Cambridge IGCSE Business Studies 0450 — 2017 May/June Paper 1 · Variant 3

Cambridge International Examinations Cambridge International General Certificate of Secondary Education 0450/13 May/June 2017 1 hour 30 minutes BUSINESS STUDIES Paper 1 Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name in the spaces at the top of this page. Write in dark blue or black pen. You may use an HB pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, glue or correction fluid. DO NOT WRITE IN ANY BARCODES. Answer all questions. The businesses described in this question paper are entirely fictitious. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question. The total number of marks for this paper is 80. The syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate. This document consists of 9 printed pages and 3 blank pages. [Turn over 06_0450_13_2017_1.17 © UCLES 2017 *1126903387*

CFE makes high quality steel used in shipbuilding. 40% of its output is exported. CFE’s equipment is old and often breaks down. CFE plans to downsize (reduce) its workforce and 1200 of its 2100 1 skilled employees could be made redundant. The Managing Director blames reduced demand because of recession in some economies. A trade union spokeswoman said: ‘Where are the opportunities from globalisation? This decision will affect many stakeholder groups. There must be another way for CFE to reduce costs.’ What is meant by a ‘trade union’? (a) … … … … [2] Identify two possible reasons (other than reduced demand for steel) that could make it necessary to downsize the workforce. (b) Reason 1: … … Reason 2: … … [2] Identify and explain two opportunities for CFE of globalisation. (c) Opportunity 1: … … Explanation: … … Opportunity 2: … … Explanation: … … [4] 06_0450_13_2017_1.17 © UCLES 2017 2

Identify two external stakeholder groups. Explain how each group might be affected by CFE’s decision to downsize the workforce. (d) External stakeholder group 1: … Explanation: … … … … … External stakeholder group 2: … Explanation: … … … … … [6] Do you think that reducing the number of employees is the best way for CFE to reduce costs? Justify your answer. (e) … … … … … … … … … … … … [6] [Turn over 06_0450_13_2017_1.17 © UCLES 2017 3

PCB is a public limited company. It makes a well-known brand of mobile (cell) phones. Pricing is important as it sells in a competitive market. PCB wants to increase its product range. It plans to 2 make luxury headphones as the demand for these is growing fast. The Operations Director has to decide whether PCB should develop its own brand of headphones or take over an existing producer. For both options, the source of finance would be a share issue. Table 1: Information on the 2 options Option 2: Buy existing producer of headphones Option 1: Develop own headphones $45m $12m – $15m Cost 3 months 12 – 18 months Time needed before product launch Existing producer has different leadership style and organisational structure Need to recruit 1 experienced designer Other information What is meant by ‘brand’? (a) … … … … [2] Identify two methods of pricing PCB could use for its mobile phones. (b) Method 1: … Method 2: … [2] Identify and explain two advantages to PCB of increasing the range of products it sells. (c) Advantage 1: … … Explanation: … … Advantage 2: … … Explanation: … … [4] 06_0450_13_2017_1.17 © UCLES 2017 4

Identify and explain one advantage and one disadvantage to PCB of issuing new shares as a source of finance. (d) Advantage: … … Explanation: … … … … Disadvantage: … … Explanation: … … … … [6] Recommend which option for increasing the product range the directors should choose. Justify your answer using the information in Table 1. (e) … … … … … … … … … … … … [6] [Turn over 06_0450_13_2017_1.17 © UCLES 2017 5

