Interface
True or False
Whilst a vision statement tends to be narrow and more specific, a mission statement tends to be a broad and abstract statement.
False
State one internal growth and one external growth
Internal - Repositioning
External - Merger&Acquisition
What is one internal economy of scale for Tesla producing in China?
Producing half of its vehicles in China lowers labour costs and increases markup per car.
What external factor is influencing KA’s strategic decision?
Customers demand energy-efficient and environmentally sustainable products.
Why are objectives important? (list three reasons)
To measure and control
To motivate
To direct
What is an example of an external diseconomy of scale for FA?
Civil war increases security and insurance costs outside FA’s control.
What trend is shown by Tesla’s labour productivity rates?
Tesla’s labour productivity increased between 2017 and 2021.
What is one benefit and cost of KA operating at full capacity?
Operating at full capacity spreads fixed costs over more units.
Operating at full capacity leaves little flexibility to respond to increased demand.
How can Interface’s mission statement motivate employees?
Interface’s mission to reverse global warming gives employees a sense of purpose beyond merely earning wages, as they are contributing to restoring the planet. This may increase motivation and commitment to sustainability focused initiatives such as recycling used carpet tiles.
How could relocating to Germany support FA’s repositioning strategy?
Advanced robotics may increase productivity, improve product quality and justify premium pricing. “Made in Germany” association is often linked to engineering excellence and high quality.
What is one cost of Tesla moving from a niche to a broader market?
Expanding to a broader market increases competition and may reduce brand exclusivity.
Explain one feature of cradle-to-cradle manufacturing in the context of QS.
Products are designed so materials can be continuously recycled. In the context of QS, this means that the air conditioners it produces are likely designed so that components and materials can be recovered and recycled into new products. This aligns with customer demand for energy-efficient products using ecologically sustainable production methods, which KA identified through its primary market research.
How does Interface’s CSR reduce environmental damage?
Recycling reduces waste sent to landfill.
It's concluded that relocation will increase long-term profitability. What limitation makes it uncertain?
The stimulus does not provide data about the size, sustainability, or profitability of the high-priced refrigerator market.
Or
There is no evidence that demand in the premium market is sufficient to offset higher production costs in Germany.
Why did Tesla’s share price increase significantly between 2019 and 2022?
Tesla’s share price rose sharply after it achieved its sales target of nearly 500,000 cars in 2020 despite the pandemic;
Moved from a $665 million loss in 2019 to a $5.52 billion profit by 2021;
Became the fifth most valuable company in the US, surpassing Toyota
Evaluate one advantage and one disadvantage of Option 2.
Option 2 provides a faster route to differentiation and sustainability without high capital investment, it increases strategic risk due to supplier dependency and potential labour unrest.
How does Interface’s production process contribute to environmental sustainability?
Using recycled materials reduces the need for extracting new raw materials.
What is one ethical disadvantage and one financial risk of relocation?
Closing the factory could harm loyal workers who may struggle to find similar employment. Higher labour costs and stricter regulations may reduce profit margins.
Outline two benefits of higher labour productivity for Tesla.
Tesla’s labour productivity rate has increased by almost 250% in 5 years, which helps to keep down its costs per unit.
The fall in costs per unit of each Tesla vehicle, due to labour productivity gains, allows Tesla to earn great profit margins on each unit of sales.
The higher profits generated by productivity gains can become an important internal source of finance for Tesla as it seeks further growth opportunities.
It concluded that Option 2 will improve KA’s long-term profitability. Identify the most relevant limitation in the stimulus that makes it uncertain.
The stimulus does not provide projected sales or revenue data showing how much demand for energy-efficient and sustainable products would increase.
OR
There is no evidence that improved sustainability and customer service will generate sufficient additional revenue to offset the risks of outsourcing and closing the production facility.