVT could be with local governments or communities in countries where they operate, who may feel that SVT’s regional monopoly limits their choices and bargaining power. This could lead to tension and conflict, particularly if SVT raises prices or fails to meet local expectations regarding water quality or service provision.
Another stakeholder conflict could be within the Engineering Division of SVT, where there may be disagreements between employees and management regarding changes to working patterns or conditions, such as the shift to a 24-hour, three-shift system. This conflict could result in low morale, high turnover rates, and even industrial action, which could negatively impact the division’s productivity and profitability
Examine the usefulness of a vision statement to SVT [6]
A vision statement is an important tool for an organisation to communicate its long-term aspirations and goals to its stakeholders. For SVT, its vision statement “Making the world a safer place” has been in place since its founding and serves as a guiding principle for the company’s operations.
The vision statement is useful to SVT in several ways. First, it provides a sense of purpose and direction for the company, which can help to align the efforts of its employees towards achieving its goals. This is particularly important for a company like SVT, which operates in a critical industry where the provision of safe and clean water is essential to public health and safety.
Second, the vision statement can serve as a source of inspiration and motivation for employees. It can help to create a shared sense of purpose and identity among employees, which can lead to higher levels of engagement, productivity, and job satisfaction.
Third, the vision statement can be used to communicate SVT’s values and priorities to its stakeholders. This can help to build trust and credibility with customers, investors, and other stakeholders who share the company’s commitment to making the world a safer place.
Distinguish between a vision and a mission statement. [4]
A vision statement outlines the aspirations and goals of an organisation, describing what it wants to achieve in the future. It provides a clear and compelling image of the future state that the organisation aims to create.
On the other hand, a mission statement outlines the purpose and core values of an organisation, describing what it does and why it exists. It defines the company’s primary objectives and guides decision-making by providing a framework for strategic planning and resource allocation.
With reference to SVT, distinguish between external and internal growth [4]
External growth refers to the expansion of a company’s business activities through mergers, acquisitions, or strategic partnerships with other companies. SVT has expanded externally by acquiring other companies in the water treatment and desalination industries, such as Geng PLC and H4 PLC.
Internal growth, on the other hand, refers to the expansion of a company’s business activities through the development and expansion of its existing operations. SVT has achieved internal growth by increasing the size and capacity of its Fresh Water and Desalination Divisions, as well as by expanding the product range of its Engineering and Consumer Products Divisions through research and development.
Explain one method of internal and one method of external growth that SVT used [6]
One method of internal growth that SVT used was expanding its product range through the creation of new divisions. SVT initially specialised in producing and delivering potable water in Norway, but in the 1980s, it expanded into other business sectors, including desalination and household water treatment products, by acquiring other companies. SVT also created four new divisions based on product: The Fresh Water Division, The Desalination Division, The Engineering Division, and The Consumer Products Division. This allowed SVT to diversify its product offerings and increase its revenue streams without relying on external acquisitions.
One method of external growth that SVT used was through acquiring other companies. SVT has grown through both internal and external growth strategies. Its most recent acquisition was Geng PLC, a major water supplier in the United Kingdom (UK). Acquisitions allow SVT to rapidly expand its business and customer base, as well as to acquire expertise and resources that may not be available in-house. This strategy has helped SVT to expand its operations globally, supplying potable water to millions of households in over 20 countries, and becoming one of the industry leaders in productivity per employee
Using the Ansoff matrix examine the growth strategies being considered by SVT. [8]
Market Penetration - This strategy involves increasing market share in existing markets with existing products. SVT has already achieved a regional monopoly in each country it operates, and the Fresh Water Division supplies potable water to nearly 200 million people around the world. To increase market penetration, SVT can focus on expanding its operations in the existing countries and targeting new areas within those countries to increase the number of people it serves. SVT has also acquired Geng PLC, a major water supplier in the United Kingdom, to expand its operations.
Market Development - This strategy involves introducing existing products to new markets. SVT already supplies water treatment plants to over 20 countries. To expand further, SVT can identify new countries with high demand for water treatment plants and enter those markets. Additionally, SVT can focus on building more desalination plants in countries with limited freshwater resources.