C&P Designs is a business partnership between Cory and Phoebe. They make handmade jewellery. Phoebe works from home making all the jewellery such as necklaces and bracelets. C&P pays for 3 materials when they are ordered, but allows their customers one month to pay. Cory manages the accounts and the shop. He is worried about cash flow, as shown in Table 2. Cory said: ‘The bank will not increase our overdraft. We should ask customers to pay more quickly.’ Phoebe thinks advertising would increase sales but is worried about legal controls on marketing. Table 2: Cash flow forecast for C&P ($) August July June 460 440 480 Cash inflow Cash outflow: 240 260 240 Raw materials 220 200 200 Shop rent and other costs 460 460 440 Total cash outflows Y (20) 40 Net cash flow (40) (20) (60) Opening balance (40) (40) X Closing balance What is meant by an ‘overdraft’? (a) … … [2] Calculate the following values. (b) X: … Y: … [2] Identify and explain two ways in which legal controls on marketing might affect C&P. (c) Way 1: … … Explanation: … … Way 2: … … Explanation: … … [4] 06_0450_13_2017_1.17 © UCLES 2017 6

Identify and explain one advantage and one disadvantage to Cory and Phoebe of being in a business partnership. (d) Advantage: … … Explanation: … … … … Disadvantage: … … Explanation: … … … … [6] Cory thinks asking customers to pay more quickly is the best way to improve cash flow. Do you agree? Justify your answer. (e) … … … … … … … … … … … … [6] [Turn over 06_0450_13_2017_1.17 © UCLES 2017 7

TUKAN makes a range of soft drinks using flow production. All employees are paid a good wage but do not receive non-financial rewards. A high percentage of employees leave the business each 4 year. A common reason given for leaving is that they have no involvement in decision-making. Last year, TUKAN’s revenue increased by $25m but profit did not increase. The Managing Director said: ‘The economy is in the growth stage of the business cycle. However, we need to improve efficiency. Lean production methods might help. We need to recruit a new Operations manager who could have some ideas about this.’ What is meant by the ‘business cycle’? (a) … … … … [2] Identify two advantages of flow production. (b) Advantage 1: … … Advantage 2: … … [2] Identify and explain two advantages to TUKAN of introducing non-financial methods of reward. (c) Advantage 1: … … Explanation: … … Advantage 2: … … Explanation: … … [4] 06_0450_13_2017_1.17 © UCLES 2017 8

Identify and explain two possible lean production methods that TUKAN might use to improve efficiency. (d) Method 1: … … Explanation: … … … … Method 2: … … Explanation: … … … … [6] Do you think it is better for TUKAN to use internal recruitment or external recruitment for the new manager? Justify your answer. (e) … … … … … … … … … … … … [6] 06_0450_13_2017_1.17 © UCLES 2017 9

