ࡱ> g @bjbjVV 4r<r<  ^^^^^rrrrlrCv}}}$kE^}}}}}^^qqq}^^q}qq }Is^b~0CL)1@))^d}}q}}}}}q}}}C}}}})}}}}}}}}} $: Leaving Certificate Business Sample Papers Solutions to Applied Business Questions Exam Year 2013 Only key points are provided, students should develop these points to fully answer the question asked. Answers given are not exhaustive, not all answers given would be required in examination. 8. Southern Farmers Co-Op/SFC plc (a) Describe the importance of market research at each stage of the development and marketing of a product range such as ICO. Refer to the text in your answer. Answer To prove that there is a consumer need for the product. To establish that there is a large potential market for the product (Jim conducted market research to identify the product areas that have real growth potential). To learn about competitors in the marketplace. To prove there is a consumer need for the product (Jim committed a substantial budget to researching new consumer-focused products). To select a brand name that consumers will respond well to and identify readily (market research established that the brand name ICO has international appeal). To identify marketing strengths or unique selling points for the product. Confirm consumer demand for the product concept. To do market research taste testing of the product at an early stage to confirm customer approval. To identify changing trends in the market for the products which should be responded to, e.g. demand for recyclable packaging, low fat products, natural flavours. Market research can assist in decisions on marketing strategies, e.g. type of advertising and promotional methods used. To confirm pricing strategy is acceptable to consumers. Test marketing of the final product combined with consumer feedback research can confirm the correct product and marketing mix before a full launch of a product. To confirm the appeal of the products in new and foreign markets before selling into these markets. (b) Evaluate the reasons why Southern Farmers should change from a co-op to a public limited company. Answer Allows the business to raise capital from the general public and not just from farmer members. Being a plc allows the business access to capital on a much greater scale. Allows the business to access finance internationally through registration on stock exchanges in other countries, e.g. London, New York stock exchanges. Being a plc gives the firm a much higher business profile (publicity) to help it to expand its business. Formation of a plc allows former investors the opportunity to sell their shares at any time if they wish. The business can pay for the take-over of the other firms with shares in the plc instead of having to pay only in cash. (c) Discuss the challenges for Southern Farmers of marketing its range of products on international markets compared to the home market. Answer Each foreign market is different and market research must be done on each new market to ensure successful marketing planning. Existing brands may need to be adapted or changed to suit particular international markets. Difficult decisions have to be made on how to sell the products in each market, e.g. selling from Ireland, setting up subsidiary companies in each country, selling through local agents, franchising to local companies, etc. It is difficult to win market share starting from nothing against established suppliers in foreign markets. There is a high level of foreign competition on price and quality in new markets. There is a difficulty of working across language barriers. New markets may have different traditions, tastes and preferences which must be allowed for. Exporting from Ireland, an island on the west of Europe, may incur additional transport costs to be covered. Exporting outside the Eurozone will involve currency exchange and the danger of exchange fluctuation. 9. Blue Dragon Transport Ltd (a) Identify how government decisions and activities can impact on a company like Blue Dragon. Refer to the text in your answers. Answer Government spending on road and port infrastructures are of benefit to the firm (government spending on road infrastructure has improved their business operations as has the improvement of the ferry port at Rosslare). Government grants to industry through agencies like Enterprise Ireland can reduce the cost of capital investments (a large government grant allowed them to part finance the building of a new repair, maintenance and transhipment depot). Government attraction of transnational corporations to set up in Ireland provides more business opportunities for firms like Blue Dragon Transport Ltd (many of their haulage contracts are with foreign multinationals producing in Ireland and exporting to European destinations). Government budgetary decisions such as increased taxes on fuel would have an adverse affect on Blue Dragon Transport Ltd (they watch each years budget carefully to see the impact on their business, they are particularly concerned that taxes on fuel do not increase as this would make them less competitive with foreign firms). Low levels of general taxation set by government produces growth in the economy and more opportunities for firms like Blue Dragon Transport Ltd. Higher levels of government spending indirectly create an increased demand for transport services, particularly for imported goods. Traffic restrictions and controls on heavy vehicles such as those introduced in Dublin recently cause costly delays for haulage firms. Increased levels of tolls charged on roads, bridges and tunnels in Ireland increase costs for Blue Dragon Transport Ltd. National agreements, which control the level of pay increases over a period of years, help firms to control their wage costs and to plan with more certainty. (b) Describe two short-term and two medium-term sources of finance and identify how each would meet the financing needs of Blue Dragon. Answer Short-term sources of finance The firm could negotiate with its bank to have an overdraft