Higher BM 2009

Section One - Question 1

2009-05-15T18:17:00.001-07:00

Remember this is worth 10 marks. Getting a good number of marks here could be the difference between bands.

Read the question.
Read the Case Study. Use your highlighter if you see things that relate to the topics asked.

eg if it asks you for:

marketing
finance
operations
external factors (PESTEC)

look through the case study for such things.

Make sure you put them down as headings or else you will only get a maximum of 3 marks.

Identify PROBLEMS - not solutions.

Use bullet points. Don't waste time writing tons here.

Remember as well that some problems may be inferred and not hit you in the face. So think! Naturally 5 out of the 10 marks will be easy to come by, but the other 5 may be a bit harder.

The normal headings you may be asked are:

Marketing (customers, products, market research, pricing, advertising etc)
Finance (budgets and money)
Human Resources (employee problems, unions, job satisfaction, strikes, pay disputes etc)
Operations (buying in materials from suppliers, stock, quality control, making/producing the product)
Internal Organisation/Corporate Culture (what ethos has the firm got? What structure has it? Management style? What type of grouping?)
External Factors (PESTEC - Political Economic Social Technological Environmental and Competitive)
Other ( in here put anything else you can think of)

There may be a new one to do with using Technology, but use your common sense!

Make sure you write at least 10 points and spread them out.

eg. Don't have 6 in Marketing and none in Finance.

Describe the stages in the recruitment and selection process

2009-05-11T04:34:00.000-07:00

The first stage in the recruitment process is to identify a job vacancy. People may retire, leave for another company or gain promotion within the organisation.

Once we have identified a need for a vacancy the Human Resources Department would create an application pack for candidates. Included in this would be two documents: Job Description and Person Specification.

The Job Description document details job title, salary, duties and responsibilities of the position, whereas Person Spec displays the skills and qualifications required by the ideal candidate. The qualities can be divided into ESSENTIAL and DESIRABLE. Essential are the basic requirements of the position eg Teachers need to have a degree in their subject, whereas Desirable would be qualities that would be an advantage, such as a Teacher being qualified in more than one subject.

Following on from the application pack, the job has to be advertised. The organisation must decide whether to advertise internally (within the organisation) or externally (outwith the organisation).

Internal recruitment is financially cheaper than external recruitment and you know the candidates as they already work for you. On the other hand, external recruitment offers a wider pool of skills/candidates which may bring new ideas into the company. External recruitment is time consuming since time has to be taken to agree the advert, publish it and then set a deadline for application returns.

Candidates are asked to fill out application forms which are the first opportunity for candidates to answer questions set by the company. CVs may be used at this stage which are returned to the company.

The firm then filter out poor candidates based on their responses in the application form. They compare their skills and experiences with what was laid out in the Job Description and the Person Specification.

Next the leet is arranged. This is when candidates who are being invited for interview are sent a letter informing them of the time, date and venue of the interview.

At interview, all candidates are asked the same questions which help identify who would best fit into the organisation.

Other selection methods that may be used include:
Tests
Assessment Centres

Tests may test a candidates intellectual ability (IQ test) or their physical fitness.

Assessment centres are normally only used for high powered jobs. They are very expensive and are usually 2-day residential courses where every aspect of managerial skills are tested such as problem solving, prioritising, leadership, and communication skills.

Once the interviews are completed the panel meet together to decide who was the best candidate. Then once they have made their decision the candidate is informed by telephone or letter that they are successful. The candidate can still turn the job down at this point, and if they do so, the job then is offered to the next best candidate.

Hot Potatoes

2009-04-23T01:41:00.000-07:00

Today for a break in past papers, I want you to create 20 questions on one unit of the course using Hot Potatoes.

The software can be found:

Start
All Programs
Accessories
Hot Potatoes

Once loaded up select JQuiz

You will need to have some false answers, but I would try and make it quite difficult.

We need a spread of topics to make the exercise worthwhile. I will demonstrate how to create a quiz using Hot Potatoes before we start.

Today!

2009-03-19T05:34:00.001-07:00

Today's plan of action:

NAB Resits for 3 students

Finish Class Presentations

Those who are finished Class Presentations can work on Higher Business Management Topic by Topic Revision Questions found in :

My Computer
RM Shared
Business Education
Higher BM (Revised)
09. REVISION
Higher Business Management Past Papers Booklet Topic by Topic Revision

What to do is copy it over to your My Documents and then answer the questions in a different colour font (best to use RED).

Staff Training

2009-02-19T06:18:00.000-08:00

2005 Past Paper Question and Solution

Discuss the costs and benefits of training staff.

Costs
Financial costs of courses
Working time is lost
Quality of work may be slower/poorer quality when staff are training
Resistance to the benefits of training

Benefits
Increased competence
Improves flexibility of staff
Increased motivation of staff
Increased production levels
Easier to introduce change
Image of organisation improves

Cash Flow Question

2009-02-19T06:15:00.000-08:00

From 2005 Past Paper

Identify 4 sources of cash flow problems and suggest one solution for each source you have identified.

