A2: Rejuvenating Maxis and Celcom - The Challenges of Operating Large Malaysia Telcos

In order to get a better idea of the negative consequences of business growth and impact of hierarchical organisational structure, students should read this article, "Rejuvenating Maxis and Celcom" and look at how some companies when they have grown to a large size will face difficulty especially in terms of working through the additional hierarchy.  This often makes the business enterprise less responsive (and in other words, how business growth can undermine the agility of business operation in responding to the demand of the market environment and competitive pressure).

When an organisation grow in size effective coordination and internal communication can be difficult to achieve.

However, the problems may not necessary have resulted solely from organisational structure as they can also be due organisational leadership and organisational culture as well as politicking within the enterprise that may hinder productive decisions.

In order to keep the business enterprise afloat and satisfy the economic interest of the shareholders, the CEO may have to make tough decision to retrench workers in order to compress the organisational workforce, making it leaner and deal with the problem of bloated manpower.

Moreover, from a marketing perspective, the act of Celcom in introducing many different telco packages can have an adverse effects on its sales as customers get confused.  Once customers are confused, they will most likely experience psychological stress and this will turn them away from the company products.  As such, it is a good call for the new CEO of Celcom to streamlined its service package in the form of Xpac.

How is this news of Maxis and Celcom in hiring a CEO of foreign origin be relevant to A-Level studies? The idea is to understand how whenever a business grows to a large may later become its weaknesses and the organisational structure make the organisation more cumbersome to operate.  Also, it is a necessary evil for enterprise to reduce its headcount especially when hiring is not properly monitored and controlled leading to a bloated workforce.

So after reading the article provided in the link, what other insights can you get that are relevant to your Business Studies?

A2 Sample Answer: Corporate Social Responsibility

CHAN CHICKEN FARM [9707/31/M/J/15, Q4]
Discuss the importance to CCF of corproate social responsibility when aiming to maximise shareholder value. (16 marks)

Consider the comment that was made in the examiner's report for this question.

"Many candidates started well with a definition or explanation of corporate social responsibility and went on to give examples of this. Occasionally a contrast was made between the stakeholder concept and the shareholder view of business. However, many responses simply quoted passages from the case study without adding to them. These answers tended to just describe the problems that CCF faced from its approach of cutting costs. Many answers wrongly conflated CSR with observing legal or regulatory constraints. Most answers contained a general assumption that CCF should consider CSR without giving supporting reasons making effective links to profit, increasing dividends and the value of shares. Only the better answers gave detailed reasons why CSR should be considered. Very few candidates looked at the concept of shareholder value – an integral part of what the question required. The better responses gave commercial reasons for considering CSR and made links between some of the problems faced by CCF and the consequent potential impact on shareholder value. Good evaluation often contrasted the short term cost of CSR with the long term benefits."

GRADE A ANSWER
Corporate social responsibility is understood as how businesses works to fulfill the triple bottomline.  These profit-making organisations do not only function to create economic wealth to benefit the financial interest of their economic masters (i.e. the shareholders) but also work to promote the community interest in addition to preserve and protect welfare of the natural environment.  However, such responsibility does not cover external stakeholders but should also include the consideration of looking after the welfare of the internal stakeholders namely the employees where these people are part of the community.

We must appreciate that corporate social responsibility has the potential to maximise shareholder value in terms helping the company to earn more profit and thereby can provide more dividend payout.  Furthermore, through CSR, the reputation of the company can be build and this subsequently can help increase the share capital value.

Unfortunately, as we see in case study, it appears that CCF has ignored or abandoned its CSR in pursuit of cost reduction.  For example, the reduction in training would be a probable cause of poor quality control leading to the production of products that are harmful upon consumption.  This is highlighted in line 19-20 where consumers suffer from food poisining. Such incidence will negative affect the reputation of the company.  This can result in customers losing confidence of CCF's brand and refuse to purchase.  As such, CCF will experience lower sales turnover and be incapable to provide shareholder higher dividend.  Moreover, as the reputation is spoiled share capital value will drop.

Furthermore, the act of CCF in putting its chicken in confined spaces may be perceived by others as animal abuse.  This can be problematic when animal activisit highlight such practice which can invite backlash from the community and result in customers boycotting CCF's products.

Another issue to consider is where CCF failed to appreciate how employees are social creature.  By abandoning teamwork, those employees may experience isolation and this may result in them experience some psychological problems and also low motivation.  Such outcome will have a negative impact on the performance output leading to poor quality of products being generated.  Again, as stated in earlier paragraph, this can result in lower sales and poor reputation which will diminish shareholder value.