facility on its current account allowing them to borrow money on a short-term basis up to a certain money limit set by the bank. There is an interest cost for this service. This source of finance can be used to fund the payment of wages or the purchase of fuel or other short-term expenses. It is convenient as you can borrow exactly the amount of money you require. Invoice discounting can also be used to get cash in the short-term. The firm can take invoices that have been issued to debtors but which are not due for payment for a period of time and sell them to a bank for cash payable immediately. The bank will pay less than the full value of the invoice to Blue Dragon Transport Ltd and will collect the full value of the invoices when they are due for payment, thus making a profit. This short-term finance method of raising finance can ensure that there are no cash shortages caused by waiting for debtors to pay. Medium-term sources of finance The firm could acquire its trucks by leasing them from banks over a period of up to five years. The firm knows how much it will have to pay on a monthly basis and can plan its cash flow. This source of finance is relatively cheap because the banks who own the assets (trucks) can claim large tax reductions and thus can charge relatively low rates by leasing the trucks. However, the company do not own the trucks during the lease period but may have an option to purchase at the end of the lease period. Blue Dragon Transport Ltd. could purchase its vehicles by taking out term loans from banks for up to five years. These loans must be repaid with interest in instalments over the loan period. These regular payments can be easily budgeted for by the firm. Having cash available to purchase its trucks allows the firm to negotiate low prices as a cash buyer and also has the benefit of them owning the asset from the purchase date. (c) Discuss the opportunities and challenges for the firm in selling their service in other EU markets. Answer Opportunities The firm can be very competitive because it has empty trucks returning to Ireland (this involves collecting goods in Europe to fill empty vehicles on their return journeys to Ireland). The firm has an advantage as it has a lot of knowledge and experience in the Irish transport market. The EU markets are very large and offer great potential for new business. With the growth in the Irish economy the demand in Europe for transport services into Ireland is growing. Threats There is a high level of competition from many transport firms operating in the EU markets. Very large transport companies may be able to offer lower prices due to lower costs resulting from economies of scale. Blue Dragon Transport Ltd will have to overcome a lack of knowledge of other EU markets and may need to spend money on market research to identify suitable customers. There may be difficulties doing business in a range of different languages in different countries in Europe. 10. M.C. Chemicals (a) Explain how the EUs common policies improve the opportunities for success of a company like M.C. Chemicals. Refer to the information in the text in your answer. Answer The Single European Market (SEM) created a free and open market that allows M.C. Chemicals access to a large market (the advantage of locating close to EU markets). The SEM has also eliminated delays and bureaucracy in shipping goods across borders and reduced the costs of distribution within the EU. EU Structural Policy has provided grant aid for the development of transport infrastructure making it much easier for firms like M.C. Chemicals to export their products from Ireland to mainland Europe. EU competition policy has ensured that there is a high degree of open competition in EU markets making it easier for new firms to enter the market (Mike sees an opportunity to make a similar product in Ireland for sale in the European market). The European Monetary Union (EMU) has created a common currency which most EU member states are part of. The Euro reduces currency exchange costs and risk for companies like M.C. Chemicals when trading within the Eurozone. EU environmental policies have ensured that firms who damage the environment will be penalised and will not gain financial advantage (they incurred substantial fines and environmental restoration costs when they were found to be responsible for pollution). (b) Draft an outline of the business plan of M.C. Chemicals under suitable headings, pointing out the importance of each section of the plan to the success of the business. Answer M.C. Chemicals Business Plan The business M.C. Chemicals Ltd, Faheen Industrial Estate, Faheen, Co. Roscommon The firm will manufacture a range of specialised chemical additives for use in the petroleum and plastics industries. Ownership The company is owned in equal shareholdings by Mike Collins, Joseph Cochrane, Leone Kuhner and Marion Baker. Management Mike Collins Chief Executive officer Joseph Cochrane Production and Research Director Leone Kuhner Marketing Director Marion Baker Finance Director Production Plan Production plant will operate in County Roscommon. Machinery is installed and approved ready for production. The production of some products will be contracted out to other firms until our plant is fully operational. We hold adequate land for the extension of the factory in time. Twenty qualified staff have been employed and are in training at present. Marketing Plan Products will be sold direct to customers throughout the EU by a sales and marketing team of four graduates. Products will also be promoted at specialist trade exhibitions for the industry. Direct marketing through the internet will also be a key element of marketing our products. Finance Plan Long-term capital investment required 2,400,000 Financed by Grant Aid 600,000 Owners Capital 800,000 Long-Term Loans 1,000,000 2,400,000 Medium-term finance required for vehicles, office furniture and equipment of 400,000 will be funded by leasing arrangements. A bank overdraft