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® IGCSE is a registered trademark. This syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate. This document consists of 14 printed pages. © UCLES 2017 [Turn over Cambridge International Examinations Cambridge International General Certificate of Secondary Education BUSINESS STUDIES 0450/13 Paper 1 Short Answer/Structured Response May/June 2017 MARK SCHEME Maximum Mark: 80 Published This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for Teachers. Cambridge will not enter into discussions about these mark schemes. Cambridge is publishing the mark schemes for the May/June 2017 series for most Cambridge IGCSE®, Cambridge International A and AS Level and Cambridge Pre-U components, and some Cambridge O Level components.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 2 of 14 Question Answer Marks Guidance 1(a) What is meant by a ‘trade union’? Clear knowledge [2]: group of workers who join together to ensure their interests are protected OR organisation represents the workers and fight for improvements to pay and conditions [2]. Some knowledge [1] – e.g. Group of workers who join together OR fight for workers’ rights. 2 Do not award ‘it is a pressure group’ on its own as this does not explain the term. 1(b) Identify two possible reasons (other than reduced demand for steel) that could make it necessary to downsize the workforce. Knowledge [2×1]: award 1 mark for each reason identified Points might include: • Economic crisis • Factory OR shop OR office closure • Merger or takeover, • Need to reduce costs • Changes in management OR strategy • Automation or replaced by machinery • Excess workforce • Relocation 2 Do not award reduced demand as excluded by question.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 3 of 14 Question Answer Marks Guidance 1(c) Identify and explain two opportunities for CFE of globalization Knowledge [2×1]: award 1 mark for each opportunity identified Application [2×1]: award 1 mark for each explanation in context Points might include: • Lower variable costs [k] as access to cheaper iron ore [app] • Access larger market [k] as 40% exported [app] • Build reputation [k] for its steel [app] • Easier to find suitable workers [k] as need to be skilled [app] • Access better or quicker distribution networks [k] to other ship yards [app] • Share ideas OR skills OR technologies between countries [k] • Benefit from reduced legal controls [k] • Quicker communications networks [k] • Able to spread risk [k] as recession in some economies [app] • Easier to import materials needed [k] 4 Application marks may be awarded for appropriate use of the following: Shipbuilding or related words such as shipyards, High quality, Steel or related words such as iron ore, Correct use of numbers e.g. 40% exported; 1200 or 2100 Skilled employees, Reduced demand, Recession in some economies, Reduce costs, Trade unions, Equipment old and often breaks down. 1(d) Identify two external stakeholder groups. Explain how each group might be affected by CFE’s decision to downsize the workforce. Knowledge [2×1]: award 1 mark for each relevant way identified Application [2×1]: award 1 mark for each relevant reference made to CFE Analysis [2×1]: award 1 mark for each relevant explanation Points might include: • Government [k] as 1200 jobs lost [app] may receive less in taxes OR have to pay out more support payments [an] • Suppliers [k] lose steel orders [app] reducing their revenue [an] • Local community [k] as employs 2100 [app] could lower demand in shops if workers have less or no money [an] • Bank OR lenders [k] as business may not be able to meet any loan repayments or interest due [an] • Customers [k] as may not be able to buy all the product it needs [an] 6 Do not award internal stakeholders such as owners or shareholders, employees (workers or managers) as this does not answer the question. Application marks may be awarded for appropriate use of the following: Shipbuilding or related words such as shipyards, High quality, Steel or related words such as iron ore, Correct use of numbers e.g. 40% exported; 1200 or 2100 Skilled employees, Reduced demand, Recession in some economies, Reduce costs, Trade unions, Equipment old and often breaks down

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 4 of 14 Question Answer Marks Guidance 1(e) Do you think that reducing the number of employees is the best way for CFE to reduce costs? Justify your answer. Knowledge [1]: award 1 mark for identification of relevant point(s) Application [1]: award 1 mark for a relevant reference made to this business Analysis [2]: award up to 2 marks for relevant development of point(s) Evaluation [2]: justified decision made as to whether reducing the number of employees is the best way for CFE to reduce its costs Points might include: • Less workers needed [k] as reduced demand [app] • Change may only be temporary [k] so if demand increase can they replace workers [an] as skilled [app] • Costs of redundancy [k] • Save labour costs [k] • Damage to reputation [k] caused by possible action by trade union [app] • Negative impact on motivation of other workers [k] leading to more mistakes [an] Other options to reduce costs may include: • Relocate [k] 40% exported [app] may lower rent [an] • Update equipment [k] so less likely to breakdown [app] reducing maintenance costs [an] • Buy cheaper raw materials [k] but this may reduce quality [an] 6 Application marks may be awarded for appropriate use of the following: Shipbuilding or related words such as shipyards, High quality, Steel or related words such as iron ore, Correct use of numbers e.g. 40% exported; 1200 or 2100 Skilled employees, Reduced demand, Recession in some economies, Reduce costs, Trade unions, Equipment old and often breaks down Note: candidates can discuss alternative ways to reduce costs. However evaluation must address whether reducing employees is the best way.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 5 of 14 Question Answer Marks Guidance 2(a) What is meant by brand? Clear understanding [2]: (unique) name, feature or design / logo or image of a product or business [1] that distinguishes it from other products or businesses OR makes it unique [1] OR unique or special name by which a product or business is known Some understanding [1]: e.g. name by which a product or business is recognised OR known [1] 2 Do not award examples as this does not explain the term 2(b) Identify two methods of pricing PCB could use for its mobile phones. Application [2×1] award 1 mark for each method Points might include: • Competitive pricing • Cost plus pricing • Penetration pricing • Price skimming • Promotional pricing 2