Sources of cash flow problems:

too much money tied up in stock
allowing customers too long to pay
debtors not paying on time
high levels of borrowing along with high interest rates
high drawings
low sales
high expenses
purchasing capital equipment

Solutions
introduce JIT
offer discounts to encourage prompt payment
offer discounts/promote cash sales
sell any unused assets
reduce loans by eg increasing number of investors
debt factoring
sale and leaseback
extended credit
arrange overdraft/loan
cut costs
promote product or serv

Prelim

2009-02-05T01:59:00.000-08:00

I hope you all did well in the Prelim.

I think it was pretty fair and the only problem I would say is that sometimes it is a test of English that sometimes throw people off. And by that I mean students sometimes write the wrong answers when if it was explained in plain English they would be able to rattle off 2,000 words.

Unfortunately that is a problem that has to be met for the final exam.

I have told you that the cut off scores will be inflated by 5% to help for appeals.

Students who totally blow the exam will have to drop down to Int 2. For those students we will see on an individual basis whether it is better for them to sit the Int 2 NABs or to complete the remaining Higher NAB.

For borderline candidates we will talk and see what you feel about it.

And again, I am not being Mr Nasty here. It is just that our job is to make sure you guys all achieve and do not fail. It is better to pass at Int 2 than fail the Higher.

I will try my best to get it marked and returned for you by Monday, but I do have another Higher to mark also. So please don't go mad if it is not done. And again... some other subjects may have it marked quicker than me but that is because they either have only one Higher class or they have more members of staff and they can divide the workload!

I hope you all did well and we shall soon find out!

Online Notes

2009-01-28T06:18:00.000-08:00

I have uploaded our booklets to a new document host and it is quite good. You will see it embedded onto the blog. All you do is click on it and scroll up and down. You can also make it full screen.

It should help if you are online and don't have your notes handy.

Pupil Solutions to questions

2009-01-15T06:30:00.000-08:00

HRM – Recruitment & Selection, Training

Please research and complete these questions in a different font and then print off your completed answers.

RECRUITMENT

Define the following terms:

Job Analysis
A job analysis is when they investigate what the job entails and all its duties.

Job Description
A job description is a document which outlines the roles and duties of the job, the title of the job, line managers and salary for possible interviewees to look at.

Person Specification
A person specification is a document which outlines the essential and desirable qualities that the candidate must possess to apply for the job. This includes skills and personality traits.

Explain the advantages and disadvantages of internal and external recruitment

Advantages Disadvantages
Internal o Cheaper;
o The candidate is already known to the organisation;
o Less time consuming;
o No new training needed. o No new ideas/skills are coming into the organisation;
o The candidate may not be capable of carrying out this role.
External o New person will be brought into the organisation that possesses new skills and ideas;
o There is a wider selection of candidates. o Very expensive;
o Time consuming.
o May not fit into the organisation;
o Will have to train new employee.

SELECTION

Discuss the various selection methods that can be used by an organisation.

o application forms, including letters of application and telephone applications;
o interviews;
o psychological tests;
o Aptitude tests.

Explain the importance of selection to an organisation.

Selection is important because there could be many candidates for the job, with very similar qualifications so an organisation must be able to choose one person who suits the position the best.

TRAINING

Describe the different methods of training available to organisations
Induction Training - designed for new employees to introduce them to company policies.
On-the-job Training - takes place while doing the work with someone watching and assisting you.
Off-the-Job Training - takes place away from the work place such as college courses or an ‘in-house’ training programme.

Discuss the advantages and disadvantages of developing and training your staff

Advantages Disadvantages
o They learn how to do their job to their optimum;
o Boost moral;
o Increases productivity. o Expensive;
o Time consuming;
o May be irrelevant and make no difference.

Explain what is meant by Staff Appraisal

A staff appraisal is a report on how well an employee is working and progressing. Usually carried out by line manager where they meet the employee for a regular meeting discussing how well the employee is progressing.

by Melanie

Payment Systems

2008-12-18T04:13:00.000-08:00

Payment systems

The search for a way to motivate, reward and even control labour has led managers to devise a variety of payment systems.

Time-rate payment systems
These are simple payment systems where the workforce receives a basic wage or salary. Workers are rewarded for the amount of time they spend at work, and for most workers in Britain this is the average working week of thirty-six hours. In addition, holidays with pay are usually included. The system is very common in many jobs from teachers to bank workers and shopkeepers. It provides a simple method of calculating payment for employees, whether they are paid hourly, weekly, or monthly. It also overcomes difficulties that might arise when trying to work out the exact value of an employee’s work, for example a doctor. From the employee’s point of view such a system guarantees income.

Overtime
There are instances where employers operate a time rate system, but also offer overtime payments when individuals work for more than their normal number of hours per week. Overtime payment systems are common in the construction industry, for example.