facility of 500,000 has been agreed with the bank to cover short-term finance needs. Importance of sections of the plan to the success of the business The Business: This section sets out clearly the identity of the business and its objectives. Gives the business a clear focus. Ownership: This indicates who the owners of the business are so that other stakeholders will be encouraged to get involved in making the business a success. Management: The quality, experience and training of the management team will have a great effect on the success of the business. Production Plan: Having the correct production facilities in place with a qualified and trained workforce is critical to producing a quality product. Marketing Plan: This shows that the firm knows how to market its products effectively and has the staff in place to do the work. Financial Plan: This plan ensures that the correct sources of finance are used for long, medium and short-term financing. This will keep the cost of finance as low as possible and will ensure that the firm will not have any cash flow or liquidity problems. (c) Analyse the possible costs and benefits to M.C. Chemicals of taking a positive approach to ethical behaviour and meeting its social responsibilities. Refer to the text to support your answer. Answer Costs Giving workers fair pay and conditions may cost the firm more than competitors who do not do so. Setting up production systems that fully protect the environment can be very expensive. Purchasing raw materials that are less damaging to the environment or to customers may be dearer than other raw materials available. By operating in a non-exploitative way, the company may give up the opportunity of making higher levels of profit. Benefits Ethical and socially responsible firms have performed very well when compared to other competing firms (Mike is determined to be proactive in relation to ethical standards and the social responsibilities of his new company). By operating in an environmentally friendly way, the firm can avoid legal costs or fines associated with court cases (Nortons incurred substantial fines and environmental restoration costs when they were found to be responsible for pollution in the area near their plant). Ethical firms produce higher quality products and earn greater loyalty from their customers (poor quality standards applied by Nortons led to customers taking successful court cases for losses caused by inferior products). Companies with an openly ethical approach have a distinct marketing advantage over their rival firms. Unethical firms can suffer bad publicity (Nortons image was badly affected by the media publicity). 11. Corrabawn Region (a) Explain how the Corrabawn area has benefited from the community development process. Refer to the text in your answer. Answer A community enterprise centre has been established. Jobs have been created in the area (the community enterprise centre now has four businesses operating in it which employ forty people). The area has been able to attract a foreign company to set up in the region (the location in the town, two years ago, of a French plastics factory employing thirty people). People are being attracted into the area to live (the population has started to increase). Local businesses have benefited from the increased spending in the area (the additional wages have given a boost to local businesses). The community has been brought together (a group of twenty farmers is developing tourism locally to supplement their incomes). New enterprising ideas are being developed (on farm tourist accommodation, traditional crafts, dying wool and weaving of shawls, sea caves and walking trails, craft shop and tourism centre). (b) Outline the strategies that the farmers can use to influence the decision of the EU. Answer Make contact with other farmers in Ireland who may be affected by the decision and form a group to work together. The farmers should work closely with the national farm organisations to try to influence any decisions that are to be made. The farmers could set up a website to create awareness about the issue with the general public and the EU decision makers. They should contact their local Member of the European Parliament (MEP) and get them to represent their case in the Parliament. They should lobby the offices of the European institutions in Ireland about the issue. They should ask the Irish Agriculture Minister to take up their case with the European Commissioner for Agriculture to try to influence the decision. They should seek media attention for the issue so that the general public will become aware of the issue. They should plan an information campaign and put on a public protest to bring attention to their cause. Send a deputation to Europe to meet the decision-makers to argue their case. (c) Evaluate why a cooperative structure would be more beneficial for the craft and tourism centre than other ownership structures. Answer A co-op is suitable to a situation where a number of people share a common interest in developing a business, in this case (to set up a craft shop and tourism centre in the town of Corrabawn). The various members of the co-op can invest varying amounts of capital depending on their financial resources. The business would be run democratically with each member having one vote when decisions are being made. The members of the co-op all have limited liability for the debts of the business which makes it less risky for people to invest in the business. New investors can join the co-op as it expands. The profits or benefits of the business are shared proportionally among the members. 