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 6 of 14 Question Answer Marks Guidance 2(c) Identify and explain two advantages to PCB of increasing the range of products it sells. Knowledge [2×1]: award 1 mark for each advantage identified Application [2×1]: award 1 mark for each explanation in context Points might include: • Spread risk [k] as sales do not rely on its phone [app] • Increase customers OR widen customer base OR increase market share [k] as it is a fast growing market [app] • Able to increase prices [k] as it’s a luxury product [app] • Increase brand loyalty OR increase attraction of business to existing customers [k] as may want headphones [app] • Improve PCB’s brand image OR reputation [k] as offer more luxury products [app] • Need to replace products in decline (stage of life cycle) [k] as operate in a competitive market [app] 4 Application marks may be awarded for appropriate use of the following: Mobile phone, Headphones, Luxury, Competitive market, Fast-growing market, Correct use of data from table 1, (Well known) brand.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 7 of 14 Question Answer Marks Guidance 2(d) Identify and explain one advantage and one disadvantage to PCB of issuing new shares as a source of finance. Knowledge [2 × 1]: award one mark for each relevant way identified Application [2 × 1]: award 1 mark for each relevant reference made to this business Analysis [2 × 1]: award 1 mark for each relevant explanation Points might include: Advantages: • Access to greater amounts of capital [k] as no restriction on shareholder numbers [an] to help raise $15m/ $45m [app] • No interest OR finance costs to pay [k] so fixed costs do not increase [an] so can invest in headphones [app] • Permanent source of capital [k] so no need to repay [an] • Avoid increasing debt [k] Disadvantages: • Possible loss of control OR risk of takeover [k] as public limited company [app] making it difficult to manage or take decisions [an] • Shareholders might expect dividends [k] • Cost OR time to arrange [k] so not able to focus on other issues [an] such as the new headphones [app] • Dividend paid after tax whereas interest paid before tax deducted [k] 6 Application marks may be awarded for appropriate use of the following: Public limited company, References to stock exchange [app] , Correct use of numbers e.g. $15–20m, $45m, Correct use of data from Table 1 Takeover, Headphones, Mobile phones (Well known) brand, Luxury, Want to increase product range.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 8 of 14 Question Answer Marks Guidance 2(e) Recommend which option for increasing the product range the directors should choose. Justify your answer using the information in Table 1. Knowledge [1]: award 1 mark for identification of relevant point (s) Application [1]: award 1 mark for a relevant reference made to this business Analysis [2]: award up to 2 marks for relevant development of point(s) Evaluation [2]: justified decision made as to which option the directors should choose. Points might include: • Cost of Option 1 is lower [k] by $30m OR $33m [app+an] so do not have to raise as much money [an] • Longer development time [k] • Need to recruit a suitable person [k] as experienced designer [app] which will increase recruitment costs [an] Option 2 • Can reach market quicker [k] as demand is growing fast [app] so customers do not buy from other businesses OR before tastes change [an] • Brings in expertise OR ideas [k] • Possible clash of management styles [k] as have different leadership style [app] • Have access to its customers [k] who you may be able to sell phones [app] further increasing sales [an] 6 Application marks may be awarded for appropriate use of the following: Public limited company, References to stock exchange [app] , Correct use of numbers e.g. $15–20m, $45m, Correct use of data from Table 1 Takeover, Headphones, Mobile phones (Well known) brand, Luxury, Want to increase product range. Note: For evaluation candidates can select either option is possible if supported by points made.