Bus 4 Revision Workshop

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Bus 4 RevisionWorkshop
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Countdown to Bus 4

• Tuesday 20 January 2009

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Todays Objectives

• Support
• Reinforce
• Identify gaps
• How to approach exam

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Outline

• Session 1 Content and the Case Study
• Session 2 Operations
• Break
• Session 3 Finance
• Session 4 People
• Lunch
• Session 5 Bus 4 Challenge
• Session 6 Marketing
• Session 7 Success in Bus 4

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Bus 4 Blast on Content
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Q1. Asset Led or Market Led?
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Q2. Give me TWO
Reasons why a firm might use a market led approach
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Q3. This type of HRM sees employees as a resource
like any other available to the business

• What is the approach?
• Hard HRM
• Soft HRM

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Q4. True or False

• Arbitration is the attempt to settle an
  industrial dispute through the use of a neutral
  party

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Q5. Average Rate of Return?

• A) total return divided by expected lifetime of
  the investment, expressed as a
• B) the net return on an investment when all
  revenues and costs have been converted to their
  current worth.
• C) the length of time it takes for an investment
  to pay for itself from the net returns of an
  investment

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The Exam Paper

• Based on unseen case study 800/900 words
  fictitious business read it and use it!
• Time allowed - 90 minutes
• 4 main questions worth 20 marks often split.
• Focus of each main question either
• Marketing
• Accounting and finance
• People
• Operations management
• Revise/use relevant AS theory too!

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Welcome to the world of Park Leisure
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Getting into the case
Size scope
Owners Objectives
Customers
Competitors
External Environment
Resources
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Case Study Snap shot
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Over to you
Read the case study on Park Leisure Highlight
SOCCER points (3 mins)
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Problemsproblems
What are the main problems facing Park Leisure?
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Park Leisures problems

• Declining sales
• Falling profits
• Other?

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Three options suggested
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Operations
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Topics

• Productive efficiency - Critical Path Analysis
• Facilities Location
• Exam skills Content, Application, Analysis and
  Evaluation

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OPTION A
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Look at Appendix A
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Bus 4 Specification - CPA

• Can you?
• Draw simple networks, calculate Earliest Start
  Times, Latest Finish Times, identify the critical
  path and calculate total float?
• Understand the implications of CPA for
  efficiency, business decision-making, time based
  management and working capital control?

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CPA in action
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Evaluate the usefulness of CPA for Park Leisure

• Define the term, explain the purpose
• CONTENT

A technique used to find the cheapest and fastest
way to complete an operation.
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Two sides

• Right of the screen

• Left of the screen

• Identify 2 problems to David of using Critical
  Path Analysis

• Give 2 benefits to David of using Critical Path
  Analysis

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Building argument 2 sides

• Useful because

• However.

• Provides a clear outline of the problem.
• Encourages forward planning
• Improve efficiency
• Can identify critical activities which must be
  completed on time
• Control mechanism,

• Construction of CPA not enough to guarantee
  success, projects need to be managed properly
• Relies on estimates of expected duration
• Does not guarantee this is the right project for
  PLL
• Unforeseen circumstances

APPLICATION AND ANALYSIS
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Evaluate it depends on

• Can provide a valuable focal point for management
  system, particularly important for HH as this is
  a new venture and the diagram will provide
  clarity to all involved.
• However a lot will depend on Davids ability to
  make sure that everything is implemented
  correctly and each activity is completed on time.

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On the other hand

• Paul Robinson, Marketing Director outlines an
  alternative

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Operations focus Location, Option

• Evaluate the key location factors that the Park
  Leisure Board of Directors should consider in
  choosing an appropriate site for the proposed
  time share development. (10 marks)

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Location, Location

• List the key location factors the PLL Board
  should consider.

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Key Location Factors
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Note the mark scheme
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Time for a Quick Break!
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Finance
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Topics

• Ratio Analysis
• Investment Appraisal
• Using the financial data to support answers on
  Bus 4

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Finance Focus Ratio Analysis
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1. Which one of the following
Measures the ability of the business to settle
its debts in the short term
A
B
Current ratio
Return on capital employed
C
D
Net profit margin
Stock turnover ratio
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2. Which formula measures how efficiently assets
are being used?
A
B
Dividend yield
Gearing ratio
C
D
Asset turnover
Net profit margin
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3. The formula, sales over net assets is the
ratio for?
A
B
Stock Turnover
Dividend per share
C
D
Asset turnover
Net profit margin
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4. Write down the formula for..

