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Evaluate these two options and recommend which option might be preferred by Morrisons’ shareholders - Edexcel - A-Level Business - Question 1 - 2017 - Paper 2
Question 1
Evaluate these two options and recommend which option might be preferred by Morrisons’ shareholders. Morrisons’ revenue and share price have increased for the first... show full transcript
Worked Solution & Example Answer:Evaluate these two options and recommend which option might be preferred by Morrisons’ shareholders - Edexcel - A-Level Business - Question 1 - 2017 - Paper 2
Step 1
Transformational Leadership
Answer
David Potts’ transformational leadership can be seen as a positive factor for Morrisons. By replacing several directors, he may have introduced new ideas and perspectives, which can lead to innovative strategies such as the 'I’m cheaper' campaign. This approach could enhance the customer experience and attract more shoppers to Morrisons, supporting revenue growth.
Step 2
Potential Counterbalance
Answer
Despite the positive impact of transformational leadership, it is essential to consider other elements contributing to improved performance. Increased consumer confidence leading to higher spending at Morrisons, which grew by 0.6%, cannot be overlooked. Additionally, factors such as greater disposable incomes from lower energy costs may have also influenced consumer behavior.
Step 3
Potential Judgement
Answer
While David Potts is newly appointed and his strategies appear promising, it may be premature to conclude that his leadership alone is responsible for improvements. Shareholders should assess the balance between internal leadership changes and external factors like economic conditions before deciding on their preferred option.