M26 Predicted P1 Study

Define the term carbon tax [2]

carbon tax is a government imposed fee charged to businesses based on amount of co2. they emit through their operations. its purpose is to incentivize businesses to reduce greenhouse gas emissions by making carbon intensive activities more expensive

Define the term first-mover advantage [2]

First mover advantage is the competitive benefit gained by a business that is the first to enter a market or introduce a new productm, service, or process. this advantage may include brand recognition, customer loyalty, control of resources and the ability to set industry standards before competitors enter

Describe two possible implications of the carbon tax for ABC [4]

case study states that country z government is expected to introduce carbon tax of 50 dolla per ton of cos and that ABC emits approximately 3m tonnes per year. this would create an additional annual cost of 150m for ABC’s concrete operations, which could significantly reduce profitability unless ABC can reduce emissions or pass costs onto customers.

the carbon tax could accelerate ABC’s investment in sustainability measures such as the proposeed solar panel installation. the financial pressure of the tax creates strongner business case for spending 20m on solar panels to reduce emissions by 10%, as tax savings would contribute to the ROI

the carbon tax could also make ABC’s e-waste division more attractive as business line, since its not carbon intensive. this could shift the strategic balance in favour of Kwame’s proposals to expand e-watste processing

Explain one advantage and one disadvantage for ABC of offering salaries 20% above the industry average in the e-waste division [4]

an avantage would be offering above average salaries would help abc fill its 12 vacant positions in the ewaste division by attacting workers with the specialist chemistry and engineering qualifications required. this is important because the ewate division has the higher profit markgin, and unfulfilled roles limit abcs ability to operate at full capacity and grow this division

the disadvantage would be paying ewaste workers 20% above industry average could create resentment among the 2400 concrete division workers who earn less, as HR director warned. this could lower moralo and motivation in concrete division, which still generates the majority of abcs revenue 800m. it could also lead to demands for pay increases across the company, raising abcs overall wage bill.

Explain one reason why the installation of solar panels could help ABC become more market-oriented [2]

installation of solar panels would reduce abcs co2 emissions by 10%, whicch could be used as a USP to attract environmentally conscious B2B customers. construction firms and property developers increasinglt face pressure from regulators and consumers to use sustainable materials. by reducing its encironmental footprint, abc can differentiate its concrete products and respond to market demands rather than simply selling a commodity. this shift from product orientation to market orientation means abc is adaptinf its operations based on customer needs rather than just focusing on production efficiency

Analyse three ways in which the conflict between the concrete division managers and Kwame could affect ABC’s ability to achieve its growth target [6]

Delayed decision-making: The resistance from concrete managers to Kwameʼs proposals could slow down strategic decisions about expanding the e-waste division. If the board cannot reach consensus on whether to prioritise e-waste or concrete modernisation, investment may be delayed or diluted. Time lost is revenue lost, particularly given the e-waste market is growing at 8% per year and EcoProcess Ltd is developing competing technology. This delay could prevent ABC from scaling the higher-margin e-waste division quickly enough to hit the 15% profit growth target.

Misallocation of resources: If the conflict leads to a compromise where investment is split between modernising old concrete equipment and expanding e-waste, neither division may receive sufficient funding to achieve meaningful results. The concrete divisionʼs 12% profit margin means that even significant efficiency gains would generate less incremental profit than scaling the 28% margin e-waste division. A politically driven allocation rather than a strategically driven one could leave ABC short of its growth target.

Talent retention and morale: The complaints from senior concrete managers about Kwame receiving preferential treatment suggest deteriorating internal relationships. If key concrete division managers leave due to perceived unfairness, ABC loses operational expertise in a business that still generates $800 million in revenue. Equally, if Kwame feels unsupported by the board, he may leave, taking his industry knowledge and vision with him. Either outcome weakens ABCʼs capacity to grow.

Damaged organisational culture: The conflict could create a ‘two-tierʼ culture within ABC, where concrete and e-waste employees see themselves as competing rather than collaborating. This undermines the cross-functional cooperation needed to execute growth strategies, such as using recycled e-waste materials as aggregates in concrete, which requires both divisions to work together.

Discuss whether ABC should accept Country Z’s government contract to become the country’s official e-waste processor [10]

Discuss whether ABC should license its room-temperature gold recovery processes to GoldTech International [10]