BUSINESS ENGLISH EXAM TERM III READING SECTION PART ONE (Question 1- !

Look at the statements below and the advice of four market experts. Which expert's advice (A, B, C or D) does each statement (1-7) refer to? For each statement (1-7), write one letter (A, B, C or D) on your Answer Sheet. You will need to use some of these letters more than once.

1" AT&T lost a lot of mone when it sold off two of its businesses. #" AT&T turned down an offer b hi!h"rankin! officials. $" The boss at AT&T spent too much on bu in! other companies. %" AT&T sold one compan for almost four times what it paid for it. &" At one sta!e# AT&T faced hu!e financial problems. '" AT&T could not cope with the speed of computer manufacturin!. " AT&T wasn$t !iven permission to move into the area of computin!. A" At the time of the compan $s break"up in %&'( AT&T had around one million emplo ees and was admired b the business world. )o what went wron!* AT&T underestimated how important wireless communications would become. At the time of the break"up# AT&T relied on a report b +ckinse # a consultanc # that claimed there would be fewer than one million wireless phone users b ,---. .n fact there were /(-m. 0ellular technolo! was then unreliable# so AT&T decided not to enter this small market 1 until %&&(# when it spent 2%%.3b bu in! +c0law 0ellular# which was sold recentl for 2(%b. B" The second mistake was in computin!. AT&T expected to become a powerhouse in computers. 4ettin! rid of the slow"movin! local operators and retainin! the Western 5lectric e6uipment business seemed a brilliant wa forward. AT&T even bou!ht a computer maker# 708# in %&&%. 9ut the fastmovin! computin! industr did not suit the compan . The e6uipment side of the business stru!!led because a number of local operators refused to bu from one source and# instead# bou!ht from a variet of different firms. .n %&&& AT&T broke itself up further# losin! Lucent and 708# at hu!e financial loss. C" This was the be!innin! of the commercial internet# et AT&T was nowhere. .t had even re:ected numerous re6uests from American national advisors over three decades to operate the internet backbone. .t missed the potential of the internet despite it runnin! over the compan $s lon!" distance lines. .n the %&/-s# its 9ell labs developed the ;7.< computer operatin! s stem# which

still powers most of the world$s lar!e corporate computers. ;nfortunatel # at that time AT&T was prevented b re!ulators from movin! into computin!# so ;7.< was commercialised b others. D" The third mistake was to bu cable operators in the late %&&-s. This was the ri!ht strate! at the wron! time and at too hi!h a cost. At the hei!ht of the technolo! boom AT&T$s then top mana!er paid over 2%-- billion for the cable firms T0. and +edia=ne. >ardl a ear later# the compan faced a debt crisis. .t had to abandon the firms it had :ust bou!ht and# with them# the strate! of offerin! a ran!e of communication services 1 a strate! now re!arded as the likeliest wa to succeed. PART T(O (Questions )-1#! 8ead the article below about evaluatin! the work of compan directors. 0hoose the best sentence from the opposite pa!e to fill each of the !aps. For each !ap (8-12), write one letter (A-G) on your Answer Sheet. ?o not use an letter more than once. There is an example at the be!innin!# @-A. A" At present# ;nilever spends %(.3B of sales on ads. B" .n mar!arine# for instance# retailers$ own brands now have as much as one"fifth of the market. C" .t also reduced its number of branches from %#C-- to (3-. D" Anal sts think the main problem is too little investment in advertisin! and marketin!. E" )oon after that# another compan # 7estlD# disappointed investors with its latest results. *" 9ut the plan failed to deliver on man of its promises. G" This is one of the main difficulties staff at the compan face.

