Link to the case study: https://drive.google.

com/file/d/1f_AK4AVi9DFZ_BMxy3mssaz6u8qbUd0f/view

We should add the answers to the questions directly on to the doc

(like not as comments)
How do you guys wanna add if there is more than one answer to
the question? As separate bullet points?
True
Yea
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IB Business Management

Paper 1 Case Study Analysis

Collaboration Document - 2019
As the original document had too many recipients,
this has been created as a backup doc. It will be
regularly updated with questions and comments from
the original doc, but please contribute to this doc as
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TABLE of CONTENTS

POTENTIAL QUESTIONS 4
Unit 1 - Business Organization & Environment 4
Unit 2 - Human Resource Management 11
Unit 3 - Finance & Accounts 14
Unit 4 - Marketing 15
Unit 5 - Operations Management 18
(Additional Information) - Section C - Possible Extra Stuff on the Paper 19
 Social 24
Technological 25
Economic 26
Ethical 27
Political 27
Legal 28
Environmental 28
SWOT Analysis of RDM - Detailed 29
Strengths: 29
Weaknesses: 30
Opportunities: 32
(Previous/Present) Threats: 33

SWOT Analysis of RDM - Condensed 34

Strengths 34
Weakness 34
Opportunities 35
(Previous/Present) Threats 35
Ansoff Matrix 36
Market Penetration 37
Product Development 37
Market Development 37
Diversification 37

Generalised Force Field Analysis (20) 38

FORCE FIELD ANALYSIS: 39

Boston Consulting Matrix (BCG) to analyze ‘product portfolio’ 41
Terms & Definition 44
Organizational History 52
UNITS IN THE CASE STUDY: 54

Stakeholder Analysis 56
May 2019: RDM Case Study Notes 62
Product: 69
Price: 69
Place: 70
Promotion: 70
People: 70
Process: 71
Physical evidence: 71
POTENTIAL QUESTIONS

Unit 1 - Business Organization & Environment

1. Define the term corporate social responsibility and the

advantages (CSR) [2/4 marks].
Definition: This applies to businesses that consider the interest of society by taking
responsibility for the impact of their decisions and activities on customers,
employees, communities and the environment. When a firm fully accepts its legal
and moral obligations to stakeholders it is said to be accepting corporate social
responsibility. RDM has a strong sense of CSR since the business first started
when CSR was not common around businesses. The family had a paternalistic
attitude towards all the workers in the company. In present time, RDM is accepting
corporate social responsibility by sourcing components from businesses who also
have good CSR practices, paying fair wages to employees, and caring about the
environment (line 99-104).
 CSR is a type of internal business self-regulation, that takes into account ethical and
fair actions/operations and relations with employees
 It is a firm's duty to act ethically and morally during its decision making process, in
order to positively affect all stakeholders
 Corporate Social Responsibility is when a business realises its impact on external
stakeholders and third parties, and thus, takes action towards it. This shows that the
company is aware of its impact on the environment. Therefore, this realisation
improves RDM's brand image, and thus their customer loyalty. Another important
reason to implement CSR into a business is, that it motivates workers, or is at least a
hygiene factor for workers in the business. This is because, now, workers can see
that RDM is an ethical company, and so will not do anything unethical with the
employees as well.
 CSR is a business’s approach which contributes to sustainable development by
delivering social, economic, and environmental benefits to all stakeholders

Advantages from adopting CSR include a better brand image and reputation, less
negative attention from pressure groups and aid customer loyalty as current
demographics are displaying a demand for ethical production and fair practice.
Increased employee motivation if their values align with that of the
business - becoming more and more important in firms and society

2. Explain two reasons why organizations such as RDM implement

corporate social responsibility strategies [6 Marks]
Objectives to meet social responsibility have become increasingly common
amongst businesses. A reason for RDM to implement corporate social
responsibility is that the image of the business and its products can be improved
with a green and socially responsible approach. This could become a major
competitive advantage, attracting new customers and loyalty from existing
customers. Secondly, workers often prefer to work at businesses that are
socially aware. As a result, the business will be able to attract the best-
motivated and efficient employees more easily. In fact, majority of the
employees love the environment they work in which a fun and creative
environment to work in (lines 96-97). Long-term profitability should result from
the reasons mentioned above.
 The reasons why they implement CSR is in short, to improve their brand image and
customer loyalty, and be a hygiene factor for their employees, who love the environment
they work in.

a. Explain one advantage for RDM of implementing another project based

organization structure [4 marks]
 Improved communication between workers from different areas (Matrix
structure)
 Benefit from the broader range of skills and expertise of people across the
organization
 Improved sense of teamwork, which can increase motivation and productivity
at RDM
 Culture of teamwork and collaboration can be formed which could potentially
decrease costs

3. Analyze the benefits of being a private company.[6 marks]

Definition: A private limited company is a small to medium sized business that
is owned by shareholders (not more than 50 individual shareholders) who are
often members of the same family. For RDM, the shareholders are from the
Radeki de Dovnic family who own 100% of the business.
Benefits:
 Shareholders get to benefit from limited liability
 Continuity in the event of the death of the CEO. For RDM, the business was
able to continue after the death of Dr. Kristian as Jan, his son took over the
business.
 Able to raise capital from sale of shares to family, friends and employees
- Security as going public can make RDM vulnerable to takeover

Disadvantages:
• Although it has shareholders as family members, friends and / or business
partners, the sources of financing for RDM are limited as it is not listed on the
stock exchange.
 Limited growth opportunities

 A private limited company is a type of business, small to medium sized, the is owned by
shareholders, who are often members of the same family or close group. Being a private
family business, the advantages or benefits are that the company has privacy against their
competitors. This means that their financial performance and accounts are not open to the
world. Secondly, being an Ltd. means that RDM have limited liability, and thus only lost the
amount they have invested. However, being a family owned business, and a limited
company, they have limited access to finance, as there are very limited shareholders.
However, being an Ltd. also means that the chance of being taken over by another officer
shareholder is very less. Also, in an event of death, there is always a continuation, as there
are family members to help the business out.

4. With reference to RDM/the case discuss the usefulness of a vision and a

mission statement. [6 marks]
 Vision definition: The vision of a business is a written declaration of where the
organization aspires to be in the future… where is the business going?
[example of a vision statement that is not part of RDM, just as an fyi, “a safer
community together”]
  Sets the framework for daily business operations conducted by managers and
employees
 Mission Definition: States what the company's current goals and the purpose of
the business existing… why does the business exist? [example of a mission
statement that is not part of RDM, just as an fyi, “to protect the lives, property,
rights, of all through service”, etc]
 Framework for decision
 To inspire stakeholders and create a shared belief
 Give the company a sense of purpose, sense of drive (motivation) and direction
for executives, engineers, computer experts, and a sense of direction
 Can improve productivity as employees are more aware of what they need to
do
 The vision and mission statements provide a focal point that helps to align
everyone with the organization, thus ensuring that everyone is working towards
a single purpose, increasing productivity

 Relevance to RDM:
 Problem… what the case says: “RDM has no corporate strategy either, apart
from a vision in Jan’s mind. He effectively communicates that vision to
employees, but no written corporate strategic plan exists to achieve that vision.
RDM has an outdated name, a weak brand identity, no relevant vision or
mission statement and no written operations management strategy or human
resources plan.” (page 4).
 RDM needs a mission/vision to develop the marketing strategy that Jan wants
by unifying RDM under one idea that will give sense of purpose to employees.
 Motivation
 Productivity
 Sense some employees claim that RDM lacks focus, mission statements will
provide a clear sense of direction

5. Explain the factors which forced RDM to invest in automation. [6 marks]

 The changes in the market as well as the competitors. This results from
globalization, fierce competition is developed and these competitors have
processes of production which are very low cost. This led to Jan determining
that in the 2000’s European manufacturers would also have very low cost
structures. In order to stay competitive RDM had to invest in this as well.
Technological changes also encouraged this change since it made it a more
achievable possibility.
 Type of product and business
 Good IT infrastructure in the Czech Republic
 Reduce labour cost

6. Explain the importance of RDM having a USP (unique selling

proposition) for its aluminium bottles
 Sets them apart from competitors, allows them to set the price for the product,
builds their brand image
 Can give the business a competitive advantage which may allow them to
increase their market share
7. Explain the stakeholder conflict that would have emerged due to the
changes made in the production process. [6 marks]
Possible changes in production process in RDM:
“To continue to grow and access these potentially lucrative markets, the chief
financial officer (CFO) has proposed that RDM build an additional production
facility elsewhere in Europe, which would extend RDM’s market area. Given
that the entire order/manufacture/delivery process could still be performed in
Lobjanec, this new facility would require limited staff and most of the work will
be done by robots. RDM can finance the expensive expansion through either
share capital or loan capital. Relocation could be very expensive and may be
beyond what RDM could raise as a private limited company so they may have
to go public to raise sufficient finance.” (page 4)

Stakeholders:
 Internal:
o Employees and managers: major conflict would be regarding job
security but RDM would “new facility would require limited staff”...
the case study is not explicitly stating what will happen with
current employees and managers at Lobjanec.
 But we can assume that it will create new jobs in the new
area in Europe, which would mostly bring positive impacts
 But even though it will be in Europe, different zones
may bring culture clashes
o Shareholders: as long as they get their profit and dividends, there
will be no major conflict
 External:
o Suppliers: no conflict but they will have to adapt to delivering raw
materials to RDM on the new zone. This means that adapting
might make it uncomfortable for them, and thus cause a conflict
on a small scale.
o Customers: interested in value for money, as long as they get a
fair price, no major conflict
o Government: will depend on which country RDM is planning to
expand
o Special interests groups: pressure groups such as
environmentalists may go against RDM new facility if RDM is not
being socially responsible (taking care of water, land, or is not
paying a fair wage to workers)
o Competitors: if RDM (given that it seems as RDM is successful
and gets profit), it may present a potential threat for local
businesses in that new area.

8. Discuss the impact on RDM when 95% of private sector companies were
nationalized by the communist takeover. [8 marks] (hard one can anyone answer
this:))
 Communist using mostly autocratic reign
-Government influence in making decision - RDM lose some control
-Nationalisation will reduce RDM efficiency - RDM may not be towards profit-
maximise
 (Communist regimes often set production goals for certain products. These
plans have a limited amount of time in which a business must meet the
production quote imposed by the state. If RDM is unable to meet the quote they
might resort to focus more on quantity than on quality hence impacting the
brand image and quality standards.)
-Since the company in publicized in a communist country, RDM would lose a
large amount of their profit as they would need to provide it to the government,
and only keeping a small amount for themselves.
-Positive impact ++ RDM have higher chance to receive subsidy/grant from
government
- Employee motivation is put at risk as when RDM is converted to a public sector
business, firstly, the wages are lowered. Secondly, a government business is
not run on profits and thus does not have any employee benefits or perks, and
does not have a good environment to work in. This is because the business is
run on government revenue. In addition, the quality of product is also put at
stake as the government will have a limited budget.

Discuss diseconomies of scale with reference to RDM [6 marks]

 Given that RDM’s production process is specialized for each customer, they
employ job production. RDM cannot use economies of scale to buy bulk raw
material for their machines because each client’s needs differs. In addition,
skilled workers (engineers) are required to alter and input data into the
machines, they are also required to have a lot of flexibility to find other ways to
make customer specifications even more fine-tuned. The training and hiring
process for such trained workers is often very resource-intensive to perform
well for job production.

9. Evaluate the impact on RDM from being shifted to the private from the
public sector in the year 1989. (8 marks)
More Control for Family
Easy + quick Decision making
Increasing motivation since government aims for governmental profit and
lowered wages

10. What motivation theory is applicable to the employees of RDM in 2019?

Why? [2-4 marks]
Pink's Theory (Autonomy, Mastery, Purpose) is applicable to the employees of
RDM in 2019, because they are recruited straight out of universities throughout
Europe, meaning that they are likely younger and trying to establish themselves
further. This is unlike the factory workers who used to work with RDM, as they
were more motivated using Maslow's Hierarchy of Needs or Adam's Equity
Theory

11. With the reference to the case study describe two advantages of
democratic leadership style [4 marks] (NEW)
One advantage would be the fact that a democratic leadership can be
motivational, as workers feel that their opinions and their input is valued, thus, creating
a greater sense of belonging and staff loyalty. In addition, this boosts employee
motivation and efficiency. Moreover, the collaborative environment often results in
better informed solutions to challenges and problems. From line 87; Teams composed
of all business functions manage orders. This is due to the democratic leadership by
Jan who replaced his father who was a paternalistic leader.

