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Look at the statements below and at the five summaries of articles from a business journal on the opposite page.
Which summary (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 summary offers insights from research into companies with contrasting success rates.[*]
A
Companies throughout the world have embraced mass customization in an attempt to provide unique value to their customers in an efficient manner and at a low cost. But many managers have discovered that mass customization can produce unnecessary cost and complexity. In The Four Faces of Mass Customization, James H. Gilmore and B. Joseph Pine II provide managers with a framework to help them determine the type of customization they should pursue. Gilmore and Pine have identified four distinct methods to follow when designing or redesigning a product, process or business unit: managers should examine each method for possible insights into how to serve their customers best.
B
Why are some companies able to sustain high growth and others are not? W. Chan Kim and Renee Mauborgne studied high-growth companies and companies in the same field which are doing less well, and found a striking difference in each group’s assumptions about strategy. In Value Innovation: the Strategic Logic of High Growth, the authors report on companies that have broken with conventional logic to offer customers quantum leaps in value. These companies have focused on what most customers need, instead of on beating their rivals.
C
Increasingly, companies are less focused on selling products and more interested in keeping customers. Ideally, they want to attract and keep only high-value customers. In Manage Marketing by the Customer Equity Test, Robert C. Blattberg and John Deighton provide a model to help managers find the optimal balance between spending on acquisition and spending on retention - and thus grow their customer equity to its fullest potential. And because the balance is never static, the authors also offer a series of guidelines to help managers frame the issue.
D
Our understanding of how markets operate is based on the traditional assumption of diminishing returns: products or companies that get ahead in a market eventually run into limitations. But, in recent times, Western economies have undergone a transformation from processing resources to processing information, from the application of raw energy to the application of ideas. As this shift in production has occurred, the mechanisms that determine economic behaviour have also shifted - from diminishing returns to increasing returns. In Increasing Returns and the New World of Business, W. Brian Arthur illuminates the differences between the two worlds and offers advice to managers operating in both kinds of markets.
E
Companies currently face a predicament in many mass markets. Customers are demanding that their orders be fulfilled ever more quickly, but they are also demanding highly customized products and services. In Mass Customization at Hewlett-Packard: The Power of Postponement, Edward Feitzinger and Hau L. Lee show how HP has proved that a company can deliver customized products quickly and at a low cost by rethinking and integrating the designs of its products, the processes used to make and deliver those products, and the configuration of its supply networks.
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Read this text about the growing demand for consultants, taken from a business magazine.
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).
EVERYBODY WANTS CONSULTANTS
Management consultancy firms have always found it easy to lure business school graduates, with the students themselves rating the sector top of their wish list. (0) ....H.... It is this obstacle to successful growth that consultancies are seeking to overcome.
One of the main attractions of consultancy has always been the high level of starting salaries. 【P1】______.In industrial companies, pay rises usually come in steps and are wide apart, while consultants’ pay tends to increase constantly and follow a steeper curve. Consultants also appreciate their autonomy, and the opportunity to broaden their experience, acquiring competences in several sectors.
The rewards of the job are more tangible than those for managers employed by companies. Consultants enjoy predicting the changes that their recommendations will make. 【P2】______. In fact, such factors mean some consultants play down the importance of pay as a motivating factor. 【P3】______For example, consultants may be working in teams where as many as ten different nationalities are represented.
Despite all this, moves out of consultancy into the corporate world are more common than the other way round. 【P4】______.As a result of such ambition, retaining talented staff is a constant challenge for consultancy firms. In this respect, they are sometimes victims of their own strengths, having drawn in recruits with promises that after two years in consultancy young graduates will be able to do almost any job. 【P5】______.The temptation is worrying for consultancy firms as demand for their services, and so their people, continues to grow at a prodigious rate, creating a huge recruitment need. 【P6】______.But so far, consultants recruited from the outside, as opposed to fresh from business schools, who adapt successfully remain a minority. This is largely due to the strong corporate cultures they have been part of.
It will be interesting to see how the situation develops over the next few years. Whatever happens, it is clear that there will be plenty of demand for consultants.
Example:[*]
A It feels even better if they are still around when these are implemented.
B They claim rather that they benefit from the whole working style, partly due to the degree of diversity within the job.
C These also then grow faster than in other sectors, according to frequently published comparisons.
D But people in industry also consider such adaptability valuable and make very attractive offers to consultants, which are hard to resist.
E It leaves them no choice but to develop the ability to integrate managers switching from industry.
F The growing trend of hiring consultants from companies owes much to the shortage of qualifying graduates.
G It is a path which is particularly visible among new graduates, who tend to view consultancy as a stepping stone towards a managerial position.
H What has been proving more difficult is appealing to people who already occupy managerial positions within companies.
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Read the following article about different-sized management consultancies and the questions on the opposite page.
For each question (15-20), mark one letter (A, B, C or D) on your Answer Sheet.
A few years ago, when Carol Nichols arrived as head of human resources with NVCT, the fast-expanding telecoms and software services company, she knew that from day one working with management consultancy firms would be an integral part of her role. ’I had already decided on the kind of consultancies I wanted to employ’ she says. When I started, I was pretty much a one-woman department. So it was important for me to form partnerships to help me support the growth of the department and the company. What I wanted was smaller consultancies with whom I could establish personal relationships - firms which would grow with us, and be flexible enough to respond to our changing needs.’
