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Table of Contents
POTENTIAL QUESTIONS
DEFINITION OF TERMS
Organizational history
POTENTIAL QUESTIONS
Unit 4 - Marketing
1. Explain the reasons which could have forced the company to come up with a
kerosene stove. [6 marks]
2. Explain the usefulness of branding. [6 marks]
3. Explain which part of the marketing mix has been greatly focused upon. Justify your
answer. [6 marks]
4. To what extent do innovation, ethical considerations and cultural differences
influence marketing practices and strategies. [8 marks]
5. Prepare a suitable marketing mix for healthcare devices manufactured by RDM. [8
marks]
6. Examine the usefulness of STP as a tool for RDM. [8 marks]
7. To what extent can e-commerce be used a promotional and distributional strategy by
RDM. [8 marks]
8. Evaluate whether all concepts of the marketing mix are equally balanced. Justify your
answer. [8 marks]
9. Discuss the importance of market research in setting up the new production plant in
another country in Europe.
10. Discuss two ways to extend the product life cycle of kerosene stoves?
11. Advise RDM on how to improve brand identity under the marketing perspective
12. Advise what marketing strategy can be adopted by Jan for RDM.
13. To what extent innovation, ethical considerations and cultural differences may
influence marketing practices and strategies. [8 marks]
14. Prepare a suitable marketing mix for healthcare devices manufactured by RDM. [8
marks]
2
Unit 5 - Operations Management
1. Distinguish between labour and capital intensive method of production. [4 marks]
2. Discuss the usefulness of the method of production adopted by Jan. [6 marks]
3. Examine the usefulness of job production. [6 marks]
4. Explain the factors which forced RDM to invest in automation. [6 marks]
5. Explain the stakeholder conflict that would have emerged due to the changes made
in the production process. [6 marks]
6. Discuss the usefulness of a vision and a mission statement. [6 marks]
7. Examine the benefit of manufacturing customized aluminium bottles. [6 marks]
8. Analyze the benefit of being a 100% family-owned business. [6 marks]
9. Examine the impact of changing from mass production to cell production. [8 marks]
10. Examine the impact of relocation To RDM. [8 marks]
11. Examine the usefulness of the just in time technique followed by RDM. [8 marks]
12. Examine the usefulness of process innovation to an organization like RDM
13. Discuss the impact on RDM when 95% of private sector companies were
nationalized by the communist takeover. [8 marks]
14. Evaluate the impact on RDM shifting from public sector to private. [8 marks]
15. Prepare a SWOT for RDM. [8 marks]
16. Using the Ansoff Matrix, discuss the growth strategy of RDM. [8 marks]
17. Using the Steeple framework, examine the impact for the external environment of
Czech Republic on RDM. [8 marks]
18. To what extent CSR helps RDM to be successful. [8 marks]
19. Evaluate the decision of building a new production facility in another location in
Europe. [8 marks]
20. Discuss the impact of RDM’s culture on the various business functions.
- Decision Tree
- Sources of finance
- Development indicators
- More detail in ‘health care services’ - for marketing strategy
- Any stakeholder conflict
- Country A vs B (relocation)
- BCG matrix on product position of products in product portfolio
- How has RDM used innovation? (Decline of kerosene stove, implementation of
healthcare devices.)
- Explain all the ways RDM has achieved economies of scale? (Amongst others, line
51, mass produced stoves sold to wholesalers.)
- SWOT Analysis
- STEEPLE
Recommend whether they should expand health devices to european markets or not
STEEPLE Analysis → Radeki de Dovnic
Opportunities Threats
- RDM could float (go public and go on the - Threats to employees as they become
stock exchange) and gain additional finance redundant as kerosene products phase out
- Increasing demand for healthcare products - Fierce competition from Asian companies,
(e.g. Germany’s widening market for especially with low labor cost
healthcare) - Lawsuits/Problems with self-driving trucks
- Czech population can speak German which - Cannot be price competitive in a lucrative
enables RDM to branch into German markets market (like Scandinavia, the Netherlands,
- Stable economy and market ensures steady France...etc.)
