BUS6057 Business Process and Systems

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Birmingham City Business School

BUS6057 Business Process and Systems

Assignment 2019

“CITY A.M. AWARDS 2017 Business of the year.  With consumers’’ wallets increasingly squeezed, Lidl has been dining out on a switch to discount shopping. The German juggernaut, which now has over 670 stores in the UK, leapfrogged Waitrose this summer to become the UK’s seventh-largest supermarket. But its ambitions don’t stop there; Lidl has its sights squarely set on the British middle classes, hitting misconceptions of its food head-on with marketing campaigns about free range poultry and sustainable-farmed mussels”. CITY A.M. 3rd Oct 2017.
You may find the information for LIDL UK retailer online, in Keynotes in the Library, Company reports, cases online, and the financial press.  The literature sources should be books, journals, refereed papers and appropriate online sources.  You should find the sources of information that you will use to deliver the three assessment parts within the first four weeks of the course.  This is important and failure to complete this task will jeopardise your performance on the module.  Your submission should address the following 3 Parts:
Part 1
Using the specific operations performance objectives it can be argued that LIDL UK is focussed on satisfying its customers’ requirements for fast and dependable services at a reasonable market price, through strategic partnerships that assist its customers to improve the services they offer (value for customers).  Specifically you should:

  • Outline the essential components for ‘effective business operations management’ (creating value for the customer) for LIDL’s operation within the UK.
  • Use a soft systems methodology to evaluate the issues LIDL UK might face if they decide to introduce hybrid facilities to allow their customers to continue shopping in store, as well as ‘order goods online and have these delivered to the door’ to compete in the market place. Support your discussion with appropriate business operations and business process models (i.e. the five operation objectives and the Four Vs (volume, variety, variation and visibility), customer value, the service gap model etc.). 

TIPS:

  1. You should start with what LIDL UK are doing well compare to the sector (why customers shop at LIDL UK).
  2. Research the problems they may face changing their business model (going hybrid – the change) using Soft Systems Methodology (critical analysis of need/problem to be solved).
  3. Support your discussions with appropriate operations models (quality/depth).

 

  • You should compare and contrast different models used by the sector in which LIDL UK operates and recommend appropriate solutions to continue being competitive in the market, make easier for customers to select and buy their products (issues to consider centralised/decentralised inventory and delivery chain, customer value chain, cost implications, sustainability etc.).
  • Comparison of different solutions with costing and choose one solution to take forward with reasoning. Business process issues to consider: What are the main elements of the service concept, and are these pf equal importance to all customers? What trade-offs have had to be made in the design to deliver a quality service package to all of LIDL’s customers.
  • With reference to the parcel conundrum (http://www.bbc.co.uk/news/magazine-18709348) recommend how LIDL UK should respond to this conundrum (keeping in mind the possible technological and environmental (CO2) impact).

 

  1. Your academic enquiry should lead to synthesis of important issues around the problem and solution.
  2. Critical analysis and evaluation of customer’s digital experience, how the new model will enhance the customer’s experience.
  3. Innovative ways to serve their customers better.
  4. Consider the services which are unique and benefits to LIDL UK.
  5. Consider customer value for shopping online and in store (which market sector are they chasing by changing the business model.
  6. Comparison of different solution with costing and choose one solution to take forward with reasoning.
  7. Following models not to be included in here Porter or Swot you may use these for your own research.
  8. Writing should be essay style (Synthesise) no bullet points, no graphs, no tables or pictures
  9. Appendix not allowed.

 

 
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Inflation, interest rates, income level, government tariffs

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Question B3
 
“U.S.-China economic ties have expanded substantially since China began reforming its economy and liberalizing its trade regime in the late 1970s. Total U.S.-China merchandise trade rose from $2 billion in 1979 (when China’s economic reforms
began) to $636 billion in 2017. China is currently the United States’ largest merchandise trading partner, its third-largest export market, and its biggest source of imports. In 2015, sales by U.S. foreign affiliates in China totaled $482 billion. Many U.S. firms view participation in China’s market as critical to their global competitiveness. U.S. imports of lower-cost goods from China greatly benefit U.S. consumers. U.S. firms that use China as the final point of assembly for their products, or use Chinese-made inputs for production in the United States, are able to lower costs. China is also the largest foreign holder of U.S. Treasury securities (at $1.2 trillion as of April 2018). China’s purchases of U.S. debt securities help keep U.S. interest rates low… More recently, the Chinese government has diversified its investments in order to obtain higher returns, such as by encouraging its firms (especially SOEs) to invest overseas to become more globally competitive, as well as to help China gain access to raw materials (such as oil), food, and technology. As a result, Chinese annual FDI outflows have grown significantly in recent years, rising from $21 billion in 2006 to $183 billion in 2016, making China the second-largest source of annual global FDI outflows.”1(W. M. Morrison, 2018)
 
