Read the following article about a US manufacturer of office supplies and the questions on the opposite page. For each question (15-20), mark one letter (A, B, C or D) on your Answer Sheet. In 1761 the German cabinet-maker Caspar Faber started a small business producing pencils. Three generations later, in the nineteenth century, the firm was run by Lothar von Faber, whose innovations included a hexagonal pencil to prevent it from rolling, and a system to designate the hardness of lead, which was eventually adopted by other manufacturers in the industry. Exports to the USA began in 1843, with a New York subsidiary set up six years later to handle the US end of the business, under the management of Lothar’s brother Eberhard. This firm subsequently started making its own pencils, using leads imported from its German parent company, until in 1903 the two companies separated. Eberhard Faber, the US company, became a competitor of the German business, now called Faber-Castell. By the 1970s, Eberhard Faber, originator of the yellow pencil familiar to generations of North Americans, had a 10% share of the $100 million pencil market. The company’s sales of pencils, pens, erasers, and rubber bands were increasing in developing countries, but recent US sales were essentially static. As a result, Eberhard Faber’s US pencil sales accounted for less than 20% of its worldwide sales, and by the end of the decade the company’s total US earnings had declined. The pencil market became particularly competitive in the early 1980s, and Eberhard Faber’s top management concluded that the key to greater US profitability was marketing. At first the firm made some mistakes. For example, after producing yellow pencils for nearly a century, the company decided to introduce a natural-looking pencil: bare cedar wood covered with a coat of clear lacquer. Eberhard Faber projected a 15% market share for the new product, thinking that the current trend toward naturalness would carry over into the pencil market. But stationers avoided the new product, preferring to stick with a proven seller. Another strategic miscalculation involved the company’s redoubled efforts in art supplies, a market that yields greater profit margins than the highly competitive office supplies market. Because Eberhard Faber’s design markers were already successful, the company acquired several art supply firms. At the same time, however, it began to put less emphasis in the commercial office supplies field that accounted for two-thirds of its total sales. In this market, which included sales to corporations under own-brand labels as well as the Eberhard Faber name, the firm found itself gaining a reputation for non-competitive pricing and sluggish new-product development, despite the consistently good quality and service it actually offered. Later in the 1980s new executives tried to revamp every aspect of the company’s ineffective marketing operation. They also developed new products, such as five-sided erasers in stylish colours. Nearly every product package was updated. Such moves benefited the company’s image, but despite its efforts Eberhard Faber was still struggling, and began seeking a buyer. Faber-Castell, seeing an opportunity to increase market share and protect the Faber trade name, made the landmark acquisition of Eberhard Faber in 1987, reuniting the two firms. After further major changes, in 1996 a new Faber-Castell was once again established as a wholly-owned US company. The new Faber-Castell USA concentrated on high end markets, and soon launched an exclusive collection of premium writing instruments and accessories, intended to bring back the handwriting culture that had been thrown aside by modern technology. According to Till Quante, the company’s marketing manager for fine writing instruments, when the calculator and later the personal computer were introduced, those in love with technology predicted the pencil companies would die, but, ’Just the opposite happened,’ says Quante. Faber-Castell is confident of a bright future.

