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GCE MAY 2008 : (AS 3) External Influences Business Enterprise

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ADVANCED SUBSIDIARY (AS) General Certificate of Education Summer 2008 GCE Applied Business assessing External Influences on the Business Enterprise A3B31 Assessment Unit AS 3 [A3B31] THURSDAY 22 MAY, MORNING TIME 1 hour 30 minutes. INSTRUCTIONS TO CANDIDATES Write your Centre Number and Candidate Number on the Answer Booklet provided. Answer all questions. INFORMATION FOR CANDIDATES The total mark for this paper is 80. Quality of written communication will be assessed in all questions except Questions 1 and 2. Figures in brackets printed down the right-hand side of pages indicate the marks awarded to each question or part-question. This paper is accompanied by a Case Study. You must not use your own annotated copy of this Case Study. ADVICE TO CANDIDATES You are advised to take account of the marks for each part-question in allocating the available examination time. A3B3S8 3641 BLANK PAGE A3B3S8 3641 2 [Turn over 1 Explain the importance of the industrial market to the Northern Ireland economy. [4] 2 Explain why globalisation is important to a company such as Bombardier. [4] 3 Analyse how Bombardier s presence in Northern Ireland could affect stakeholders. [9] 4 Analyse five factors that have influenced the degree of competition in the aircraft industry. [15] 5 Evaluate six ways in which Bombardier could seek to improve competitiveness. 6 Evaluate the importance of the concepts of supply, demand and elasticity to a business such as Bombardier. [24] [24] THIS IS THE END OF THE QUESTION PAPER A3B3S8 3641 3 [Turn over S 4/07 530-045-1 ADVANCED SUBSIDIARY (AS) General Certificate of Education 2008 GCE Applied Business Case Study Assessment Unit AS 3 assessing External Influences on the Business Enterprise [A3B31] THURSDAY 22 MAY, MORNING You must use this clean copy of the Case Study in the examination and not your own annotated copy. A3B31CSI A3B3S8 3641.02 CSI Shorts Aerospace Company Shorts Aerospace Company has played an important economic role in Belfast for almost seven decades. The company arrived in the city in the 1930s when it outgrew its premises in England. The Short brothers decided to set up a plant in Belfast and soon formed a partnership with another economic giant, Harland and Wolff, to produce the Short Sandringham and Seaforth seaplanes. The Second World War followed and production reached an all time high. In 1943 the government took over management of the Belfast factory after it was targeted by German aircraft bombers during Easter 1942. They merged the companies to form Short Brothers and Harland Ltd. During the 1960s and 1970s the company enjoyed success through the sales of their short-haul freighter aircraft. In 1977 the company changed its name back to Short Brothers and in 1984 it became a public limited company when the British Government sold off its shares. The company was then purchased by a Canadian aerospace and railway company, Bombardier, in October 1989 for 30 million. Bombardier Shorts is Northern Ireland s second largest employer and its biggest manufacturer, and has an annual turnover of approximately 480 million. Bombardier s mission is to be the world s leading manufacturer of planes and trains. To achieve this, they are committed to providing superior value and service to their customers, and sustained profitability to their shareholders by investing in people and products. They lead through innovation and outstanding product safety, efficiency and performance. Bombardier standards are high, they define excellence and seek to deliver it. All Bombardier s policies stem from their core values. The core values which seek to improve competitiveness are as follows: INTEGRITY: Bombardier seek to behave with integrity and in an ethical manner in everything they do and say, thereby earning and maintaining the trust and respect of customers, shareholders, suppliers, colleagues, partners and communities. COMMITMENT TO EXCELLENCE: Bombardier s commitment is to demonstrate excellence in all spheres of its work and in its interactions with customers, shareholders, suppliers, colleagues, partners and communities. In addition, it commits to exercising judgment, professionalism, rigour, self-discipline, perseverance and team spirit. CUSTOMER ORIENTATION: The company promotes a customer-centred culture that emphasises outstanding service and its commitments at every level of the organisation. A3B3S8 3641.02 CSI 2 [Turn over SHAREHOLDER FOCUS: Bombardier is focussed on creating sustainable shareholder value through developing profitable products and projects, and soundly managing the business for the benefit of customers, shareholders, suppliers, colleagues, partners and communities. However, despite these values, growing competition from low cost economies, the terrorist events of 11 September, 2001 and a United States airline industry that is facing financial difficulties have resulted in restructuring and subsequent job losses. Since 2001, Bombardier Shorts has seen a 32% reduction in employee numbers from a total workforce of 7800 staff. In October 2006, the company announced a further 645 redundancies. Despite this huge loss of jobs, the company gave reassurances that the future of the organisation was not in jeopardy. Management also emphasised that the job losses were due to a fall in demand for aircraft. This was in response to allegations that the redundancies were more to do with the growth in operations in Mexico where it was announced that 1200 new jobs were to be created. Management further stressed the importance of making the redundancies as a measure to protect the company s overall business and to safeguard the remaining Belfast jobs. The then Enterprise Minister, Maria Eagle, pledged that the government would do all in its power to minimise the impact of the 645 job losses. She also stressed that Laurent Beaudion, Chairman of the Board and Chief Executive Officer, has assured her of Bombardier s long-term commitment to its Northern Ireland operations. Politicians were united in their shock at the job losses. East Belfast MP, Peter Robinson, expressed his concern at the announcement, highlighting its negative impact on the local economy. Sir Reg Empey MLA, called on Bombardier to attract new work and avoid as many job losses as possible. The then Secretary of State, Peter Hain, assured workers that those affected would be provided with training and skills support to provide them with alternative employment. One of the major reasons for the decline in demand was the increased competition from Brazilian plane makers, Embraer, who operate in a lower wage economy. This has led to Bombardier having discussions with Russian and Chinese aviation companies about potential partnerships. In manufacturing, cost base is of paramount importance. Bombardier Aerospace A3B3S8 3641.02 CSI 3 [Turn over S 4/07 530-045-2 [Turn over

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Additional Info : Gce Applied Business May 2008 Assessment Unit AS 3 - External Influences Business Enterprise
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