66688 question paper unit f248 strategic decision making
TRANSCRIPT
ADVANCED GCE F248APPLIED BUSINESSUnit 9: Strategic Decision-Making
WEDNESDAY 11 JUNE 2008 Morning
Time: 2 hours
Candidates answer on the question paperAdditional materials (enclosed): Clean copy Case Study
Additional materials (required):Calculator
This document consists of 13 printed pages and 3 lined pages.
SPA (SHW 00049 5/07) T50907/4 © OCR 2008 [F/102/8214] OCR is an exempt Charity [Turn over
INSTRUCTIONS TO CANDIDATES
• Write your name in capital letters, your Centre Number and Candidate Number in the boxes above.• Use blue or black ink. Pencil may be used for graphs and diagrams only.• Read each question carefully and make sure that you know what you have to do before starting your
answer.• Answer all the questions.• Do not write in the bar codes.• Write your answer to each question in the space provided.• Additional answer space is available on the lined pages at the back of this
booklet. Answers on these pages must be clearly numbered.
INFORMATION FOR CANDIDATES
• The number of marks for each question is given in brackets [ ] at the end of each question or part question.
• The total number of marks for this paper is 100.• The quality of written communication will be taken into account in marking
your answer to the question marked with an asterisk (*).
*CUP/T50907*
FOR EXAMINER’S USE
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1 (a) What is meant by the term ‘mission statement’?
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(b) Describe one possible strategic objective which a small private limited company might have in its first year of trading.
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2 Erica is concerned about the number of expedition leaders moving to other firms.
2006 2007
Number of expedition leaders leaving EETL
16 19
Average number of expedition leaders employed by EETL
25 28
(a) Calculate the labour turnover among expedition leaders in 2007. [2]
Show your working:
Answer = ............................................
(b) Analyse the likely problems which EETL could face as a result of a high labour turnover among its expedition leaders.
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3 Erica calculated the likely net cash-flow for each of the three options.
Net cash-flow
Year Option 1 Option 2 Option 3
0 (282 000) (45 000) (750 000)
1 20 000 25 000 75 000
2 30 000 20 000 100 000
3 56 000 20 000 130 000
4 122 000 15 000 200 000
5 162 000 10 000 250 000
6 190 000 10 000 250 000
7 206 000 10 000 250 000
(a) Calculate, showing your workings, the Payback Period for Option 1. [2]
Show your working:
Payback Period = ...................................
(b) Calculate, showing your workings, the ARR for Option 1. [4]
Show your working:
ARR = ..................................
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(c) Describe one disadvantage of using each of the Payback Period and the ARR as investment appraisal techniques.
(i) Payback Period ..................................................................................................................
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(ii) ARR ...................................................................................................................................
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4 Erica consulted a business advisor about the various options facing EETL. They put together a decision tree to help assess the situation, including the possible future expansion of Options One and Three.
(a) Complete the decision tree below. [8]
succ
ess
90%
failu
re10
%
succ
ess
75%
failu
re25
%–£
100
000
yes
no
succ
ess
40%
failu
re60
%
£20
000
£500
000
£2 2
00 0
00
£750
000
£400
000
£400
000
£600
000
succ
ess
50%
failu
re50
%£9
0 00
0
expa
nd to
all U
K?
succ
ess
70%
failu
re30
%ye
s
no
£2 5
00 0
00
£1 3
00 0
00
buy
seco
ndbo
at?
Op
tio
n 1
Op
tio
n 3
Op
tio
n 2
–£28
2 00
0
–£75
0 00
0
–£45
000
–£60
0 00
0
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(b) Assess the extent to which this decision tree is useful to EETL in its strategic decision-making.
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5 (a) Explain three sources of finance which EETL could use should it decide to expand.
1. ...............................................................................................................................................
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(b) Explain four ways in which the external environment could impact upon EETL’s financial position.
1. ...............................................................................................................................................
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2. ...............................................................................................................................................
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3. ...............................................................................................................................................
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6 (a) Label the four quadrants in the Ansoff’s Matrix grid below. [4]
(b) Insert each of the three options available to EETL in the correct quadrant. [3]
Products
Existing New
Markets Existing 1. ...................................................... 2. ......................................................
New 3. ...................................................... 4. ......................................................
(c) Using both quantitative and qualitative information, recommend and fully justify which option EETL should choose.
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7* Erica decided to choose Option One (Educational tours). Recommend and fully justify an appropriate marketing strategy for this option.
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