Piece-rate payment systems
In manufacturing industries the most common method of payment is some form of payment by results, or a productivity related scheme. In some instances this can simply be payment to the worker for each item he or she makes/produces. This system was very common in the soft fruit industry where workers would be paid by the weight of each basket of strawberries or raspberries they picked. It is also felt to offer the greatest incentives to employees to maximise their output – the more they produce the more they get paid. However, a system that only offers piece-rate payments may result in little or no income for employees, because of breakdowns in machinery or other unplanned stoppages.

Piece rates plus a basic or fixed pay element
To avoid the problems mentioned above, some employers calculate pay using a system made up of two elements. Firstly, they will pay a basic or fixed-rate wage calculated on a time rate basis, and then to this they will add a variable, piece-rate element, calculated on output.

Commission payments
When looking to establish payment systems for a sales force, it is very common to base this too on a flat-rate wage supplemented by some form of commission based on sales volume or value achieved. In some organisations the greatest part of the wage received by the sales force comes in the form of commission paid. This has led to complaints that such workers may use pressure tactics in order to achieve sales – and maintain their own income levels.

Fringe benefits and non-financial payments
This covers any payments other than wages and salaries that an employer might make. They include private medical insurance, subsidised meals, company cars or loan and mortgage facilities. Since the 1960s fringe benefits have increased in importance, particularly in the managerial and professional sectors.

Bonuses
Another common production payment system is one that operates with a flat rate of pay that is then supplemented by a bonus directly related to the output
each worker, or group of workers, achieves. Such bonuses might be related to setting targets for:

• volume of output,
• quality standards achieved,
• reductions of wastage,
• improved machine use,
• reduction in the loss of working days through workplace accidents. (This last example is very common in the North Sea oil industry.)

Incentives to professionals
It is generally accepted that professional employees, for example dentists, doctors and other health service specialists, receive a basic salary from their employing health authority, but can enhance this by undertaking private patient work for which they receive payment on an individual case basis. There has also been an increase in ‘no win no fee’ legal cases in recent years. Based on a system devised in the USA, and particularly common in civil law suits for damage claims, the client only pays the lawyer a fee if the outcome of the case is in his favour. The percentage rate of the fee will be set out and agreed before the legal action is started.

Contract employment
It is becoming more and more common for employers to hire staff on a contract basis. This may be for the completion of a job or project, for example the building of a new stretch of dual carriageway, or may be for a fixed time period of, say, one university academic year. The employer can make substantial savings using a contract basis for employment – it is unlikely that he will offer paid holidays, pay for days lost through sickness, maternity pay or a company pension scheme. From the employee’s point of view the rate of pay is often higher than for those on permanent contracts. But there is a high degree of uncertainty and risk of loss of income when the contract ends.

Profit-sharing schemes
Although not widespread in Britain, there has been a move in recent years for employers to use systems that include a share of pre-tax profits as part of the payment made to the workforce. Some employers feel that this system is likely to increase the commitment from the workforce, not only in terms of output, but also in overall terms to the organisation itself. However, others are less enthusiastic and feel that the relationship between daily output and annual profit-share payments is too remote to be an effective motivator.

Reason for Preparing Budgets (2006 Past Paper)

2008-12-18T04:08:00.000-08:00

Why are Budgets prepared? Remember there are different types of budgets.

Monitoring and control – comparison of actual performance with the budget

Allows the firm to take corrective action, eg increase production to meet forecast sales

Allows managers to organise resources

Sets targets for management and employees to reach

Individual managers/departments can be allocated budgets so that control is tighter

Cash budgets highlights periods when a negative bank balance is expected so finance can be arranged in advance

Forecasting cash surpluses allows a firm to invest money in assets

Allows managers to identify problems

Offer solutions

Plan for the future

Describe the advantages and disadvantages to an organisation of a structured decision making model (2005)

2008-12-18T03:28:00.000-08:00

Again, here is a solution to a question that students struggle with. I think it is best to think about the decision being a Product Decision ie something that relates to whether or not we should launch/update/modify/alter/recall/drop products.

So with that in mind, think about the Cadbury's Fuse video. What would affect them as decision makers?

Time consuming to gather and analyse information – if a solution is needed quickly the structured model may slow down the process

Can be expensive to evaluate if the decision was a success or not.

Not always possible to gather sufficient information of quality

May stifle creativity - structured decisions leave no room for brainstorming or idea generation at times

Government legislation may interfere with the decision or change the effect of the decision.

Sometimes difficult to come up with alternative solutions – the best solution for the organisation may not suit the decision maker personally

Sometimes difficult to realise all the consequences of different solutions

Technology may be expensive or unavailable which can limit decisions.

No rash decisions made as time is taken to analyse the information

Information is gathered in quantity and of quality

Time taken to develop alternative solutions

Unmotivated workers may not perform as they were expected to, thus diluting the effect of the decision. They may not even agree with the decision.

Competitors may move the goalposts by making decisions of their own which counteract yours.

Quality Systems and how to improve quality

2008-12-18T03:16:00.000-08:00

Benchmarking
Copying the best techniques used by other organisations
Products/services taken apart and re-engineered.
Can result in a better product than the original.
However if it takes time, competition may have moved on from what was the original best practice.

