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DIVA PLC. REVISION. PLC. What is a Plc? What are the main features of Plc companies? How can Plc companies gain access to money easily? Do they have limited or unlimited liability?. ANSWERS. Public Limited Company

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  • What is a Plc?

  • What are the main features of Plc companies?

  • How can Plc companies gain access to money easily?

  • Do they have limited or unlimited liability?


  • Public Limited Company

  • Have £50,000 to start up, have to produce annual accounts, have to hold an AGM and can sell shares on the stock market.

  • By selling more shares.

  • Limited liability


  • What type of structure does Diva Plc have?

  • What is the span of control for Joanna Diva?

  • How could Diva Plc change the structure of the business?


  • Hierarchical structure

  • 6

  • They could operate without some of the additional layers such as supervisors in the production department so that it is a more lean company where communication flows freely.


  • How does Diva Plc make their shoes?

  • Name 2 features of the one production process that they use.

  • Do you think the purchasing manager should make use of overseas suppliers or take advantage of economies of scale?

  • What are economies of scale?


  • Mainly use batch production but for special orders they use job production.

  • Batch Production -Make lots of different types and sizes of shoes in different colours.

  • Economies of scale as it is quite a large company and buying in bulk will help with financial targets.


  • What is a Trade Union? What does a Trade Union do?

  • Why are Health and Safety issues important?

  • How could Diva Plc motivate their workers?

  • How could Diva Plc improve communication methods in the company?


  • Trade Unions are there to support the staff, usually in pay negotiation and if there is a dispute over wrongful dismissal.

  • Health and safety is important as it is law and they could be sued .

  • Job rotation, enrichment, Maslow or McGregor.

  • By removing some of the layers and ensuring that communication is clear to everyone.


  • Looking at resource sheet 1 where do you think product I would be on the product life cycle?

  • Do you think that their marketing strategy is appropriate? Explain your answer.

  • What are the main market segments of Diva Plc?


  • In the decline area

  • No because it is very basic and does not allow for the company to reach other market segments.

  • Women over 20 and men over 40!


  • Which location would you choose for the factory shop from resource sheet 4 a and b?

  • Why does it concern Diva Plc that their share price is falling?

  • Do you think Diva Plc should move manufacturing abroad?


  • Can give any answer as long as you justify it but site B would probably be the best.

  • This means not that many people will wish to invest in the company in the future which could lead to cash flow problems.

  • No it is costly as have to find premises, new employees as well as paying redundancy to workers in the UK.


  • Should Diva Plc open Diva retail shops in major cities in the UK?

  • Should they merge or amalgamate with another UK company?

  • What else could Diva Plc do?


  • Might enhance sales but also need to look at expanding their product range.

  • This might be possible but may lose the identity of the business and also eventually full ownership if the other company is larger than Diva.

  • Diva could look at other products and diversifying the products that they make.


  • What has happened to the sales revenue?

  • Which section has seen the largest growth in sales revenue?

  • Which section has seen the largest decline in sales revenue?


  • It has increased by £6m

  • Internet shopping doubling the sales revenue generated.

  • Independent shoe shops, department stores and mail order have all seen a 5% decrease in sales revenue.


  • Do you think this is a good promotional opportunity for Diva PLC?

  • Would you want to win on the scratch card?

  • What could Diva Plc have done differently to promote their products?


  • No as it is very basic and the prizes are not very good.

  • No as none of the prizes would appeal to younger customers.

  • The products could be more up to date, the competition could have better prizes and need to attract a new market segment to ensure that sales continue to increase.


  • Do you think the cash flow forecast shows that setting up a factory outlet shop is a good idea?

  • What would happen if the set up costs were included?

  • Would you agree to setting up the factory outlet shop if you were on the board of directors?


  • Generally yes as it looks like they hope to generate a large profit by the end of the forecasted year.

  • There would be no profit being made by the end of the year.

  • I would want to see more financial information and break even forecasts before making a decision.

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