Globalisation Practice Questions

Item A: Bramble & Birch Ltd

Bramble & Birch Ltd is a small private limited company based in Chester. It was set up in 2015 by Erin Naylor, who makes wooden toys for children aged 2 to 7. Its best-selling product is a wooden train set, which is sold for £28 in independent toy shops and on the company's own website. Erin employs six people in a workshop on the edge of the city.

All of the beech wood used by Bramble & Birch is imported from a supplier in Germany and is paid for in euros. Over the past year the value of the pound has fallen from €1.18 to €1.09. This has increased the cost of the wood used in each train set by about 8%.

At the same time, consumer incomes in the UK have been falling. Erin has noticed that more parents are choosing cheaper plastic toys instead of her hand-finished wooden ones.

Erin is worried that Bramble & Birch Ltd will not make enough profit this year. She is considering two options:

• increase the price of every toy by 10%
• buy beech wood from a sawmill in Shropshire, paying in pounds.

Item A: Brackenfield Dairy plc

Brackenfield Dairy plc makes mature cheddar cheese and natural yoghurt at a creamery in North Yorkshire. It was founded in 1978 and floated on the stock market in 2016. It buys milk from 140 British dairy farms and employs 620 people.

Brackenfield now sells to 22 countries. Its cheddar has sold particularly well in Germany and Poland, where demand for British cheese has grown. Everything the business sells is produced in North Yorkshire and taken abroad by refrigerated lorry, which is expensive and limits how fresh the yoghurt is when it arrives.

The directors are considering opening a second creamery in Poland. The land and machinery would cost £18 million. Labour costs in Poland are lower than in the UK and the creamery would be close to Brackenfield's European customers. However, Polish milk would have to be used, and the directors are unsure whether customers who buy the cheese because it is British would accept this.

Table 1 Brackenfield Dairy plc sales revenue, 2024

Market	Sales revenue (£m)
UK	84
Republic of Ireland	15
Rest of Europe	12
Asia	9

Item A: Mazaro Foods Ltd

Mazaro Foods Ltd manufactures cooking sauces at a factory in Leicester. It began by selling only to UK supermarkets and now exports to Germany, Japan and the United Arab Emirates (UAE). Exports account for 38% of its £22 million sales revenue.

Mazaro changes its products for each market. The chilli content of its sauces is reduced for Japanese customers, and the jars sold in Japan are smaller because many shoppers there have less storage space at home. All products sold in the UAE are halal certified. Labels are translated into German, Japanese and Arabic.

Prices also differ between markets. A 400g jar sells for £2.80 in the UK, while the smaller jar sold in Japan sells for the equivalent of £4.10, where there is less competition in the premium sauce market. In Germany, Mazaro sells through a wholesaler and promotes its sauces using social media, while in the UK most promotion takes place in supermarkets.

The founder, Jamal Osei, says exporting has transformed the business. However, the production manager points out that 14 different recipes are now made at the Leicester factory. She suggests making the same four sauces for every market, with only the labels changed.

Item A: Calderbrook Cutlery plc

Calderbrook Cutlery plc designs and manufactures kitchen knives. It was founded in Sheffield in 1998 and became a public limited company in 2019, raising £24 million by selling shares on the stock market.

Until now all its knives have been made at its Sheffield factory, which employs 220 people. Calderbrook exports to 22 countries, where it competes with large rivals that make their knives in Asia and sell them at lower prices.

The board is considering opening a new factory in Vietnam, where average labour costs are £2.10 per hour compared with £12.60 per hour in Sheffield. Around 160 Sheffield jobs would go, although design and marketing would remain in the UK. Shareholders have been told that the move should reduce the cost of making each knife by about 20%.

Calderbrook advertises its knives as 'British made to last a lifetime'. A pressure group campaigning for UK manufacturing jobs has written to the national press about the plan.

Table 1 Calderbrook Cutlery plc sales revenue by region, 2025

Region	Sales revenue (£m)
United Kingdom	18.4
European Union	9.2
North America	6.5
Rest of the world	1.9