Quality Circles
Small groups of employees from different departments and at different levels of management who meet to discuss and solve quality issues.
Improves the workforces motivation as they feel more valued as their opinions are taken into consideration.
Suggestions are made to management for approval

Quality assurance
Products are checked at various stages during production
Unacceptable products are discarded

TQM (Total Quality Management)
No errors tolerated
Treat everyone in the production chain as a customer therefore creating a Quality Chain.
Based on Kaizen philosophy (Continuous improvement)
All staff involved and committed to ensuring high quality (unlike Quality Circles where only small groups are targeted)
Work processes scrutinised
Constant strive to make processes more efficient and reduce waste
Focus on teamwork
Training provided

BSI
A national standard for certain products
When a business meets the standard its product can carry the BS Kitemark
Other quality standard symbols also exist (Lion marks on eggs)

Recruitment
Quality staff need to be appointed
Staff with appropriate qualifications, skills and qualities must be appointed

Training
Quality training must be provided regularly

Materials and Equipment
Good quality materials must be purchased
Equipment must be maintained regularly

Workplace Legislation

2008-12-18T03:10:00.000-08:00

Health and Safety at Work Act 1974
States employees’ and employers’ duties with regard to health and safety
Employers have a duty to take responsible care of their own health and safety as well as that of their employees

Office, Shops and Railway Premises Act 1963
States regulations which must be met by employers regarding working temperatures, toilet and washing facilities, first aid, space requirements, cleanliness

Equal Pay Act 1970
States that all employees should receive the same pay when work of equal value is undertaken

Race Relations Act 1976
Unlawful to discriminate on the grounds of race, colour, religion or ethnic origin regarding recruitment, training, promotion, conditions of service

Sex Discrimination Act 1975
Unlawful to discriminate on the grounds of sex or marital status regarding recruitment, promotion, training, conditions of service
Victimisation and sexual harassment are unlawful

Employment Rights Act 1996
States duties and rights of employer and employee
Includes the right to a written Contract of Employment within 2 months of starting work
The right to an itemised pay slip
Rights of employees regarding Sunday working
Rights of employees regarding maternity and termination of
employment

Data Protection Act 1998
Data must be obtained fairly and lawfully
The organisation must register the purpose for which the information is held
They must keep records for no longer than necessary
The information must be up to date and accurate
Employees have a right to request to see information held about them and have it changed if incorrect
The information should not be used for any other purpose than that for which it was collected
They must take appropriate security measures to keep the information safe

Sources of Finance

2008-12-18T03:07:00.000-08:00

Leasing
Renting of vehicles or equipment
More expensive in the long term than buying the asset
Asset is replaced when obsolete
Spread payments

Share issue
Dividends have to be paid to shareholders
Loss of control possible
Can generate large amounts of money/capital

Debentures
A long term loan to plcs
Debenture holders receive fixed interest
Debenture holders receive the money lent back

Venture Capital (think Dragons' Den)
Venture capitalists lend money when banks think it is too risky
Large amounts lent but interest is high
Part ownership often needed in exchange for finance

Hire purchase
A deposit is required and the rest of the price is paid in instalments
Ownership remains with the finance company until the last instalment
is made

Mortgage
A large sum of money borrowed from a bank or building society to
purchase property
Monthly repayments required (interest)
Long term borrowing eg 25 years

Grants
Some of the money paid by eg Local Authority or Government
No need to repay a grant
May be given if organisation is creating jobs in an area of high
unemployment etc

Sale of asset (Divestment)
Equipment or property which is no longer required is sold off to raise
cash

Retained profits
Profits made are not distributed to the owners but kept back for
reinvestment

Costs and Benefits of Staff Training

2008-12-18T03:03:00.000-08:00

People are an organisations greatest resource. But they have to know how to do their job. Skills have to be updated and renewed via training, which can be on-the job or off-the job.

But like everything there are costs and benefits. So again, taking this from the 2005 Higher solutions here are some short answers for your study!

Costs
Financial costs of courses
Working time is lost
Quality of work may be slower/poorer quality when staff are training
Resistance to the benefits of training

Benefits
Increased competence
Improves flexibility of staff
Increased motivation of staff
Increased production levels
Easier to introduce change
Image of organisation improves

How ICT can aid Stock Control

2008-12-18T03:02:00.000-08:00

ICT can have different uses in Stock Control:

Scanning bar codes means stock records are updated immediately on receipt or
issue of stock

Managers can identify best sellers and non movers easily

Managers can obtain the total stock figure at any time of the day

Can identify which products sell best at certain times of the day or year

Computer can be linked to the supplier resulting in product being automatically recorded when re-order level is reached

Spreadsheets could be used to record information and totals and balances will be calculated using formulae

Fax/email allows accurate orders to be placed

Understocking and Overstocking

2008-12-18T03:01:00.000-08:00

Understocking
Cannot cope with unexpected changes in demand
Production line may have to stop – therefore firm is paying an idle labour force
Cannot meet customers’ orders so they may choose to go elsewhere
Increased administration costs if firm is frequently re-ordering

Overstocking
High costs of storage and maintenance
High insurance costs
Possible need for security measures
Large amount of space needed
Money is tied up in stock which could be used elsewhere
Stock may deteriorate or become obsolete
Safe disposal incurs extra cost

This answer was taken from the 2005 Higher BM paper, so remember to expand!