12. Audio Devices Ltd. (a) Identify the ways in which the rapid expansion may impact on the company. Illustrate with examples relevant to Audio Devices Ltd. Answer The organisation structure of the firm may change it may be more product, or more geographically-based depending on the effects of the growth of the firm. The company will most likely change to being a public limited company registered on several international stock exchanges such as London, New York and Tokyo to allow it to raise the finance needed for its global operations. The firm will enter into business alliances with other companies around the world to allow it to carry out its plans (another is being built in South Korea in a strategic alliance with a local electronics company). Global production in three or more locations around the world will make planning production and delivery of products much more complicated. For instance, the firm may use production sharing where it produces different parts of products in different locations and then ships them all to one location for assembly. The firm will have to change its management approach to a global one with a head office in Ireland and managers who have experience of running a business operating in a number of different countries. The firm will have to apply a global marketing approach with a global marketing mix to its rapidly expanding world market. (b) Compare the benefits and drawbacks of equity and loan finance as ways of meeting the expansion needs of Audio Devices Ltd. Answer Equity finance Benefits Equity finance does not have to be paid back and so helps the firms cash flow position. There is no interest to be paid on equity finance The firm can pay a dividend to the shareholders if it wishes but does not have to do so every year. By listing its shares on world stock exchanges the firm will have access to very large amounts of share capital. The firm can use equity capital to fund the acquisition of other firms by paying in shares, rather than cash. The firm can use shares and share options to pay and reward its management team to motivate them to achieve its growth objectives. Drawbacks The issuing of shares to new owners dilutes the control of the business for the original shareholders. The firm will need to be profitable so that it can pay out a dividend to the shareholders each year to keep them happy with their investment. It costs a lot of money to raise finance through the issuing of shares Loan finance Benefits Loan finance does not affect the control of the business for the shareholders. Loans are easy to get for a firm that is growing and profitable. Raising loan finance is relatively cheap. Loan finance does not affect the sharing out of the profits of the firm. Drawbacks There is an annual interest cost which must be paid on the loan. The assets of the company may be given as security for the loan which means that the firm has not got control over disposal of the assets. The firm must repay the loan over a period of time which is a burden on its cash flow. (c) Evaluate how changing trends in the international business environment may impact on the development of Audio Devices Ltd. Answer The growth of large transnational companies and global business means that Audio Devices Ltd. will face strong competition. World trade agreements are reducing barriers to international trade and this will favour the firm. The development of trading blocs such as the European Union create free trade areas. The firm may need to have a production unit inside each large trading bloc in the world. Rapid changes and improvements in communications technology make it easier and cheaper for firms like Audio Devices Ltd. to operate on a global basis. World transport infrastructure is improving so that firms can produce in different parts of the world and ship their products to other countries relatively easily. New emerging markets in Asia, Africa and Eastern Europe are major targets for future markets for Audio Devices Ltd. 13. Sun Products Ltd (a) Explain how the business climate created by governments has affected Sun Products plc. Refer to the information in the text in your answer. Answer The government provided grant aid to new firms setting up to help them create jobs (with grant aid from the Irish government). To help Irish firms to expand their market the government provided marketing assistance for exporting (further marketing assistance from state agencies helped the business to develop export markets). Government commitment to membership of the EU created great opportunities for Irish firms to sell their products in European countries. Environmental controls and regulations set by governments of different countries influences where firms choose to locate their business (new production locations have been influenced by local environmental controls). Differences in rates of taxes between countries also has a big effect on how firms like Sun Products Ltd choose the location of their production units (production locations have been influenced by the taxation schemes in different countries). (b) Explain how exploiting the full range of promotional options could increase sales for Sun Products plc. Answer Set up a website advertising the products and giving advice on skin protection. Joint product promotions, e.g. with sale of sunglasses. Giving out small free samples of the products for consumers to try out. Giving money-off coupons for future purchases of the product. Using label space on one product to advertise and promote another product in the range. Run competitions for consumers as an incentive for them to purchase the product. The firm could develop new point of sale promotional displays for the products to encourage consumers to pick the products in the store. (c) Evaluate the potential benefits and drawbacks of changing to a global company. Answer Benefits The firm can gain economies of scale (cost reductions) from producing a standardised product for all world markets. The firm can benefit from having global brand names that are recognised in all markets and are cheaper to create than a number of different brands in different markets. The firm can save a lot of money by production sharing where components of products can be produced in different locations and then shipped to another location for final production. With global brands the firm