Outline two factors which may have affected RDMs corporate culture. HL (4 marks)
this is a hard question.
When the company was owned by the government
12. Discuss the use of a SWOT analysis for RDM [4 or 6 marks]
13. Prepare a SWOT for RDM. [8 marks]

S W
Strengths Weaknesses
 100% owned by the radeki de dovnic family  No marketing plan
(line 1)  No relevant vision or
 No shareholders to bare in mind mission statement (line
 Streamlines decision making 123)
process as decisions can be made  No Brand identity
on the spot and not have to consult  Insufficient guidance
anyone else and lacks focus (line 98)
 Competitive advantage - highly  Lack of
customizable goods - very attractive for the motivation -
customer (lines 35-42) better leadership
 There is a culture of innovation could fix this
 Over 100 years old - well established,
experience, good track record with
customers

O T
Opportunity Threats
 Baby boom generation  Division of the country
 Increase automation further  Rising competition from
 Velvet revolution and its impact the Asian market
 Relocation  Expensive factors of
 Globalization (Market production
penetration/diversification)  Healthcare product
 Innovation regulation
 Stable economy  Community
 Favourable trade relations Ambivalence
 Political stability  High transportation cost
 Major tourist centre- Prague
 Growing technology
 Germany: Europe’s largest economy
 Increasing ageing population- growing
demand
 Free movement of labour within the
european Union

Opportunity (expanded - demographics)

Position map

I.e., possible places where Dovnic could expand (based on Hofstede’s culture) to
minimise culture clashes
Germany (good econ) could be an option but it is within the 700 radius.
UK could be the new location in Europe (i.e., if business switches to health care products
exclusively (such as 3d printing), the NHS might be a possible customer)

Within Czech republic, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3375100/


 
 Main problem: ageing population, preventable diseases (liver diseases, diabetes)

14. Using the Ansoff Matrix, discuss the growth strategy of RDM. [8 marks]
15. Define the term mission statement (line 123) [2 marks]
Mission statement is a declaration of an organization’s fundamental purpose. It
forms the foundation for setting the objectives of a business.
16. Define the term location (line 106) [2 marks]
The location of both the customer and production influence shipping costs and
times. Location has a large impact on the profitability of a business.
17. Using the STEEPLE framework, examine the impact of the external
environment of the Czech Republic on RDM. [8 marks] (Can somebody answer this?)
HARDq
18. To what extent does CSR help RDM be successful? [8 marks]
19. Evaluate the decision of building a new production facility in another location in
Europe. [8 marks]
20. Explain two key functions of management [4 marks]
 The role of management is to: Communicate, Lead, Organize, Motivate,
Represent, be a Role Model
21. Explain the importance of leadership at RDM [4 marks]
22. Explain two roles of mission statement [4 marks]
a. A vision statement outlines an organizations aspirations (where it wants to be)
in the distant future.
23. Discuss the appropriateness of share capital to RDM as a source of finance for
the construction of an additional production facility. (lines 111-117) [7 marks] Similar
question Q3
24. Define the term vision statement (line 123) [2 marks]
25. In the context of RDM, explain the meaning of capital expenditure (line 54)
Definition : The money spent to acquire fixed assets in a business that will last
for more than a year and may be used over and over again.
26. Explain why it is important that RDM generates new revenue streams
27. Explain the importance of human resources plan (line 124) for RDM
28. State two stages in the product life cycle [2 marks, or 4 if explaining is specified]
29. Draft a corporate strategic plan for RDM

Business Plan:

The  Radeki de Dovnic Manufacturing, Lobjanec Czech Republic

business  Adriana Radeki de Dovnic (CEO), Kristián Radeki de Dovnic
(CEO), Jan (CEO)
 Private limited company

The  Coal burning stoves, oil burning stoves, healthcare,

product customizable bottles
 USP: customization of products (healthcare products can be
designed by customers and then reviewed by engineers)
 Factory is highly automated (robots and machinery) - capital
intensive

The market  Target market: baby boomer generation. Ageing Population

enables RDM to utilize the first mover’s advantage and capture
large market share in this relatively new market.

The  Loan and share capital for relocation

finance

The  117 workers

personnel  Not skilled manual labourers but highly trained engineers and
computer experts
 Manage automated processes, accountants and delivery
 Recruits employees from universities across Europe

The  Product sold directly to customers (web page for design

marketing requests), no intermediates
  USP: customer service is very personalized, customization of
products

Potential additional information:

On 1 January 2016, RDM purchased new machinery at a cost of $50,000 rather than
leasing it. RDM’s financial manager researched further information:
*The machinery has a useful life of four years.
*Its residual or scrap value will be $8000.
*The engineering industry uses a 40% depreciation rate per annum. ning is concerned
with the identification of resources that are available and their allocation to meet specified
objectives.”
*Technology in this industry is changing rapidly.

GD’s financial manager has not yet decided on which depreciation method (such as
straight line
or reducing/declining balance) to use for the new machinery.
1. Describe one disadvantage for RDM of leasing. [2]
Leasing is expensive in long-term.
Leasing can turn out to be more expensive than the outright original purchase
of an asset due to the accumulated total cost of the leasing charges.
When leasing, the assets aren’t considered fixed assets since they aren't the
companies property, therefore in case of needing to raise finance, leased
assets aren’t helpful

2. Calculate the value (also known as net book value) of new machinery at 31
December 2017 using the straight line depreciation method (show all your working).
[2] HL

3. Calculate the value (also known as net book value) of new machinery at 31
December 2017 using the reducing/declining balance method, applying the industry
depreciation rate of 40% per annum (show all your working). [4]

4. Explain one advantage for RDM new balance depreciation method. [2]

Unit 2 - Human Resource Management

1. Explain the reasons behind RDM being hierarchical under Kristian. [6
marks] SUP
a. positives
 facilitates decision-making as it shows clear lines of communication
within RDM. (chain of command)
It might create a sense of belonging and boost motivation, as the
workforce is clearly linked to functional department
b. negatives
i.Harder to communicate (?), if longer hierarchical structure, and more autocratic, (long
COC) then it is harder to communicate, and there are communication barriers.
ii.Employees at the bottom of the hierarchy might feel isolated from their managers =
TRU
c. external environment
.political circumstance
3. To what extent do innovation, ethical considerations, and cultural
differences influence human resource practice and strategies in an
organization? [8 marks]
. HARD ONE PLEASE HELP.
.THIS IS MORE OF A CUEGIS QUESTION, WHICH WILL NOT LIKELY COME
UP ON A CASE STUDY PAPER.

3. Discuss the internal and external factors that influence HR planning. [8

marks]

Internal → since the company does job production, but uses the same software
and machines, a long-term workforce is best, since there is a need of training and a
long process of recruitment due to specific profile of highly skilled employees. Labour
turnover rates influences RDM on the profile they’re looking for in their workforce.
Flexibility is needed.

External → demographic changes refer to government data regarding changes

in the demographic of the business. If RDM outsourced, there would be external
factors influencing the HR planning.

4. Evaluate the impact of 8 from a tall structure under Jan’s father to a

project based structure under Jan. [10 marks]
Project based organizational structure
Improved communication between workers from different areas (departments)
A project based hierarchical structure is more flexible, and easier
communication that having a tall structure that Kristian had.
Jan is able to have more control over the company by improving the
communication between Jan and the departments, and between departments.
Improving the order, manufacture and delivery process, even being more
ergonomic. Reducing the waste of time(lean production) of the employees also
related with CSR. Giving employees and managers the opportunity to have
more tasks per day, be more productive, and get to reach the last levels of the
Maslow pyramid: esteem needs and self-actualization. Also, managers are
able to notice if an employee is not doing his or her duty correctly (easier to
evaluate employees for appraisal). There is less hierarchy in the company as
there are less people involved in the processes, for example, in the recruitment
process there might be just two or three filter (interviews) before someone is
hired. Much more organised, and thus is easier to control for Jan. Suitable for
RDM’s type of production business.
5. Explain, with reference to RDM two common steps in the process of
recruitment for [4 marks]
Identifying individual talent
Negotiating wages/fringe benefits
Conducting interviews with potential candidates
Aptitude tests, references, induction
Recruitment:
Identification
Application
Selection
Training
Off The Job
On the Job
Cognitive
Behavioral

Appraisal:
Self
Formative
Summative
360

Dismissal
Dismissal:
Termination:
Redundancy:

6. Discuss the suitability of a democratic style of leadership displayed by

Jan to run RDM. [8 marks]
 Since the HR is structured in a project based organizational structure,
employees are encouraged to give their opinions and seek innovation,
therefore listening and considering the workforce’s point of view helps
Jan see other opportunities while increasing motivation. VERY NICE

7. Identify and discuss Jan’s leadership style in comparison to his father’s

leadership style. [10 marks]
 Jan - Democratic, and more short and project based.
 Kristian - Paternalistic, and more tall structure
8. Using a relevant motivational theory, examine the impact of Jan’s
leadership style. [8 marks]
 Maslow’s pyramid. Being democratic motivates workers in terms of
esteem needs and self-actualization, which are the two top levels of
Maslow’s theory. Being democratic allows them to make sure they don’t
loser their job by giving useful opinions and ideas, and thus fulfills the
security category of Maslow’s motivation theory.
9. Examine the changing role of trade unions in an organization like RDM. [8
marks](HL question)
 Capacity of highly trained engineers to adapt to new circumstances
 Increases motivation (avoiding that workers get bored of doing the same
tasks)
  Helps workers to understand other perspectives of how the business
functions, which can encourage them to emphasize with each other
10. To what extent will the automation influence motivation of employees?
Discuss with reference to one motivation theory. [8 marks]
a. Referring to Maslow’s theory of motivation, the job security category will not be
fulfilled as employees will be worried on losing their jobs to the automation. Also, the
second to top category of intrinsic motivation, and esteem needs, will not be fulfilled,
as employees will be insecure about their performance, and thus become
demotivated. Being worried about their employment status, employees will be
stressed, and will start to lose confidence. However, nothing will happen to their basic
needs of food and shelter, as they will still be getting paid, until they are made
redundant.
11. Discuss the advantages and disadvantages of democratic and
paternalistic style.
Paternalistic leadership shares some features with autocratic leadership in that the
leader has considerable authority over employees.Unlike autocratic leaders, however,
a paternalistic leader views the employees as family a figurative family, certainly, but
a family all the same.
12. Discuss 2 advantages and 2 disadvantages of RDM recruiting employees
from across Europe. [6 marks]
13. Analyze the impact of RDM’s recruiting strategy on their possibilities for
expansion. [10 marks]
14. Distinguish between the leadership styles of Jan and his father [6 marks]
15. Discuss why you think Jan had a democratic style leadership while his
father has a paternalistic style leadership? [5 marks]
16. Explain the appropriateness of paternalistic leadership. [5 marks]
17. Discuss the impact of having no human resources plan on the employees
of RDM [4 marks]
 Line The business had a hierarchy, now teams are composed of individuals from
88 all business functions.
Jan, the new CEO since 2001, has a democratic leadership style which is
Line different from his father's paternalistic style.
89 Most involved in manufacturing are not skilled manual labourers but highly
trained engineers and computer experts would manage the automated
Line process.
95  Jan fosters an atmosphere conducive to creativity, with teamwork,
diversity, humour, and fun. But it seems chaotic sometimes.-Intrinsic
Line motivation
91 o Positive results
o However, some employees complained that there is
insufficient guidance
 Millennials want to learn new skills and develop from
the job
Line Environment of Innovation
99 Shift from depressing environment under Kristian due to the high
redundancy rates.
Strong sense of CSR and caring and paternalistic attitude towards their
Line workers. Environment and fair pay are important to them now.
123 Vision is clearly communicated to employees.

Possible Questions:
 Name two leadership styles
 How does a democratic leadership style differ to a paternalistic style
 Name the differences in the intrinsic and extrinsic motivation of staff
 How does a hierarchy structure benefit RDM?
 Work practices preferences and patterns

Unit 3 - Finance & Accounts

1. Define variable costs and identify 2 variable costs from the case study [2
marks]
Variable costs are costs that vary directly with production
 2 examples are raw materials such as the number of bottles, the used, things
necessary for production rates such as electricity, water, as every product is
produced with specific needs, delivery.