Budgets

2008-12-18T02:33:00.000-08:00

Budgets are a financial plan used by firms to allocate resources for the future.

Why do we use them? ****

Cash Flow

2008-12-18T02:29:00.000-08:00

Cash Flow is a statement which lists all likely inflows and outflows of cash on a monthly basis.

Many businesses fail due to poor cash flow.

A prediction so adjustments can be made to expenditure or income,

Such as leasing equipment
Increasing revenue
Invest in assets for the future
Borrowing arranged.

More likely to convince lender if it can be shown that the money borrowed could be paid
back.
It could be used when applying for bank loan
Or when making comparisons between years.

Businesses must stick to the cash flow forecasts where possible.

Cash Flows can help arrange short-term loans and overdrafts which can be arranged ahead of time which helps keep costs down.

LIMITATIONS OF CASH FLOW
Previous records have to be accurate in order to aid future planning.
Does not take into account one-off happenings, it is based on what is known and regular.

Why use Accounting Ratios?

2008-12-18T02:21:00.000-08:00

Ratios are used in business because they are measureable and can be used in the decision-making process.

It allows companies to compare their performance with competitors.

It can judge how profitable a firm is and how liquid (ability to pay off debtors) it is.

It also allows firms to compare their own yearly performance.

It can be used by banks as a measure to grant or deny loans.

There are some problems however:

Ratios are historic, so info may be out of date.

External factors are not taken into consideration. For example, there could be a worldwide recession, or an event in the firm's life that has a serious affect on it. Perhaps a natural disaster like Hurricane Katrina or the burning down of a warehouse (though hopefully insurance would come into it!).

Other factors have to be taken into account, like the ability of the workers

However it has to be with similar competitors (you have to compare like with like, ie Tesco judging performance with a local grocer is pretty silly!)

Remember the different Ratios?

GROSS PROFIT PERCENTAGE

NET PROFIT PERCENTAGE

RETURN ON CAPITAL EMPLOYED

WORKING CAPITAL RATIO (CURRENT RATIO)

ACID TEST RATIO

RATE OF STOCK TURNOVER

What does a Balance Sheet show?

2008-12-18T02:19:00.001-08:00

A Balance Sheet is a snapshot of how much a business is worth at that given point in time.

It lists the value of the Assets (what it owns) and the Liabilities (what it owes).

Balance Sheets also show how the business is financed (where the start-up money came from, loans from banks, family & friends etc).

What does a Profit and Loss Account show?

2008-12-18T02:16:00.000-08:00

A Profit and Loss Account is used to illustrate the difference between the businesses Gross Profit (or it could be a loss) and the expenses that have been incurred.

From this we then come to what is called the Net Profit, which is the money made from sales and trading less all other expenses.

The Profit and Loss Account is calculated over a financial period, normally one year. Many firms financial year is April to April, but not always.

How ICT can be used in business

2008-12-18T02:14:00.000-08:00

ICT is obviously a great tool in the hands of modern businesses. But how do they actually use them? Here are some ideas and uses. Please feel free to add some more and tell me!

In terms of Customers
Businesses can send customers special offers via email.
Businesses arrange so customers can buy online through e-Commerce.
Businesses can store customer details in a database which can be used to generate the mailshots.
In certain cases, for example O2, customers can be sent text messages to inform of updates and special offers.

In terms of Employees
Businesses can set up an Intranet to let employees share information and communicate with each other.
Videoconferencing can be used to communicate with different branches.
Interactive DVDs can be used to highlight good practice, such as a Health & Safety video.
Sales Reps can be issued with mobile phones and laptops in order to keep in touch with the office.
Businesses can set up a remote access link like Easy Link so that employees can access their work folders from home.

In terms of Suppliers
Businesses can make orders to suppliers via email, which is instant.
They can also use mobile phones to keep in regular touch with suppliers.

Value of Information

2008-12-18T01:53:00.001-08:00

In questions like this is it actually pretty easy to collect a lot of marks. What to do is give a quick definition of what each one means and how it affects decisions getting made.

Say for example Gordon Ramsay wants to open a new restaurant in LA. He gets info from other British chefs who work in the US.

Is information:

Accurate? - is the information true and correct? Gordon many be misled by what the Chefs say.

Timely? - is the information out of date? When was the info collected? Gordon may find that what the Chefs tell him is not what is happening currently. This may be important in terms of who the customers will be and what suppliers he may have to buy from.

Complete? - is Gordon getting the full picture from the Chefs? Perhaps he should talk to customers and suppliers also? Plus are all the Chefs successful?

Appropriate? - is the info relevant? Gordon may be talking to Chefs based in Chicago, New York and Miami. LA is very different, and even within LA there are very, VERY different neighbourhoods of ultra poor and mega rich, and diverse ethnic populations.

