The design mix: ● function, aesthetics, cost. The product life cycle: ● the phases of the product life cycle ● extension strategies. The importance to a business of differentiating a product/ service.
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Demonstrate Question
This question is an Evaluate question. You will be presented with a case study and a question that asks you look at the advantages and disadvantages of an element from the case study. You MUST use the BLT format throughout your answer. Your answer should give an advantage with a BLT followed by a however with BLT. This needs to be repeated aith another advantage followed by a however with BLT. Finally you must have a conclusion that explains your opinion to the question and what it will depend upon to succeed. An example is below for a different Evaluate question. The structure of your answer should match the example.
Evaluate whether Sainsbury's is likely to benefit from its takeover of Home Retail Group. You should use the information provided as well as your knowledge of business. (12 marks).
One advantage of its takeover of Home Retail Group is that larger business can benefit from economies of scale this is because Argos stores are closing down and incorporated into Sainsburys stores. Therefore fixed costs will be reduced and prices of items can be reduced to compete with rivals such as Lidl and Aldi. However they will still struggle to compete with Amazon because it is an E-tailer and still has lower fixed cost. This leads to Amazon still able to offer lower prices even after the merger. Therefore making the merger unlikely to make large gains for both companies
One disadvantage of the takeover is that these businesses have different target markets. This could lead to some low income Argos customers not going to Sainsburys/Argos as this isn't where they normally do their food shop. Therefor customers may go down. However if the economies of scales are enough that this leads to prices decreasing. It may be that therefore Sainsburys can compete with a rival such as Amazon.
To conclude I think this merger will not benefit Sainsburys and Argos enough as they still won't be able to compete with Amazon in the short term. In the long term if they can build large enough economies of scale they then can compete price wise to Amazon but this depends on keeping fixed costs to a minimum whilst also attracting existing customers from both companies.
Have a go at your own
Evaluate the importance of function within GoPro's design mix. You should use the information provided as well as your knowledge of business. (12 Marks)
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Mark Scheme
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