Answering 10-mark questions (DP IB Business Management): Revision Note

TechNova Electronics is a multinational corporation (MNC) based in Germany. The company makes popular consumer electronics such as smartphones, wearable devices, and smart home products. Founded 20 years ago, TechNova has become a global leader in its industry, known for its innovative designs and reliable products. In the last 10 years, the company has expanded quickly into developing markets like Brazil, South Africa, and Vietnam, where it has opened factories and shops.

TechNova’s strategy is to produce its products in countries where costs are lower and sell them at competitive prices. This approach has helped the company grow its market share in developing markets significantly. In 2020, TechNova held 15% of the market share in these regions, which increased steadily to 30% by 2023. However, some people have criticised TechNova for its practices. In Brazil, workers at TechNova factories say they are paid low wages and that working conditions are not always safe. In South Africa, small businesses say they cannot compete with TechNova’s low prices, which is harming local industries.

Despite these challenges, TechNova believes it has brought benefits to the countries where it operates. The company has created thousands of jobs, introduced new technology, and invested in local infrastructure. However, a recent employee survey revealed differences in motivation levels between regions. In Germany, 80% of employees feel motivated and supported, but this drops to 55% in Brazil and 60% in South Africa. Workers in these regions have cited low pay, unclear career paths, and limited training as barriers to engagement.

TechNova’s management is also thinking about how to keep its strong organisational culture as it grows. The company values innovation and teamwork, but these principles are harder to maintain across international operations. To address this, the company is looking at improving its training and support programmes for workers in developing countries.

TechNova’s expansion and new projects are funded through profits, loans, and corporate bonds. Now, the company is considering raising money by selling shares. This would help fund a new range of budget smartphones designed for customers in developing countries. The management is also discussing how to balance its rapid growth with maintaining good relationships with its employees and communities.

Table 1: Financial Overview (2023)

Table 2: Employee Survey Results (2023)

• Your first paragraph should focus on defining the key terms that appear in the question stem

  • In this case, you should define sources of finance

• Check the question to ensure you present the correct number of arguments

  • In this case, you need to examine two sources of finance

• Make sure you consider both the advantages and disadvantages of your suggestions

  • This ensure that you present a balanced response

• Make frequent references to the case study throughout your answer

  • Use data from the tables or graphs, as well as information presented in the main body of the case study

• Make sure you identify further information not provided in the case study that could support your recommendation

Belvedere Event Management specialises in organising weddings, corporate events, and festivals. Recently, the company expanded into luxury event planning to cater to high-income clients. This required a significant investment in marketing campaigns, recruitment of experienced staff, and upgrading its event management systems.

Belvedere’s financial ratios reveal areas for improvement. The creditor days ratio has increased due to extended payment terms negotiated with suppliers, which has helped improve liquidity. However, the debtor days ratio has risen, as some corporate clients have delayed payments, putting pressure on cash flow. Additionally, the company’s return on capital employed (ROCE) has decreased, as recent investments in luxury services have yet to generate significant returns.

To address these challenges, management is reviewing its credit control policies and considering offering discounts for early payments to improve debtor days. The company is also focused on its marketing strategy. In the competitive luxury events market, Belvedere plans to promote its unique selling points (USPs): bespoke planning services, partnerships with premium retailers, and sustainability initiatives.

Belvedere’s marketing plan includes objectives such as increasing brand awareness, boosting revenue by 15% within two years, and improving customer retention. To achieve these goals, the company plans to focus on its target market of high-income clients through digital campaigns, collaborations with social media influencers, and advertisements in luxury lifestyle magazines. Management has allocated an approximate budget of £150,000 to implement these strategies, which are expected to support revenue growth and position the company as a leader in the luxury events market.

Table 1: Key Financial Ratios

Table 2: Marketing Plan Components