2. Evaluate the source of finance which needs to be used for the new
production facility. [8 marks]
 To acquire properties, Dovnic should lean on joint ventures
 Disadvantages: Dovnic would have to share equipment with other
people (companies), limiting the time that Dovnic can use the equipment.
 But, Dovnic will not always be using the equipment (it is not used during
the 24 hours of the day), so having the machinery without use is a waste
of costs)
 Instead of owning machinery, Dovnic can invest that money instead in
technological advances
 3. Discuss whether or not RDM should use loan capital or share capital to
finance their additional production facility (possible 10 marker)
 Share capital: consists of all funds raised by a company
o The amount a company reports on its balance sheet: only the total
amount initially paid by shareholders.
 Advantages: there is no debt
 Disadvantages: limited cash, and take into account the interests
of shareholders (harder to get to agreement)
 Loan capital: money that a business borrows from banks and other
organizations for an agreed period of time… the company will be paying
interests
o Advantage: You can ask for several loans and don't have “cash limit”
o Disadvantage: Debts and interests
 RDM should use share capital, long term
o Advantages:
 This way there is less investment per person
 There is a reduction of costs because you don’t have to pay
interests in the long term
o Disadvantages:
 There will be many shareholders, so it is harder to get to a
consensus (it will take lots of time, conflict may rise)
4. Justify why RDM should go public to raise finance (line 117) [6-8 marks]
a. The primary benefit of going public is the ability to raise a large amount of capital
without needing to repay the debt on top of the interest (if we are talking about bank
loans), thus the company does not have to factor in repaying debts plus interest. This
can allow them to invest in certain opportunities available:
i.Automate the distribution with autonomous trucks, thus increasing the costs of
transport making it more competitive.
ii.Increased competitiveness with the Asian market, bank loan requires repayment while
going public does not.
iii.Invest in Research and Development making it more competitive.
iv.Expand into other regions in Europe such as North Germany, can access the Low
Countries, Denmark and France.
b. Going public also increases the public awareness of the company.
c. If the owners want to liquidate their stake in the company, an IPO is an effective
exit strategy. I find this highly unlikely due to the historical significance of the company.

5. What type of expenditure does RDM rely on?[2 marks]

Maybe for Finance, they will add a table in the actual paper on the
costs of investment of the new facility or related and make us do
an investment appraisal. Seeming that there is no finance in the
case study, maybe they will add a table in the paper with financial
data.
 Line 54 Requiring capital expenditures for automation - Capital expenditures
Line 105 Delivery costs for the customers
Line 107 Competitive pricing - strategies
Line 115- Finance expansion through either share capital or loan capital -
116 Financing strategies
Appendix 700 km competitive pricing radius
2 Considering private to public limited company transition to sell shares
Line 117 and acquire more capital

Possible Questions:
 Define share capital and Loan capital
o Advantages and disadvantages
 Differences between public and private limited companies
o Private limited companies: are companies that are not
listed within the stock market,
 Advantage: allows centralized management, they
do not have to share sensible info with others
o Public limited companies: companies that are listed within
the stock market
 Advantage: easy financing
 To reach a decision, all of the shareholders need
to agree (or get what they want to agree… they
may not agree with a decision but it it brings profit,
they might lean on to agree)
 Define competitive pricing:
Selecting strategic price points to best take advantage of a
product/service (based on competitors)
 Advantages: increases revenue (wholesale)
 Disadvantages: products may not be of the same quality.
 Profit and loss account: financial statement that summarizes the
revenues, costs, and expenses incurred during a specified period
(the accounting period)
 Balance sheet: a statement of the assets, liabilities, and capital
of a business or other organization at a particular point in time,
detailing the balance of income and expenditure over the
preceding period.
 Break even point for a certain product

Unit 4 - Marketing
1. Explain the reasons which could have forced the company to come up with a
kerosene stove. [6 marks]
2. Explain the usefulness of branding to RDM. [6 marks]
a. RDM has a weak brand identity, therefore rebranding RDM would enable the business to
be more up to date thus new customers as they would be fascinated by the brand that depends
highly on job production, which is not labour intensive and rather capital intensive. Rebranding,
would add to the value of the brand, as brand name could have a price which could move the
company higher up in hierarchy as it would value more.While also, branding could give RDM a
boost in the market enabling it to grow as it would make it stand out.
 3. Explain which part of the marketing mix has been greatly focused upon. Justify
your answer. [6 marks]
4. To what extent do innovation, ethical considerations, and cultural differences
influence marketing practices and strategies. [8 marks]
5. Prepare a suitable marketing mix for healthcare +devices manufactured by
RDM. [8 marks]
6. Examine the usefulness of STP as a tool for RDM. [8 marks]
7. Evaluate whether all concepts of the marketing mix are equally balanced.
Justify your answer. [8 marks]
8. Discuss the importance of market research in setting up the new production
plant in another country in Europe.
9. Discuss two ways to extend the product life cycle of kerosene stoves?
10. Advise RDM on how to improve brand identity under the marketing perspective
11. Advise what marketing strategy can be adopted by Jan for RDM. can someone
pls answer this thx (Price skimming?????)
12. With reference to the case study, describe two advantages of RDM having good
brand identity
 Influence customers to buy again and again (gain customer
loyalty/improve customer retention) especially when RDM is known to
be an ethical company/ have good reputation of producing high quality
products such as kerosene stoves. RDM able to sell more since it
produced in mass quantity.
 RDM is looking to finance its potential new production facility. Having
strong branding would improve RMD's chance of securing loans from
investors
13. Explain the role/usefulness of a to RDM [6 marks]
 Improve sales - RDM use most effective/suitable pricing strategy to be
competitive in the 700km radius
 Use most effective promotion strategy, (e.g. above-the-line) - raise more
awareness above RDM product since they are using mass customization
production - able to reach appropriate target market effectively.
14. What would the disadvantages/ advantages be if Radeki were to use Guerilla
marketing?
Line 4 They changed their product life cycle, as they noticed that their product is
Line declining
33-34 “Primarily manufactures healthcare devices.” Diversification
Line “Template on RDM’s web page” - RDM is offering a website to target the
36 audience
Line The marketing team is telephonically in contact with the customers
42 “Sold its products to wholesalers”
Line “Fierce competition from Asian manufacturers, which had lower cost
52-53 structure” - different pricing strategies in the competition
Line “Jan, however, is constantly seeking innovation in both RDM’s products and
53 its processes”
“Competitive pricing in a 700-km radius of Lobjanec (Appendix 2)
Line “Which would extend RDM’s market area” - By expanding, they reach new
93-94 market groups. In order to profit more.
They don't have a corporate strategic plan to achieve their vision.
Line “RDM has an outdated name, a weak brand identity, no relevant vision or
107 mission statement and no written operations management strategy or
Line human resources plan. The company makes good products at competitive
113 prices and is responsive to customers’ needs.”

Line Possible Questions:

119-  Product
125 o Mention the stages of the product life cycle
o Draw the product life cycle
o How could RDM expand their product portfolio
 Pricing Strategies
o Mention the pricing strategy and future pricing strategies for
RDMs
o Mention the importance of pricing strategies for market growth
 Advantages and Disadvantages of using E-commerce with reference
to RDM
 Discuss the importance of the company-customer relationship with
reference to RDM
o How do the robots help RDM to build better customer
relationships
 Evaluate the marketing strategies RDM has in place and discuss a
possible vision
 In reference to the RDM marketing strategies, apply the 4 P's
business tool
 To what extent does RDM profit from expanding their production
facility in European
 How can RDM increase their market growth
 How can RDM achieve a competitive advantage

Unit 5 - Operations Management

 1. Distinguish between labour and capital intensive method of production. [4
marks]
2. With reference to RDM, distinguish between product innovation and process
innovation. HL? [ marks]
3. Discuss the usefulness of the method of production adopted by Jan. [6 marks]
4. Examine the benefits of job production. [6 marks]
5. Explain the factors which forced RDM to invest in automation. [6 marks]
6. Explain the stakeholder conflicts that would have emerged due to the changes
made in the production process. [6 marks]
7. Give one advantage and disadvantage of RDM of using a quality circle [4
marks]
8. Examine the benefit of manufacturing companies customized aluminium
bottles. [6 marks]
9. Analyze the benefit of being a 100% family-owned business. [6 marks]
10. Examine the impact of changing from mass production to cell production. [8
marks]
11. Examine the impact of RDM’s relocation. [8 marks]
12. Examine the usefulness of the just in time technique followed by RDM. [8
marks]
13. Examine the use of process innovation to an organization like RDM
14. Discuss the impact on RDM when 95% of private sector companies were
nationalized by the communist takeover. [8 marks]
15. Evaluate the impact on RDM shifting from the public sector to private. [8 marks]
16. Discuss the impact of operating on a B2B basis for RDM [8 Marks]
17. Discuss the impact of RDM’s culture on various business functions.
18. Analyze the impact of RDM’s recruiting strategy on their possibilities for
expansion. [10 marks]
19. Discuss in relation to RDM their operations planning and sustainability. [10
marks]
20. Evaluate RDM’s decision to expand to Europe [10 marks]

Possible (4 marks) question that we came up with:

1. List and explain two benefits for RDM introducing modern technologies in their
production system
2. One advantage and disadvantage of having an automated business.
 Redundancy - low skilled labour no longer needed
3. Outline one disadvantage and advantage from including customization to the
company.
4. Outline an advantage and disadvantage of moving to a fully automated
manufacturing.
5. State two ways on how RDM can improve their brand identity.
6. Discuss the possible advantages and disadvantages that exist with the
introduction of a new product and entry into a new market?
7. Discuss the potential approaches to develop HR strategies

Line 33-43 5.2 Production methods -> Job customized, previously mass
customization production
Line 105-  “For most orders, customers enter desired specifications…..”
117 Distribution Channels & Location of Operation -> Outsourcing

Line 103- 
104
5.4 Location -> outsourcing (depending on company CSR)
 “

(Additional Information) - Section C - Possible Extra Stuff on the Paper

Balance Sheet for when they invested in the automated manufacturing process.

 Decision Tree
 Sources of finance
 Development indicators
 More detail in ‘health care services’ - for marketing strategy
 Any stakeholder conflict
 Country A vs B (relocation)
 BCG matrix on product position of products in the product portfolio
 Force field analysis
 Options for expansion with financial information (building vs buying
the factory, starting a joint venture) using ARR/NPV
 Specific information about management structure at RDM

 How has RDM used innovation? (Decline of kerosene stove, implementation of

healthcare devices.)
 Explain all the ways RDM has achieved economies of scale? (Amongst others,
line 51, mass-produced stoves sold to wholesalers.)
 SWOT Analysis
 STEEPLE