can develop a global marketing mix for its products which can be more effective and less costly. Huge amounts can be spent on research and development of new products as these costs can be spread over huge quantities of products being sold. Global firms can save huge amounts of money in taxes by manipulating where they earn their profits and ensuring that they pay the least amount of tax. Drawbacks Going global involves the investment of huge amounts of capital in production, marketing and distribution on a global basis which involves some level of risk of failure. By producing one standardised product and marketing one brand the firm is taking a greater risk by putting all its eggs in one basket. Managing a worldwide business on a twenty-four hour a day basis places very heavy demands on the management team. There is always a degree of resistance among consumers to global companies as they are seen as dominating the market and exploiting the consumer. 14a. Canvas and Sail Products (a) Describe how John can identify new business opportunities from inside and outside the business. Answer Opportunities from inside (any four and link answer to questions) Invest in Research and Development. Encourage and seek staff suggestions (experienced and skilled workers). Introduce incentives scheme for innovation among staff (profit-sharing). Consult sales staff as they know the market. Check and note consumer feedback may get ideas/suggestions. Develop teamwork structures generally to increase innovation. Develop team approach to coming up with new opportunities. Develop employee empowerment, this leads to innovation and intrapreneurship. Opportunities from outside (any four and link answer to questions) Market research. Research and Development links with university joint projects. Recruit new staff who are creative and can develop new product opportunities. Monitor competitor products improve on their ideas. Foreign markets can often indicate new product trends that we can follow. Acquire new opportunities through any of the following: strategic alliances; buying patents, mergers, takeovers, franchises/licences. Import substitution identify imported products that he can make. (b) Suggest a new ownership structure for the business. Contrast the possible benefits to the firm of this structure with the benefits of being a sole trader. Answer Any seven points from below, pointing out the contrasts. Suggested new structure: Private Limited Company (a co-operative or a Public Limited Company would also be acceptable with answer adjusted) Benefits of Limited Company (contrast with sole trader) Owners have limited liability. New shareholders bring additional finance. New shareholders bring additional expertise, influence, and skills. Risks of business shared. Easier to get loans from banks. Continuity of the business if a shareholder dies. Benefits of a sole trader (contrast with Limited Company) The owner gets all the profits. The owner has full control. Quick decisions can be made, no consultation required. The business has privacy, does not have to disclose accounts. Easy, quick and cheap to set up. (c) Discuss the benefits of expansion into EU markets compared to non-EU markets. Answer Expansion into EU markets is on a free trade basis, whereas other world markets may be protected with trade barriers. EU markets are generally closer incurring lower transport costs than other world markets. EU transport networks are very efficient to facilitate internal trade. Free trade in the EU reduces red tape and paperwork which would apply to a much greater extent in trade with other world markets. The EU has a policy of open competition making it easier for member countries to sell their products to other EU member countries. Within the EU a number of countries use the Euro along with Ireland which makes selling to those countries easier than selling into other world markets using different currencies. Some non-EU markets such as the United States and Australia are easier to trade with as they speak English. 15. Service IT (a) Identify the market research methods employed successfully by Cora in the past and those which could make her business successful in the future. Answer Any six points below, two past and two future In the past She used observation on a trip abroad to get her original idea. Observation in her business to identify a market need. Survey of home computer users. Customers asked for feedback. Reading business magazines. In the future Desk research to identify towns big enough to support a franchise operation. Observation by visiting towns to identify locations. Surveys by questionnaire of consumers in target towns. (b) Evaluate the benefits of expanding the business through franchising compared to organic growth. Answer Any five points from those below Low capital investment have to find a lot of capital. Low risk for franchise holder organic growth carries all the risk of each new outlet. Allows rapid expansion organic growth limited to slower pace Only small management team required organic growth requires large increase in staff and management. Development of strong national brand through advertising organic growth could only support local advertising for far branches. Profits increase in proportion to sales of each franchise outlet. Organic growth profits may be reduced by the expenses of the firm. Successful franchise may have export potential. Organic growth would be much slower to realise export potential. (c) What are the challenges for Cora in selling her franchise on a global basis? Answer She needs to scale up her Irish operation and prove her franchise can operate on a large scale. She needs to ensure that she puts in place the legal arrangements for operating a franchise internationally. She needs to develop a standardised service that can be offered to different countries throughout the world. She needs to ensure that she has a global brand identity that can be applied in all countries. There is a lot of competition globally from other global firms and local firms. She will need to establish a presence in each new market which will require a lot of finance. 