As you work for a U.S. company that exports goods to China, you are expected to forecast the value of U.S. dollars with respect to the Chinese yuan.
 
Required: Explain how each of the following conditions will affect the demand and supply of the currencies, hence affect the value of the dollar against Chinese yuan, holding other things equal.
 

  1. a) While U.S.’s inflation remains low, Chinese inflation increased substantially. (4 marks)

 
 

  1. b) Chinese interest rates have increased substantially, while U.S.’s interest rates remain low. Both countries’ investors are attracted to high interest rates. (4 marks)

 
1 Wayne M. Morrison, “China-U.S. Trade Issues”, Congressional Research Service, July 2018

  1. c) With the economic growth, the income level increased substantially in China while U.S.’s income level has remained comparatively stable. (4 marks)

 
 

  1. d) The U.S. government is going to increase the tariff on goods imported from China. As a result, Chinese government will also increase the tariff on goods imported from the U.S. (6 marks)

 
 

  1. e) Based on the reported figures of trade and investments between the US and China, combine all expected impacts mentioned from Question (a) to (d) to develop an overall forecast of the dollar’s movement against the Chinese yuan. (10 marks)

 
Total 28 marks
 

 
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Exchange rate, Money market hedge, interest arbitrage, Inflation, interest rates, Economics

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Section B (Attempt TWO questions in Section B)
Question B1
HB Corp., a UK company, has subsidiaries in the U.S., Germany, Singapore and
Australia. It regularly sells goods denominated in U.S. dollars. The company will have
two transactions in the near future:
Three months (90 days): Paying 400,000 Euros for imported goods
Six months (180 days): Receiving 600,000 USDs for exports
The following exchange rates and interest rates are available for the company:
Bid Quote Ask Quote
(bank buys) (bank sells)
Spot exchange rate (Euro per £1): 1.17 1.13
Three-month forward rate (Euro per £1): 1.10 1.05
Spot exchange rate (USD per £1): 1.217 1.188
Six-month forward rate (USD per £1): 1.202 1.178
Spot exchange rate (AUD per £1): 1.762 1.735
1-year forward rate (AUD per £1): 1.765 1.738
1 year (360 days) interest rates:
Borrow Deposit
USD 7.8% 4.0%
Pound 6.7% 2.4%
Euro 6.2% 3.2%
AUD 7.8% 5.2%
a) Suggest how HB Corp. could implement a money market hedge for payables,
support your answer with detailed calculations. Would HB Corp. be better off using
forward hedge or money market hedge? Substantiate your answer with estimated
cost each type of hedge.
(10 marks)
b) The company has recently received £800,000 and is considering invest in Australia
to exploit the higher interest rate. What is the yield to the company if it conducts a
covered interest arbitrage? Would covered interest arbitrage work for the company
in this case? (Ignore transaction fees and tax effects.)
(10 marks)
c) Based on the question above, discuss how the Australian dollar’s spot and forward
rates will adjust until covered interest arbitrage is no longer feasible. Why are
arbitrage opportunities diminishing quickly after they have been discovered? To
illustrate your answer, assume that the immediate purchase and forward sale of
Australian dollar is allowed. What is the resulting equilibrium state referred to?
(8 marks)
Total 28 marks
Question B2
a) Scandina Corp., a Swedish furniture producer, plans to establish a subsidiary in
Malaysia in order to penetrate the Asian market. The company’s managers believe
that the value of Malaysian ringgit is relative weak now and will strengthen against
the Swedish Krona over time. If their expectations about ringgit’s value are correct,
how will this affect the costs and earnings of the project? Explain.
(5 marks)
b) Scandina Corp. is also considering a joint venture with a Malaysian company IDEAL
AS for two years. Scandina will invest 20 million ringgits to help to finance IDEAL’s
production. For each of the two years, 50% of the total profits will be distributed to
the Malaysian company and the other 50% will be converted to krona to be sent to
Sweden.
The estimated total profits resulting from the joint venture per year are as follows:
Total Profits (in ringgits)
Performance Probability Year 1 Year 2
Strong 80% 30 million 50 million
Poor 20% 10 million 20 million
Scandina is concerned about the country risk that the Malaysian government is