cash flow and predictable results for RDM - Land is expensive to purchase (Hard for the
- Czech was a planned economy, so it’s now a company to relocate)
transitional economy into a free market. - Has no local influence
Growth rates of TNEs are frequently fast - The vocational school no longer liaises with
- Automation - cost implications of self driving the company - lack of support from the local
trucks community
- Potential expansion to Germany could - Loan capital might difficult to get as RDM has
increase brand awareness/identity no mission and vision statement making the
- foundation of the business weak
Weaknesses
● Line (28-29) unprepared CEO takeover: Dr. Kristian Radeki had professional training and experience that
hardly prepared him for the task and position of CEO
● Line (27-29) Kristian was CEO despite being untrained and inexperienced in business or engineering,
having studied history. He also lacked local knowledge due to the political events that occurred during his
absence. This weakness was defused when Jan became CEO because he had a very good engineering
mind helping in the production processes of RDM.
● Line (39-42) Pricing is made by human accountants and marketing executives. This is at a disadvantage
to automated pricing because it is more efficient and less time consuming.
● Line (51) Previously employed a very large unionized labor force (500 workers). This made them hard to
manage and supervise. They also represented huge expenses in terms of wages. This was solved by
having an automated manufacturing process that Jan introduced.
● Line (54-55) Automation requires a lot of capital expenditures to purchase and revenue expenditures to
maintain them.
● Line (74-76) Letting hundreds of workers leave the company can cause demotivation to the workers in the
business.
● Line (80-81) By transforming the labor force and decreasing it RDM does not have as much influence on
the local community and this makes them less powerful
● Line (89) Constant changes in leadership style can be very confusing and demotivating for RDM
employees. Line (89) the change in organizational structure from Hierarchical to project based and the
change in the management style from paternalistic to democratic: this can lead to demotivation amongst
the workers in the company.
● Line (91-94) When Kristian headed the company, there was a negative environment within the company
as employees were being made redundant due to the fall in kerosene stove sales. The work environment
was depressing, orderly, and dull. This could lead to demotivation of workers. This was not the case with
Jan, as he always sought innovation. This was solved when Jan introduced a new leadership style.
● Line (95-98) Although Jan’s leadership style is fun, it is sometimes chaotic and workers feel there is
insufficient guidance and help by their managers and that the business lacks focus.
● Line (99) CSR incurs higher costs for RDM which makes them have less profits and well as operate under
very strict ethical rules.
● Line (105-110) They cannot offer competitive pricing beyond the 700-kilometre radius which reduces
European market share and affects them being price competitive in lucrative markets. This causes them
to miss out on a huge pool of price elastic customers across Europe.
● Line (118-120) They have no marketing strategy. This makes RDM employees confused about pricing,
promotions, distribution, and production. This also causes another weakness for RDM which is weak
brand identity. Thus, RDM is not very reputable because they fail to make themselves reputable. This
also makes RDM unable to reach their target audience.
● Line (123) Having an outdated name means RDM is not memorable for customers. By failing to have a
marketing strategy they do not compensate for their outdated name.
● Line (121-123) No written corporate strategy even though there is a vision communicated by Jan. This
lack of organization can lead to confusion for the employees. RDM lacks focus.
● Line (123-124) No written operations management strategy can lead to confusion within the operations
sector which can cause lower quality products.
● Line (124) No human resources plan can cause employees to feel insecure in the workplace as there is
no set of procedures for the dismissal of workers.
Opportunities:
● Line (5-10) Demand for goods and services in the healthcare industry would be growing as the baby
boomer generation reaches retirement age.
● Line (15-20) Prague is a magnet for tourists as it is one of the most beautiful cities in Europe which has
aided the economy of Czech.
● Line (15-20) Educated Czech’s speak German in addition to Czech which facilitated positive trade
relations with Germany, which is Europe’s largest economy.
● Line (60-70) Success of the order for water bottles lead to the executives at RDM encouraged Jan to
manufacture customized aluminum bottles.
● Line (75-80) Free movement of labour throughout the European Union lead to RDM recruiting engineers
from universities across Europe.
● Jan having Westernized innovative ideas
● Line (106-107) They have the opportunity to lucrative markets where the demand is high such countries
as the Netherlands, Scandinavia, Belgium, and France.