• RETURN ON CAPITAL EMPLOYED

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Examiners tip

• You will need to know
• How to calculate the ratios
• How to interpret the ratios, some exam questions
  give the results of the ratios as part of the
  information.
• Be prepared to use the information to show
  application and analysis

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Tricky topics investment appraisal

• Content application
• Techniques for comparing the value and timings of
  different investment projects
• Payback calculates the time period required for
  earnings to cover the original investment costs
• Average Rate of Return (ARR) calculates the
  rate of return generated over a period of time
• Net Present Value (NPV) uses discounted cash
  flows to convert future earnings into present
  values

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Investment appraisal

• Analysis examples
• Interpreting the results of calculations
• Advantages/disadvantages of using techniques
• Evaluation - examples
• Considering relative importance of financial and
  non-financial factors
• Making judgements on the most suitable technique
  for a given scenario

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Park Leisure Ltd
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Option C is now presented to the board
Anne Robinson, Finance Director outlines Option C
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Option c Sale and re-invest

• Sale of smaller parks to generate cash
• Investment in larger parks

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You are the Board
Discuss whether Park Leisure Ltd should sell its
smaller parks in order to finance investment in
the larger more profitable sites (12 marks)
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Examiners tip - What the data tells us
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The potential sale

• Ann has identified 3 non core parks which
  together generate sales of 5.5 million and
  operating profit of 200,000.
• The sale value including land is estimated to be
  4 million

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Alternatives

• Focus on big parks

• Keep all parks

• Park Leisure need the funds
• Focus on smaller number of parks
• Cutting costs for maintenance
• Need to upgrade facilities to remain competitive
• Improves profit margins
• Finance raised can be used to reduce debt,
  reduces interest charge

• More parks more effective marketing, fixed cost
  of marketing spread over larger number of units
• Offering customer less choice
• Smaller intimate parks USP
• Lose park loyalty
• Earning return, not loss making

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People
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Quick Challenge Employment Law
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Impact of Employment Law on Business

• Developing Analysis
• Consider positive and negative consequences for
  business.
• Write down 1 positive and 1 negative effect.

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Park Leisure

• Building Application
• Nature of business and organisation
• Type of workers
• Industry
• Issues facing the business

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National Situation
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Workforce at PLL

• Context
• Temporary contracts
• Part time
• Less reliance on full time permanent workers
• CONTENT FLEXIBLE WORKFORCE

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Tricky topics flexible workforce

• Analysis examples
• Benefits of using temporary/part-time staff
• Drawbacks of using temporary/part-time staff
• Evaluation example
• Judgement on whether benefits outweigh costs for
  specific firms/circumstances
• Comparisons between short-term and long-term

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Task

• Watch the clip
• Look at the Appendix
• Note down the personnel issues facing PLL in the
  table.

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Employee Performance Indicators
Write down how you would calculate the rate of
labour turnover for PLL during 2008
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Rate of Labour Turnover

• RTL No leaving a business over a period of time
  x 100
• Average no. employed over a given
  period
• RTL 42 x 100 10.9 PLL Labour Turnover
  for 2008
• 385
• RTL 19 x 100 4.7 PLL Labour Turnover
  for 2007
• 400

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Exam Question
To what extent do you agree with Lucy Robinsons
view that Park Leisure Ltds future success
depends on whether it can resolve its personnel
problems? (12 marks)
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Impact on PLLs success
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Success dependent on other factors.

• But
• PLLs success also dependent on its ability to
  appeal to holidaymakers if not, it will go out
  of business, regardless of the performance of its
  workers.
• Also depends on its ability to manage finances
  effectively increasing overheads are reducing
  profits and an over-reliance on long-term
  borrowing will increase the level of risk faced
  by the company

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Marketing
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Topics

• Marketing decision-making
• Marketing planning

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Quick challenge

• Four methods of setting a marketing budget

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What decision making model did Simon use?
Scientific versus Hunch
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Marketing model - definition
Marketing model outlines the process by which
marketing decisions can be made on a scientific
basis
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Examiners Tip

• Consider the benefits to the organisation of
  taking a scientific approach to decision making
• Think about each stage and why it is useful to
  the organisation in the case study
• E.g. Benefit of setting objectives clear goal,
  sense of purpose and direction, all working to
  same objectives

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But which one is the best approach?

• marketing model

• hunch

• Reduces the risk, by basing decisions on
  information
• Likely to involve more than one person, therefore
  reduce the possibility of bias
• Setting of objectives, linked to aims and provide
  clear sense of direction
• Select strategy, look at alternatives
• Decisions monitored and reviewed

• Does not involve large collection of data which
  can be expensive
• Decisions made quickly and avoids any delay
• Decisions not based on data therefore no risk of
  using information which is out of date or flawed

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Evaluate the most suitable approach will depend
on

• Write down 3 factors that will influence the
  choice of the approach

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Factors

• Size of business
• The character and experience of the person
  involved
• Information available
• Predictability of the market
• Speed of the decision

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A2 an integrated approach
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Park Leisure - The final decision
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The decision

• The vote was unanimous, the Board decide to go
  ahead with Option C. To sell off the less
  profitable parks and invest heavily in the larger
  parks
• The marketing plan will focus on targeting the
  premium end customer and developing their product
  by building and enhancing park facilities

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Exam Question
Discuss whether developing a marketing plan will
guarantee the success of the project (20 marks)
Plan your answer to the question above. You have
3 minutes
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Step 1 Define Marketing Plan

• Details a businesss marketing strategy showing
  how it will be carried out
• Sets out an action plan to achieve marketing aims
  and objectives