likely to increase the corporate tax rate imposed on joint venture from 10% to 20%
beginning from Year 1 and the possibility is 50%.
Scandina’s average cost of capital is 12 per cent and it automatically adds 3
percentage points to it cost of capital when deriving required rate of return on
international joint venture projects. Though this project has particular form of
country risk that is unique, Scandina plans to account for the form of risk within its
estimation of cash flows.
Required:
Determine the expected net present value of Scandina’s investment. Would you
recommend Scandina to participate the Joint Venture? Explain.
(15 marks)
c) Scandina finally decided to penetrate Malaysian market by purchasing an 80%
stake in IDEAL AS, a Malaysian company that produces furniture. How can
borrowing Malaysian ringgit locally from a Malaysian Bank reduce the exposure of
Scandina to (i) exchange rate risk and (ii) political risk caused by government
regulations? (8 marks)
Total 28 marks
Question B3
“U.S.-China economic ties have expanded substantially since China began reforming
its economy and liberalizing its trade regime in the late 1970s. Total U.S.-China
merchandise trade rose from $2 billion in 1979 (when China’s economic reforms
began) to $636 billion in 2017. China is currently the United States’ largest
merchandise trading partner, its third-largest export market, and its biggest source of
imports. In 2015, sales by U.S. foreign affiliates in China totaled $482 billion. Many
U.S. firms view participation in China’s market as critical to their global
competitiveness. U.S. imports of lower-cost goods from China greatly benefit U.S.
consumers. U.S. firms that use China as the final point of assembly for their products,
or use Chinese-made inputs for production in the United States, are able to lower
costs. China is also the largest foreign holder of U.S. Treasury securities (at $1.2 trillion
as of April 2018). China’s purchases of U.S. debt securities help keep U.S. interest
rates low… More recently, the Chinese government has diversified its investments in
order to obtain higher returns, such as by encouraging its firms (especially SOEs) to
invest overseas to become more globally competitive, as well as to help China gain
access to raw materials (such as oil), food, and technology. As a result, Chinese
annual FDI outflows have grown significantly in recent years, rising from $21 billion in
2006 to $183 billion in 2016, making China the second-largest source of annual global
FDI outflows.”1
(W. M. Morrison, 2018)
As you work for a U.S. company that exports goods to China, you are expected to
forecast the value of U.S. dollars with respect to the Chinese yuan.
Required:
Explain how each of the following conditions will affect the demand and supply of the
currencies, hence affect the value of the dollar against Chinese yuan, holding other
things equal.
a) While U.S.’s inflation remains low, Chinese inflation increased substantially.
(4 marks)
b) Chinese interest rates have increased substantially, while U.S.’s interest rates
remain low. Both countries’ investors are attracted to high interest rates.
(4 marks)
1 Wayne M. Morrison, “China-U.S. Trade Issues”, Congressional Research Service, July 2018
c) With the economic growth, the income level increased substantially in China
while U.S.’s income level has remained comparatively stable.
(4 marks)
d) The U.S. government is going to increase the tariff on goods imported from
China. As a result, Chinese government will also increase the tariff on goods
imported from the U.S.
(6 marks)
e) Based on the reported figures of trade and investments between the US and
China, combine all expected impacts mentioned from Question (a) to (d) to
develop an overall forecast of the dollar’s movement against the Chinese yuan.
(10 marks)
Total 28 marks

 
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LIPC1110 De Montfort University Leicester Amazon Company Analysis

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De Montfort University International College
Programme title:     IFY, BAL
Module Title:            Academic and Professional Practice
Module code:          LIPC1110
Owning Board:       Joint Academic Board (DMU/OIEG)
Faculty:                     University Wide Learning (DMU)
Term/semester:      Autumn Term, October 2019
Module Tutor:         Neeha Goswami
Email address:        Neeha.goswami@dmu.ac.uk
Assignment 1:       Course work, Individual Essay
Weighting –              50%
Word count:             1,200 words
Submission date:     Wednesday 6th November 2019, by 9am, via Turnitin
 