Product Development - This strategy involves introducing new products to existing markets. SVT’s Engineering Division manufactures water treatment equipment and power turbines. To pursue this strategy, SVT can invest in developing new and innovative water treatment equipment and machinery that can improve the efficiency of its operations. Additionally, the Consumer Products Division can focus on developing new household water filters with improved technology.
- This strategy involves introducing new products to new markets. SVT has already diversified into the desalination and household water treatment product sectors. To further diversify, SVT can consider expanding into related industries such as renewable energy, wastewater treatment, or infrastructure development.
Examine the implications of acquiring a UK-based company Geng PLC a water supply company.[6]
The acquisition of Geng PLC, a major water supplier in the United Kingdom, by Skandvig Terra PLC (SVT) has several implications. First, it increases SVT’s market share in the UK’s water supply industry, which can lead to increased revenue and profitability. Second, SVT can leverage Geng PLC’s existing infrastructure, knowledge, and expertise to expand its operations in the UK and improve its service offerings. Third, the acquisition may lead to job losses in Geng PLC or changes in employment contracts, which can have implications for employee morale and public relations. Fourth, the acquisition may attract regulatory scrutiny, particularly in terms of potential monopoly and antitrust issues, which may require divestitures or other measures to ensure fair competition. Finally, the acquisition may require significant investment in integrating Geng PLC’s operations into SVT’s existing infrastructure and management, which can be costly and time-consuming.
Examine the implications of taking over H4 PLC, a rival engineering company. [6]
The takeover of H4 PLC by Skandvig Terra PLC (SVT) has several implications. First, SVT has expanded its product range to include steam and gas turbines, which are used to produce electricity. This acquisition provides SVT with a new income stream, as well as the ability to manufacture and supply its own turbines for use in its water treatment plants.
Second, the takeover enabled SVT to achieve by modernising H4’s operations and integrating them into SVT’s existing operations. This allowed SVT to improve efficiency, reduce costs, and increase productivity, which could ultimately result in higher profits.
Third, the modernization program required a change in the shift patterns of H4’s employees, which was met with resistance from some long-serving employees. SVT offered incentives for employees to sign new flexible-working contracts, but a significant number of employees chose to leave the company instead. This could result in a loss of experience and expertise, as well as potential disruption to operations in the short-term.
Fourth, SVT faced challenges in filling the 300 vacancies that were created as a result of the exodus of former H4 employees. Highly skilled and specialized employees were in short supply in the UK, which could have implications for future recruitment and retention of talent.
analyse the implications of SVT being a multinational corporation.[6]
SVT being a multinational corporation has several implications. On the one hand, it allows the company to diversify its business portfolio, access new markets, and benefit from . On the other hand, being multinational also exposes the company to a variety of risks, such as currency fluctuations, political instability, and regulatory differences between countries.
One advantage of being a multinational corporation is the ability to access new markets. For example, SVT’s expansion into other countries has allowed the company to supply potable water to millions of households and diversify its revenue streams. Moreover, being multinational allows SVT to benefit from by centralizing certain functions, such as research and development, production, and marketing, which can lead to cost savings.
However, being multinational also exposes the company to several risks, such as currency fluctuations, political instability, and regulatory differences between countries. For example, if the currency of a country where SVT operates devalues, the company’s revenues will decrease. Similarly, political instability in a country could lead to a disruption in SVT’s operations and a loss of revenue. Finally, regulatory differences between countries can create challenges for SVT in terms of compliance and adapting to local laws.
In conclusion, while being a multinational corporation has several advantages, such as and , it also exposes the company to risks. SVT needs to carefully manage these risks to ensure its long-term success.
With reference to Jayne, discuss the qualities that an intrapreneur must have.[4]
Jayne, the director of the Consumer Products Division, is an example of an intrapreneur within Skandvig Terra PLC. An intrapreneur is someone who operates within an existing organisation and brings a spirit of entrepreneurship to their work.
To be a successful intrapreneur, one must possess several key qualities. Jayne, for example, has demonstrated the following qualities:
Creativity and innovation - She has developed a new home water filter product that has resulted in significant revenue growth for the Consumer Products Division. She has also developed a sustainable packaging initiative that has reduced the division’s carbon footprint.
Risk-taking - Jayne took a risk by investing in the development of the new home water filter product. She also advocated for the sustainable packaging initiative, despite potential resistance from other stakeholders.