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Step 2 Yesbecause

• Help to co-ordinate new project particularly
  important to PLL as it is likely to be a long
  term project and a new market segment
• Enable the Board to review the firms progress
  against actual outcomes
• Will clearly outline how the marketing function
  can help achieve its objectives
• Developing plan targeting new market, help
  understand the market

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Step 3 However, on other hand

• PLL objectives are unclear
• Other factors will influence success, such as
  external influences
• Depend on co-ordination with other functional
  areas
• PLL needs to produce an integrated marketing mix
  aimed at its target market does it have
  sufficient knowledge of new targeted segment(s)
  or is further research required and what will be
  the cost of this?
• Marketing planning may take up valuable time and
  delay decision making
• New market segment making sales forecasting more
  difficult
• Better to focus and resolve personnel issues as
  this could affect success

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Successful Exam Technique
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Earning the marks

• 84 marks in total (includes 4 QoL marks) one
  mark per minute!
• Effective communication - make every sentence
  count
• Different questions test different skills use
  trigger words and mark allocation
• 6 marks content, application
• 8 marks content, application, analysis
• 10 marks content, application, analysis,
  evaluation

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Comparing mark allocations

• BUS 4
• Content 20
• Application 26
• Analysis 34
• Evaluation 20

• A/S
• Content 30
• Application 30
• Analysis 23
• Evaluation 17

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Assessing skills Content (C)

• Tests knowledge and understanding - how well you
  can recognise and describe key terms, concepts
  and theories.
• 16 marks available 20
• Trigger words
• State
• Outline
• Define
• Describe
• Hint if content isnt relevant then no marks
  for application, analysis or evaluation either!

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Words, words, words!

• A good definition can get full content marks and
  unlock marks for other skills.
• Few content marks available and no time to think!

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• Write a concise, accurate definition of one of
  the following
• Liquidity
• Communication
• Computer-aided manufacture (CAM)
• you have two minutes!

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• Liquidity the proportion of a firms assets
  that can be easily converted into cash.
• Communication the transfer of information or
  ideas between people.
• Computer-aided manufacture (CAM) the use of
  computers to support the manufacturing process.

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Assessing skills application (P)

• Tests ability to explain or apply knowledge to
  given business scenario
• 21 marks available 26
• Trigger words
• Calculate
• Using examples
• Demonstrate
• In the case of..
• Hint consistent application is crucial for good
  evaluation!

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Assessing skills analysis (A)

• Tests how well you can develop an argument using
  relevant theory cause and effect
• 27 marks available nearly 34
• Trigger words
• Examine
• Explain why.
• Analyse the reasons why..
• Hint Questions worth more than 6 marks require
  analysis!

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Assessing skills evaluation (E)

• Tests your ability to weigh up the evidence and
  make a judgement
• 16 marks available 20
• Trigger words
• Assess..
• Discuss.
• To what extent
• Hint good evaluation requires a clear decision!

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Levels of response

• Most questions
• Level 2 good understanding, application,
  analysis, evaluation.
• Level 1 some understanding, application,
  analysis, evaluation.
• Level 3 for 20 mark questions.

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Develop dont list!

• Content Application Analysis Evaluation
• Point
• Point
• Point
• Point

Yes
No
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Skills signalling

• Careful use of language will make it easier for
  the examiner to award marks!
• Signalling analysis
• because/as.
• which will mean.
• this could lead to..
• Signalling evaluation
• The most significant factor isbecause..
• The success of Option A may depend on
• It is vital thatis concerned because

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An example

• Outline two benefits to Park Leisure Ltd from
  having a more flexible workforce. (6 marks)
• Analyse the main benefits to Park Leisure from
  having a more flexible workforce. (8 marks)
• To what extent will the creation of a more
  flexible workforce help to secure the future
  success of Park Leisure? (12 marks)

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An example

• Outline two benefits to Park Leisure from having
  a more flexible workforce. (6 marks)
• State benefit one briefly develop, linking to
  PL
• State benefit two briefly develop, linking to
  PL
• Analyse the main benefits to Park Leisure from
  having a more flexible workforce. (8 marks)
• This will help the business becauseThis could
  then lead to a
• To what extent will the creation of a more
  flexible workforce help to secure the future
  success of Park Leisure? (12 marks)
• Therefore, although keeping labour flexibility is
  important, what is even more vital to Park
  Leisure is its ability to devise an effective
  marketing strategy/improve customer service
  because.

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Skills signalling

• Careful use of language will make it easier for
  the examiner to award marks!
• Signalling analysis
• because/as.
• which will mean.
• this could lead to..
• Signalling evaluation
• The most significant factor isbecause..
• The success of Option A may depend on
• It is vital thatis concerned because

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In the Examiners Shoes

• Read and mark the following student answer.
• Consider the strength of the response, in terms
  of
• Content
• Application
• Analysis
• Evaluation

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To what extent do you agree with Lucy Robinsons
view that Park Leisures future success depends
on whether it can resolve its personnel problems?
(12 marks)
Student A
C /2 P /3 A /4 E /3 Total / 12
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Bus 4 RevisionWorkshop