Business Studies: Exam Style Questions – 10
BSkyB welcomes subscriber boost
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BSkyB has seen a strong rise in pay-TV customers, but its profits have been hit
by the cost of launching its new broadband service.
BSkyB added 82,000 digital satellite subscribers in the three months to 30
September, its best first-quarter performance in three years.
The country's leading pay-TV operator now has 8.25 million subscribers.
But profits fell from £200m to £166m, as the August launch of Sky's phone and
broadband service pushed up costs.
But the cost of promoting the service, handling customer enquiries and managing
subscriptions has told on the company's balance sheet.
Carphone Warehouse made a £45m broadband loss in the past six months, after
struggling to cope with demand for its offer.
Source: BBC News 3rd November 2006 (adapted)
Questions
1.
2.
3.
4.
5.
What costs are involved in launching a broadband service?
What was the percentage fall in profits?
Why offer broadband if the costs would create a loss?
How do broadband operators compete?
Are there any arguments against using broadband?
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Business Studies: Exam Style Questions – 10
Net veterans come to aid of online start-ups
For Martha Lane Fox and Brent Hoberman, the founders of Lastminute.com, the
online travel company, the present crop of web-based firms must bring a sense of
deja-vu.
They were among the trailblazers in the first internet revolution back in the late
1990s, laying down the groundwork for what is happening now - the emergence of
entrepreneurs in the current internet boom, sometimes called Web 2.0.
The social networking site Bebo and the virtual teen hangout Habbo Hotel are just
two recent successes.
So is it any easier to set up shop now then the last time?
"It is never easy," Ms Lane Fox told Guardian Unlimited. "But there is a lot more
belief in the internet, there's lots more money, lots of excitement and people are not
having to fight for the technology."
The chancellor, Gordon Brown, is a keen admirer of the entrepreneurial culture in the
US and often talks about encouraging the same spirit in the UK. There is a plethora
of government agencies from the Small Business Service to the Business Link, to
help start-ups.
Source: The Guardian 26th October 2006 (adapted)
Questions
1. Explain reasons for Bebo and Habbo Hotel’s success.
2. Why is there more belief in internet?
3. Explain the phrase ‘the entrepreneurial culture’ and evaluate government
steps to enhance it.
4. Take any THREE agencies set up or help businesses and describe and
evaluate their services.
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Business Studies: Exam Style Questions – 10
Creator of web warns of fraudsters and cheats
The creator of the world wide web told the Guardian last night that the internet is in
danger of being corrupted by fraudsters, liars and cheats. Sir Tim Berners-Lee, the
Briton who founded the web in the early 1990s, says that if the internet is left to
develop unchecked, "bad phenomena" will erode its usefulness.
His creation has transformed the way millions of people work, do business, and
entertain themselves.
Sir Tim was yesterday launching a new joint initiative between Southampton
University and the Massachusetts Institute of Technology to create the first degree in
web science. The two schools hope to raise the standards of web content.
Internet-savvy students will get the chance to study online phenomena like Google.
The ultimate task for students of web science will be to come up with the next
generation of the internet - and bring about the "semantic web", a more intelligent
version of the systems we use today.
Source: The Guardian 3rd November 2006 (adapted)
Questions
1. Give examples of the ‘bad phenomena’.
2. Explain and expand on “His creation has transformed the way millions of
people work, do business, and entertain themselves.“
3. What business lessons can be learned from Google?
4. Explain what a ‘semantic web’ is likely to be.
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Business Studies: Exam Style Questions – 10
Back to the future, with a Victorian flavour
There's a line of thought which argues that the internet will liberate the masses and
allow us to achieve self-actualisation. "With technology," the proponents exclaim,
"economies will spiral upwards, national boundaries will dissolve and people will work
only for self-enlightenment!" And today's mighty panacea, often referred to as "usergenerated content", will bring joy to the world and peace to us all.
Source: The Guardian 2nd November 2006 (adapted)
Questions
1. The idea of self-actualisation … Explore the work of Maslow and investigate
whether the internet, used at work, can be a great motivator.