Read this advice about responding to questions from the audience while giving presentations. Choose the best sentence from the opposite page to fill each of the gaps. For each gap (9-14), mark one letter (A-H) on your Answer Sheet. Do not use any letter more than once. There is an example at the beginning (0). Taking Questions When giving presentations, it is common practice to encourage audience involvement and this often takes the form of questions from the floor. A good deal has been written recently discussing the pros and cons of various approaches to handling these. (0)___H___ One approach is to take questions as and when they arise. Usually there are only a few points from the floor but in the event of receiving too many, the presenter may move the presentation on by reminding the audience of the time, and offering to continue the discussion later. 【P1】______.Those who aren’t will simply have to wait. Another approach is to ask for questions after each main point has been addressed. A danger here is that too much time may be sacrificed to questions and, as a consequence, important parts of the message have to be edited out. The audience may also confuse the presenter by asking about points that he or she intends to cover later in the presentation. If this happens, it is important to make the audience aware that any such queries will be dealt with during the course of the session. 【P2】______ Alternatively, mid-point questions can be discouraged by signalling, during the introduction, that you would prefer questions at the end. If you take this approach, however, it is important to bear in mind that when you get to the end, it may take a little time for people to adjust and to reflect on what they have heard and to formulate a question they want to ask. 【P3】______.To overcome this, it is useful to have a chairperson to direct the proceedings or a colleague ’planted’ in the audience who is prepared to ask the first question if necessary. A chairperson can also help by ensuring mat questions are taken in turn. This is particularly useful if you have an over-eager questioner who tries to monopolise attention. 【P4】______. Another potential problem is hostile questioners who ask the kind of question they know will be difficult to answer. This may be done in an attempt to destroy the presenter’s case and every effort must be made to limit the damage and to search out opportunities to gain advantage. It is always a good idea to be aware of the traps that this type of questioner may try to set. 【P5】______.Even then, it may be that you do not know the answer, in which case the safest response is to say so. The rest of the audience may appreciate your honesty. It may also be possible to move the attention away from the questioner by asking the rest of the audience if anyone else can provide an answer. Sometimes members of the audience may attempt to put forward an alternative case or demonstrate their own competence by making a lengthy claim rather than asking questions. 【P6】______. For example: ’Yes, I think we need to bear some of these points in mind. May we have the next question, please?’ Example:[*] A Other members of the audience may quickly become frustrated if this means that their questions remain unanswered. B An opportunity may still arise to make the point clearer and eliminate any such ambiguity. C Acknowledging the statement and then seeking a question from someone else can be an effective way of moving the session on. D This approach indicates to the audience that answering their questions now might undermine the clarity and structure of the talk. E A statement such as ’I will come back to this point at the end’ should keep most people happy. F Anticipating potential weaknesses in your argument and how you might respond to questions about them is an important aspect of your preparation. G There is even the possibility that an embarrassing silence may ensue. H However, my intention here is simply to present the most common strategies.

Read the article below about a manufacturing company. For each question (31-40), write one word in CAPITAL LETTERS on your Answer Sheet. There is an example at the beginning (0). Example:[*] Company focus - PWT Within theTelcar group, PWT, maker of energy management systems, is a small player and as (0) ______has little influence over broad group strategic direction and resource allocation. 【B1】______this, the company can point to a history of operational excellence on 【B2】______it has built up a 30% market share under the nose of competitor Blacktons. Success has been hard won. Before 1990, the main plant, which accounts 【B3】______ three-quarters of company turnover, made its products in traditional mass-production push-mode - building batches for stock to complex schedules and forecasts. Lead times were long, even 【B4】______the warehouse was always bulging with stock, and customer satisfaction was low. A substantial loss in 1995 finally resulted in PWT making fundamental changes in order to survive. Taking a collective deep breath, it moved to stockless production using JIT (just-in-time) principles and production cells in place of the previous assembly line. 【B5】______sooner had it done so than it began to see dramatic results, e.g. lead times slashed from six weeks to three days. Without forecasting and scheduling, materials control became massively simplified. 【B6】______really enabled PWT to compete 【B7】______ equal terms anywhere in the world were its unbeatable lead times and consistent quality. So efficient had the company’s practices become 【B8】______in 2004 it moved production to a new site with no downtime, meaning that 【B9】______even a single order was missed. The next phase? The company is now engaged 【B10】______introducing a redesigned range. In the group context, it’s as a centre of manufacturing excellence that PWT can keep on punching above its weight.

