Explain growth to public limited company status and stock-market flotation, linking external finance, ownership, control, regulation, scale and expansion.
Sources for use with Extract C Hot sauce is essential in Mexican cuisine Hot sauce (or ‘salsa picante’ in Spanish) is an everyday ingredient in Mexican cooking. The people of Mexico have developed a strong liking for chilli peppers. In Mexican restaurants and homes no table is completely set without a bottle of hot sauce. Chilli peppers are mostly grown in Western Mexico. Each sauce tastes different, depending on the type of pepper used and the ratio of chillies to other ingredients such as vinegar and spices. Most households make their own versions but numerous businesses manufacture hot sauce brands for sale in Mexico and for export. Extract D Grupo Tamazula – our story Grupo Tamazula is a public limited company that manufactures hot sauce in Guadalajara, in the Jalisco region of Mexico. The business began in 1960 when the Tamazula brand was introduced. It quickly became popular throughout Mexico. Shortly after, it introduced another brand of hot sauce, Salsa Valentina, to the market. Salsa Valentina became a market leader of hot sauce production with increasing sales across Mexico. Grupo Tamazula products are made with the finest ingredients. Salsa Valentina for example, is thicker than many of its competitors, and contains less vinegar and more fresh chillies. The hot sauces are packed using the most modern equipment available and investment in new technology keeps Grupo Tamazula up to date. The factory is over 26,000 m2, generating employment in the area. The company sells its products all over Mexico and through its US-based international sales office. Exports continue to increase, especially to the US and Canada.
Discuss the benefits for Grupo Tamazula of being a public limited
company (plc).
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- A public limited company is a business owned by shareholders where the shares can be traded on the stock market
- Grupo Tamazula could raise a large amount of money from selling shares to the public
- This means it could afford to finance keeping the 26,000 m2 factory up to
date with investment in the most modern equipment available
- Grupo Tamazula may benefit from having a more prestigious profile as a
plc
- This could be especially important due to the high number of competitors
in the Mexican hot sauce market, as a better profile could allow Grupo
Tamazula to increase its market share further
- However, setting up a plc can be very expensive and time-consuming, as
well as not being able to keep accounts private
- Outsiders may take control of the business, meaning the traditions from its
formation in 1960 and its products being made from the finest ingredients
may change
- As a result of the outside control, Grupo Tamazula may no longer be able
to deal with customers on a personal level, therefore losing some of its
ability to cater for their needs
Level
Mark
Descriptor
0
No rewardable material.
Level 1
1-2
Isolated elements of knowledge and understanding - recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2
3-5
Accurate knowledge and understanding.
Applied accurately to the business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced, and
unlikely to show the significance of competing arguments.
Level 3
6-8
Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, well contextualised, using quantitative and/or
qualitative information and shows an awareness of competing
arguments/factors.
Question
Assess whether Grupo Tamazula will find it difficult to keep waste to a minimum.
Indicative content