2. How will technology enable economies to spiral upwards?
3. Examine the impact of the internet on a) exporters b) small businesses
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Business Studies: Exam Style Questions – 10
UK Christmas shopping online set to hit £7bn
Britons are set to spend more than ever online this festive season, with internet
shopping predicted to rise 40 per cent to a record £7bn in the 10 weeks leading up
to Christmas day.
The sales boom is being driven by increased investment in online services by big
retailers such as Tesco and Argos, according to the Interactive Media in Retail Group,
as well as shoppers’ growing willingness to buy online items such as clothes and
furniture they would normally have bought on the high street.
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Christmas internet sales have more than doubled since 2004, when Britons
spent £3.3bn.
Internet retailing hit £5bn over Christmas 2005, just under a 10th of the
£56bn Britons spent throughout November and December.
Verdict, the retail consultancy, thinks that overall Christmas spending –
including October sales – will edge 3.3 per cent higher in 2006.
Source: The Financial Times 3rd November 2006 (adapted)
Questions
1. How much were internet sales in 2005?
2. Why are shoppers buying certain goods online that previously they would
have bought in the High Street stores?
3. Is demand for goods bought via the internet likely to be a) income and/or b)
price elastic?
4. Is the internet a threat or an opportunity for High Street stores?
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Business Studies: Exam Style Questions – 10
Regional carrier survived turbulence in low-cost market
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British Airways is to offload its loss-making regional operation to the rival
airline Flybe in a move that will result in a one-off charge of £106m and
hundreds of job losses.
The decision to sell BA Connect, which employs 1,900 staff and operates 52
routes from 13 regional airports, came as BA disclosed the financial impact of
the terrorist security clampdown in August.
The disruption cost BA £100m, resulting in an 8 per cent fall in secondquarter profits to £240m. Pre-tax profits, including the impairment charge
relating to the disposal of BA Connect, fell 27 per cent to £176m.
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Source: The Independent 4th November 2006 (adapted)
Questions
1.
2.
3.
4.
5.
Explain why selling an operation may result in job losses.
Examine ways in which the effect of the job losses may be minimised.
How do job losses affect the local economy?
How much were the profits before the 8% fall?
Discuss THREE ways in which an airline can increase profits.
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Business Studies: Exam Style Questions – 10
3.2m pints of Polish beer sold in Britain
After all that hard work labouring for Britain's middle classes, it is little wonder Polish
immigrants might feel the need for letting off some steam. Sales of brewer
SABMiller's Polish beer brand, Tyskie, have risen by more than 400% in Britain over
the past year.
It expects exports of both Tyskie, and its Lech brand, to double again in the current
financial year to 160,000 hectolitres - that's about 3.2m pints according to SAB
spokesman, James Crampton. In Poland, Tyskie is the biggest-selling brand,
commanding around 16% of the market.
Source: The Guardian 30th October 2006 (adapted)
Questions
1.
2.
3.
4.
5.
Is demand for beer elastic or inelastic?
Suggest possible reasons for the 400^ rise in sales?
What opportunities are presented by the above article?
Is Polish beer a niche market?
What are the characteristics of a niche market?
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Business Studies: Exam Style Questions – 10
Tesco expands home shopping range
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Tesco is launching a new home shopping service for a range of 8,000 nonfood items including sofas, bikes, golf clubs and cameras.
Called Tesco Direct, shoppers can use the service via the Tesco website or a
mail order catalogue, and place orders on the web, by phone or in some
stores.
Shoppers can pick items up at selected stores or get them delivered next day.
Tesco already has a 31.6% share of the UK grocery market, and the service
will rival catalogue firms such as Argos.
In the online arena, Tesco's domination of the UK grocery market is even greater,
with a 66% share, amounting to 30,000 orders per day.
The supermarket giant will be able to distribute millions of catalogues via its 1,400
stores, many of which will be able to act as pick-up points.
Source: BBC News 30th August 2006 (adapted)
Questions
1. Is Tesco a threat to a) other retailers and ultimately to b) the consumer?
2. If you were in charge of Argos, what strategy would you adopt to combat
Tesco?