Learning outcomes:
LO2.               Manage their time effectively
LO3.               Manage their studies effectively
LO4.               Demonstrate academic reading, writing and reflection skills
LO5.               Think critically
LO8.               Think and act in a professional manner
 
 
 
A major expectation of all assessments whilst at DMU/DMUIC is that students work in the English language and generate their assignments in the English language.  Initial work should therefore be produced in English, NOT a second language.  This means that the use of any language generation, paraphrasing or translation software, or web sites, is actively discouraged.  The use of such tools may be considered as Bad Academic Practice and as such the consequences outlined in the module guide will apply.  Failure to observe these instructions may result in a loss of mark awarded.
 
 
 
 
Assignment 1
Case Study
Amazon’s hiring process is notoriously difficult.
The company believes that every new employee should increase the average level of productivity on whichever team they join, ensuring that the company’s standards get higher and higher as time goes on.
Its interviews are no joke either, having in the past used difficult questions ranging from “How would you solve problems if you were from Mars?” to “You are Amazon, and Samsung offers you 10,000 Samsung Galaxy S3s at a 34% discount. Is that a good deal?”
Back in the early days of the company, founder and CEO Jeff Bezos shared with a colleague an idea that perfectly encapsulates Amazon’s hiring philosophy.
According to a Fast Company story, Bezos said, “I’d rather interview 50 people and not hire anyone than hire the wrong person.”
This philosophy explains why the company uses employees it calls “bar raisers” to weed out people who aren’t a perfect fit for company.
Bar raisers are full-time employees who, in addition to all their other duties, spend 2o to 30 hours a week interviewing potential job candidates for positions in other parts of the company.
Excluding warehouse workers, each prospective employee goes through five interviews that take two to three hours each. And if a bar raiser has an objection to Amazon hiring the candidate, they can simply veto the application.
In addition to making sure every hire fits in with the company’s culture, the bar raiser program smartly prevents a manager from hiring the wrong person because there is an opening that needs to be filled. Since the bar raisers come from other parts of the company, they have less pressure to hire someone quickly.
As Bezos put it in his 1998 letter to shareholders, “Working to create a little bit of history isn’t supposed to be easy, and well, we’re finding that things are as they’re supposed to be! … Setting the bar high in our approach to hiring has been, and will be, the single most important element of Amazon.com’s success.”
 
 
 
 
 
 
Assessment:                                                                                                                                                                                                                                                                                                         This assessment will contribute to 50% of the total module marks.  Individually you are required to read the case study detailed on the previous page and write a 1,200-word essay providing solutions to the following issues.
Questions
1.     Identify and explain Amazons recruitment process in America. How might the recruitment process at Amazon UK differ?                                                                        (10)
 
Marks
Description
No relevant content.
1-2
Knowledge of recruitment process is limited, poorly focused or absent. The answer as a whole lack’s clarity, has many inaccuracies and is poorly organised. Specialist terminology either absent or inappropriately used.
3–5
Knowledge of the recruitment process is present. Focus is mainly on description. The answer lacks clarity, accuracy and organisation in places. Specialist terminology used inappropriately on occasions.
6-8
Knowledge of the recruitment process is evident. There are occasional inaccuracies. The answer is mostly clear and organised. Specialist terminology is mostly used with research to support any claims.
9-10
Knowledge of recruitment process is accurate and generally well detailed. Clear comparison with reasoning. The answer is clear, coherent and focused. Specialist terminology is used effectively. Research used to support answer.
2.     Identify and explain where Amazon advertise, discuss the advantages and disadvantages of this method?                                                                                        (15)
 
Marks
Description
No relevant content.
1–3
Knowledge of advertising methods is limited, poorly focused or absent. The answer as a whole lack’s clarity, has many inaccuracies and is poorly organised. Specialist terminology either absent or inappropriately used.
4–6
Knowledge of advertising methods is present. Discussion of advantages and disadvantages of recruitment methods is limited. Focus is mainly on description. The answer lacks clarity, accuracy and organisation in places. Specialist terminology used inappropriately on occasions.
7-9
Knowledge of advertising methods is evident. Discussion of advantages and disadvantages of recruitment methods is apparent and mostly effective supported by research. There are occasional inaccuracies. The answer is mostly clear and organised. Specialist terminology is mostly used.
10-15
Knowledge of advertising methods is accurate and generally well detailed. Clear discussion of advantages and disadvantages of recruitment methods. The answer is clear, coherent and focused. Specialist terminology is used effectively. Research used to support answer.
 
