The ripple effect of cutting water

Read this BBC article on how the external environment has impacted on Unlever development of new products

Level 1: Knowledge
1) Identify the 2 key areas where Unilever hopes to reduce its impact on the environment

Level 2: Application
2a) Explain what the Unilever spokesman Gavin Neath means when he says
“For far too long, businesses like ours have been effectively shipping water around the globe”

2b) Explain the concept of ‘Embedded Water”. Use the graphic to calculate the amount to embedded water needed to produce
• 1Kg of coffee
• 1Kg of sugar
• 1 pair of jeans

Level 3: Analysis
3) Examine the reasons behind Unilever’s decision to talk to the BBC in the creation of this article.

Note Level 1 – Level 4 are questions based on IB standards where
Level 1: Knowledge
Level 2: Application
Level 3: Analysis
Level 4: Evaluation

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 and from my website

Shell gains from high oil prices

Introduction
Shell Oil has just announced huge 3rd quarter profits. This article identifies various external environment factors that have had an impact on Shell

Glossary of Terms
3rd Quarter 2008 = Period July 2008 to September 2008
The Hague = The capital of Holland
Chancellor Alistair Darling = Chancellor of the Exchequer (UK Government minister of Finance)

Instructions
Read this article, and answer the following questions:

Q1) At the time of writing this post, the UK Pound to Hong Kong Dollar exchange rate was £1 = $HKD 12.61. Calculate Shell Oils 3rd quarter profit in $HKD.

Q2) What factors are suggested as the main reasons for this increase in profits?

Q3) The following objectives are mentioned in the article - are they short, medium or long term objectives?
a) ..to expand a Canadian oil sands project..
b) To pay progressive dividends…
c) …to make significant investments in the company for future profitability..

Q4) Describe the trend in the price of oil over the last year. Use at least one suitable diagram to support your explanation (hint: Look at this article and this one)

Q5) The following factors are mentioned in the article: What sort of STEEPLE factors are they?

a) ..the world economic situation

b) the impact of hurricanes in the Gulf of Mexico

c) ..Chancellor Alistair Darling said he wanted to see the (oil price) reductions passed on to motorists in the form of cheaper fuel

The party is nearly over

Submitted by Arnett Edwards

This article is useful for both IB Economics (transition economies) and for Business and Management (external environment).

For business the article could be used for students to understand some of the key economic indicators of an economy.

Questions to think about

1. Why are economists arguing that Eastern Europe is facing an economic slowdown?
2. What is the article saying about why Poland is “looking better”? (paragraph 4)
3. Why are economists concerned about the Hungarian economy?
4. What impact would the slowdown in Eastern Europe have on economies in Western Europe?