Mixed Questions

1. Explain one influence to RDM’s organisational structure [4 marks]

2. Explain the strategic and operational implications of RDM if they have to
expand into other International Markets [10 marks]
3. Discuss the impact of globalization on International marketing with
reference to RDM [10 marks]
4. Compare paternalistic and democratic leadership styles as used by Jan
and his father in RDM [10 marks]
5. Outline one importance of RDM establishing a CSR statement. [6 marks]
Explain the factors which forced RDM to invest in automation. [6 marks]
6. Explain the stakeholder conflict that would have emerged due to the
changes made in the production process. [6 marks][2 marks]
7. Analyze the benefits of being a 100% family-owned business. [6 marks]
8. Discuss the usefulness of a vision and a mission
9. Discuss the impact on RDM when 95% of private sector companies were
nationalized by the communist takeover. [8 marks]
10. Evaluate the impact on RDM from being shifted to the private from the
public sector in the year 1989. [8 marks]
11. Discuss the use of a SWOT analysis to RDM [4 or 6 marks]
12. Using the Ansoff Matrix, discuss the growth strategy of RDM. [8 marks]
13. Examine the impact of the external environment of the Czech Republic
on RDM. [8 marks]
14. To what extent does CSR help RDM be successful? [8 marks]
15. Prepare a decision tree/force field analysis as to whether Jan should use
self-driven lorries or continue using human-driven ones for delivery. [8
marks]
16. Draft a decision tree weighing up the 3 options of where to relocate
RDM’s manufacturing in Europe.
17. What is the Influence of human resource practices and strategies on an
organization? [8 marks]
18. Discuss the internal and external factors that influence HR planning. [8
marks]
19. Evaluate the impact of changing from a tall structure to a matrix structure
under Jan.
20. Explain, with reference to RDM two common steps in the process of
recruitment for [8 marks]
21. Discuss the suitability of a democratic style of leadership displayed by
Jan to run RDM. [8 marks]
22. Identify and Discuss Jan’s leadership style in comparison to his father’s
leadership style. [10 marks]
23. Using a relevant motivational theory, examine the impact of Jan’s
leadership style. [8 marks]
24. Examine the changing role of trade unions in an organization like RDM
25. To what extent will the automation influence motivation of employees?
Discuss with reference to one motivation theory. [8 marks]
26. Explain the reasons which could have forced the company to come up
with a kerosene stove. [6 marks]
27. Explain the usefulness of branding to RDM. [6 marks]
28. Explain which part of the marketing mix has been greatly focused upon.
Justify your answer. [6 marks]
29. To what extent do innovation, ethical considerations, and cultural
differences influence marketing practices and strategies. [8 marks]
30. Prepare a suitable marketing mix for healthcare devices manufactured
by RDM. [8 marks]
31. Examine the usefulness of STP as a tool for RDM. [8 marks]
32. To what extent can e-commerce be used as a promotional and
distributional strategy by RDM. [8 marks]
33. Evaluate whether all concepts of the marketing mix are equally
balanced. Justify your answer. [8 marks]
34. Discuss the importance of market research in setting up the new
production plant in another country in Europe.
35. Advise RDM on how to improve brand identity under the marketing
perspective
36. Advise what marketing strategy can be adopted by Jan for RDM.
37. To what extent innovation, ethical considerations, and cultural
differences may influence marketing practices and strategies. [8 marks]
38. Prepare a suitable marketing mix for healthcare devices manufactured
by RDM. [8 marks]
39. With reference to the case study, describe two advantages of RDM
having a good brand identity
40. Explain the role/usefulness of a to RDM [6 marks]
41. Distinguish between labour and capital intensive method of production.
[4 marks]
42. Discuss the usefulness of the method of production adopted by Jan. [6
marks]
43. Examine the usefulness of job production. [6 marks]
44. Explain the factors which forced RDM to invest in automation. [6 marks]
45. Explain the stakeholder conflict that would have emerged due to the
changes made in the production process. [6 marks]
46. Give one advantage and disadvantage of RDM of using a quality circle
[4 marks]
47. Examine the benefit of manufacturing customized aluminium bottles. [6
marks]
48. Analyze the benefit of being a 100% family-owned business. [6 marks]
49. Examine the impact of changing from mass production to cell production.
[8 marks]
50. Examine the impact of relocation To RDM. [8 marks]
51. Examine the usefulness of the just in time technique followed by RDM.
[8 marks]
52. Examine the use of process innovation to an organization like RDM
53. Discuss the impact on RDM when 95% of private sector companies were
nationalized by the communist takeover. [8 marks]
54. Evaluate the impact on RDM shifting from the public sector to private. [8
marks]
55. the production facility in another location in Europe. [8 marks]
56. Discuss the impact of RDM’s culture on various business functions.
57. List and explain two benefits for RDM introducing modern technologies
in their production system
58. One advantage and disadvantage of having an automated business.
59. Outline one disadvantage and advantage from including customization
to the company.
60. Outline an advantage and disadvantage of moving to a fully automated
manufacturing
61. State two ways on how RDM can improve their brand identity.
62. Discuss the possible advantages and disadvantages that exist with the
introduction of a new product and entry into a new market?
63. Discuss the potential approaches to develop HR strategies.
64. Recommend whether they should expand health devices to European
markets or not
65. Evaluate the decision of moving to self-driving trucks to replace human-
driven delivery.
66. Distinguish between Public enterprise and Private enterprise.
67. Why RDM changed from coal-burning stoves for residence
68. RDM is highly automated what is the difference between automated and
mechanized organization?
69. Capital intensive vs Labour Intensive
 70. Stoves were mass produced whereas the healthcare equipment was
customized according to the needs and desires of the customers. (Mass
production and Just In time?)
71. Impact of globalization on RDM. Lower costs in the Asian markets.
72. RDM to diversify into different product lines.
73. What motivation theory is applicable to the workers of RDM in 2019 (Pink
Motivation Theory)
74. What motivation theory is applicable to the workers of RDM in 1970
75. Advantages and disadvantages of job production
76. Qualities that make Jan a good manager
77. Capital intensive, what will be the advantages and disadvantages of
using machinery
78. Advantages and disadvantages of mass production in relation to
economies of scales
79. “The reasoning behind the move to manufacturing medical devices was
that, with the baby boomer generation soon to reach retirement age, the
demand for goods and services in the healthcare industry would be
growing” How did RDM’s family anticipate that the demand for goods
and services in the healthcare industry would be growing?
80. How does the extension strategy of introducing kerosene/oil burning
stoves help the RDM company?
81. Critically evaluate the introduction of an automation process
82. How does an integrated IT system help a business like RDM?
83. Analyze the impact of globalisation for RDM
84. What impact did the change of leadership of Jan had on the stakeholder
(employee) and the company.
85. Why do you think RDM opted for CSR even before it became fashionable
to the world.
86. Identify and explain the pricing techniques that RDM can offer other than
competitive pricing. Which pricing technique will be the best to use.
87. Justify the importance of having a written corporate strategy for RDM.
88. In your opinion, which source of finance should RDM use for expansion
into the new market (share capital or loan capital)
89. on RDM company.
90. With the reference of the case study describe two advantages of
democratic leadership style (4 Marks)
91. Should RDM open a new production facility in Europe? (Possibly with
reference to a decision tree)
92. Recommend sources of finance for RDMs expansion project.
93. Discuss the impact of globalization on RDM’s workforce planning. (8
Marks)

STEEPLE Analysis of RDM - detailed

Social 1. Ageing population → more demand for healthcare products
(Line 13)
2. Demands for kerosene stoves have been declining for many
years;end of product life cycle. (Line 4)
3. Impact of tourism has aided the Czech economy. (Line 19)
 4. Many Czech also speak German, this means that they have
positive relations with Germany - Europe’s largest economy.
Which also impacted the IT infrastructure, making Czech’s IT
infrastructure among the best in the world. (line 21)
5. Automation forces people to quit their job and not to have a
job since all functions of the business are done by robots.
(Job redundancy)
6. “ Rarely do humans have to intervene.” (Line 46).‘RDM’
progressively employs fewer workers as they move toward
automation (threat to workers).
7. Line 81: Vocational school relation with RDM worsen since
highly trained engineers are required instead of skilled
manual laborers (which is available in the vocational school);
resulting in the loss of RDM’s local influence.
8. Changing trends of products can also be considered in social
9. The change from the paternalistic to the democratic style of
leadership led to complaints of lack of focus on the part of
the management, which depicts that there was some
resistance to the change. (Line 97)
10. RDM liaised with a vocational school, which provided
opportunities for local workers to enhance their skills.
11. Their attitudes, aspirations and motivations differ significantly
from the workers who survived the Second World War and
had worked under the Communist regime. With the 76.6%
reduction in, and transformation of, RDM’s labour force, the
company no longer has the level of local influence that it
formerly had. The vocational school no longer liaises with
RDM regarding the required skills of worker after the
significant reduction in labour workforce.

12. Czech’s IT among the best in the world (line 21)

Technological 13. Potential widespread use of Computer Aided
Manufacturing (CAM) and Computer Aided Design (CAD) could
drastically reduce manufacturing costs for RDM
14. Most ordering (purchasing) is done digitally and contacts
between customers and engineers are also done digitally - making
this process faster and more efficient
15. Demand for ergonomic/personalized healthcare devices
grow.
16. Diversified into aluminum bottles. (Line 60-64)
17. The gradual growth rate of self-driving cars can be cost-
effective. (line 48-49)
18. (line 21-22 “Czech”) potential for e-commerce & trading →
, therefore, don’t need a physical store, therefore reducing a lot of
their expenses (both Variable and Fixed)
19. such as AI, robots etc.
 As demand for kerosene stoves had been declining for
many years, in 1993, Adriana decided to add health
 devices using ergonomic designs to RDM’s product
portfolio. (Line 10)
 The Czech Republic now has an IT infrastructure that
ranks among the best in the world.
 Jan began to introduce a highly automated
manufacturing process in 2006 that was operational by
2009.
 Jan wonders whether it will be long before self-driving
lorries will replace current human-driven ones for
delivery (line 49).
 In addition, digitized communication between robots
allowed RDM
 to be responsive to customers’ requirements. As
RDM improved its automation processes and
integrated cloud computing, mobile devices, big
data, artificial intelligence and three-dimensional
(3D) printing, its ability to customize products
improved dramatically regardless of the size of the
order.
 Given that the entire order/manufacture/delivery
process could still be performed in Lobjanec, this
new facility would require limited staff and most of
the work will be done by robots.

20. Fierce Asian competition → In general, Asian companies

Economic can produce goods at a cheaper cost which are highly competitive
to ‘RDM’
21. Lucrative markets in Europe i.e. Germany
22. The Czech Republic is one of the most stable economies in
the world
23. Competitive pricing zone within a 700-km radius
24. The economic growth rate in Czech is 4.4%, making the
Czech economy the highest growth in Europe.
25. Trade Blocs economics stuff, like fiscal or monetary
policies: certain legal restrictions to be able to trade with
other countries (i.e. tariffs (taxes on imported goods)) .Since
the Czech Republic is part of the Monetary Union (EU), it enjoys
the advantages of the highest level of economic integration (i.e.
reduced tariffs, free movement along member countries or an easy
access to skilled labour from prestigious member countries´
universities).
26. Recession in many European countries (Portugal,
Italy, Greece, Spain) may reduce RDM’s growth (which is a
reason for their planned expansion)
27. Low levels of unemployment and inflation.
o Transition from labour intensive to capital intensive
means they do not need as much work force
 28. Communist takeover: 95% of private sector
commercial enterprises were nationalised in 1949
29. In 1989, Velvet Revolution: businesses went from
state-owned to privately owned
30. Czech economy had a smooth transition
31. Stable market economy and democracy
32. Prague is a tourism magnet
33. Positive trade relations with Germany
34. RDM employed a large unionized labour force
35. Because of globalization and fierce competition from
Asian manufacturers, which had lower cost structures
36. Free movement of labour throughout the European
Union
37. Capital intensive business can be expensive to
maintain (depreciation of assets)
38. Euro still not used widely in the Czech Republic,
exchange rates can still impact costs and prices for RDM
39. Tourism aids RDM’s economy

40. Pioneering CSR activities to RDM stakeholders

Ethical 41. Fair wages (line 104)
42. Emphasis on the care of the environment (line 104)
43. Has relationships with suppliers that also maintain
their CSR, and hence, fosters community services
44. The rise in consumers opting to invest/ purchase
products that come from ethical sources. This places
pressure on businesses like RDM to adapt by obtaining raw
materials from suppliers known to be ethical and treat
employees fairly.
45. Job production manufacturing method minimizes
wasted products and materials on the company’s behalf
(excess could be bought by customers and wasted), abiding
by the ethical environmental standards.
46. Strong emphasis on automation and the use of novel
AI technologies (potentially self driving cars) may raise
ethical concern in the future, both by the public and
legislative entities

47. Free movement of labor in the EU allows highly

Political specialized workers to be recruited around Europe → RDM
has a wide pool of applicants to choose from
48. Czech used to be a communist state but has
transitioned to a free market
49. Brexit may negatively impact the market growth of
RDM.
o Won’t be able to sell products to UK
o Tariffs and other fees will increase their prices in the UK
→ A stable government in the Czech Republic is
beneficial for the market drivers in the economy
50. Globalization - forcing lower costs of production
 51. In 1949, following the Communist takeover of what
was then Czechoslovakia, over 95 % of private sector
commercial enterprises, including RDM, were nationalized.
Following the Velvet Revolution of 1989 when Communism
in Czechoslovakia collapsed, many companies moved from
being state owned to privately owned.
52. Post-revolution good Economic growth-stable
market economy + democracy post-communism.
53. Post-revolution, tourism has surged and there is
greater economic integration within European countries.
54. democratic governance which facilitates stability in
the country necessary for business to thrive (line 18)
55. Part of this success stems from the relatively smooth
transition, compared to some other former Soviet bloc
countries, to a stable market economy and democracy.
56. For decades, RDM employed a large unionized
labour force, mass-produced stoves and sold its product to
wholesalers. Because of globalization and fierce competition
from Asian manufacturers, which had lower cost structures,
in the early 2000s, Jan determined that European
manufacturers would have to lower costs.

57. Cost of transition from private limited to public

Legal involves legal formalities and structural changes
58. Many countries have their own consumer and
employee protection legislation. RDM is at an advantage
here since they have automated process
59. Different consumer protection laws across Europe in
non-EU countries.
60. There might be restrictions on healthcare products
in different countries.
61. Labor laws in an integrated system like the EU allow
for easier mobilisation of labor
62. Import and export restrictions are greatly reduced
within the EU, allowing for goods to be competitively priced
with domestic ones.

63. Pollution from delivering products in using of lorries

Environmental can result in negative CSR for RDM
64. Coal burning and kerosene stoves (previously)
65. The carbon footprint from production methods as
Euro Standards are high for pollution
66. Medical devices are based on the cradle-to-cradle method
of production, which can protect the environment.
67. Use of AI (robots) leads to minimum wastage of scarce
resources (e.g. metals), and hence, optimising the production
process.

SWOT Analysis of RDM - Detailed

Strengths:

 Lines (1-2) Company is 100% owned by the Radeki de Dovnic family (private
limited company), so they have total control over it
 Line (17) Stable Trading Bloc ensures that there is an elimination of tariffs and
exports of RDM products will drive down the cost of imports.
 Lines (34-35) Highly automated manufacturing process that was operational
by 2009 optimised production.
 Lines (35-36) Customers could enter their desired specification for healthcare
devices and RDM could proceed with their specialized order… More effective
responses to customer needs.
 Line (38) RDM developed several minor adaptations to customers’ products
that let them produce desired orders at a cheaper cost (and more stably)
 Line (45) Higher efficiency due to using AI and robotic configuration of the
tooling (highly automated machinery)
 Line (46) Highly trained engineers monitor the highly automated processes to
ensure products meet the quality standards specified by consumers
 Line (54) The highly automated system lowers costs in the long run as it
eliminates wastes and labour cost, despite significant capital expenditure. This
implies that the company has a lean production system.
 Line (55) Digitized communication between robots allowed RDM to be
responsive to customers’ requirements
 Line (57) Can customize products of any size after improving their automation
by integrating cloud computing, big data, AI, and 3D printing
 Line (61) Tools aren’t restricted to manufacturing healthcare services due to
the integration of technologies, which widens their product portfolio- and in turn
increases their revenue and reduces risk of bankruptcy due to sudden
seasonal variations
 Line (67) They could quickly and inexpensively produce customized bottles
(even though it wasn’t the product they initially produced)
 Line (77) They have highly trained engineers and computer experts who
manage the automated processes in 2019.
 Line (83) RDM recruits engineers from universities across Europe, which
means a wider selection of potential employees with appropriate skills
 Line (87-88) Teams composed of individuals from all business functions
manage orders. This is a project-based organizational structure
 Line (89) The leadership style is democratic. This means the CEO is engaged
with his employees, who in turn have more say and be more motivated
 Line (90) Jan changed many RDM practices to create an environment of
innovation, constantly seeking it in both RDM’s products and services.
 Line (94) Jan fosters a creative atmosphere with positive results, emphasizing
teamwork, diversity, humor, and fun which employees are motivated by
 Line (100) The family had long held a caring and paternalistic attitude towards
the people who worked for them, including workers in their factory.
 Line (104-105) Always displayed a strong sense of CSR, like sourcing
components from businesses who have good CSR practices, paying fair
wages and placing strong emphasis on care for the environment (leading to
worker motivation, improved brand image and customer loyalty)
  Line (113) The new facility would extend their market area. It requires limited
staff and most work will be done by robots since the order / manufacture /
delivery process can still be done in Lobjanec
 Line (125) RDM makes good products at competitive prices and is responsive
to customer needs.

Weaknesses:

 Line (28-29) unprepared CEO takeover. Kristian had no professional training

and experience, making him unprepared him for being CEO
 Line (27-29) Kristian was CEO despite being untrained and inexperienced in
business or engineering, having studied history. He also lacked local
knowledge due to the political events that occurred during his absence. This
weakness was defused when Jan became CEO because he had a very good
engineering mind helping in the production processes of RDM.
 RDM let hundreds of workers leave the company which can cause
demotivation to the workers in the business.
 Line (39-42) Prices are set by human accountants and marketing executives,
which is more inefficient and time-consuming than automated accounting
 Line (51) Previously employed a very large unionized labor force (500
workers), which is difficult to manage and supervise. They also represented
huge expenses in terms of wages. This was solved by having an automated
manufacturing process that Jan introduced.
 Line (54-55) Automation requires a lot of capital expenditures to purchase and
revenue expenditures to maintain them.
 Line (74-76)
 Line (80-81) By transforming the labor force and decreasing it, RDM doesn’t
have as much influence in the local community
 Line (89) Constant changes in leadership style can be very confusing and
demotivating for RDM employees. The change in organizational structure from
hierarchical to project-based and the change in the management style from
paternalistic to democratic: this can lead to cut conflict and demotivation
amongst the workers in the company.
 Line (91-94) When Kristian headed the company, there was a negative
environment within the work environment was depressing, orderly (uncreative,
less freedom), and dull. This could lead to demotivation of workers in the
company as employees were being made redundant as a result of the fall in
kerosene stove sales. This was not the case with Jan, as he always sought
innovation. This was solved when Jan introduced a new leadership style, but
the high redundancy rate in the past could affect RDM’s reputation in the local
community.
 Line (95-98) Although Jan’s leadership style is fun, it is
sometimes chaotic and workers feel there are insufficient
guidance and help by their managers and that the business lacks
focus.
 Line (99) CSR incurs higher costs for RDM which makes them have fewer
profits and as well operate under very strict ethical rules.
 Line (105-110) They can’t offer competitive pricing beyond the 700-km
radius, which reduces European market share and restricts them from
 being price competitive as compared to the Asian competitors in
potentially lucrative markets. This causes them to miss out on a huge
pool of price elastic customers across Europe.
 Line (118-120) They have no marketing strategy. This makes RDM employees
confused about pricing, promotions, distribution, and production.
 This also causes another weakness for RDM, such as a weak brand
identity. Thus, RDM fails to make themselves reputable and unable
to reach their target audience. The brand is not internationally
recognised because of the lack of a marketing strategy.
 Line (123) Having an outdated name means RDM is not memorable for
customers. And failing to have a marketing strategy does not
compensate for it
 Line (121-123) No written corporate strategy despite Jan’s vision.
This lack of focus and organization can lead to confusion for
employees
 Line (123-124) No written operations management strategy can lead to
confusion within the operations sector which can cause lower quality
products and increase wastage, and hence, reduce the benefits obtained
from the automated production process.
 Line (124) No human resources plan can cause employees to feel
insecure in the workplace as there are no set procedures for the
dismissal of workers.
 Initially with automation, RDM won’t make profit, since capital expenditure will
outweigh sales revenue (Jan would lower prices due to competition)

Opportunities:

 Line (5-10) Demand for goods and services in the healthcare industry would
be growing as the baby boomer generation reaches retirement age.
 Line (15-20) Prague is a magnet for tourists as it is one of the most beautiful
cities in Europe which has aided the economy of Czech.
 Line (15-20) Educated Czechs speak German as well as Czech which
facilitates positive trade relations with Germany, Europe’s largest economy,
so RDM has access to a larger customer base as it is easier to export/reach
out to German customers
 Line (22) Its IT infrastructure is ranked amongst the best in the world, so there
could be many more e-commerce opportunities for RDM.
 Line (60-70) Success of the order for water bottles lead to the executives at
RDM encouraging Jan to manufacture customized aluminum bottles. This
also indicates that with their highly automated system, they are highly flexible
in designing and producing products which are not related to the healthcare
industry. Hence, this can give them the8 opportunity to diversify when the
need arises.
 Line (75-80) Free movement of labor throughout the EU lets RDM recruits
engineers from universities all across Europe
 Jan having Westernized into ideas (since he studied in the US). He is a next
gen leader.
  Line (106-107) TJob production with highly automated processes to make
aluminum bottles ensures no aluminum is wasted, increasing environmental
sustainability
 Job production with highly automated processes to make aluminum bottles
ensures no aluminum is wasted, increasing environmental sustainability

(Previous/Present) Threats:

 Line (5-6) the communist takeover: because the RDM became nationalized
after being owned 100% by the Radeki family
 Line (10) change in social trends/preferences: demand for Kerosene stoves
declined so RDM had to change their product.
 Line (31-32) the division of Czechoslovakia into the Czech Republic and the
Slovak Republic which is a threat to the economic situation of the country as
well as the market in which RDM operates
 Line (34-36) possibility of technological issues, depreciation, the problem with
the system can lead to delay in production altogether and can be time-
consuming and expensive to repair
 Line (45-46) the automation of production methods: laying off workers can
cause them to formulate pressure groups or revolt
 and this is not beneficial for the company’s reputation in the community
 Line (53) Due to globalization, the fierce competition increased with the Asian
manufacturers, causing Jan to lower cost structures by automation.
 Line (75-77) Due to globalization leading to automation, the business had to
lay off some of the employees which could be a threat to the business as it
caused trouble with the local community which can lead to damage of the
business’s reputation.
 Line (80) Due to the reduction and transformation, the business no longer has
the level of local influence that it had.
 The technology used for the production of the healthcare devices may
become obsolete over a period of time. There may be a need for upgrades in
the future that comes with a high capital expenditure.

SWOT Analysis of RDM - Condensed

Strengths
 100% family owned business full control
 Innovation and automation
  Customization and product development
 Democratic leadership style - Jan
 Qualified CEO
 Production system and supply chain
 Organizational structure- matrix (except for aluminum water bottle - a new
division (hierarchical))
 Skilled workforce
 CSR- fair wages, sourcing raw materials from local suppliers, sustainable
 Consistent profits
 Just in time
 Flexibility
 Competitive prices

Weakness
 The high cost of innovation and automation
 Possible working capital issues while financing its expansion
 Stakeholder conflict due to the change in the production process
 High dependency on technology
 Workers complain about the leadership style
 Poor marketing strategy (weak branding)
 Lack of a strategic direction
 Outdated marketing mix
 Cannot employ economies of scale due to non-standardised products
 High shipping costs

Opportunities
 Velvet revolution and its impact
 Relocation
 Globalization (Market penetration/diversification)
 Innovation
 Stable economy
 Favourable trade relations
 Political stability
 Major tourist centre- Prague
 Growing technology
 Germany: Europe’s largest economy
 Increasing ageing population- growing demand
 Free movement of labour within the european Union
 ###### As of 2017, 23% of Europe’s population was aged 60+. By 2030, more
than 25% of Europe’s population will be aged 60+. Alex Gorsky, the Chairman
of the Board and CEO of Johnson & Johnson, said that “People over the age
of 65 years use approximately seven times more healthcare than younger
people.” The steadily increasing senior population is key to driving the
healthcare industry (Centre for the Promotion of Imports, 2017).

(Previous/Present) Threats
 Division of the country
  Rising competition from the Asian market
 Expensive factors of production
 Healthcare product regulation
 Community Ambivalence
 Disenfranchised stake-holders
 High transportation costs
 The vocational school no longer liaises with the company - lack of support from the
local community
 Loan capital might be difficult to get as RDM has no mission and vision statement
making the foundation of the business weak
 Land is expensive to purchase - Hard for the company to relocate

Ansoff Matrix
 Market Penetration
Coal Stoves (doesn’t sell anymore) RDM has successfully carried this out
Kerosene Stoves
(lowers price in the long term, in
quality to compete internationally)
(although demand for them is
decreasing)
Geographic Relocation
Product Development
through the:
 Implementation of Ergonomic
Design
 Different Colours/Designs/Etc
→ RDM has successfully done this before,
with going from coal/kerosene stoves to
healthcare - machinery is flexible
regarding the production of products.
→ water bottle, as water bottles cater for a
wider market (not only baby-boomer
generations) and are a different product
than healthcare devices or stoves

Market Development Diversification

Expanding their healthcare RDM doesn’t do this now but it would
products/kerosene stoves to involve a new product in one of their
potentially lucrative markets in lucrative markets. E.g. Kitchen hardware in
Scandinavia, and elsewhere in France (marketing implementations would
Europe (only 700 km radius) (105, be weak)
appendix 2) Aluminium water bottles
- machinery is flexible regarding the production of products.
- batch production is the current type of production, as they have been manufacturing
aluminum bottles for individual businesses, and have not reached large scale
production.
- mass production would probably be the preferred type production due to potentially
high levels of demand. (md)

-Weak brand may make additional production facility not work

Generalised Force Field Analysis (20) only HL

FORCE FIELD ANALYSIS:

Score RESTRAINING DRIVING FORCES Score

FORCES

Relocation could be Would extend RDM’s

very expensive and market area. They could
may be beyond what be the first one to
4 RDM could raise as a GLOBALIZE introduce an innovative 5
private limited TO business idea in the
company. They will LUCRATIVE European lucrative
have to go public to MARKETS market (Scandinavia, the
raise sufficient finance ELSEWHERE Netherlands, Belgium,
or either go for share IN EUROPE France and etc.)
or loan capital.
 Due to democratic Enhance brand image in
leadership, some of Europe. RDM has a
RDM’s employees strong sense of
have complained that corporate social
2 there is insufficient responsibility, where they 3
guidance and the have a caring and
business sometimes altruistic attitude towards
lacks focus which can their workers. They also
impact the way they have a strong emphasis
globalize. on care for the
environment. This is an
advantage because it
can attract customers
who are ethically and
environmentally
concerned.