Available? - is the info easy to collect, and if so is this still good?

Cost effective? - is it worthwhile for Gordon to collect this info? And even at that is it valuable enough or will he have to conduct an expensive survey?

Objective? - Is the information biased? Gordon may be misled by Chefs who perhaps either don't really know the market or in fact may want him to fail. Or he could be told porkie pies!

Concise? - is the information to the point and not long winded? Gordon is a busy man. He doesn't want a report the size of War and Peace, though it still has to contain the information he needs.

Product Life Cycle - Extension Strategies

2008-12-18T01:44:00.000-08:00

The Product Life Cycle diagram displays a product going through the process of development, introduction, growth, maturity (sometimes saturation) and finally decline.

But remember the products that are still with us? How do they do it?

They renew themselves in one way or another.

The best way to answer a question like this is to think about changing or modifying each of the 4Ps of the Marketing Mix: Product, Price, Place and Promotion.

Changing or modifying the product could result in a change of shape or colour or indeed new additional and improved features, for example wireless broadband.

Altering packaging can transform the perception of a product. It may introduce brighter, more child friendly colours or eco-friendly packaging to appeal to a different market segment.

Changing where a product is sold can extend its life. Making products available online increases the customer base considerably. Also remember the Brother Typewriters. They were made obsolete in the West by the Word Processor, then the PC and now the laptop. But they still sell in the Third World where electricity is still not available to everyone.

Changing prices either up or down can extend the product, though in most cases it would be lowering price to allow it to be more affordable to more customers.

Changing the way a product is advertised/promoted can extend its life. Using sales promotions and BOGOF attracts more customers who are perhaps looking for savings.

What External Factors might affect a Firm moving abroad?

2008-12-18T01:36:00.000-08:00

When you get to see Michael Moore's excellent debut film Roger & Me which is about the decline of General Motors in Flint, Michigan, many of the problems that occurred there in the 1980s happen over and over, all over the world.

In the UK many firms have relocated abroad (even though with the Pound becoming very weak it will encourage investment from abroad as we will have cheaper labour, premises and machinery) but what are the reasons behind this?

Interest rates are important. If interest rates are lower somewhere else, then it makes sense to borrow high sums that mean you don't have to pay as much back.

Taxation is also a factor. The UK seems to be taxing everything! Corporation Tax and VAT are two taxes that affect a firms costs. Though recently the Government have reduced VAT from 17.5% to 15%, though this is only a temporary measure.

Cost of Labour - UK employees have a minimum wage which builds in costs for firms. Workers may be cheaper abroad to employ.

If the Pound is strong, then it is very expensive to export goods from the UK to Europe and the US.

Foreign Governments offer subsidies and grants to firms who wish to relocate to their countries. This is an incentive to attract profitable firms. Remember these firms will create jobs and workers pay taxes! This gives the Governments their budgets to spend on their policies. It is common sense really!

Competitive Pricing Strategies

2008-12-18T01:35:00.000-08:00

There are three main types of competitive pricing that is used in businesses at present.

Low Price
This is when a firm charges a lower price than the competition.
It is used to create interest and awareness. This in turn will boost sales.
It works best when customers are not very loyal to any particular brand and in markets that are price sensitive (meaning that they are highly responsive to changes in price)
It is often used in highly competitive markets, not a good idea to be used in markets with one or two main competitors.

Penetration Pricing
This is used when entering a new market and is set very low, sometimes at a loss.
This can generate high sales and a large market share very quickly.
Once the firm is established, the price may well go back up.

Destroyer Pricing or Predatory Pricing
This is used normally in existing and highly competitive markets. It is actually illegal as it is deliberately used to eliminate competitors.
Large firms often do this to get rid of small or medium sized competitors. Large firms can take losses for longer and once the small firm has went bust, they can absorb their customers and revenue.
Markets that have firms using destroyer pricing are often seen as high risk and may put off new entrants to the market.

DATA PROTECTION ACT

2008-12-18T01:34:00.000-08:00

Some key points about the Data Protection Act

• Org must be registered with the Data Protection Registrar
• Data must be obtained lawfully
• Data not held for longer than needed
• Only data needed for purpose should be kept
• Data must be up-to-date
• Data subjects have right to see info on request
• Data must be changed if incorrect

This was taken from a past paper marking scheme, so remember don't just write these down in an exam. Write them in sentances and put in context where possible.

Effective Stock Control

2008-12-11T10:01:00.001-08:00

The Stock Control Diagram is an important issue when talking about effective stock control.

It is vital to remember that when you are answering any questions on this you must describe/explain the different elements that make it up:

Maximum Stock Level

Minimum Stock Level

Re-Order Level

Lead Times

Re-ordering Quantity

In summary,

be able to draw the diagram

be able to explain/describe the above elements = so we're looking for a definition and then something to beef it up.

Any problems, make an appointment to see me at lunch or after school.

Or you could use technology! Email or Blog me!