Paul Eden, Managing Director of NVCT, confirms the desirability of smaller consultancies. ’Larger firms have a tendency to use one person to sell, and another to deliver with the result that clients may not really know who or what they are buying. With a smaller firm, you are buying the consultant as much as the product - the person rather than the brand.’
Penny White, financial services group Interco’s Head of Strategic Management, highlights other advantages of the smaller consultancy. ’A smaller consultancy recognises that it cannot do everything, and is much more willing to work with other preferred consultants for the good of the client,’ she says.’And on fees, smaller consultancies can be less rigid and more cost-effective, simply because their overheads are lower That is not to say that they need to undercut to win business, but part of a small consultancy’s strategy must be to thoroughly investigate how to add value to everything
it does. Larger consultancies are gaining expertise in business psychology and applying it to running change programmes, but they still tend to bring in their own team to implement projects, which means that when they move on, the know-how goes with them, leaving the client with a knowledge vacuum, not the integrated training that small firms, in particular really need.’
But the larger consultancies do have their advocates. Bill Dawkins, editor of Consultancy Today. ’One area where the industry giants have an edge is where major global companies require a standardised service across a number of different countries. Such clients are frequently spending substantial sums of money in consulting engagements and, not surprisingly, they are seeking the reassurance of a recognised and respected brand which they know they can trust to deliver’.
When it comes to choosing which kind of consultancy to use, there is no right or wrong in any absolute sense. By their very nature, smaller entrants are able to move more swiftly than the larger firms. But the question is whether they have the necessary substance and track record behind them to see larger-scale programmes through. Choose a smaller consultancy for pilot implementations where you want ’look and see’ solutions in a short space of time. Then turn to a larger firm for full implementation and transformation programmes. Increasingly, the choice between big and small is not mutually exclusive, but complementary.The two often find themselves working together on the same project - creating a combination neither of them can achieve on its own.
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Read the extract below from a bank’s advice to businesses about finding and keeping customers.
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).
Finding and keeping customers
Customers and buyers are the lifeblood of any business. The constant challenge is to first find your customers and then sell to them.
For businesses which are just (0)______ up, marketing professionals suggest working out a SWOT analysis - a systematic review of your Strengths, Weaknesses, Opportunities and Threats - to clarify your business thinking and 【C1】______realistic sales targets.
Once you’ve gained customers it’s important to remember that they can 【C2】______or break your business. After all, if you give excellent service, they will freely advertise your company to colleagues and friends, giving you a competitive 【C3】______over your rivals.
When you’re planning to pay for advertising, business directories, local newspapers and the internet can be very cost-effective. Trade exhibitions can also 【C4】______you to a wide range of useful contacts and lucrative new markets.
You may also be able to 【C5】______company news into free PR by sending press 【C6】______to magazines and newspapers. But editors have very 【C7】______space, so your story must be unusually interesting and entertaining to 【C8】______in print.
At JS Bank we specialise in helping new businesses 【C9】______off to a promising start. We can help you develop your business, and our free book How to 【C10】______your business potential is a detailed, practical guide to advertising, endorsed by the Institute of Direct Marketing. Contact your local JS Bank for a copy.
Example:
A starting B coming C growing D bringing
[*]
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Read the article below about a British 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:[*]
Manufacturer’s
newservicefocus
The huge Eastman chemical complex in Tennessee, USA symbolises the effort by one mid-sized UK manufacturer to make a move (0)______the world of services.
Stationed full-time on the site - which is one of the biggest chemical works in the US - are six employees of British firm AES Seal, 【B1】______job is to maintain and replace the mechanical seals in rotating machinery throughout the complex. The link with Eastman is part of AES’s push to become as much a service company as a manufacturer.
The company has built its service operations by spelling 【B2】______ the direct financial benefits it can offer new customers: 【B3】______ return for a service contract covering a specific site, AES will reduce current maintenance costs by 25%. The company has been able to hit this target up until 【B4】______and its service contracts account 【B5】______a respectable proportion of its annual revenue.
However, the added service offering consists 【B6】______only of the pursuit of individual contracts, but also of trying to build the question of service into AES’s overall culture. About a fifth of the company’s employees currently work in a service function, advising customers both on the type of seal to buy 【B7】______on the correct way to operate their plants 【B8】______that sealing costs are reduced.
Design skills are also central to the operation. AES employs about 25 people to design new seals, vital in helping the operating efficiencies of the companies it sells 【B9】______Progress is such 【B10】______AES will soon be scarcely recognisable as the company it used to be.
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Read the text below about changes in employment patterns in the UK.
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:[*]
The changing nature of employment in the UK
0 The unwritten contract between worker and their employer is changing rapidly. No
00 longer is an employer able to guarantee anybody a job, or even a career, for
【M1】______the life. Neither should employees attempt to wed themselves to an
【M2】______organisation for the promise of security, such as it will not be there. If we, as
【M3】______employees, are to survive, then we will have to make the effort to change too. It
【M4】______is simply no longer well enough to sit tight in our office chairs and hope that
【M5】______somehow, if we keep quiet, we will be overlooked but when the hammer of
【M6】______redundancy strikes. It will be the survival of the fittest and there will be few
【M7】______exceptions. The rules have changed too. Qualifications all alone will no longer
【M8】______guarantee promotion as they might have done this in the past. In these new
【M9】______circumstances, employees will be judged on their ability how to resolve conflict,
【M10】______negotiate a solid contract, motivate people under them to work so hard, and
【M11】______demonstrate a considerable amount of personal commitment towards their future of
【M12】______development. It is certainly going to be tough to get ahead and, as if for staying ahead, that will be tougher still.