 
 
 
 
 
3.     Identify and explain what type of contracts Amazon provide to the new recruits. Discuss why you think they do this.                                                                                   (15)
 
Marks
Description
No relevant content.
1-3
Knowledge of contract types, poorly focused or absent. The answer as a whole lack’s clarity, has many inaccuracies and is poorly organised. Specialist terminology either absent or inappropriately used.
4–6
Knowledge of contract types is present. Discussion of advantages and disadvantages of different contract types is limited. Focus is mainly on description. The answer lacks clarity, accuracy and organisation in places. Specialist terminology used inappropriately on occasions.
7-9
Knowledge of contract types is evident. Discussion of advantages and disadvantages of different contract types is apparent and mostly effective supported by research. There are occasional inaccuracies. The answer is mostly clear and organised. Specialist terminology is mostly used.
10-15
Knowledge of contract types is accurate and generally well detailed. Clear discussion of advantages and disadvantages of different contract types. The answer is clear, coherent and focused. Specialist terminology is used effectively. Research used to support answer.
4.     Jeff Bezos believes having ‘bar raisers’ involved in recruitment is effective. Evaluate how this would be seen to motivate or demotivate the employees.                                 (30)
 
Marks
Description
No relevant content.
1-7
Knowledge of motivation is very limited. Application is limited, poorly focused or absent. Evaluation is limited, poorly focused or absent. The answer as a whole lack’s clarity, has many inaccuracies and is poorly organised. Specialist terminology is either absent or inappropriately used.
8-14
Knowledge of motivation is present. Focus is mainly on description. Any application is of limited effectiveness. Any evaluation is of limited effectiveness. The answer lacks clarity, accuracy and organisation in places. Specialist terminology is used inappropriately on occasions.
15-22
Knowledge of motivation is evident but there are occasional inaccuracies/omissions. Application/evaluation of the explanations is mostly effective. The answer is mostly clear and organised but occasionally lacks focus. Specialist terminology is used appropriately. Research used to support answer.
23-30
Knowledge of motivation is accurate and generally well detailed. Application is effective. Evaluation of the explanations is thorough and effective. Minor detail and/or expansion of the argument is sometimes lacking. The answer is clear, coherent and focused. Specialist terminology is used effectively. Research used to support answer.
 
5.     “Setting the bar high in our approach to hiring has been, and will be, the single most important element of Amazon.com’s success”. – In light of Amazon’s current performance, evaluate this statement.                                                                               (30)
 
Marks
Description
No relevant content
1-7
Knowledge of business success is very limited. Application is limited, poorly focused or absent. Evaluation is limited, poorly focused or absent. The answer as a whole lack’s clarity, has many inaccuracies and is poorly organised. Specialist terminology is either absent or inappropriately used.
8-14
Knowledge of business success is present. Focus is mainly on description. Any application is of limited effectiveness. Any evaluation is of limited effectiveness. The answer lacks clarity, accuracy and organisation in places. Specialist terminology is used inappropriately on occasions.
15-22
Knowledge of business success is evident but there are occasional inaccuracies/omissions. Application/evaluation of the explanations is mostly effective. The answer is mostly clear and organised but occasionally lacks focus. Specialist terminology is used appropriately. Research used to support answer.
23-30
Knowledge of business success is accurate and generally well detailed. Application is effective. Evaluation of the explanations is thorough and effective. Minor detail and/or expansion of the argument is sometimes lacking. The answer is clear, coherent and focused. Specialist terminology is used effectively. Research used to support answer.
 
 
Assessment Deadline: Before 9.00am on Wednesday 6th November 2019 via Turnitin on Blackboard.
 
Contact: Please email  Neeha.goswami@dmu.ac.uk if you have any queries, prior to the submission date.
 
 
 
 
 
 
 

 
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