Managing change

Section B — Extract D: Northwind Hotels plc

Northwind owns 22 mid-priced hotels in northern England. Its objective is to grow revenue by 30% in five years. It is considering refurbishing its Edinburgh hotel at a cost of £2.0 million. Forecast net cash flows are:

Year	1	2	3	4	5
Net cash flow (£m)	0.5	0.6	0.7	0.8	0.8

An alternative is a new marketing campaign. Option A (social media) costs £1.5m with a 60% chance of £3m extra profit and 40% chance of £1m. Option B (TV) costs £1.6m with a 50% chance of £4m and 50% chance of £0.5m. Northwind has also received an offer to take over Stayra, a chain of 12 budget hotels with a strong online booking brand but a very different, informal culture. Staff at Stayra are worried about job losses.

From Paper 2: Business activities, decisions and strategy

2(e)20 marks

Evaluate the importance of managing organisational culture and stakeholder concerns if Northwind takes over Stayra.

Score 0 / 20 · 0 of 1 marked

This paper is written by Plasmo in the style of the Edexcel A-Level Business exam. It is not a past paper and is not produced or endorsed by the exam board.

Managing change Exam Questions: Edexcel A-Level Business | Plasmo