Threats:
● Line (5-6) the communist takeover: because the RDM became nationalized after being owned 100% by
the Radeki family
● Line (10) change in social trends/preferences: demand for Kerosene stoves declined so RDM had to
change their product.
● Line (31-32) the division of Czechoslovakia into the Czech Republic and the Slovak Republic which is a
threat to the economic situation of the country as well as the market in which RDM operates
● Line (34-36) possibility of technological issues, depreciation, problem with system can lead to delay in
production all together and can be time-consuming and expensive to repair
● Line (45-46) the automation of production methods: laying off workers can cause them to formulate
pressure groups or revolt and this is not beneficial for the company’s reputation in the community
● Line (53) Due to globalization, the fierce competition increased with the Asian manufacturers, causing
Jan to lower cost structures by automation.
● Line (75-77) Due to globalization leading to automation, the business had to lay off some of the
employees which could be a threat to the business as it caused trouble with the local community which
can lead to damage of the business’s reputation.
● Line (80) Due to the reduction and transformation, the business no longer has the level of local
influence that it had.
Ansoff Matrix
Term Definition
Private Sector Part of the economy that is not under the control of the
government.
Unincorporated/Incorporated
Democratic leadership Everyone has a vote in the production and functions of the
business.
1. Mission statement
2. Vision statement
3. Org. structure
4. Leadership style
5. Corporate objectives
6. Dress code
7. Company policies
8. Pay and salary, motivation methods used
Add on to the below terms and definitions:
No Term Definition Line No.
1. Product life - Typical process that products go through from their initial design and 4
cycle launch to their decline and eventual withdrawal.
- Different products undergo each of the five stages (research, launch,
growth, maturity, and decline) at varying speeds.
- Measured overtime in terms of sales revenue.
6. Product Refers to the range of products or strategic business units owned and 11
portfolio developed by an organization at any one point in time.
8. Commercial A business that engages in buying and selling activities on a large scale, for 6
enterprises the purposes of making a profit.
9. Demand Is the quantity of a good or service that consumers and businesses are 13
willing and able to buy at a given price in a given time period.
10. Division of Dividing a job into many specialized parts, with a single worker or a few 68
labour workers assigned to each part. Division of labor is important to mass
production.
11. Economies of refer to lower average costs of production as a firm operates on a larger N/A
scale scale due to gains in productive efficiency, e.g. easier and cheaper access
to finance.
12. Economic measures changes in the Gross Domestic Product of a country over time. It N/A
growth occurs if there is an increase in GDP for two consecutive quarters.
13. Inequality Refers to the difference between the rich and poor, the haves and have-nots N/A
– it is shown by people's different positions within the economic distribution –
wealth, pay and income. Inequality is large in a society where few people
own a disproportionate amount of economic pie.
14. Fiscal policy is the use of taxation and government expenditure policies to influence N/A
business activity. The government spends the tax revenue that it raises, in
addition to other sources of government revenue, on a number of areas
including social security, health care, education, transport and infrastructure.
15. Consumption In economics, the use of goods and services by households. Consumption is N/A
distinct from consumption expenditure, which is the purchase of goods and
services for use by households
17. Scarcity Refers to the basic economic problem, the gap between limited – that is, N/A
scarce – resources and theoretically limitless wants.
18. Private sector The part of the economy run by private individuals and businesses, rather 6
than by the government, e.g. sole traders, partnerships, companies, and
cooperatives.
19. Price elasticity Measures the responsiveness of quantity demanded for a product to a N/A
of demand change in price.
20. Opportunity A benefit, profit, or value of something that must be given up to acquire or N/A
cost achieve something else.
21. Productive Is the maximum possible output of an economy. According to the United N/A
potential Nations Conference on Trade and Development (UNCTAD), no agreed-upon
definition of maximum output exists.
22. Wholesalers The intermediary entity in the distribution channel that buys in bulk and sells 52
to resellers rather than to consumers.
23. Globalization The growing integration and interdependence of the world's economies, 52
causing consumers around the globe to have increasingly similar habits and
tastes.
24. Unionized The process of organizing the employees of a company into a labor union 51
labour force which will act as an intermediary between the employees and company
management. In most cases, it requires a majority vote of the employees to
authorize a union.