Path to no growth
7iall FitE!erald# the co"chief executive of the An!lo"?utch consumer"!oods !roup ;nilever# was one of those involved in the compan $s FGath to 4rowth$ strate! of focusin! on its brands# which was launched five ears a!o. (0) HFH =n )eptember ,-th last ear# ;nilever warned that it would not report its promised profits. .t$s a difficult time for producers of branded consumer !oods. ;nilever and its competitors have to deal with pressure on prices from the supermarkets$ own brands. 0ol!ate"Galmolive warned of lower profits. (8) H >owever# ;nilever admits it has caused man problems itself. The FGath to 4rowth$ strate! aimed to make the firm more efficient. ;nilever saved about ( billion @2(.& billionA in costs over a period of five ears. (9) H 9ut ;nilever still failed to meet its tar!ets for profit and salesI it reported a sales decline of -./B for the second 6uarter of ,--(. (10) H Gerhaps it is also due to unrealistic performance tar!ets. ;nilever cut its advertisin! and marketin! bud!et at the worst moment# sa s Andrew Wood at )anford 9ernstein# an investment" research firm. ;nilever has also suffered from competition from retailers$ own brands. (11) H ;nilever also overpublicised some successful brands# for instance# 9ertolli$s olive oils and pasta sauces. Accordin! to +r Wood# ;nilever can sustainabl !row its business at about JB a ear. .t was aimin! for 31CB.

8ud +arkham# ;nilever$s chief financial officer# thinks that consumers look first for a product and then# from the brands available for that product# choose one. The compan has decided it needs to focus on promotin! its brands. >owever# ad spendin! at ;nilever is supposed to remain at current levels. (12) H. 9ut even +r +arkham admits the compan has Fissues of competitiveness$. After seven 6uarters of disappointin! performance# it needs to please its investors a!ain. =ver the second half of ,--(# mana!ement thou!ht a!ain about its strate! for the next five" ear plan. Gatrick 0escau# a Frenchman who will take over runnin! the compan # will not have an eas time. PART THREE (Questions 13-18)

8ead the article below about 9ritish companies and their performance in the American For each 6uestion (13-18), write one letter (A, B, C or D) on your Answer Sheet.

market.

Advertising
1 .n ,--J# the advertisin! industr was still stru!!lin! after the burstin! of the technolo! bubble in ,--%# which led to a drop in advertisin! spendin!. 5ven as spendin! be!an to !row a!ain slowl # some forms of advertisin! didn$t seem to be as successful as the once were. )ome advertisers stopped usin! traditional ads and chose other forms of marketin!# such as outdoor posters. Twelve months later# thin!s improved# even if it didn$t !et back to Fbusiness as usual$. 2 Kenith=ptimedia predicted accuratel that worldwide advertisin! spendin! would !row b almost /B in ,--( to 2J/- billion. This is above !lobal economic !rowth and Kenith sa s this !rowth shows that the advertisin! market has started to pick up well 1 as it has done man times before# after similar falls. 3 .t sa s# historicall # ad spendin! has tended to fall further when 4?G falls# and !rows faster when economies !row. 8obert 0ohen# a media specialist# thinks firms will become more a!!ressive in their fi!ht to !ain market share and to help brands that have faced cheaper competitors. 9 ,-%%# Kenith predicts# 0hina will have overtaken 9ritain and 4erman to become the third lar!est advertisin! market in the world after America and Lapan. 4 Accordin! to Kenith# TM remains the most powerful form of advertisin!# with a J'B !lobal share of spendin! on ma:or media in ,--(. )ome people# especiall oun! men# now spend more time surfin! the internet than watchin! TM. 9ut thin!s are chan!in!. +an people toda watch satellite channels# rather than the main networks. Kenith expects TM !enerall to retain its overall proportion of the !lobal advertisin! market. 5 )pendin! will also chan!e in other areas. The internet is the fastest !rowin! form of advertisin!. This reflects advertisers tr in! to reach both online shoppers and people searchin! for product and price information. The internet now accounts for 2'./ billion @3.(BA of America$s ad spendin! @worldwide# it$s J.CBA. Kenith thinks the use of the internet for advertisin! will double b the end of this decade. This will mostl be at the cost of newspapers and ma!aEines. 6 Lupiter 8esearch sa s specialist ad a!encies now spend more than 3-B of their marketin! bud!et on online marketin! in the ;). The internet is increasin!l bein! incorporated into campai!ns that use different forms of advertisin!. What advertisers like about the internet is that

