Milk

Question 1: Changes in Wiseman’s external environment (12 marks)

Award 1 mark for each relevant point and up to 4 additional marks for development, reasoned reference to relevant concepts and/or justified illustrative examples from the case study. This gives a maximum of 5 for each relevant point. Relevant points must make a link between the change in the external environment and the actions of senior managers. This link may be implicit. However, answers which make no explicit link may not gain more than 6 marks. Two well developed points would earn a grade A mark.

Relevant concepts: systems approach; stakeholders; internal and external environment; nature of managerial work; users of financial information.

Answers should identify changes (eg policy decision by Asda; price reduction by Arla; offer of shares by First Milk; Competition Commission; increased role of supermarkets) and explain how they could have influenced senior management. For example, the decision by Asda to buy all its milk from Arla influenced senior management in that they had to respond to losing 15% of the company’s business. They could have done this by seeking alternative contracts and by emphasising RWD’s efficiency. This is an immediate response but the long term foundations for this had been laid by capital investment in dairies, attention to quality, restructuring and so on. Good answers could relate the response to models of management eg planning has helped the company to be in a position to respond.

Question 2: Use of financial statements (12 marks)

Award 1 mark for each relevant point and up to 5 additional marks for development, reasoned reference to relevant concepts and/or justified illustrative examples from the case study. This gives a maximum of 6 for each relevant point. Answers may, therefore, concentrate on the profit and loss account summary and the consolidated balance sheet summary in Appendix 6.

Two well developed points would earn a grade A...