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XYZ Ltd has been sourcing, packaging and marketing frozen vegetables in NSW for the past 20 years - HSC - SSCE Business Studies - Question 26 - 2010 - Paper 1
Question 26
XYZ Ltd has been sourcing, packaging and marketing frozen vegetables in NSW for the past 20 years. Until recently XYZ Ltd has had 20% market share and its eight dome... show full transcript
Worked Solution & Example Answer:XYZ Ltd has been sourcing, packaging and marketing frozen vegetables in NSW for the past 20 years - HSC - SSCE Business Studies - Question 26 - 2010 - Paper 1
Step 1
Outline TWO external influences that could have been sources of change in this business.
Answer
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Economic Factors: The economic environment significantly impacts XYZ Ltd's operations. Changes in consumer spending power, inflation rates, and overall economic growth can influence demand for frozen vegetables. A downturn in the economy may lead consumers to seek cheaper options, thus affecting XYZ's market share.
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Competitive Dynamics: The rise of competitors with innovative marketing strategies or product offerings can profoundly affect XYZ Ltd's standing. If competitors enhance their supply chains, adapt better to consumer preferences, or invest in marketing effectively, XYZ Ltd may lose ground in a competitive market.
Step 2
Discuss ONE product strategy that the business could use to achieve its marketing objective.
Answer
Product Differentiation Strategy: XYZ Ltd could adopt a product differentiation strategy by introducing unique product lines, such as organic frozen vegetables or region-specific products. By emphasizing quality, nutrition, and sustainability, this strategy could help attract health-conscious consumers and those seeking premium products, thereby improving market share.
Step 3
Propose and justify ONE effective cash flow management strategy and ONE effective profitability management strategy to solve the problems of XYZ Ltd.
Answer
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Effective Cash Flow Management Strategy: Implementing a robust inventory management system can enhance cash flow. By using techniques like Just-In-Time (JIT) inventory, XYZ Ltd can reduce holding costs and free up cash, allowing the company to respond swiftly to market demand while minimizing waste.
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Effective Profitability Management Strategy: Adopting a cost leadership strategy could significantly enhance profitability. By streamlining operations, negotiating better terms with suppliers, and reducing production costs, XYZ Ltd can maintain lower prices than competitors, thus attracting more customers and increasing overall profits.