3. What advantages does Tesco have over a) other supermarkets and b) other
shops selling non-food items?
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Business Studies: Exam Style Questions – 10
Supermarket fizz sparkles in test
Some supermarket own-brand champagnes are as good or better than some of the
more well-known names, according to food critic Egon Ronay. He hailed as
"excellent" three bottles of supermarket bubbly priced between £14 and £18 a bottle.
UK supermarkets have grabbed a bigger slice of the market- 64% of all sales (59% a
year ago).
"It would certainly be a mistake to buy the well-known brands just because of the
name on the label when some of the supermarket champagnes stand up to them
very well,"
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Egon Ronay
According to research firm AC Nielsen, UK customers spent £301.64m on champagne
from shops, supermarkets and off-licences over the past year.
Of that amount, £192.73m was spent in the major supermarkets and the likes of
M&S and Lidl.
Source: BBC News 5th November 2006 (adapted)
Questions
1. Does the increasing share of the champagne market suggest that demand is
price elastic?
2. Are there any problems in charging a low price for champagne?
3. Are the factors affecting demand for beer the same as those affecting the
demand for champagne?
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Business Studies: Exam Style Questions – 10
Virgin Atlantic reduces fuel levy
Fuel accounts for about a third of Virgin's operating costs
Virgin Atlantic has become the latest airline to cut its fuel surcharge, after a fall in oil
prices.
The firm said fuel levies on all its international journeys would be reduced by £5 per
flight to £30.
Oil prices have fallen to around $59 a barrel - after surging to record highs above
$78 in July.
On Friday, Germany's national carrier, Lufthansa also said it was cutting its fuel
surcharge, while KLM announced a similar reduction earlier in the week.
Source: BBC News 13th October 2006 (adapted)
Questions
1. Using demand and supply explain why oil prices fall/rise.
2. What is a ‘fuel surcharge’?
3. Is a cut in fuel surcharge likely to increase the firm’s a) revenue and b)
profits?
4. Explain how airlines compete – is the method of competition the same among
all airlines?
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Business Studies: Exam Style Questions – 10
Business, stop moaning. These 'burdens' are what keep us civilised
The CBI's new offensive against regulation exposes the values that underpin the
whole Conservative tribe
HSBC is threatening to leave Britain. "From a tax point of view, the UK is not the best
place to be," warned its head of group financial planning and tax.
George Osborne leapt to back it up. "This is yet more evidence that the increasing
complexity of our tax system is harming the economy," the shadow chancellor said.
"We urgently need simpler, fairer taxes." But HSBC didn't say simpler; it said less,
which is exactly what Osborne means too. His "simpler, fairer" is always code for
less. As it happens, corporation taxes have been cut by Gordon Brown. How high are
our business taxes? The UK's tax-to-GDP ratio is still below the EU 15 average and
well below its 1982 peak. Stepping in sharply behind the HSBC came the CBI, yet
again shaking its fist at the government. "Some companies are relocating," warned
its new head, Richard Lambert. "We can see a trickle. Our anxiety is, it doesn't turn
into a flood."
UN figures for inward investment show that last year the UK attracted more inward
investment than any other country. It was twice as high as America's, growing by
183% last year. Meanwhile, the OECD ranks the UK as one of the most attractive
places for foreign direct investment. The World Bank rates the UK top of the EU for
best business conditions. Look at the CBI website and it is full of calls for more
spending on roads, rail and, especially, education: it fulminates against low basic
standards. But all these need higher taxes. A country attracting business needs more
spending on everything that makes it a good place to live, travel and work. But the
CBI is too sectarian to examine any of its own contradictions objectively.
The CBI claims that "New employment regulations cost UK business £37bn since
1998". Every change for the better is called a "burden" - its press release grumbles
about "far-reaching rules on age discrimination and extensions to maternity leave
and pay". The British Chambers of Commerce, competing with the CBI for members,
goes one better. Its "Burdens Barometer" claims "burdens to business now top
£50bn" since 1998. Every company has a legal duty to maximise value for its
shareholders; without regulation they would have a duty to poison, maim, cheat and
exploit in pursuit of profit. Social responsibility may be useful PR, but most of it is
imposed by regulation - and most good companies appreciate that.