Role and Importance of Operations

2008-12-11T09:56:00.000-08:00

One issue I have noticed in class is the problem with the book's definition of the role and importance of Operations.

THE ROLE OF OPERATIONS
I would say that Operations' Role is to make sure that the right resources in the right quantities are being purchased to ensure production.

This obviously would then help satisy consumer demand.

Or you could even mention that Operations is the process of transforming raw materials into the finished product.

THE IMPORTANCE OF OPERATIONS

Operations is a core activity of the business, It could not function without it. It also attempts to minimise waste and this would lead to an overall reduction in costs (less reworks, less raw materials being bought in).
Operations is important because it creates the products which are going to be sold to end users (consumers).

I hope that clears it up a bit, and I think I will amend the BM Handbook for next year to include what I have just written.

Improving quality in organisations

2008-12-11T09:24:00.000-08:00

Different Quality Systems or procedures are used to attempt to improve the standard in the organisation.

Quality Circles are good ways to improve. They are when you have different people from different levels in the organisation and from different departments coming together to solve problems.

These groups are normally very small and they offer suggestions to improve the working process or the product/service being offered.

It has a major positive impact on staff morale as employees feel valued and consulted.

BSI - the British Standards Institution is famous for the Kitemark quality seal. This gives products the stamp of approval. It aims to promote quality at all stages of production.

Benchmarking is when you find a Best Practice and then go about copying or emulating it. It may end up seeing the imitator outperforming the original benchmark. Though it is wise to remember that they are copying something that could be out of date by the time it is ready for market.

Also by setting targets that motivates staff. Think of your own target setting in Higher Business Management!

TQM or Total Quality Management involves what is called a Quality Chain - everyone being treated as a customer along the production line.

It thrives and encourages teamwork. Every person in the organisation has a remit for improving quality.

This ties in with the Japanese philosophy of Kaizen or continuous improvement, something you should think about with regards to your studies!

Training & Development - Investors in People - if you invest in your workers/employees then they will gain more skills and the end product should become better. Less waste and an increase in efficiency would be seen also.

Better Raw Materials - GIGO or Garbage In, Garbage Out. In other words, the better the materials you buy in from your suppliers, then the better the end product will be. Look at Gordon Ramsay's Kitchen Nightmares. He is always banging on about good local produce and if your starting ingredients are of good quality it will help the diner's experiences and of course your reputation!

Revision Plan

2008-12-05T21:55:00.000-08:00

I think the Friday revision plan is a great idea. In line with last year I will assign you exam questions which you will have to answer (with a partner) in the form of a presentation. This will be done outwith of classtime and preparing you for college/univeristy life.

Parents' Night was very useful. It is always nice to meet the people behind you, so to speak, as they really want you to do well. That means that if we work as a team (Pupils, Teachers and Parents) then we can improve the odds of success.

I told you guys (and gals) the target for this year is the 32 UCAS points achieved by Class 2007-08. We have a smaller number, but that means more of you will have to get Bs or As. Can it be done? Of course it can.

Another important item brought up and discussed with you and again at Parents' Night was Study Skills. I will try to show you the best I can how to answer questions (I am not an English teacher sadly) and also how to take notes. Summarising information is a vital skill for academic life. And you have to CONVERT your notes or your reading. It could be turning them into mind maps, using coloured pens to highlight key points, or using graphic organisers... there are a myriad of different forms.

So remember that on Fridays, bring in your coloured pens and pencils, your highlighters... and I'll provide the scissors and glue. BUT please remember to bring in newspapers, especially the Business or Finance sections. You can bring them in during the week and on Friday we can review them.

And just to recap:

MON - Theory, with Q&A and Class Discussion
TUE #1 - ICT Research Tasks/Investigations
TUE #2 - Groupwork, Case Study or Homework Feedback
WED - Theory, with Q&A and Class Discussion
THU - ICT Individual Outcome Presentation
FRI - Revision, Paper Review, Study Skills

Also now that there is a bit more meat on the bones of the course we can do more quizzes. If the projector was easier to get started I'd do it on the PC, but to save time I will probably print it out.

Also keep your Glossaries with you for in class and then at home for revision and homework.

The Finance and HRM booklets have been copied, and I will issue them early, because you can study over Xmas.

Also, we will have to update your target setting booklet to include the start of Operations. I hope you have kept them all in class!

Finally, I will get the past papers from 2006,2007 & 2008 turned into an A5 booklet for you, WITH the marking scheme. Remember the bullet points are only there to help you find the key points. It has to be in context and be appropriate to the command word.

So the last 2 weeks have been productive, and the questionnaire was a good motivational tool. If we aim high and act like A Candidates there is more likelihood of success.

As the Sgt Apone says: "Let's move like we've got a purpose, people!"

Pupil Questionnaire

2008-11-04T13:04:00.000-08:00

I have emailed you a Pupil Questionnaire, which is to be used both for target setting and as a self-evaluation tool.

It is not anonymous, as I am looking for people's strengths and areas for improvement.

Please do not feel threatened, but be rather be honest and truthful.