The act of reducing wage rates may lead to CCF to be perceived as not being socially responsible.  This is because for the sake of reducing cost in hope to get higher profits, it ignore the economic needs of the employees who want to receive adequate earning especially if the economic environment is undergoing inflation.  The basic needs of the employees may not be fulfilled leading to lower motivation which may be the cause of lower productivity (stated in line 15).  Perhaps, the employees, seeing how CCF is not being considerate of their welfare, they may react and retaliate by not providing their dedication to their work.

As we can look at the above analysis, we can safely conclude that corporate social responsibility is indeed very important and has the potential to maximise shareholder value in the long term by promoting employee motivation, building a more positive reputation, and instill confidence in the customers to encourage more sales.  Eventually, the act of doing good to the other stakeholders can help CCF to increase the dividend and share capital which are the economic return of the shareholders.

Marketing: A2 Level Revision

Note:In the year 2013, there are two questions on marketing that came out in Global Media Corporation [9707/31/M/J/13] and Shoe Style International [9707/31/O/N/12]

Marketing Plan	Market Segmentation	International Marketing	Internet Marketing	Price
10	1	1	1	1

Elasticity of Demand	Sales Forecasting	Miscellaneous
3	4	8

Table 1: Analysis of the frequency of marketing related questions that appears in the past year A-Level exam from May/June 2012 to Oct/Nov 2016 based on topics.

Marketing Plan (inc. Marketing Objectives and Marketing Strategy

1. Recommend to LeBlanc Kitchen Equipment (LKE) an appropriate strategy for marketing its products in country Y. Justify your recommendation. (16 marks) [9707/31/O/N/13, Q5]
2. Discuss an appropriate marketing plan for the launch of Global Media Corporation (GMC) cell phone service in your country. (16 marks) [9707/32/M/J/13, Q5]  Click here for answer discussion.
3. Discuss the extent to which Cloud Catering should change its marketing strategy within country Y.  Refer to the data in Appendix 2 and other information in your answer. (16 marks) [9707/33/M/J/13, Q3]
4. Evaluate the key features of a marketing plan which Building Supplies Limited) could use for increasing sales to the retail market. (14 marks) [9707/32/O/N/12, Q3]
5. Recommend a marketing strategy for the Global Conglomerate Company (GCC) education subsidiary.  Justify your recommendation. (16 marks) [9707/32/M/J/12, Q5]
6. To what extent will a marketing plan ensure that the new 'Maize Crunchies' product is profitable? (14 marks) [9707/32/M/J/15]
7. Using the data in Table 1, calculate for 2014:

(i) gross profit margin (3)

(ii) net profit margin (3)

(b) Recommend a marketing plan which could increase profit margins for Ramos Sugar Corporation (RSC)'s Food Manufacturing Division.  Justify your recommendation. (14 marks) [9707/31/M/J/14 Q2]

8. Assume CCP is to begin selling the Sandson Electeronic Limited (SEL) designed robo-cleaner in your country for the first time.  Evaluate a marketing strategy that CCP could use. (16 marks) [9609/31/M/J/16, Q3]
9. Refer to Appendix B and other information.  Discuss the changes that Xiang Mobile (XM) might need to make to its current marketing strategy when entering the market in country Z. (16 marks) [9609/33/M/J/16, Q4]
10. Refer to Table 2 and other information.  Discuss the changes Khalid and Akbars (KA) could make to its current marketing strategy in response to the difficult economic conditions. (16 marks) [9609/31/O/N/16, Q4]

Market Segmentation

1. Analyse the advantages to Platypus Accessories of market segmentation. (10 marks) [9707/33/M/J/14, Q1]

 

International Marketing - Localisation vs Standardisation

1. Recommend to Pop Cool (PC)'s Board of Directors which one of the two strategies should be adopted for entering new markets in Asia and Africa (lines 31-45). (16 marks) [9707/33/O/N/13, Q3]

Internet Marketing / E-Commerce

1. Discuss the most important features of a marketing plan that Leo Fantastic Flowers could develop to sell flowers successfully through the Internet (e-commerce). (16 marks) [9707/33/O/N/12, Q5]

Sales Forecasting

Note: When studying about Sales Forecasting, students should not just be proficient in making calculation of the the moving average but must also know how sales forecasting can be useful to other departments and their respective functions besides marketing especially HR and the production department.

1. (a) refer to the data in Appendix 2. Calculate the following missing values.