Source: The Guardian October 13th 2006 (adapted)
Questions
1.
2.
3.
4.
5.
6.
What is the CBI and what is its role?
Why is HSBC threatening to leave Britain?
What is the ‘tax burden’?
Why has tax revenue grown?
Suggest reasons why the UK is attractive for inward investment?
“Look at the CBI website and it is full of calls for more spending on roads, rail
and, especially, education: it fulminates against low basic standards. But all
these need higher taxes.” Do you agree?
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Business Studies: Exam Style Questions – 10
7. "New employment regulations cost UK business £37bn since 1998" Give
examples of this.
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Business Studies: Exam Style Questions – 10
German inflation at 30-month low
Falling oil prices helped inflation in Germany to fall to 1% in September - a two-anda-half year low - figures show..
Higher eurozone interest rates as well as continued lower oil prices should keep price
rises moderate in October, analysts say.
But experts expect inflation to pick up again next year as VAT is due to rise from
16% to 19% on 1 January.
Germany - Europe's largest economy - is emerging from several years of sluggish
growth, which had put a brake on other eurozone economies.
The recovery is being partly driven by an increase in consumer spending particularly on the back of the recent World Cup football tournament, which was
staged in Germany - as well as strong exports of German goods abroad.
Germany's jobless count fell by 134,000 to 4.24 million - or 10.6% of the population
- in September, according to official figures. -Source: BBC News October 12th 2006 (adapted)
Questions
1. Outline three steps a government may take to lower inflation – and how each
step may impact on a business.
2. “Higher eurozone interest rates as well as continued lower oil prices should
keep price rises moderate in October” – explain how this happens.
3. Why and how does the German rate of growth affect other economies?
4. The jobless count. Outline two types on unemployment and one government
policy for each, aimed at reducing that particular type.
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Business Studies: Exam Style Questions – 10
Firms say rate rise would harm recovery
Employment, exports and investment saw healthy growth in the third quarter, the
British Chambers of Commerce said yesterday in a broadly optimistic snapshot of the
UK economy.
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The quarterly survey found service sector employment hit a nine-year
high, with 24% of firms expanding rather than contracting their
workforce in the third quarter.
Manufacturers planning to raise investment also reached a nine-year
high.
Manufacturing export sales also strengthened markedly, with a balance of 34%, up
from 19% and the highest for over a decade, reflecting the recovery in the eurozone
- the destination for half Britain's exports.
Two new members of the MPC - Professor Tim Besley and Dr Andrew Sentance gave testimony to a parliamentary committee in which both warned that wage
inflation could yet pick up in response to the oil price rises of the past two years.
Source: The Guardian October 13th 2006 (adapted)
Questions
1.
2.
3.
4.
5.
6.
How do exports and important affect unemployment?
How does the exchange rate affect international trade?
How does a change in interest rates affect the exchange rate?
Manufacturing is raising investment – what factors affect investment?
Why does a fall in oil prices not necessarily mean a fall in inflation?
Examine possible links between interest rates, exchange rates, growth,
inflation and unemployment.
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Business Studies: Exam Style Questions – 10
Petrol prices fuel US inflation
US inflation rose in July, driven by a sharp increase in the price of petrol and other
energy bills.
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The closely watched Consumer Price Index rose by 0.4% last month, double
the 0.2% increase seen in June.
Most of the rise, which was in line with market expectations, was caused by a
2.9% increase in energy prices, the highest jump in three months.
Core inflation, which excludes food and energy, rose just 0.2%, below analyst
predictions of a 0.3% increase.
July's slowdown in core inflation was helped by clothing prices dipping 1.2%,
their biggest decline in two decades.
The rise in petrol and other energy bills has been fuelled by the continuing
instability in the Middle East.
Source: BBC News August 16th 2006 (adapted)
Questions
1.
2.
3.
4.
How do petrol prices affect inflation?
In the UK, how is inflation measured?
How might a firm react to a rise in inflation?
Is industrial production likely to rise or fall if there is inflation?
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