Look at the statements below and at the five newspaper items about different companies on the opposite page. Which company (A, B, C, D or E) does each statement (1-8) refer to? For each statement (1-8), mark one letter (A, B, C, D or E) on your Answer Sheet. You will need to use some of these letters more than once. There is an example at the beginning (0). Example: 0 This company has sold off some of its brands.[*] A Angus Since coming to the market five years ago, Angus has enjoyed great respect, considerably more than its peers in construction and building materials. This has been well deserved, with its initial profits now four times as great. However, the company’s recent warning that such growth is unlikely to be maintained has caused a levelling off in its share price. Investors apparently want to see evidence that the current expansion into North America is paying off and paying for the large workforce, before pushing Angus shares any higher. B Johnson’s Steven Green, chairman of the ailing furniture manufacturer Johnson’s, has produced his long-awaited turnaround plan for the company, comprising aggressive cost savings targets and some optimistic-looking profit forecasts. Further reducing the cost of raw materials by 15% is perhaps over-ambitious, given the resistance to the 5% cut the company imposed last year. Remaining savings should be more easily achievable through improving manufacturing efficiency, including job cuts and plant closures. Should Johnson’s miss those targets, including returning to an operating profit as early as next year, Green’s job could rapidly be in danger. C Hora Products Four years ago, the shares of Hora Products, the watches and handbags distributor and retailer, stood at 405p. At that time, Hora revealed profits up by a third to ￡22m, but warned that growth was unlikely to continue at such a pace. The shares immediately dropped 11% and kept on falling, until they hit a trough of 64p. Last year Hora decided to concentrate on its volume divisions, which include the Lagoon and Horato watch brands, and disposed of all its luxury marques, a strategy that will be watched with interest by its rivals. D ForYou A 2% drop in UK like-for-like sales in the last 3 months has forced healthcare retailers ForYou to issue a profit warning, with a suggestion that earnings for the year are likely to be cut by 10-15%. Management has been accused of over-optimism in believing it could deliver 40% new product growth annually. The turmoil resulting from this strategy will increase stock-carrying costs by ￡3m, and has resulted in the resignation of the director responsible for product and marketing. The shares closed on Friday at 76p, down 29% in the past year. E D&K Consumer goods giant D&K has already abandoned the targets it set only six months ago. At the time, the new chief executive Gerald Lansbury made much of his move away from his predecessor’s goals for growth in sales and earnings to more realistic figures. Clearly, though, his more modest ambitions are still not modest enough: D&K has real problems with losses in market share, and faces stagnating sales. Yesterday, sure enough, Lansbury set his sights even lower, blaming market conditions for the company’s poor performance.

Read the article below about pricing policies. Choose the correct word to fill each gap from A, B, C or D on the opposite page. For each question (21-30), mark one letter (A, B, C or D) on your Answer Sheet. There is an example at the beginning (0). Pricing policies Whenever a product or service is made (0)______for sale, one of the most important 【C1】______to be made is the one related to the price to be charged. To have no coherent policy 【C2】______price - merely to ’think of a number’ - is to 【C3】______trouble. The basic point as far as pricing is 【C4】______is to answer the question, ’【C5】______what level should we pitch our prices?’ A relatively high price (in comparison to the competition) 【C6】______that the product has something special about it not found in the other products. In other words, the customer is expected to pay a 【C7】______for the extra-special qualities to be found in the product. This also applies to services like any form of maintenance or repair work. Unfortunately, it is a well-established economic law that the higher the price, the lower the 【C8】______sold. Nonetheless, both ends of the market can be equally profitable. The question of discounts is important too. Some organisations offer discounts out of 【C9】______, while others never give any kind of discount. A ’quantity discount’ can attract customers: the more they buy, the lower the unit price. ’Prompt-payment discounts’ are another 【C10】______to the customer (usually retailers), whereby if payment is made quickly (say, within ten days), the amount payable is less than it would normally be. Example: A available B convenient C appointed D obtainable [*]

Read the text below about business schools. In most of the lines (41-52), there is one extra word. It is either grammatically incorrect or does not fit in with the meaning of the text. Some lines, however, are correct. If a line is correct, write CORRECT on your Answer Sheet. If there is an extra word in the line, write the extra word in CAPITAL LETTERS on your Answer Sheet. The exercise begins with two examples (0 and 00). Examples:[*] Faculty Sent Out Into Real World 0 As companies downsize by their eliminating managers and combining many 00 functions in one, business schools have also started crossing departmental 【M1】______lines when teaching management. One school where has recently begun 【M2】______selecting and training some of its faculty members so that they can take over 【M3】______some of the school’s key accounts from its executive department. Selling the 【M4】______school’s executive programmes was used to be the work of a separate marketing 【M5】______division, but from now on it has been decided that the teachers themselves will 【M6】______assume responsibility taken for portfolios from top clients. They will be prepared 【M7】______for their new tasks in a team-teaching seminar and learn how to handle on 【M8】______customer relations. They will also visit companies and see how they do 【M9】______operate. Another important aspect of their training is the reading case studies 【M10】______and learning to negotiate with and design programmes. It is hoped that this 【M11】______project will bring the school closer to the market and boost up revenue. If it 【M12】______proves to be successful, no doubt about other schools will soon begin to adopt the same measures.

The US company run by Eberhard Faber was set up in order to

What are we told about Eberhard Faber’s situation in the 1970s?

What problem did Eberhard Faber face when it introduced cedar wood pencils?

According to the fourth paragraph, what strategic mistake did Eberhard Faber make?

According to the fifth paragraph, in the 1980s Eberhard Faber was failing to

According to the last paragraph, Faber-Castell USA is implementing a strategy of