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Unit 10 Business Strategies Part I Getting ready Exercise B Keys 1 e 2 h 3 d 4 f 5 a 6 g 7 b 8 c Tapescript 1 The level of investment rose suddenly 2 There has been a steady increase in costs over several years 3 The Research and Development budget has stabilized over the past few years 4 At the end of the first year sales stood at 50 per cent of the present level 5 The share price reached a peak before falling a little and then maintaining the same level 6 The sudden collapse in share prices has surprised everyone 7 Sales of Product A fell slightly in the final quarter 8 The value of the shares has shown a steady decline Exercise C Keys 1 The European Union 2 The Organization of Petroleum Exporting Countries 3 The World Health Organization 4 The International Monetary Fund 5 The North American Free Trade Agreement 6 The Association of South East Asian Nations 7 The United Nations 8 The General Agreement on Tariffs and Trade Tapescript 1 They receive a subsidy from the EU Do you mean that it s funded by the European Union Yes that s what I was told 2 They re a member of OPEC I m sorry but what s OPEC The Organization of Petroleum Exporting Countries 3 The WHO is interested in the scheme Do you mean the World Health Organization Yes 4 It s a decision by the IMF The IMF Why is the International Monetary Fund involved in this 5 NAFTA was formed in 1993 What does NAFTA stand for Haven t you heard of it It s the North American Free Trade Agreement 6 Is Japan one of the ASEAN countries I m sorry but I don t remember what ASEAN stands for It s the Association of South East Asian Nations I don t think so 7 The UN resolution is being ignored But this is an internal matter It doesn t concern the United Nations 8 It s part of the WTO agreement Remind me what WTO stands for The World Trade Organization Exercise D Keys 1 A 2 A 3 A 4 B 5 B Tapescript Gary Sam could you review the results of the survey on leisure sporting activities again We need to plan out our proposal for this Friday s business meeting Sam Sure Gary I ve summarized the results in the handout broken down by consumer age groups and sporting activities The survey was administered to 550 men and women between the ages of 18 and 55 years old and the results have been compiled in the following age groups 18 to 26 27 to 35 36 to 45 and 46 to 55 According to the results the most active group involved in sporting activities are those between 18 and 26 years old followed by those 36 to 45 years old Gary Okay Sam As far as particular sports are concerned people in these two groups cited jogging as their favorite recreational sport followed by skiing tennis swimming and cycling Gary And what about these groups broken down by gender Sam Oh Gary thanks for bringing that up Men appear to be slightly more active than women in the 18 to 26 year old age group but women seem more active in the other three groups Gary Hmm Based on what you have said I think we should consider targeting the 18 to 26 year old age group more in the future I also feel we should consider expanding our line of athletic shoes particularly jogging and tennis footware We also have to come up with a more appealing slogan aimed at this age group Sam I see what you mean However when these results are compared with the survey carried out three years ago we can see a growing trend among older consumers those 14 I mean 46 to 55 who are becoming more conscious and concerned about staying fit I believe this trend will continue so we should focus on this group instead Gary I see your point Well let s meet again on Wednesday to iron out more of the details of this proposal Part II SWOT analysis Outline I 1 Strengths 2 after sale team II 3 Marketing III 4 Opportunities IV 5 impressive dealer network Tapescript What I d like to do is to outline a SWOT analysis of the company which we have recently carried out As I m sure you all know SWOT stands for strengths weaknesses opportunities and threats So let s start with the strengths It s apparent that out main competitive advantage is our range of products Our accounts software packages are perceived as the most user friendly on the market relatively easy to install requiring much less training than our competitors packages and representing better value for money So all in all we ve got an excellent product Our other main strength is our people especially on the after sales side Our after sales team is perceived as faster more qualified friendlier and generally more efficient than our competitors This applies both to the helpdesk and the field maintenance people Right Let s turn to the weaknesses Although we have such a strong product we haven t achieved the sort of market penetration we should have Basically this is because our marketing is not so effective as our competitors One especially STERLING has a much stronger presence in the market both in terms of sales and profile We ve relied too heavily on product quality not enough on promotion We ve got to put considerably more effort into our advertising and direct mail campaigns So that brings me to the opportunities We re clearly not taking the opportunity we have to dominate the small business user market We could be achieving significantly higher sales I estimate fifty to sixty percent more We could also be building a much more extensive customer base this would ensure a more secure future as well Our main threat of course is STERLING They ve got a much more impressive dealer network and their promotion is a lot more sophisticated than ours On the other hand we ve got the better range of products We should be capitalizing on this Part III Dealing with growth Market trends Exercise B Keys 1 280 2 440 3 the full milk 4 the skimmed milk 5 long life milk 6 milk drink Exercise C Keys Notes Total market 280m 440m Sector share Full milk 74 42 Skimmed milk 12 35 Long life 5 13 Milk drink 1 Over next 10 years Full 40 2 Skimmed level off 40 Long life 20 Drink 2 Tapescript I m not going to talk for long just long enough to give you an overview of developments so that we can discuss the implications So let s start by looking at trends over the last ten years On this first transparency you ll see two pie charts the first represents the milk product market ten years ago the second how it looks now There are two outstanding features firstly that the total market has grown substantially from 280 million litres to 440 million litres secondly the actual sector share of the four main milk products has changed radically the full milk sector has fallen