Evaluate SVT’s outreach programme.[8]
SVT’s Outreach Programme is an initiative that aims to benefit society by offering free skilled labour to less economically developed countries (LEDCs). It is a long-term commitment that offers SVT employees a chance to participate in the program after ten years of continuous employment. This CSR initiative by SVT has several strengths and weaknesses, which are as follows:
Strengths:
SVT’s Outreach Programme has helped several LEDCs by offering skilled labor to various projects such as teaching in schools, repairing infrastructure, and providing training to local people.
The program offers a three-month paid career break to SVT employees, which can help employees develop new skills, gain new perspectives, and increase their job satisfaction.
The initiative has a positive impact on the company’s reputation, as it is seen as a socially responsible company that cares about society.
Weaknesses:
The program only offers skilled labour, which may not be the most effective solution for the problems faced by LEDCs. Other solutions such as providing funding, resources, or developing local businesses may be more effective.
The program is limited to SVT employees who have completed ten years of continuous employment, which may exclude employees who have valuable skills or experiences that could benefit the program.
The program may create a dependency on foreign aid, which may hinder the development of local businesses and economies in LEDCs.
Examine the scope of a PPP model (not for profit) for an organisation like SVT for the new product WF15. [6]
A PPP model, or Public-Private Partnership model, is a type of collaboration between the public and private sectors to achieve a common goal, usually a public service or infrastructure project. However, in the case of a not-for-profit organisation like SVT, the scope of a PPP model for the new product WF15 may differ from a for-profit organisation.
The following are some potential scopes of a PPP model for SVT and WF15:
Collaboration with government agencies: SVT could partner with government agencies to develop and distribute WF15 to low-income or underserved communities, as a public service. The government agency could provide funding or other resources to help SVT achieve this goal.
Partnership with other non-profit organisations: SVT could partner with other non-profit organisations that share similar values and mission to help distribute WF15 to communities that could benefit from it.
Collaborating with private sector companies: Even though SVT is a not-for-profit organisation, it could still partner with private sector companies to develop WF15. The private sector company could provide resources and expertise to help SVT develop and distribute WF15.
Fundraising and grants: SVT could also use a PPP model to raise funds and apply for grants to help fund the development and distribution of WF15. SVT could partner with foundations and other philanthropic organisations to raise funds and apply for grants.
Crowdfunding: SVT could also use a crowdfunding model to develop and distribute WF15. Crowdfunding allows individuals to contribute small amounts of money to help fund a project. This could help SVT reach a wider audience and raise funds more quickly.
Overall, the scope of a PPP model for SVT and WF15 would involve collaborations and partnerships with government agencies, other non-profit organisations, private sector companies, and fundraising and grant opportunities. The focus would be on providing WF15 to communities that could benefit from it, rather than generating profits for SVT.
State two features of a family-owned business as a form of business ownership (line 51). [2]
Family control: Family-owned businesses are controlled by a family or a small group of families who have ownership and management control. This means that the business decisions are often made by family members or close relatives.
Long-term focus: Family-owned businesses are often focused on long-term success and sustainability, rather than short-term gains. This is because the family has a vested interest in ensuring the success of the business for future generations, and may prioritise reinvesting profits back into the business instead of taking them out as dividends.
Identify two features of non-governmental organisations (NGOs) (line 104). [2]
Non-profit: NGOs are typically non-profit organisations that do not distribute profits to owners or shareholders, but instead use their resources to pursue specific social or environmental objectives. They are often focused on advocacy, education, and/or service delivery to address societal issues.
Independent: NGOs are independent of government control and are typically run by a board of directors or trustees who are responsible for setting organisational strategy and ensuring that the organisation’s activities align with its mission and values. This independence allows NGOs to operate flexibly and respond quickly to changing circumstances.
Identify two features of charities (line 104). [2]
Charities are organisations that are tax-exempt under the law because they are dedicated to charitable purposes that provide a public benefit. This means that charities are exempt from paying taxes on any income or donations that they receive. This tax-exempt status is granted by the government in recognition of the public benefit provided by charities.
One way that charities are able to raise funds is through donations from the public. Charities often rely on the generosity of individuals and businesses to support their activities. They may use various fundraising methods, such as direct mail, online donations, fundraising events, and corporate sponsorships, to raise funds from the public.