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Page 3 of Paper

Section A: Data Response

[25 Marks]

Answer all questions

1 Read the passage below and answer the questions that follow.

Agachi Furniture is a business that manufactures classic kitchen furniture and modern bedroom suites for middle income households and local furniture outlets throughout Zimbabwe. It was started by Agatha, a qualified wood designer, after she failed to secure

formal employment in the furniture industry.

Currently, Agachi Furniture has factories in Harare, Mutare and Bulawayo. The business has fifty employees well skilled in their lines of duty. The workers are all committed to producing quality furniture. Quality has become Agachi Furniture’s unique selling point.

As a result of this reputation the market for Agachi Furniture products grew rapidly up to the year 2010. At the end of 2010, the market share stood at 30%. However, in 2011, this optimistic picture began to decline as showin in the table below:

Year

Industry Sales ($)

Agachi Sales ($)

2011

200 000

50 000

2012

210 000

40 000

2013

215 000

30 000

The decline in sales was a result of changes in market conditions. Consequently, the market share declined and management decided to explore foreign markets in Botswana, South Africa and Swaziland.

(a) Define the term market share as used in the passage. [3]

(b) (i) Calculate Agachi Furniture’s market share for the three years 2011

to 2013. [3]

(ii) Suggest possible reasons for the decline in Agachi Furniture’s market

share. [3]

(c) Explain how Agatha might segment the market for the furniture. [6]

(d) To what extent are foreign markets useful in reviving Agachi Furniture’s

market share? [10]

Section B: Essays [75 Marks]

Answer any three questions from this section.

2 To what extent are multinational companies of significance to the economy of your

country? [25]

3 (a) Explain economic constraints faced by businesses. [15]

(b) Discuss the effects of exchange rate fluctuations on businesses. [15]

4 (a) Explain why some firms might not be keen to use desk research. [10]

(b) Assess the importance of market research to a producer of breakfast cereals. [15]

5 (a) Discuss the possible barriers to effective communication. [10]

(b) Evaluate strategies businesses may have to use to encourage effective communication. [15]

6 (a) Clearly distinguish between training and development. [8]

(b) Critically examine the importance of training to a business. [17]

7 Evaluate the significance of contribution costing to managers of a multinational

product. [25]

8 (a) Explain the importance of effective stock management. [10]

(b) Assess the importance of producing quality products to a business. [15]

9 (a) Distinguish between financial accounting and managament accounting. [8]

(b) Discuss the usefulness of business accounts information to a company’s

shareholders. [17]

10 Evaluate the impact of information technology (IT) on a business in your country. [25]


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