5 RDM has an outdated Processes except

name, a weak brand delivery and
identity, no relevant manufacturing can be in
vision or mission the first production facility 3
statement and no in Lobjanec.
written operations
management strategy
or human resources
plan. This can affect
their appeal to the
newer lucrative
market.

3 There is competitive Since the company

pressure on RDM enjoys healthy profits,
because there might they can easily obtain
be possible finance. 2
competitive markets in
Europe. If the
globalization fails in
Europe and there is no
cash flow, the
business might close
and end up in
bankruptcy.

The company sells

products at a competitive
price directly to their
consumers. There is no
intermediate wholesale. 3
RDM is also responsive
to customer’s needs.
 Total Restraining Total Driving Forces:
Forces: 15 20

Based on the Force Field Analysis, the Driving Forces is higher (20) than the
Restraining forces (15). RDM should pursue the strategy of relocating their additional
production facility elsewhere in Europe. The restraining forces can be solved in the
short term, and thus driving forces outweigh restraints.

Boston Consulting Matrix (BCG) to analyze ‘product portfolio’

Dog: Coal-burning and kerosene stoves (however no longer active)
Problem Child (Questionmark): Aluminum customizable bottle
Star: Ergonomic healthcare products
Cash Cow: Healthcare products (Launched a long time ago, earns a healthy profit for
the company)

Terms & Definition

Add on to the below terms and definitions:
No Term Definition Line

1. Product life  Typical process that products go 4

cycle through from their initial design and
launch to their decline and eventual
withdrawal. `
  Different products undergo each of
the six stages (research &
development, introduction, growth,
maturity, saturation, and decline) at
varying speeds.
 Measured over time in terms of
sales revenue.
 A cycle that shows the lifespan of a
product going through the initial
phases to its eventual withdrawal.

 The stages through which goods
and services move from the time
they are introduced on the market
until they are taken off the market.
 the stages a new product goes
through in the marketplace:
Development, Introduction, Growth,
Maturity - Saturation, and Decline

2. Chief Executive Highest-ranking executive in a company, 9

Officer (CEO) usually at the top of the organizational
structure of an organization, and their
primary responsibilities include making
major corporate decisions

Top manager who is responsible for the

overall performance of a corporation.

Trade Bloc  A type of intergovernmental 17

(between states) agreement, where
barriers to trade (tariffs and other
protectionism policies) are reduced
or eliminated among the
participating states

 Soviet bloc in RDM ensures smooth

transportation and delivery of goods
across Europe without paying more
to export.
 Any association of one or more
countries where an agreement is
made to reduce trade barriers and
promote trade with one another.

3. Hierarchical  Type of organizational structure 85

where items are ranked according to
levels of importance.
 In a corporate environment,
hierarchies depend upon structure,
 rules, and top-down control to guide
business practices and activities.
 Decision-making is usually
centralized

 Organizational structure that ranks

according to importance, so higher
levels exercise greater authority and
control.

4. Capital Money a company spends to 54

expenditure buy/maintain/improve its fixed assets (long
term)
Money spent by a business or organization
on acquiring or maintaining fixed assets,
such as land, buildings, and equipment.

5. Integrated A system of tools and technologies that 57

cloud connects various applications Not a
computing business term

6. Product The range of products or strategic business 11

portfolio units owned and developed by an
organisation.

7. Automation the use of largely automatic equipment in a 54

system of manufacturing or other
production process.

8. Commercial A business that engages in buying and 6

enterprises selling activities on a large scale, for the
purposes of making a profit and gaining
market share.

9. Demand The quantity of a good or service that 13

consumers and businesses are willing and
able to buy at a given price in a given time
period.

10. Division of labor Dividing a job into many specialized parts, 68

with a single worker or a few workers
assigned to each part. Division of labor is
important to mass production.

11. Economies of Refer to lower average costs of production N/A

scale as a firm operates on a larger scale due to
gains in productive efficiency, e.g. easier
and cheaper access to finance.

12. Diseconomies Refers to the cost disadvantages a

of Scale business faces due to an increase in firm
 size or output, resulting in the production of
products, goods or services at an
increased cost per unit. e.g cost of truck
operation (expanding the business means
more trucks required to deliver their
products, thus more money)
 graph is cost vs. output
 show a downward peak (lowest point
is the optimal level of output)

13. Economic measures changes in the Gross Domestic

growth Product of a country over time. It occurs if N/A
there is an increase in real GDP for two
consecutive quarters.

14. Inequality Refers to the difference between the rich N/A

and poor, the haves and have-nots – it is
shown by people's different positions within
the economic distribution – wealth, pay and
income. Inequality is large in a society
where few people own a disproportionate
amount of economic pie.

15. Fiscal policy is the use of taxation or government N/A

expenditure policies to influence business
activity. The government spends the tax
revenue that it raises, in addition to other
sources of government revenue, on a
number of areas including social security,
health care, education, transport and
infrastructure.
 deflationary fiscal policy
 expansionary fiscal policy
o tax cuts and increased public
sector spending

16. Consumption In economics, the use of goods and N/A

services by households. Consumption is
distinct from consumption expenditure,
which is the purchase of goods and
services for use by households.

17. Corporate A business approach that contributes to 99

Social sustainable development by delivering
Responsibility economic, social, and environmental
benefits for all stakeholders.

18. Scarcity The basic economic problem of the gap N/A

between limited resources and
theoretically limitless wants.
19. Private sector The part of the economy run by private 6
individuals and businesses, rather than
by the government, e.g. sole traders,
partnerships, companies, and
cooperatives.
Company owned by private individuals and
businesses rather than the government so
shares can only be sold to close family
members and friends, not to the general
public.

20. Price elasticity Measures the responsiveness of quantity N/A

of demand demanded for a product to a change in
price.

21. Opportunity A benefit, profit, or value of something that N/A

cost must be given up to acquire or achieve
something else.

22. Productive Is the maximum possible output of an N/A

potential economy. According to the United Nations
Conference on Trade and Development
(UNCTAD), no agreed-upon definition of
maximum output exists.

23. Wholesalers The intermediary entity in the distribution 52

channel that buys in bulk and sells to
resellers rather than to consumers.

24. Globalization The growing integration and 52

interdependence of the world's economies,
causing consumers around the globe to
have increasingly similar habits and tastes.

The growing integration of the economies

and societies of the world

25. Unionized Labor force is largely composed of 51

labour force employees who are a member of a labor
union, which will act as a representative for
employees in negotiations with company
management. In most cases, it requires a
majority vote of the employees to authorize
a union.

Organization whose members unite to

protect their rights and welfare

26. Paternalistic The managerial approach that involves a 89

leadership style dominant authority figure who acts as a
parent and treats employees and partners
 as though they are members of a large,
extended family, by guiding them through a
process of consultation.

Leaders who treat their employees as

family members. They are consultative and
act in the best interests of their employees

27. Democratic Involves a team guided by a leader where 89

leadership style all individuals are involved in the decision-
making process to determine what needs
to be done and how it should be done. The
group's leader has the authority to make
the final decision of the group.

a style in which the nominal leader invites

the group's participation in decision making

28. Motivation Internal and external factors that stimulate 78

desire and energy in people to be
continually interested and committed to a
job, role or subject, or to make an effort to
attain a goal.

29. Nationalization The transfer of a private sector firm to state 7

ownership or control.

30. Promotion A type of marketing communication used to 40

inform target audiences about a firm’s
production or service

31 Budget deficit When expenses exceed revenue, and it is N/A

an indicator of financial health.

32 Current account A measurement of a country's trade where N/A

deficit the value of the goods and services it
imports exceeds the value of the goods and
services it exports

33 Progressive tax A tax in which the average tax rate (taxes N/A
paid ÷ personal income) increases as the
taxable amount increases.

34 Regressive tax Taxation that takes a larger percentage of N/A

a lower-income and a smaller percentage
of a higher income.

35 Distribution The chain of businesses or intermediaries N/A

channels used to get the product to the consumer,
including wholesalers, retailers,
distributors, etc.
37 Price How much the business sells its products 40
to consumers.

38 Cost of How much a product cost 47

products The costs incurred by a company in order
for them to create a certain good or provide
a service.

How much it costs for the business to

create a good or provide a service

39 Mission A company’s objectives that set a clearer 123

Statement path to its decision making. For a deeper
understanding, A mission statement
underlays the purpose for the existence of
the business and their core values. Second
layer of goals under vision statement

a statement of the organization's purpose -

what it wants to accomplish, its core
values, and the purpose for its existence

Sets a clear path to its decision making

40 Vision Summary of aims and values of a 123

Statement company. What the business wants to be
in the future. A vision statement outlines
the distant aspirations of a business. For
example Adidas' vision statement is to be
the leading sports brand in the world.
Vision statement is more long-term.

Summary of aims and values of a

company.
What the business wants to be in the
future, the business' distant aspirations

41 Productive Is the maximum possible output of an N/A

potential economy. According to the United Nations
Conference on Trade and Development
(UNCTAD), no agreed-upon definition of
maximum output exists.

42 Excess supply A situation that can occur in a market or N/A

business where the amount of a product
provided or material obtained exceeds the
amount required or demanded.

43 Supply Is a fundamental economic concept that N/A

describes the total amount of a specific
 good or service that is available to
consumers.

45. Market Area The geographic zone containing the people 113
who are likely to purchase a firm's goods or
services.

46. Production Foundation of a product life cycle and the N/A

Strategies execution plan for further development.
The product strategy allows the business to
zero in on specific target audiences and
focus on the product and consumer
attributes.

47. Research and Refers to the work a business conducts for N/A
Development the innovation, introduction, and
improvement of its products and
procedures.

48. Market an economic system in which economic 17

Economy decisions and the pricing of goods and
services are guided solely by the aggregate
interactions of a country's individual
citizens and businesses.

economic system in which decisions on

production and consumption of goods and
services are based on voluntary exchange
in markets

49. Democracy A political system that is run and controlled 18

by citizens of the country. Democracies are
made up of elected representatives and
require that governmental measures be
voted on by these elected representatives
or the people.

50. Infrastructure the transportation, communication and 22

support networks in a certain area.

52. Accounting It reveals profit or loss for a given period 40

and the value and nature of a firm's assets,
liabilities and owner's equity.

53. Innovation The process of translating an idea or 91

invention into a good or service that creates
value or for which customers will pay.

 Product Innovation: New

products/services are created or
improvements to current products
  Process Innovation: Parts of
manufacturing or service delivery
process are improved
 Positioning Innovation: Use or
perception of a new/existing product
or service
 Paradigm Innovation: Innovation so
important, it may change the
industry itself. Focus on impacts for
short and long term of new
products/services

changing processes or creating more

effective processes, products and ideas

54. Marketing Management process of predicting, 40

identifying and meeting the needs and
wants of customers in a profitable manner.

55. Big data extremely large data sets that may be 57

analyzed computationally to reveal
patterns, trends, and associations,
especially relating to human behavior and
interactions.

56. Artificial Software technologies that make a 57

intelligence computer/robot to perform better than
normal human computational ability
inaccuracy, capacity, and speed.

57. Teams A group of people with a full set of 87

complementary skills required to complete
a task, job, or project.

58. Strategy Plans of action that businesses use to 121

achieve their targets and aim

59. Economic The overall direction in which a nation's 15

Trends economy is moving.

Most business managers need to be aware

of the prevailing direction of the economic
trend for the product markets and countries
in which they operate in order to make
more accurate and effective plans for their
company.

60. Products Refer to both goods and services 85

61. Creativity Characteristic that allows a person to think 94

outside of the box, which results in
 innovative or different approaches to a
particular task.
 Adaptive creativity: transfers and
applies existing forms of thinking
and problem solving to new
scenarios or different situations
 Innovative creativity: generates new
forms of thinking, addressing
problems from an unusual
perspective

62. Fair wages Wages paid to workers that is reasonable 104

for the amount of work done

trade and public work wages paid to the

majority of workers in a specific area.
63. Competitive The process of selecting strategic price points 107
pricing to best take advantage of a product or service
based on the market relative to the competition.

When the product is priced in line with or just

below competitors' prices to try to capture more
of the market.