dramatically from 74 to just 42 here on the pie chart the skimmed milk sector has rocketed from only 12 to 35 reflecting the weight of publicity directed towards low fat diets The other two sectors are long life milk and milk drinks It s interesting to see the long life sector has risen from 5 to 13 a significant rise considering initial consumer resistance to this type of milk And finally the milk drinks have remained pretty stable just increasing by 1 So the two big winners of the decade are skimmed and long life milk and the big loser the full milk sector Now what s really important is the likely trends over the next ten years in these four sectors We forecast that the full milk sector will decline more gradually over the next five years to around 40 and then fall a further 2 by the end of the 10 year period the skimmed milk sector should continue to rise steadily to 40 over the next five years and then level off around this figure for the next five years We expect long life milk to continue rising moderately so that at the end of this period this sector will represent a significant 20 Finally we project a fairly marked decline in the milk drink sector as consumer awareness of the sugar content of these drinks increases We forecast an eventual fall to just 2 by the end of the period Exercise D Keys 1 grown substantially 2 change radically 3 fallen dramatically 4 rocketed 5 risen 6 remained stable increasing 7 decline gradually fall further 8 rise steadily level off 9 expect continue rising moderately represent significant 10 project fairly marked forecast eventually Tapescript A We all know that there have been some major changes in our market over the last ten years and we can expect further changes over the next ten years I d like to present the trends over the last ten years and also anticipate the trends we predict over the next ten years I m not going to talk for long just long enough to give you an overview of developments so that we can discuss the implications Do interrupt me if you ve got any questions or comments So let s start by looking at trends over the last ten years On this first transparency you ll see two pie charts the first represents the milk product market ten years ago the second how it looks now There are two outstanding features firstly that the total market has grown substantially from 280 million litres to 440 million litres secondly the actual sector share of the four main milk products has changed radically the full milk sector has fallen dramatically from 74 to just 42 here on the pie chart the skimmed milk sector has rocketed from only 12 to 35 reflecting the weight of publicity directed towards low fat diets The other two sectors are long life milk and milk drinks It s interesting to see that the long life sector has risen from 5 to 13 a significant rise considering initial consumer resistance to this type of milk And finally the milk drinks have remained pretty stable just increasing by 1 So the two big winners of the decade are skimmed and long life milk and the big loser the full milk sector B Excuse me can I just ask how you account for this slowing down in decline A Er if you don t mind I ll come to that in a moment Just to complete the picture the skimmed milk sector should continue to rise steadily to 40 over the next five years and then level off around this figure for the next five years We expect long life milk to continue rising moderately so that at the end of this period this sector will represent a significant 20 Finally we project a fairly marked decline in the milk drink sector as consumer awareness of the sugar content of these drinks increases We forecast an eventual fall to just 2 by the end of the period Right now let me come back to your question why do we expect these trends Well one critical factor of course Part IV More about the topic Safe Investing Exercise A Keys 1 C 2 A 3 C 4 B 5 A Tapescript Hi I m George Boros Have you always wanted to invest but didn t know where to get started We re here today to present you with three basic guidelines to smart investing for your future Number one is to have clear goals Decide how many years you will invest for and what your needs will be in the future Number two is to understand the range of possibilities You ll want a diversified portfolio one with a mix of stocks mutual funds bonds and cash It s a jungle out there Each of these products has different risks associated with them and also different potential rewards Understand them before you buy so there won t be any big surprises later Finally number three is to have realistic expectations As our friend Leonardo da Vinci said in the year 1500 He who wishes to be rich in a day will be hanged in a year Over the past several years New York stocks have averaged 30 annual returns but don t count on this continuing While it s true that since the year 1900 stocks have averaged an 11 annual return it s a roller coaster ride with many minus years as well so you have to stay in for the long term you have to weather the storm and not be too greedy Well let s get started and Happy hunting Exercise B Keys 1 gifts 2 selling goods 3 inflation 4 prices 5 financial 6 long term 7 losing Tapescript Investing is a way to make money with your money First you have to earn money As a kid you get money from allowance gifts services or from selling goods such as lemonade Try to save some if not all of this money The next step is to make your money grow through investing There are two main reasons why you should invest The first is to stay ahead of inflation and the second is to achieve financial goals Inflation causes the increase of prices When a Big Mac goes up from 1 20 to 1 50 or when gas goes up from 1 30 to 1 70 a gallon we say that is inflation You need to make more money just to keep up with the rising cost of living Financial goals can be separated into two types short term goals and long term goals The first refers to the things that you need or want now or within the year such as a bike a computer or a video game Generally it takes less money to reach these short term goals However long term goals are expensive and requires more planning They are things you need or want in a few years or more for example going to college buying a house and even starting a business Investing is like planting money A small amount of money invested will often grow to a larger sum over time You ve heard the phrase Time is money With investing time also makes money Although investing can make money with money the downside of i

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