25. Paternalistic The managerial approach that involves a dominant authority figure who acts 89
leadership as a patriarch or matriarch and treats employees and partners as though
style they are members of a large, extended family.
26. Democratic Involves a team guided by a leader where all individuals are involved in the 89
leadership decision-making process to determine what needs to be done and how it
style should be done. The group's leader has the authority to make the final
decision of the group.
27. Motivation Internal and external factors that stimulate desire and energy in people to be 78
continually interested and committed to a job, role or subject, or to make an
effort to attain a goal.
28. Nationaliation The transfer of a major branch of industry or commerce to state ownership 7
or control.
29. Promotion A type of marketing communication used to inform target audiences about a 40
firm’s production or service
30. Budget deficit When expenses exceed revenue, and it is an indicator of financial health. N/A
31 Current A measurement of a country's trade where the value of the goods and N/A
account deficit services it imports exceeds the value of the goods and services it exports
32 Progressive A tax in which the average tax rate (taxes paid ÷ personal income) increases N/A
tax as the taxable amount increases.
33 Regressive tax Taxation that takes a larger percentage of a lower-income and a smaller N/A
percentage of a higher income.
34 Distribution The chain of businesses or intermediaries used to get the product to the N/A
channels consumer, including wholesalers, retailers, distributors, etc.
35 Scarcity Refers to the basic economic problem, the gap between limited – that is, N/A
scarce – resources and theoretically limitless wants.
36 Private sector The part of the economy run by private individuals and businesses, rather 6
than by the government, e.g. sole traders, partnerships, companies, and
cooperatives.
40 Vision A company’s objectives that sets a clearer path to its decision making. 123
Statement
41 Productive Is the maximum possible output of an economy. According to the United
potential Nations Conference on Trade and Development (UNCTAD), no agreed-upon
definition of maximum output exists.
42 Excess supply A situation that can occur in a market or business where the amount of a N/A
product provided or material obtained exceeds the amount required or
demanded.
43 Supply Is a fundamental economic concept that describes the total amount of a N/A
specific good or service that is available to consumers.
44. Demand Is the quantity of a good or service that consumers and businesses are 10
willing and able to buy at a given price in a given time period.
45. Market Area Geographic zone containing the people who are likely to purchase a firm's 113
goods or services.
46. Production Foundation of a product life cycle and the execution plan for further N/A
Strategies development. The product strategy allows the business to zero in on specific
target audiences and focus on the product and consumer attributes.
47. Research and Refers to the work a business conducts for the innovation, introduction and N/A
Development improvement of its products and procedures.
48. Market an economic system in which economic decisions and the pricing of goods 17
Economy and services are guided solely by the aggregate interactions of a country's
individual citizens and businesses.
49. Democracy A political system that is run and controlled by citizens of the country. 18
Democracies are made up of elected representatives and require that
governmental measures be voted on by these elected representatives or the
people.
50. Infrastructure the transportation, communication and support networks in a certain area. 22
52. Accounting It reveals profit or loss for a given period, and the value and nature of a fir 40
m's assets, liabilities and owners' equity.
53. Innovation The process of translating an idea or invention into a good or service that 91
creates value or for which customers will pay.
55. Big data extremely large data sets that may be analysed computationally to reveal 57
patterns, trends, and associations, especially relating to human behaviour
and interactions.
56. Artificial Software technologies that make a computer/robot to perform better than 57
intelligence normal human computational ability inaccuracy, capacity, and speed.
57. Teams 6A group of people with a full set of complementary skills required to 87
complete a task, job, or project.
58. Strategy Plans of action that businesses use to achieve their targets 121
59. Economic The overall direction in which a nation's economy is moving. Most business 15
Trends managers need to be aware of the prevailing direction of the economic trend
for the product markets and countries in which they operate in order to make
more accurate and effective plans for their company.
61. Creativity Characteristic that allows a person to think outside of the box, which results 94
in innovative or different approaches to a particular task.
● Adaptive creativity: transfers and applies existing forms of thinking
and problem solving to new scenarios or different situations
● Innovative creativity: generates new forms of thinking, addressing
problems from an unusual perspective
62. Fair wages Trade and public work wages paid to the majority of workers in a specific 104
area. The prevailing wage is usually an hourly wage and determines
overtime pay as well as benefits for laborers in that field.