If there are areas to improve we will look at strategies to bridge the gap and take into account the way you learn best.

Web Based Notes

2008-11-04T13:03:00.001-08:00

I have decided to save copies of the Core Notes on the network as webpages.

Any important materials will be uploaded onto the blog or emailed to you.

AB Test

2008-11-04T13:00:00.000-08:00

I have decided that the AB Test will be held on Tuesday 18th of November in X2 and then X3 during the double period.

The AB Test is an important tool in order to focus you on the job at hand, which being totally brutal is passing exams.

Take the Test seriously, as while it is not a Nab, it will be used to consider the level you should take the Prelim.

As I have said before, I expect you to read between classes and take an interest in Business news, either on TV or on the net.

2008 Business Management Research Project Presentation WINNERS

2008-10-11T15:03:00.000-07:00

Last year Jennifer McKendrick and Emma Lees won the Prize but in this year's battle of the sexes the boys have emerged triumphant.

The standard of presentations were very, VERY high. A worthy mention goes to Melanie Robertson and Catriona Jack for their excellent Diageo presentation but our judges ruled that the winners were REGGAE REGGAE SAUCE and the all male team of Grant Garrett, Fraser Porteous and Head Boy Grant Cuthbert.

The lads' presentation was very interesting and entertaining. The subject matter obviously helped, with the boys even showing a clip from Dragons Den of the sauce's creator, Levi Roots, unique musical pitch.

I will be publishing the presentations via slideshare pretty soon.

Outcome 1 Revision

2008-10-01T06:26:00.000-07:00

Now that we are finished Outcome 1 - Business in Contemporary Society you will need to be aware of what you need to know!

definition of business and business activity
the business cycle
needs and wants
goods and services
factors of production
industry sectors (primary, secondary & tertiary)
business sectors (private, public, voluntary)
objectives
entrepreneurs (the role of)
types of ownership (the different types of business, be alert for compare and contrast)
methods of growth (integration)
stakeholders
PESTEC Analysis (external factors)

I will cover Sources of Finance in class soon. This does recurr in Finance, but it is needed for one of the homework questions.

2008-09-09T01:54:00.001-07:00

I have added some excellent presentations by Higher BM 2008.

Your mission when it comes is to top these three. This was revision work for the final exam, so don't worry if some of the topics are unknown to you just now.

2008-09-03T00:36:00.000-07:00

Now that you have all discovered the wonders of the Internet, perhaps then you can start finding business stories that you find interesting and that relate to parts of the Higher/Int 2 Business Management course.

If you do please do not copy and paste large sections of it. Give a hyperlink to the full article and write a short summary of what the story is about and more importantly what YOUR opinions are on it.

Broadening your knowledge outside of textbooks is vital to help you understand the wider world!

2008-09-02T03:59:00.000-07:00

orite

2008-09-02T03:58:00.002-07:00

Heeeeeeere's EDDIE!!! >:)

2008-09-02T03:58:00.001-07:00

hi there.anytime u want to borrow a pair of golf trousers jst give is a shout.u mite need to wear them as turn ups as ur a bit of a smurf.

2008-09-02T03:58:00.000-07:00

Ma namess Naomi am fae the row !

2008-09-02T03:56:00.003-07:00

hiyaa =)

2008-09-02T03:56:00.001-07:00

hia :)

hey there

2008-09-02T03:53:00.001-07:00

hey there flullfy mcgowan
loving the hair doo !!

2008-08-28T13:49:00.001-07:00

I will be looking for revision materials to be posted onto the blog very soon.

Therefore dig out your imaginations and your notes!

"When you go will you send back..."

2008-08-27T02:44:00.000-07:00

Glossary homework is due on Monday 1st September.

So far we have covered the basics of Needs and Wants, the Business Cycle, Factors of Production and Business Industry Sectors and of course De-industrialisation.

Remember our friends the Proclaimers and their song "Letter From America" and if you have time find out about what used to happen in places like Linwood and Bathgate etc.

One issue that worries me is that we have to touch on the Role of the Entrepreneur but we did do a bit of this in June. So I intend to give you a research homework on that.

You have your group Research Project (the one on a business) that you will do in class on Thursdays. It is to be completed AND presented in 6 periods. I will count this as week 1.

Please drop by the blog and add your comments on any business-related topic. There may be interesting developments in the news that can happen anytime through the year.

Welcome

2008-06-23T04:10:00.000-07:00

This is a pre-August welcome to those who are taking Higher Business Management.

I'm going to be using this blog as a means of directing you to good and relevant materials on the net and also as a notice board for information that affects you.

I'm going to use ICT to make the subject as interesting as possible for you, but it will mean some research work for you.

In fact I am going to change the homework this year for the first unit and have an assignment/investigation that will bring together the fundamentals of what you would have learned in Standard Grade.

I'll tell you more about that later.

In the meantime, if you come across this before we start in earnest, please ensure you have created or updated your CV and that if you want to get into the entrepreneurial spirit get your name down for Young Enterprise and look for ideas!

Have a good summer holiday and I look forward to seeing you all when we return.