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 9 of 14 Question Answer Marks Guidance 3(a) What is meant by an ‘overdraft’? Clear understanding [2]: e.g. loan repayable within 12 months [2] Some understanding: [1] e.g. identifies a relevant feature such as short term source of finance 2 Do not award explanation of bank loan as this is not a short term option 3(b) Calculate the following values: X and Y Application [2×1] award 1 mark for each correct answer. Closing balance: X: (20); Net cash flow: Y: 0 or zero 2 3(c) Identify and explain two ways in which legal controls on marketing might affect C&P. Knowledge [2×1]: award 1 mark for each way identified Application [2×1]: award 1 mark for each explanation in context Points might include: • Cannot make false claims about what the product will do OR must avoid misleading adverts OR Advertising claims might have to change to ensure compliance [k] • Contents OR product must be described accurately [k] so would need to be handmade • Products must be safe to use OR must offer to repair or replace faulty goods [k] e.g. if bracelet broken [app] • May have to change how products made [k] • Mistakes could lead to fines OR damage reputation [k] 4 Application marks may be awarded for appropriate use of the following: Jewellery and related words such as necklaces and bracelets, Metals, Correct use of data from table 2, Pay for materials when ordered, Phoebe works from home, Cory manages the accounts and shop, Business partnership.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 10 of 14 Question Answer Marks Guidance 3(d) Identify and explain one advantage and one disadvantage to Cory and Phoebe of being in a business partnership. Knowledge [2 × 1]: award one mark for a relevant advantage and disadvantage identified Application [2 × 1]: award 1 mark for each relevant reference made to this business Analysis [2 × 1]: award 1 mark for each relevant explanation Points might include: Advantage: • More ideas [k] which could make business more competitive [an] • More capital (than sole trader) [k] which may help solve cash flow problems [app] so less need to borrow money [an] • Share responsibilities OR workload OR Specialisation OR more skills [k] so have time to focus on what they are good at [an] as Corey focuses on finance [app] • Share risk OR losses [k] Disadvantage: • Different objectives [k] such as Phoebe wants to keep current supplier [app] leading to disagreements [an] • Have unlimited liability [k] Phoebe could lose her home [app] as personal belongings at risk if business fails [an] • Have to share profits [k] so each person makes less than if it’s a sole trader [an] • Do not have separate legal identify [k] • Slow decision making OR risk of disagreements [k] as takes times to resolve differences [an] 6 Application marks may be awarded for appropriate use of the following: Jewellery and related words such as necklaces and bracelets, Metals, Correct use of data from table 2, Pay for materials when ordered, Phoebe works from home, Cory manages the accounts and shop, Business partnership.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 11 of 14 Question Answer Marks Guidance 3(e) Cory thinks asking customers to pay more quickly is the best way to improve cash flow. Do you agree? Justify your answer. Knowledge [1]: award 1 mark for identification of relevant point (s) Application [1]: award 1 mark for a relevant reference made to this business Analysis [2]: award up to 2 marks for relevant development of point(s) Evaluation [2]: justified decision made as to whether asking customers to pay more quickly is the best way to improve cash flow. Points might include: • Asking to pay quicker would make cash available sooner or right away [k] • Could lead to reduced demand OR customers become dissatisfied [k] so cash inflows reduced [an] Other options include: • Buy cheaper materials [k] which would reduce cash outflow [an] buy may lower demand as customers think it is poorer quality [an] • Reduce level of inventory ordered [k] as represents half its outflows [app] • Could ask suppliers to change payment terms [k] as have to pay in full [app] allows more time to generate cash [an] • Change supplier [k] but might give same OR worse terms [an] so cannot get materials to make jewellery [app] • Sell unwanted non current assets [k] 6 Application marks may be awarded for appropriate use of the following: Jewellery and related words such as necklaces and bracelets, Metals, or related words such as gemstones, Correct use of data from table 2, Pay for materials when ordered, Phoebe works from home, Cory manages the accounts and shop, Business partnership, Legal controls on marketing, Advertising to increase sales Can award discussion of other ways to improve cash flow e.g. reduce fixed costs [k] such as shop rent [app]. Do not award increase overdraft as this option is not available to them based on stem. Do not award methods such as increase sales, lower costs or raise prices as too vague. Note: For evaluation must focus on whether asking customer to pay quicker is the best way or not.