63. Competitive The process of selecting strategic price points to best take advantage of a 107
pricing product or service based market relative to competition.
64. Share Capital money raised from selling shares in a limited liability company, from its initial 115
public offering (IPO) and any subsequent share issues.
65. Loan Capital Medium to long-term sources of interest- bearing finance obtained from 116
commercial lenders.
66. Private Limited Company that cannot raise share capital from the general public. Instead, 117
Company shares are sold to private family members and friends.
67. Public Limited able to advertise and sell its shares to the general public via a stock 117
Company exchange.
68. Brand Identity How a business presents itself to, and wants to be perceived by, its 123
consumers.
69. Raw materials Materials or substances used in the primary production or manufacturing of 45
goods.
70. Chief Financial Responsible for financial control and planning of a firm or project as well as 111
Officer (CFO) all the accounting functions including such as:
- (1) credit control
- (2) preparing budgets, financial statements
- (3) coordinating financing and fundraising
- (4) monitoring expenditure and liquidity
- (5) managing investment and taxation issues
- (6) reporting financial performance to the board
- (7) providing timely financial data to the CEO.
71. Labour Industry where a larger portion of total costs is due to labor 51
intensive
72. (Business) A business strategy in which growth is obtained by increasing the number of 115
Expansion stores in which customers can buy a company's products and services.
73. Relocation A change in the physical location of a business. A business might 116
relocate because of rising costs at the current facility, better tax
breaks in a different location, changes in its tarot other reasons.
74. Profit positive difference between a firm's total sales revenue and its total costs of 126
production.
75. Capital The manufacturing or provision of a product relies heavily on machinery and
Intensive equipment.
77. Corporate A corporate strategy is a long-term plan of action which will be used to 121
Strategy complete or satisfy the corporate aims for a business.
78. Privatisation Term used to describe the transformation of businesses when they change 8-9
from public ownership to private ownership.
79. Human Management function of using and developing people within a business to 124
Resources meet its organizational objectives.
Planning
80 Operations Providing the right goods and services in the right quantities, at the right 124
management quality level, and right time in a cost-effective and timely manner
81 Baby boomer The term "Baby Boom" is used to identify a massive increase in births 12
following World War II. Baby boomers are people born between 1946 and
1964
Organizational History
● 1873
- founded
-100% family owned
-located = Lobjanec (Small city in Czech Republic)
-original product = manufacturing of coal-burning stoves for residences
● 1949
-followed by the communist takeover, of what was then Czechoslovakia
-became nationalized, as over 95% of the private sector commercial enterprises
became nationalized
● 1970s
-500 workers
-largest single employer in Lobjanec
● 1989
-followed by the Velvet Revolution
-No more communism, privately owned again
- move from communist economy (not much choice in terms of products) to market
economy/ free market (determines products to produce based on the market
demand; or reliant on invisible hand for pricing)
● 1990
-Adriana took over as CEO
● 1993
-Adriana added healthcare devices using ergonomic designs to RDM’S product
portfolio- the demand for stoves was declining
● 1995
-Adriana retire as CEO
-Kristián took the role of CEO = giving the opportunity to return to his home country
and take on the role of CEO of the family business
-accepted even though his profession and his experience had hardly prepared him
for the task
Kristián
- was for many years the head of RDM
-earned a PhD in history and became a professor at an American University
● 2001
-Kristián died in 2001
-Jan took over CEO
● 2002
-RDM produced its last kerosene stove and now primarily manufactures healthcare
devices
● 2006-2009
-Jan began to produce highly automated manufacturing in 2006 and it became
operational in 2009
● Early 2000s
-RDM employed a large unionized labour force, mass producing stoves and selling its
products to wholesalers
-due to globalization and fierce competition from Asian manufactures (lower cost
structures) - Jan determined that European manufacturing would have lower costs
automation → requires significant capital expenditures & long run - lower costs
-digitized communication between robots = allowed RDM to meet consumer’s
requirements
- improving automation processes and integrating cloud computing, mobile devices,
big data, artificial intelligence, 3D printing = enhanced RDM’s ability to customize
products, regardless of the size of the order