64. Share Capital A source of finance, raised from selling shares 115
in a limited liability company, from its initial
public offering (IPO) and any subsequent share
issues.

65. Loan Capital Medium to long-term sources of interest- 116

bearing external finance obtained from
commercial lenders. Examples include
mortgages, business development loans and
debentures

67. Public Limited Can advertise and sell its shares to the general 117
Company public via a stock exchange.

An incorporated business that allows the

general public to buy and sell shares in the
company via a stock exchange. All
shareholders enjoy limited liability.

68. Brand Identity How a business presents itself and products 123
and is perceived by consumers/general public

69. Raw materials Materials or substances used in the primary 45

production or manufacturing of goods.

70. Chief Financial Responsible for financial control and planning 111
Officer (CFO) of a firm or project as well as all the accounting
functions including such as:
  (1) credit control
 (2) preparing budgets, financial
statements
 (3) coordinating financing and
fundraising
 (4) monitoring expenditure and liquidity
 (5) managing investment and taxation
issues
 (6) reporting financial performance to
the board
 (7) providing timely financial data to the
CEO.
The position responsible for all of the
company's financial concerns.
Responsible for financial control and planning
of a firm.
Accounts for credit control, prepares budgets,
financial statements, coordinates financing and
fundraising, monitors expenditure and liquidity,
manages investment and tax issues, reports
financial performance to the board and
provides timely financial data to the CEO

71. Labour intensive An industry where a larger portion of total costs 51

is due to labor

72. (Business) A business strategy in which growth is obtained 115

Expansion by increasing the number of stores in which
customers can buy a company's products and
services.

73. Relocation A change in the physical location of a business. 116

A business might relocate because of rising
costs at the current facility, better tax breaks in
a different location, changes in its tarot other
reasons.

74. Profit the positive difference between a firm's total 126

sales revenue and its total costs of production.
a positive difference between total sales
revenue and total costs

75. Capital Intensive The manufacturing or provision of a product

relies heavily on machinery and equipment.
production process requiring large amounts of
capital in relation to labor

75 Capital Finance spent on fixed assets 49

expenditure

76. Training process of providing opportunities for workers 29

to acquire employment-related skills and
knowledge.
77. Corporate A corporate strategy is a long-term plan of 121
Strategy action which will be used to complete or satisfy
the corporate aims for a business.

78. Privatization The term used to describe the transformation 8-9

of businesses when they change from public
ownership to private ownership.

79. Marketing A Marketing Strategy is a business’s overall 199

Strategy game plan for reaching people and turning
them into customers of the product or service
that the business provides

80. Human Management function of using and developing 124

Resources people within a business to meet its
Planning organizational objectives.

81. Operations Providing the right goods and services in the 124
management right quantities, and the right quality level, and
the right time in a cost-effective and timely
manner

82. Baby boomer The large number of people who were born 12
after World War II, between 1946 and 1964.

There are lots of quizlets with the definitions: (88 terms defined)
https://quizlet.com/371592401/ib-paper-1-2019-radeki-de-dovnic-
manufacturing-flash-cards/

(80 terms defined)

https://quizlet.com/ca/370494861/radeki-de-dovnic-manufacturing-ann-flash-
cards/
https://quizlet.com/367225373/radeki-de-dovnic-manufacturing-flash-cards/

(95 terms defined)

https://quizlet.com/377391901/business-rdm-definitons-flash-cards/

Organizational History - Timeline

-followed by the communist takeover, of what was then Czechoslovakia

-became nationalized, as over 95% of the private sector commercial enterprises
became nationalized
 1949
-not immune to broader economic trends in Europe
-After the revolution, the Czech economy has fared well
-thus, making it a stable market economy and democracy
-The fact that the capital, Prague, is one of the most beautiful cities of Europe
magnets tourism - aiding the economy
-traditionally, educated Czechs speak German and Czech = facilitating positive
trade relations with Germany (largest European Economy)
 -small city in the Czech Republic- great in IT infrastructure - ranking among the
best in the world
 1970s
-500 workers
-The largest single employer in Lobjanec
 1989
-followed by the Velvet Revolution
-No more communism, privately owned again
- move from communist economy (not much choice in terms of products) to
market economy/ free market (determines products to produce based on the
market demand, or reliant on invisible hand for pricing)
 1990
-Adriana took over as CEO
 1993
-Adriana added healthcare devices using ergonomic designs to RDM’S product
portfolio- the demand for stoves was declining
- Since the Velvet Revolution 1873
- founded
-100% family owned
-located = Lobjanec (Small city in the Czech Republic)
-original product = manufacturing of coal-burning stoves for residences
 1995
-Adriana retire as CEO
-Kristián took the role of CEO = giving the opportunity to return to his home
country and take on the role of CEO of the family business
-accepted even though his profession and his experience had hardly prepared
him for the task
Kristián
- was for many years the head of RDM
-earned a Ph.D. in engineering and became a professor at an American
University

 2001
-Kristián died in 2001
-Jan took over CEO
Jan
 Kristián's son
 born and grew up in the US
 studied engineering at University
 had wanted to live in the Czech Republic
 2002
-RDM produced its last kerosene stove and now primarily manufactures
healthcare devices
 2006-2009
-Jan introduced highly automated manufacturing in 2006 and it became
operational in 2009
 The early 2000s
-For decades, RDM employed a large unionized labour force, mass producing
stoves and selling its products to wholesalers. Today it’s highly automated.
 -due to globalization and fierce competition from Asian manufacturers (lower
cost structures) - Jan determined that European manufacturing would have
lower costs
automation → requires significant capital expenditures & long run - lower costs
-digitized communication between robots = allowed RDM to meet consumer’s
requirements
- improving automation processes and integrating cloud computing, mobile
devices, big data, artificial intelligence, 3D printing = enhanced RDM’s ability to
customize products, regardless of the size of the order
 2019 (Labour force and relationship with the stakeholders)
-Today: 117 people involved in manufacturing (small number)
-not skilled manual
-but highly trained engineers and computer experts - managed the
automated process
-their attitudes, aspirations, and motivations = significantly different from
the workers who survived WWII and were under the Communist regime
- a more democratic leadership style is therefore required
-This reduction and transformation in RDM labor force - company has no
longer local influence. Vocational school no longer liaises with RDM
regarding the skills of worker
-now: experiencing the free movement of labor throughout the European
Union. RDM recruits engineers across European universities
UNITS IN THE CASE STUDY:

Business Organization
HRM Finance Marketing Operations
Management

-CSR (Corporate -Leadership -Cost of Product life -Outsourcing

Social styles Production cycle -Lean
Responsibility) Paternalistic → (decreased - growth & production-
-Family owned democratic over time decline stages JIT
-Private Sector because of (baby boomer -Cellular
(commercial Structure automation generation) manufacturin
Enterprise) - used Hierarchical to - achieving -CSR g
to be state owned matrix (project better (Corporate -Automated
-Stakeholders team structure) economies Social machinery
-Growth and of scale) Responsibility) -most by
evolution (Enter Redundancie -Loan USP - expose machine, yet
new markets, s (Job losses) Capital brand- still some by
Expansion → changing the - customizable engineers
Europe. Growth = location would Competitiv products -Offshoring/
Internal) require less e Prices -Weak Brand relocation- the
-Types of staff -going identity costs- build a
Organization Public -Design production
-Vision/Mission -Recruitment (Source of Specification facility in
Statement Local - the finance) (USP - through Europe
-The first state- whole of - research) -Raw material
owned then Europe Investmen -Location?
 private sector t appraisal- -Highly trained
because of the -Lack of costs of Target market Engineers
revolution guidance and expansion - Baby Boomer -Costs of
-IPO structure - (ARR, Generation Production
-STEEPLE- because the PBP, NPV) (high initially to
external leader is very -New Market get the
environment democratic sources of Segmentation machines)
-SWOT Analysis- -Job losses - revenue - -Technology
about growing, (Revenue psychographic - Kaizen
expanding and Redundancy - streams) , demographic
opening a new Automation -Healthy (Age) Labour
location -Large profits Intensive to
-Strategies Unionized - Share -Innovation Capital
Labour Force- capital -Competition Intensive
trade unions -Market Share Mass
-Restructure -Ergonomic production to
-The culture Design Mass
within the -Globalization Customizatio
business -competition n
(organizational from Asia
structure) caused the
company to
Motivation decrease its
-financial and production
non-financial costs-
rewards automation
-4Ps- dealing
with a product
-Artificial
intelligence
-Ansoff Matrix
and BCG

Stakeholder Analysis

Person or group Stakeholder Explanation of Stakeholder Interests

of people Category
Internal /
External

Radeki de Dovnic Long term aspirations for running their business.

Family Managers Reaping profits, need for power. Aristocratic
family started RDM in 1873. Regained control of
RDM in 1990 after it was nationalised in 1949 by
the communists.
Residents in Customers Provided demand for coal-burning stoves.
1873

Communists Government Wanted to nationalize private sector companies

(1949-1989) including RDM.

Adriana Radeki Managers Fondness of Czech Republic. An opportunist

de Dovnic (CEO) wanting to work in Prague. She added
in 1990 Healthcare product with ergonomic designs to
the product portfolio.

Baby boomer Customers Need for healthcare products as the baby

generation boomer generation has reached retirement age.

Educated Czechs Employees Monthly wages, respect of their opinions in a

democratic leadership, fear of being made
redundant as RDM have started recruiting
engineers from universities across Europe.

Czech Republic Government National firm with plans to diversify into other
Government countries leading to increased national
reputation, the larger the firm higher the
corporate tax, carbon tax. An increase in the
amount of jobs in the Czech economy, although
a higher inflation rate due to the possible
increase in taxes/government revenue.

Dr. Kristian Managers Professor in history, Austro Hungarian baron born

Radeki de Dovnic in 1920. Fled Czechoslovakia in 1944 to the USA
(CEO in 1995) with only the money in his pocket. Becomes CEO
when Adriana retires and was not prepared to be
a CEO. Has a paternalistic leadership style,
which made the working environment dull and
depressing.

Jan (became Managers Son of Kristian, democratic leadership style. Born

CEO in 2001) in the USA studied engineering at uni. CEO at
age 38. Seeking product innovation and process
innovation to compete with Asian manufacturers.
Wants fun and humour in the workplace. No
mission statement, no strategic plan, no HR plan.

Customers Customers Are interested in the production of goods by RDM

Engineers in Employees Likely to be highly paid, democratic leadership

RDM style appeals to them, matrix structure might
appeal as well as they are highly-skilled and
therefore might prefer to have some degree of
autonomy (Pink’s motivation theory).
Human Employees May not fear redundancies as RDM prefers to
accountants in keep their accounts compiled by humans instead
RDM of machines.

Lorry drivers Employees Fear of redundancy, loss of jobs due to possibility

of self-driven trucks

Asian Competitors Upcoming stiff competitions, prospects of

manufacturers mergers and acquisitions, higher chances of
inter-firm benchmarking

European Competitors Higher competition if RDM expands and starts a

Manufacturers production facility in some other EU country

Workers in the Employees Loss of jobs due to automation.

factory

Computer Employees Likely to be highly paid and in high demand. May

experts be an increase in demand for them if RDM does
expand into lamerce.

The vocational Potential Was favoured under Kristian but not under Jan
school employees, after he implemented automation. Loss of
local information from a company that had previously
community allowed them to fine-tune the skills of their
students and prepare them for the current
employment sector.

Universities Society RDM is a possible employer for international

across Europe graduates.

New facility staff Employees Highly paid staff, specialised in automated

machinery maintenance, reduces the amount of
workers needed for the new facility.

CFO Managers In charge of finance. Will have to cost everything

to obtain an accurate prediction of total costs for
products, manufacturing, delivery, relocation.
Have to determine sources of finance for all of
this. Wants to sell shares on the public market to
obtain share capital for relocation.
 Stakeho Current / History Success Weakne Opportun Other
lders Previous es sses ities Informa
Position tion

Adriana CEO in Strong Was Possible

Radeki de 1990 till powerful responsi gap in the
Dovnic 1995 woman ble for market as
product kerosene
develop stoves’
ment product
into oil- life cycle
burning was in
stoves decline.
which
were a
successf
ul
venture.

