Aurelia Beauty is a UK-based multinational selling hair and skin products in 40 countries. Last year revenue was £640m, of which £224m was earned in the UK. It has factories in Wales and Poland and is building a new factory in Vietnam to serve Asian markets.
Aurelia uses palm oil in many products. Campaign groups accuse the industry of contributing to deforestation. Aurelia buys 60% of its palm oil from certified sustainable sources and has promised 100% within five years, which would raise costs.
In the EU, Aurelia earns about €50m a year. The euro has moved from €1.15 to €1.20 per pound. Some countries in South America have raised tariffs on imported cosmetics.
Aurelia's marketing director wants a single global brand image and advertising campaign; regional managers argue that products, ingredients and messages should be adapted locally. The board is also considering buying Belamar, a Brazilian cosmetics company with a strong local brand and its own factory.
Case study: Aurelia Beauty plc
Aurelia Beauty is a UK-based multinational selling hair and skin products in 40 countries. Last year revenue was £640m, of which £224m was earned in the UK. It has factories in Wales and Poland and is building a new factory in Vietnam to serve Asian markets.
Aurelia uses palm oil in many products. Campaign groups accuse the industry of contributing to deforestation. Aurelia buys 60% of its palm oil from certified sustainable sources and has promised 100% within five years, which would raise costs.
In the EU, Aurelia earns about €50m a year. The euro has moved from €1.15 to €1.20 per pound. Some countries in South America have raised tariffs on imported cosmetics.
Aurelia's marketing director wants a single global brand image and advertising campaign; regional managers argue that products, ingredients and messages should be adapted locally. The board is also considering buying Belamar, a Brazilian cosmetics company with a strong local brand and its own factory.
1(a)3 marks
Calculate the percentage of Aurelia's revenue earned outside the UK.
1(b)6 marks
Explain two reasons why Aurelia might choose Vietnam for its new factory.
1(c)9 marks
Analyse the effects of higher tariffs in South America on Aurelia.
1(d)12 marks
Assess whether Aurelia should move to 100% sustainable palm oil sooner than planned.
1(e)16 marks
Evaluate whether Aurelia should use a single global marketing strategy or adapt its marketing to local markets.
2(a)3 marks
Calculate the value in pounds of €50m of EU revenue at each exchange rate, and the change.
2(b)6 marks
Explain two opportunities that emerging economies offer Aurelia.
2(c)9 marks
Analyse how Aurelia could use PESTLE analysis before buying Belamar.
2(d)16 marks
Evaluate whether Aurelia should buy Belamar.
Finished?
Answer every question to finish (9 left), or finish when the time’s up.
Score 0 / 80 · 0 of 9 marked
This paper is written by Plasmo in the style of the OCR A-Level Business exam. It is not a past paper and is not produced or endorsed by the exam board.
OCR A-Level Business Mock Exam: Paper 3: The global business environment | Plasmo