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 12 of 14 Question Answer Marks Guidance 4(a) What is meant by the ‘business cycle’? Clear understanding [2]: fluctuations in economic activity that an economy experiences [1] over a period of time OR changes in level of economic growth over time Some understanding [1]: shows changes in GDP 2 Do not award answers which refer to an individual business or confuse the business cycle with the product life cycle. 4(b) Identify two advantages of flow production Knowledge [2 × 1] award 1 mark per advantage Points might include: • Large volumes or increased output • Economies of scale • Low average costs • Quicker production • 24-hour OR continuous production • Allows greater use of unskilled labour • Allows for specialisation • Allows for capital intensive production 2

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 13 of 14 Question Answer Marks Guidance 4(c) Identify and explain two advantages to TUKAN of introducing non- financial methods. Knowledge [2×1]: award 1 mark for each advantage identified Application [2×1]: award 1 mark for each explanation in context Points might include: • Some options cost little OR no money [k] so less need to pay good wages [app] • Improve motivation [k] when using flow production [app] • Help retention [k] so lower percentage want to leave each year [app] • New ideas [k] as workers may suggest ways to improve efficiency [app] • Can lead to more flexible work force [k] 4 Do not award examples or methods of non- financial methods of reward, as this does not answer the question. Application marks may be awarded for appropriate use of the following: High percentage leave each year, Flow production, Good wages, Lean production, Plan to recruit new Operations manager, Economy at growth stage (of business cycle), Revenue increased by 25%, Profit did not increase, Looking for ideas as need to improve efficiency, No involvement in decision making, Soft drinks 4(d) Identify and explain two possible lean production methods that TUKAN might use to improve efficiency Knowledge [2 × 1]: award one mark for each relevant method identified Application [2 × 1]: award 1 mark for each relevant reference made to this business Analysis [2 × 1]: award 1 mark for each relevant explanation Points might include: • Kaizen or continuous improvement [k] as mistakes OR errors would be eliminated [an] • Just–in-time inventory control [k] which would reduce storage costs [an] • Reorganise the factory layout [k] so saving time moving between places [an] • Cell production/ team working [k] • Kanban [k] • Time based management [k] • Waste reduction [k] 6 Application marks may be awarded for appropriate use of the following: do not give non-financial methods, High percentage leave each year, Flow production, Good wages, Lean production, Plan to recruit new Operations manager, Economy at growth stage (of business cycle), Revenue increased by 25%, Profit did not increase, Looking for ideas as need to improve efficiency, No involvement in decision making, Soft drinks

0450/13 Cambridge IGCSE – Mark Scheme PUBLISHED May/June 2017 © UCLES 2017 Page 14 of 14 Question Answer Marks Guidance 4(e) Do you think it is better for TUKAN to use internal or external recruitment for the new manager? Justify your answer. Knowledge [1]: award 1 mark for identification of relevant point (s) Application [1]: award 1 mark for a relevant reference made to this business Analysis [2]: award up to 2 marks for relevant development of point(s) Evaluation [2] – justified decision made as to whether TUKAN should use internal or external recruitment for the new manager. Points might include: • Wider pool of candidates [k] can help attract right person [an] • Bring in new ideas [k] as need to improve efficiency [app] • Increased recruitment costs [k] which will increase expenses [an] when profit has not increased [app] • New person has no knowledge of business [k] so will need to spend time or money while get to know things [an] • Are suitable candidates available [k] if many people leave each year [app] Internal • Act as incentive OR motivation for employees [k] which could increase efficiency [app] • People know the business [k] so can start work quicker [an] • Company knows the people [k] • Generate stability and experience [k] so reducing labour turnover [app] 6 Application marks may be awarded for appropriate use of the following: High percentage leave each year, Flow production, Good wages, Lean production, Operations (manager), Economy at growth stage (of business cycle), Revenue increased by 25% Profit did not increase, Looking for ideas as need to improve efficiency, No involvement in decision making, Soft drinks