(i) x (1 mark)

(ii) y (1 mark)

(iii) z (2 mark)

(b) Refer to the data in Appendix 2 and Jo's extrapolated trend line on the graph in Appendix 3.  Forecast JCL's actual sales level in:

(i) 2013 Quarter 4 (3 marks)

(ii) 2014 Quarter 1 (3 marks)

(c) Evaluate the extent to which Des should only rely on this moving average method of sales forecasting when making decisions about operating capacity and staffing levels [9707/32/O/N/13, Q4]

2. Evaluate the extent to which you agree with Rakesh that 'sales forecasting techniques were a waste of time and resources for a business such as Mountain Tour (MT)'. (16 marks) [9707/32/M/J/13, Q3]
3. (a) Refer to Table 1, Calculate the values of:

(i) u (1 mark)

(ii) v (1 mark)

(iii) w (1 mark)

(iv) x (1 mark)

(v) y (2 marks)

(vi) z (2 marks)

(b) Assess the usefulness of sales forecasts to Chilled Air Limited (CAL). (12 marks) [9707/33/M/J/12, Q2]

4. Assess the extent to which the use of sales forecasting might improve the effectiveness of Farah Fruit Farm (FF)s human resource management, such as workforce planning. (16 marks)  [9707/33/O/N/15, Q5]

Price

1. Using the data in Appendix A, analyse the benefits to Active Fitness (AF) of its current pricing structure. (10 marks) [9707/31/O/N/14, Q1]

Elasticity of Demand

1. (a) Refer to Appendix 2. calculate for the Daily Recorder:

(i) price elasticity of demand in December 2012 (3 marks)

(ii) advertising elasticity of demand in May 2013 (3 marks)

(b) Using your results from (a) and other information, discuss whether Global Media Corporation should close the Daily Recorder. (14 marks) [9707/31/M/J/13]

Note: Sometimes advertising elasticity of elasticity can be known as promotional elasticity of demand

2. Discuss how the business could make the demand for the bicycles produced by Bikes For All less sensitive to price increases. (16 marks) [9707/31/M/J/12]
3. (a) Using the data in Appendix C, calculate:

(i) promotional elasticity of demand for Lemonfizz (3 marks)

(ii) price elasticity of demand for Lemonfizz (3 marks)

(b) Discuss whether LF should reduce price or increase promotional expenditure in order to increase sales of Lemonfizz, refer to your results from (a) and any other relevant information. (14 marks)  [9707/31/O/N/14, Q4]

4. (a) Refer to Appendix 2 and the Board's market share objective on lines 55-56. Calculate:

(i) forecast value of MFI's sales in country Y in 2017 (3 marks)

(ii) price elasticity of demand of the best-selling premium brand of processed fish. (5 marks)

(b) Discuss z suitable marketing strategy that marco could use for FineDine products in country Y.  Use your results from 4(a) and other relevant information. (14 marks) [9609/32/O/N/16, Q4]

Miscellaneous Topics

Note: We can see there are some occasions that the question on marketing in the A2 past year papers do not touch on any major topics cover in the syllabus such as - integrated marketing mix, Ansoff's matrix and the application of marketing strategies for each quadrant, product portfolio analysis, building customer relationship, strategy to promote customer loyalty and analysis of factors affecting the success of a marketing effort.  As such, students should be prepared to have understanding of the minor topics in order to address any eventualities.

1. Discuss the importance to the success of Marco shoes of an integrated and coordinated marketing mix. (14 marks) [9707/31/O/N/12, Q3] Click here for answer discussion.
2. Evaluate the strategies that Shoe Style International (SSI) could adopt (other than introducing the Marco range of shoes) to achieve increases in sales and profits. Use Ansoff's Matrix in your answer. [9707/31/O/N/12, Q5]
3. Analyse the benefits and limitations to Chan Chicken Farm (CCF) of an extensive product portfolio. (10 marks) [9707/31/M/J/15, Q1]
4. Discuss the factors that may determine the success of Genco Oven (GO)'s entry into the consumer oven market. (16 marks) [9707/32/O/N/15, Q3]
5. Evaluate how Timtang Corporation (TC) could develop its long term relationships with customers if it opens its own retail outlets (Strategic Option 1). (16 marks) [9707/32/O/N/14, Q3]
6. (a) Using data in Table 1, calculate:

(i) payback period

(ii) net present value (NPV) at discounted rate of 12%

(b) Using your results from 2(a) and other information, discuss whether further research and development expenditure is advisable for Global Construction (GC). (14 marks) [9707/32/M/J/14, Q2]  This question relates to the topic of product being one of the component of the marketing mix and new product development.

7. Evaluate ways in which Senbo Corporation (SC) increase customer loyalty to Senbo Home Maintenance (SHM). (14 marks) [9707/33/O/N/14 Q3]
8. Discuss the importance of Research and Development (R&D) to Xiang Mobile's future success in the smartphone market. (14 marks) [9609/33/M/J/16, Q2]

Important Note: Research and Development is not the same as market research.

Further Consideration

Students are encouraged to further explore the following marketing related issues and acquire more information about.

• Social media marketing - pros and cons
• Mobile marketing consideration (as an additional channel for marketing communication and commercial transaction)
• Strategies for product life extension
• Product portfolio analysis

Those who like to download the past year exam papers for Cambridge A-Level Business Studies (9707) for the year 2014 and 2015 can click on the link here. You can ask your respective lecturers to provide you the past year papers especially those from 2013 and before.