Plasshape (PS) manufactures plastic packaging for industrial markets (B2B). Its customers include food manufacturers and cosmetics firms. PS has 500 employees in each of two countr... Plasshape (PS) manufactures plastic packaging for industrial markets (B2B). Its customers include food manufacturers and cosmetics firms. PS has 500 employees in each of two countries with a similar factory in each country. Employee payment methods and non‑financial motivators vary in each factory. In country Z, PS uses time‑based payment methods, offers employee development and uses many non‑financial motivators. In country V, PS uses piece rate payment methods, but there are fewer opportunities for employee development and non‑financial motivators are not used. Some employees are demanding equal pay and opportunities for employee development in both PS factories. Technology is changing rapidly in the packaging industry. PS’s research and development (R&D) team has developed an environmentally friendly type of food packaging. However, this costs more to make and it will need investment in new machinery. This unique new packaging product is expected to increase added value. Table 1.1 shows a summary of PS’s financial data if it does not launch the new packaging product. Table 1.1 PS’s financial data if it does not launch the new packaging product $m Revenue 40 Direct costs 26 Indirect costs 6 If PS launches the new packaging product, Isha, the Finance Manager, forecasts the following changes: • revenue increases by 30% • direct costs increase by $6m • indirect costs increase by $1m. (a) (i) Identify one non‑financial motivator. [1] (ii) Explain the term piece rate (line 6). [3] (b) (i) Refer to Table 1.1 and other information. Calculate the change in forecast profit if the new product is launched. [3] (ii) Explain one way PS could use cost information to improve business performance. [3] (c) Analyse two elements of the marketing mix that PS should consider when launching the new packaging. [8] (d) Evaluate whether PS should use the same payment method and employee development in both factories. [12]
Understand the Problem
This is a business case study question about Plasshape (PS), a plastic packaging manufacturer. The question covers several aspects of the business, including employee motivation, payment methods, cost analysis, marketing mix, and strategic decisions about standardizing practices across different factories. You are required to define terms, calculate profit changes, analyze marketing elements, and evaluate the pros and cons of a business decision.
Answer
Please see the answer for the breakdown of the Plasshape (PS) questions.
Here are the answers to the Plasshape (PS) questions:
(a) (i) One non-financial motivator is employee development. (ii) Piece rate is a payment method where employees are paid a set amount for each unit they produce. (b) (i) The change in forecast profit if the new product is launched is $5.8 million. (ii) PS could use cost information to identify areas where costs can be reduced, improving efficiency and profitability. (c) Two elements of the marketing mix that PS should consider when launching the new packaging are product and price. (d) PS should consider the advantages and disadvantages of using the same payment method and employee development in both factories before making a decision.
Answer for screen readers
Here are the answers to the Plasshape (PS) questions:
(a) (i) One non-financial motivator is employee development. (ii) Piece rate is a payment method where employees are paid a set amount for each unit they produce. (b) (i) The change in forecast profit if the new product is launched is $5.8 million. (ii) PS could use cost information to identify areas where costs can be reduced, improving efficiency and profitability. (c) Two elements of the marketing mix that PS should consider when launching the new packaging are product and price. (d) PS should consider the advantages and disadvantages of using the same payment method and employee development in both factories before making a decision.
More Information
The answers are derived from the case study provided, applying business principles to analyze the situation and make informed recommendations.
Tips
When calculating profit changes, ensure you accurately account for all revenue increases and cost changes. In marketing mix analysis, consider all 4 elements of the mix (Product, Price, Place, Promotion) and how they interact.
Sources
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