17a. Glenfada Village (a) Outline how community development activities assist the growth of enterprise in a village like Glenfada. Refer to the text in your answer. Answer Any 5 points from those below Brings all individuals and organisations together to work together. People learn co-operation and management and other skills needed in enterprise. Community activities promote enterprise among the population. An audit of enterprise opportunities may be carried out. State agencies may be enlisted to assist and support enterprising activities such as FS and Enterprise Ireland. An Enterprise Centre is often set up as a focal point to serve the needs of new entrepreneurs. Many people realise they have entrepreneurial skills through community development work. (b) Analyse the short, medium and long-term finance needs of the leisure activities centre and the sources of finance they should use. Answer Short-term finance Needs Finance to pay for wages, insurance, rates, materials, heat, light, power, i.e. day-to-day running expenses and materials. Sources Credit from service suppliers, e.g. ESB, phone company, credit from materials suppliers Bank overdraft Unpaid tax amounts, e.g. PAYE, VAT, PRSI Medium-term Finance Needs Purchase of equipment such as boats, sailboards and other stocks of equipment. Purchase of vehicles, office furniture and office machinery. Any other needed Sources Term loans used to purchase equipment Purchase of assets under Hire Purchase arrangements Requiring the use of assets by leasing them, sometimes with an option to purchase Long-term Finance Needs Large amounts of finance to fund the development of the land for leisure activities, for the building of the jetty, for building offices and other premises Sources Their own capital which they can invest Sale of shares to investors by setting up a limited company Long-term bank loans, possibly using their land or other assets as security Grants from some government agencies or perhaps the Leader fund of the EU What benefits does Irelands membership of the European Union have for enterprise in Glenfada? Answer EU funded Leader programmes provide financial support for development of tourism enterprises. Access to a huge free market without barriers. Irelands membership over years has developed strong European tourist market Glenfada can tap into that market. EU consumer protection policies make European customers more likely to buy tourism services within Europe. The EU provides money for development of transport infrastructure making it easier for European customers to travel to Ireland (Glenfada). Glenfada can develop business in a number of countries which will reduce its dependence on individual markets. 18a. Irish Colourcraft Ltd (a) Describe the strategies that can make Irish Colourcraft Ltd more ethical and socially responsible in the way it operates. Refer to the text above in your answer. Answer Five points from the list below with reference to the text in each case. Management should take leadership role in being ethical and socially responsible. Management should set objectives and plan for the firm to be ethical and socially responsible. Introduce a code of ethical behaviour for the firm. Set high quality standards for product and service, introduce TQM. Set minimum standards in relation to product safety. Reviews of treatment of workers regularly to ensure fair and respectful treatment. Ensure all laws and regulations are fully known and complied with. Take a proactive role in relation to environmental protection. Be open and transparent about the activities of the firm. Engage in dialogue with stakeholders in the firm. Conduct social audits of the firms activities to identify issues that require action. (b) Identify two possible methods of expansion into European markets and compare the main benefits they offer the business. Answer Any five of the points below with development of the comparison of expansion methods * Comparison of any two of the following methods of expansion (a) Own sales and distribution operation in each country. (b) Enter alliance with a suitable firm in each market. (c) Appoint an agent firm to sell Colourcraft products in each market. (d) Set up manufacturing units in each or some of the markets. (e) Franchise out the production and sale of the product range to firms in each country. (f) License the production of the range of products to a manufacturer in each market. (g) Take over or merge with similar firm in each market. Examples (a) Own sales and distribution operation in each country. (i) Maintain total control over the distribution and sale of products. (ii) Retain all profits earned with the firm or group of firms. (iii) Better communication and co-ordination between operations in different countries. (iv) Direct contact developed with customers in new markets, better able to meet their needs. (b) Enter alliance with a suitable firm in each market. (i) Costs of setting up in new markets are shared. (ii) Partner in alliance has knowledge of foreign market. (iii) Shared control of project allows firm to protect its interests. (iv) Direct contact with customer base is maintained. (v) Sharing knowledge, expertise and resources with each alliance partner will benefit core business of the firm. (c) Outline how the changes in the business can bring success to marketing the firms products. Answer A new Chief Executive Officer from the United States will bring different marketing knowhow to the company. Improved quality in materials and finished products will assist in promotion of the firms products Change to ethical methods will be appreciated by customers and is a feature that can be successfully marketed. Increased cooperation with local stakeholders will improve the image of the firm and make marketing easier. -]^gh) * + . 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