World trade fall hits Hong Kong shipping

Read this article and answer the following questions:

Level 1: Knowledge
1) Define the term ‘demand’. Give 3 determinants of demand for ships.

Level 2: Application
2a) Use a suitable diagram to explain this statement from the first section of this article: "There is less cargo moving around the world, so less need for ships. Hence dramatically lower rates for hiring large ships’

2b) Use your knowledge of different cost types to distinguish between the terms ‘hot lay up’ and ‘cold lay up’ that are mentioned in the 'Lay-up' section of the article

Level 3: Analysis
3) Examine the reasoning behind this statement from the article 'the surprising fact in Hong Kong is that, so far, no major ship-owning company is in dire straits'. As a Hong Kong student, what do you think of this

Level 4: Evaluation
4) Recommend a suitable medium term growth strategy for Hyundai Heavy Industries Co., Ltd. (the world’s largest shipping company). Hints – you may find relevant information in the “Order Book’ section of the article, an internet search on the company, and your knowledge of External Growth.

NOTE : Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC .