The macroeconomic environment of business

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_{Adapted from www.computerweekly.com/news/366555332/Gymshark-turns-to-Google-Cloud-for-infrastructure-revamp-and-generative-AI-trials and www.retailgazette.co.uk/blog/2022/10/gymshark-ben-francis-ipo-sale/ and uk.gymshark.com/pages/about-us and en.wikipedia.org/wiki/Gymshark a}Gymshark Ltd

State one method of selling.

Analyse one likely impact on Gymshark Ltd’s customer service of using technology such as Artificial Intelligence (AI) within its app.

Analyse one advantage for Gymshark Ltd of operating as a multinational company (MNC).

Analyse one advantage and one disadvantage for Gymshark Ltd of raising additional finance by issuing shares.

Recommend whether Gymshark Ltd should use a share issue or retained profit to fund future expansion.

* Evaluate whether the economic climate is likely to affect Gymshark Ltd’s marketing decisions.

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Unilever plc

Unilever plc is a multinational company that makes and sells a wide range of quality products including food, cleaning agents and beauty products across 190 countries.

Unilever plc has benefitted from operating in a global marketplace and the majority of its products are international brands. Some of its branded products include Lynx Body Spray, Dove Soap, Hellmann’s Mayonnaise, Ben & Jerry’s ice cream and Persil washing machine detergent. All of these products are made in factories all around the globe, some using flow production and others using batch production.

Unilever plc’s average revenue has grown over the last five years. However, the economic climate is becoming more difficult and Unilever plc’s directors are having to adapt to these challenges.

Fig. 1 Unilever plc worldwide revenue from 2018 to 2022

Identify two characteristics of flow production.

Analyse one way the marketing function impacts on the operations function of Unilever plc.

Calculate Unilever plc’s average revenue from 2019 to 2022.

Explain one way revenue affects a business’ decision making.

Explain how operating in a difficult economic climate might affect a business.

State what is meant by international branding.

Evaluate the benefits of international branding to Unilever plc.

Text 3

Glorious Kitchens Ltd

Glorious Kitchens (GK) is a private limited company based in Brighton. The company makes and fits high-quality, luxury wooden kitchens throughout the south-east of England. Its most popular range is the Deluxe.

The average price of a Deluxe kitchen is £15 000 including fitting. GK calculates its fixed costs for the year to be £250 000 and its variable costs for the Deluxe to be £6380, which means they need to sell 29 kitchens to break even.

GK is concerned about the future economic climate and its possible impact on the company’s sales. It is predicted that there will be a fall in consumer incomes in the south-east of England until 2025. Unemployment in the south-east of England is forecast to follow the trend shown in Table 1.

Financial data for GK at the end of 2022 is shown in Table 2.

State one reason why cash is important to a business.

Analyse how GK can use the break-even level of output for its Deluxe range.

Analyse one limitation to GK of using break-even when making decisions about its Deluxe range.

Analyse one impact on GK of the predicted fall in consumer incomes.

Analyse one impact on GK of the forecast change in the unemployment rate shown in Table 1.

Recommend whether the predicted fall in consumer incomes or the forecast change in the unemployment rate will have the greatest impact on GK.

* Evaluate how useful the financial data in Table 2 is to GK’s stakeholders.

Identify one economic factor which may affect a company’s profit.

Analyse the importance of quality in the production of the houses that BD plc produces.

Analyse one advantage to BD plc of obtaining 90% of its raw materials from the UK.

Analyse one advantage and one disadvantage to BD plc of producing components in batches at its factory.

Recommend whether BD plc should continue to produce components in batches at its factory.

* Evaluate how useful break-even analysis is to BD plc’s pricing and promotional decisions.

Text 3 Pukka Pies Ltd

Pukka Pies Ltd is a family-owned business with approximately 360 employees. It makes a range of high-quality savoury pies, including steak, chicken and mushroom, and chicken balti, in batches at its factory in Leicester, England. Pukka Pies are sold in more than 4000 food stores nationwide as well as in sports stadiums, fish and chip shops and cafés across the country.

Three of Pukka Pies Ltd’s key values are recruiting people who are ambitious, delighting customers with quality pies, and building trust with suppliers through food safety. Each of these values helps the business meet the requirements of consumer law.

The success of Pukka Pies Ltd is affected by many factors, including its logistical and supply chain decisions. Pukka Pies Ltd procures the ingredients for its pies from businesses across the UK and overseas; consequently its supply chain is long. Nevertheless, all of these ingredients need to arrive in good condition and, therefore, its logistics are time-critical. Unemployment levels also have a significant impact on Pukka Pies Ltd.

Pukka Pies Ltd considers its environmental impact across all aspects of business activity. It has already replaced some of the non-recyclable plastics used in its packaging with alternatives that can be recycled. In addition, none of the company’s waste goes to landfill.

Identify one way consumer law protects consumers.

Analyse the benefits to Pukka Pies Ltd of using a batch production process.

Analyse one way falling unemployment might influence recruitment at Pukka Pies Ltd.

Analyse the impact of each of the following on Pukka Pies Ltd:

the length of its supply chain........

the time-critical nature of its logistics........

Recommend whether the length of its supply chain or the time critical nature of its logistics has the greater impact on Pukka Pies Ltd’s success.

* Evaluate how Pukka Pies Ltd’s environmental considerations might influence its marketing

mix.