Dr Kristian Head of Former Under ‘’Professi Paternal

Radeki de the Austro- his onal istic
Dovnic family(19 Hungarian leadershi training leadersh
20-2001) Baron (low- p the and ip style.
CEO level environ experien
(1995- royalty) ment ce had
2001) who fled was hardly
Died in Czechoslov orderly prepared
2001 akia in him for
1944. the task.’’
Escaped to Environm
the US, ent at
and earned RDM
a PhD in was dull.
history and
became a Environm
professor ent was
at an orderly,
American even
Uni. dull.
(Depress
ing
because
workers
being
made
redundan
t)
 Jan CEO Born in Fosters —> Democr
(son (2001- 1963, he an employe atic
of now) was born atmosph es Leaders
Kristi Introduce and grew ere complain hip
an) d highly up in the conduciv ed there style.
automate US. e to is Wonder
d Studied creativityinsufficie s if self-
manufact engineerin , with a nt driving
uring g at heavy guidance lorries
processe university, emphasi and the will
s in 2006, always s on business replace
operation wanted to teamwor sometim lorries
al in 2009 live in k, es lacks for
Czechoslov diversity,focus. delivery.
akia. humor Has not
Divided and fun. written a —>
into the mission employe
Czech Create statemen es love
Republic an t innovati
and Slovak environ No ve env.
Republic ment of corporate Althoug
on the 1st innovatio strategy h
of January n both plan sometim
1993 products es
and seems
processe chaotic
s
is open
to
change
(Which
is good
for
business
es)

CFO Proposed
RDM
build an
additional
productio
n facility
elsewhere
in Europe.
Extending
market
area.

Employees Occasion Highly Some RDM

ally trained have was
 humans engineer complain once
intervene s- ed that (1970)
usually if review Jan’s the
there is specs, leadershi largest
an issue. contact p has single
the caused a employe
custome lot of r of
r if uncertain workers
question ty and (500)
s arise lacks but now
or focus only has
engineer 117
s have a employe
way of es
improvin Automat
g design. ion has
Then directly
sent to affected
accounti the
ng and number
marketin of
g to employe
determin es and
e price, the
marketin sector
g they
contacts work in
custome Enginee
r to ask if rs are
they recruited
want to from
proceed universit
with the ies
order. across
Currently the EU
, staff
enjoy the
corporat
e culture

Customers Customer
s enter
desired
specificati
ons for
healthcar
e devices
into
template
 on
webpage.
Confirm
design
specs.

May 2019: RDM Case Study Notes

 Lines (1-2) Company is 100% owned by the Radeki de Dovnic family (Private
Limited Company)
 Line (11) They are able to utilize ergonomic designs towards the production of
a variety of goods, hence widening their product portfolio
 Line (17) stable Trading bloc ensures that there is an elimination of tariffs and
exports of RDM products will drive down the cost of imports.
 Lines (34-35 (35-36) Customers could enter their desired specification for
healthcare devices and RDM could proceed with their specialized order…
Ability to meet consumer needs
 Line (38) RDM developed several minor adaptations to customers’ products
that allowed them to produce the desired orders at a cheaper cost (and more
stable)
 Line (45) Higher efficiency due to the robotic configuration of the tooling (highly
automated machinery)
 Line (46) Highly trained engineers that monitor the highly automated processes,
thus ensuring that the products meet the quality standards as allocated by
consumers
 Line (54) The highly automated system lowers costs in the long run, despite
significant capital expenditure
 Line (55) Digitized communication between robots allowed RDM to be
responsive to customers’ requirements
 Line (57) Improved their automation by integrating cloud computing, mobile
devices, big data, artificial intelligence, and three-dimensional printing improved
the customization of products, regardless of size.
 Line (61) Not restricted to manufacturing healthcare services due to the
integration of technologies. (easy retooling to the manufacturing of other
products)
 Line (67) They were able to quickly and inexpensively produce the customized
bottles (even though it was not the product they initially produced as a
company)
 Line (77) They have highly trained engineers and computer experts who
manage the automated processes in 2019.
 Line (83) RDM recruits engineers from universities across Europe.
 Line (87-88) Teams composed of individuals from all business functions
manage orders.
 Line (89) Jan changed the leadership style from paternalistic to democratic.
This motivates employees, who’d now have more say. The CEO is also more
engaged with his employees
 Line (90) Jan introduced many changes to practices at RDM to create an
environment of innovation, constantly seeking innovation in both RDM’s
products and services.
 Line (94) Jan fosters an atmosphere conducive to creativity, with a heavy
emphasis on teamwork, diversity, humor, and fun which employees love
(increased motivation) (this has aided in the production of positive results).
 Line (100) The de Dovnic family had long held a caring and paternalistic attitude
towards the people who worked for them, including workers in their factory.
 Line (104-105) Always display a strong sense of CSR, including source
components from businesses who have good CSR practices, paying fair wages
and having a strong emphasis on care for the environment (this leads to worker
motivation, improved brand image, and customer loyalty)
 Line (113) The new facility would extend their market area. It would require
limited staff and most work will be done by robots since the
order/manufacture/delivery process can still be done in Lobjanec
 Line (125) RDM makes good products at competitive prices and is responsive
to customer needs.
 Line (28-29) unprepared CEO takeover: Dr. Kristian Radeki had professional
training and experience that hardly prepared him for the task and position of
CEO
 Line (27-29) Kristian was CEO despite being untrained and inexperienced in
business or engineering, having studied history. He also lacked local
knowledge due to the political events that occurred during his absence. This
weakness was defused when Jan became CEO because he had a very good
engineering mind helping in the production processes of RDM.
 Line (39-42) Pricing is made by human accountants and marketing executives.
This is at a disadvantage to automated pricing because it is more efficient and
less time-consuming.
 Line (51) Previously employed a very large unionized labor force (500 workers).
This made them hard to manage and supervise. They also represented huge
expenses in terms of wages. This was solved by having an automated
manufacturing process that Jan introduced.
 Line (54-55) Automation requires a lot of capital expenditures to purchase and
revenue expenditures to maintain them.
 Line (74-76) Letting hundreds of workers leave the company can cause
demotivation to the workers in the business.

 Line (80-81) By transforming the labor force and decreasing it RDM does not
have as much influence on the local community and this makes them less
powerful
 Line (89) Constant changes in leadership style can be very confusing and
demotivating for RDM employees. Line (89) the change in organizational
structure from Hierarchical to project-based and the change in the management
style from paternalistic to democratic: this can lead to demotivation amongst
the workers in the company.
 Line (91-94) When Kristian headed the company, there was a negative
environment within the company as employees were being made redundant
due to the fall in kerosene stove sales. The work environment was depressing,
orderly, and dull. This could lead to demotivation of workers. This was not the
case with Jan, as he always sought innovation. This was solved when Jan
introduced a new leadership style.
 Line (95-98) Although Jan’s leadership style is fun, it is sometimes chaotic and
workers feel there are insufficient guidance and help by their managers and that
the business lacks focus.
 Line (99) CSR incurs higher costs for RDM which makes them have fewer
profits and well as operate under very strict ethical rules.
 Line (105-110) They cannot offer competitive pricing beyond the 700-kilometer
radius which reduces European market share and affects them being price
competitive in lucrative markets. This causes them to miss out on a huge pool
of price elastic customers across Europe.
 Line (118-120) They have no marketing strategy. This makes RDM employees
confused about pricing, promotions, distribution, and production. This also
causes another weakness for RDM, such as a weak brand identity. Thus, RDM
is not very reputable because they fail to make themselves reputable. This also
makes RDM unable to reach their target audience.
 Line (123) Having an outdated name means RDM is not memorable for
customers. By failing to have a marketing strategy they are not able to
compensate for their outdated name
 Line (121-123) No written corporate strategy even though there is a vision
communicated by Jan. This lack of organization can lead to confusion for the
employees. RDM lacks focus.
 Line (123-124) No written operations management strategy can lead to
confusion within the operations sector which can cause lower quality products.
 Line (124) No human resources plan can cause employees to feel insecure in
the workplace as there is no set of procedures for the dismissal of workers.
 Initially, by moving towards automation, RDM will not make a profit, since
capital expenditure will outweigh sales revenue (Jan is forced to lower price due
to competition)
 Line (5-10) Demand for goods and services in the healthcare industry would be
growing as the baby boomer generation reaches retirement age.
 Line (15-20) Prague is a magnet for tourists as it is one of the most beautiful
cities in Europe which has aided the economy of Czech.
 Line (15-20) Educated Czech’s speak German in addition to Czech which
facilitated positive trade relations with Germany, which is Europe’s largest
economy.
 Line (60-70) Success of the order for water bottles lead to the executives at
RDM encouraged Jan to manufacture customized aluminum bottles.
 Line (75-80) Free movement of labor throughout the European Union lead to
RDM recruiting engineers from universities across Europe.
 Jan having Westernized innovative ideas
 Line (106-107) They have the opportunity of lucrative markets where demand
is high (Netherlands, Scandinavia, Belgium, France...etc)
 Utilizing job production method in production of aluminum bottles, ensures that no
aluminum would be wasted - environmentally friendly.
 Line (10) change in social trends/preferences: demand for Kerosene stoves
declined so RDM had to change their product.
 Line (31-32) the division of Czechoslovakia into the Czech Republic and the
Slovak Republic which is a threat to the economic situation of the country as
well as the market in which RDM operates
  Line (34-36) possibility of technological issues, depreciation, the problem with
the system can lead to delay in production altogether and can be time-
consuming and expensive to repair
 Line (45-46) the automation of production methods: laying off workers can
cause them to formulate pressure groups or revolt and this is not beneficial for
the company’s reputation in the community
 Line (53) Due to globalization, the fierce competition increased with the Asian
manufacturers, causing Jan to lower cost structures by automation.
 Line (75-77) Due to globalization leading to automation, the business had to lay
off some of the employees which could be a threat to the business as it caused
trouble with the local community which can lead to damage of the business’s
reputation.
 Line (80) Due to the reduction and transformation, the business no longer has
the level of local influence that it had.
1. (a) Explain the following:
(i) working capital cycle (Appendix 1) [4 marks]
Working capital (or net current assets) is the amount of finance available to a
business for its daily operations. It is calculated by current assets minus current
liabilities. HOWEVER, the working capital cycle refers to the time interval between
cash outflows for costs of production and cash inflows from customers who receive
their finished goods and services.
*If anyone’s school mentioned anything about guerrilla marketing please share with
us!!
it's basically a low-cost marketing strategy that businesses use to advertise a specific
product, where they usually do something big and attention-grabbing. An example in
RDM’s case would be placing a giant aluminum water bottle in downtown Ctech.
Pros: low cost, effective, and takes a short time to be recognized with the
improvements in technology (pictures and social media).
Cons: it is only effective in certain places, redundant, ethics are involved, does
not target a specific audience, takes a long time to set up, it can seriously damage a
company’s reputation
-Like the time a company placed a giant piano on a staircase. Good times.
Come up with mission/vision statement? - Ko Seung Ho assisted by Javier
Nalwa
Marketing Mix 7P’s

-Product:
 Every design is somewhat different, job production
o Based on design requested by the customer
 Kerosene stoves product cycle at the declining stage → healthcare
 Customized healthcare products
o Meets specific requirements
 Strive for innovation
 Provide manufacturing services for ergonomic medical equipment to medical
professionals - “You need it, we make it”

Price:
 Depends on design
o Accounting and marketing decide on the price
 Price follower (competitive)
o Important in markets such as Germany (which is highly competitive)
o Adapted in competitive markets
o Setting a price similar to others
o Market orientated, customers not lost due to high prices
o Does not take into account costs, thus profit margins may be low
 In the past used mass production so prices for stoves could be low
 Most of RDM is automated but not the costing of products. This is done by human
accountants.

Place:
  Central Europe (Based in Czech Republic) - mainly sell to Germany
 Low shipping costs in 700km radius
 Direct distribution (producer → consumer)
o lowers the price
 Shipped on lorries
o Idea about self-driving lorries
o Potential on using 3rd party couriers

Promotion:
 Word of mouth
 Below the line marketing
 No marketing strategy
o Relies on the high brand awareness
 Niche market
 B2B
 Recurring customers (assumption)

People:
 Engineers that give feedback on the design, first point of contact - means that they are
in the role of customer service also.
 Accountants and marketers give a price quote
 Highly skilled engineers and computer experts
o Recruited from European schools
o High quality products
 Jan represents the company’s
 Delivery and installation crew
 After sales services creme

Process:

 Order process (Client submits design, engineer helps improve it, price is determined
by accounting and marketing, order is confirmed)
 Delivery (700 km radius), perhaps self-driving lorries in the future
o Expensive outside the 700 km radius

Physical evidence:
 Website
o Should be appealing to the clients as it is where they make their delivery order.
The website is where the client experiences the company and communicate
with them so that they can process the order properly and successfully finish
the transaction.
 Factory
 Customized products allow the client to receive a product that is aesthetically pleasing
to them. Increases customer satisfaction