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Explain one internal cause of the business failure of MG Rover Group - Edexcel - A-Level Business - Question 2 - 2018 - Paper 2

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Explain one internal cause of the business failure of MG Rover Group. Extract E The business failure of MG Rover Group MG Rover Group was the last UK-owned mass-pr... show full transcript

Worked Solution & Example Answer:Explain one internal cause of the business failure of MG Rover Group - Edexcel - A-Level Business - Question 2 - 2018 - Paper 2

Step 1

Understanding an internal cause of business failure

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Answer

One internal cause of the business failure of MG Rover Group was its failure to produce new and improved models. This lack of innovation meant that the company could not compete effectively against rival manufacturers, leading to declining sales.

Step 2

Contextualized example

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Answer

The company struggled to roll out updated versions of popular models like the Mini, which sold well historically but became outdated. As consumer preferences shifted towards newer foreign models, MG Rover's inability to adapt resulted in poor sales.

Step 3

Analysis of the cause

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Answer

This failure to innovate led to a significant drop in consumer interest and sales, ultimately resulting in poor profit margins. With high production costs and low sales volume, the company found it increasingly difficult to sustain profitability, contributing to its eventual collapse.

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