the effect of marketin! messa!es can be more easil measured. For example# a compan will know how man people who have seen its ad have clicked throu!h to a website and how man have bou!ht somethin!N 13. .n ,--J# advertisin! a!encies A worked to!ether to sta competitive. B started usin! more diverse advertisin! media. C saw advertisin! spendin! fall to an all"time low. chan!ed the wa the do business. 14. Which statement does Kenith=ptimedia make* A Advertisin! spendin! has increased b about %-B over the last ear. B The advertisin! industr is startin! to improve a!ain. C dvertisin! a!encies want to develop their business overseas. 0hina will become the world$s leadin! advertisin! market. 15. What does Kenith sa about TM* A TM will keep its share of ad spendin! worldwide. B +an main TM networks have stopped showin! ads. C TM ads are chan!in! dramaticall . TM is still most popular amon! oun! men. 16. What does Kenith sa about the internet* A +ore people have used the internet in the ;) than elsewhere. B +ost people use the internet for shoppin!. C There$ll be twice as much online advertisin! b ,-%- as there is now. The cost of usin! the internet is fallin! slowl . 1!. Accordin! to Lupiter 8esearch# man ad a!encies now A spend half their income on findin! new markets. B advertise in a variet of wa s. C limit their advertisin! to online campai!ns. emplo specialists in online marketin!. 18. Accordin! to the article# internet ads are popular because A the can be much cheaper than other advertisin! media. B companies can easil see how successful the are. C the ads can be updated 6uickl . companies can remove them easil if the aren$t effective. PART *OUR @Questions 19-33)

8ead the extract below from a compan chairman$s annual report to shareholders. 0hoose the best word to fill each !ap from A, B, C or D. For each 6uestion (19-33), write one letter (A, B, C or D) on your Answer Sheet.

Brea"ing #e$ords
Wood Allen once :oked Fif m films don$t show a profit# . know .$m doin! somethin! ri!ht$. For most other people# in most other (0) H # profit is a mark of success# and in most countries

corporate profits are currentl (19) H Last ear# America$s after"tax profits (20) H to their hi!hest for /3 earsI the shares of profit in the euro area and Lapan are also close to their hi!hest for at least ,3 ears. ;9)# a )wiss bank# (21)H that# in man world economies# the share of profits in national (22) H has never been hi!her. )o# are @23) H profit mar!ins sustainable* Are the fair* 0orporate profits ma be inflated in various wa s. .f firms put mone aside for the future (24) H costs for the over C3s or whatever# their earnin!s would be smaller. 7evertheless# the impressive (25) H of American firms to increase productivit and cut costs are !enuine# (26) H some claims to the contrar in the press. Firms elsewhere# notabl in Lapan and 4erman # are also (2!) H a!!ressivel . The share of profit in 4?G alwa s !oes up sharpl after a downturn# but in the ;nited )tates a bi!!er slice of the increase this time has !one to profits than in an (28) H post" war recover . .f the share of wa!es in 4?G (29) H to slide# there could be a reaction from workers. Yet the chances of this are lower than before. The old (30) H between Fthem$ and Fus$ is becomin! unclearO man workers also own compan (31) H# which sooner or later will !ive them some of the profits. .n an (32) H# there are !ood reasons to believe that the (33) H in profits will soon slow sharpl . 19 . 20 . 21 . 22 . 23 . 24 . 25 . 26 . 2! . 28 . 29 . 30 . 31 . A elevatin! A raised A :ud!es A mone A current A !rant A demands A despite A reconstructin! A previous A maintains A break A dividends B boostin! B raise B evaluates B income B present B redundanc B efforts B however B redecoratin! B earl B carries B disconnection B shares C boomin! C rise C estimates C pa C actual C allowance C trials C nevertheless C re!eneratin! C beforehand C continues C partition C premiums liftin! rose assesses earnin!s up"to"date pension tests althou!h restructurin! sooner sta s divide bonuses

32 . 33 .

A state A extension

B situation B development

C case C expansion

instance !rowth

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