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6 (a) State one market segment that On Your Bike has targeted - Edexcel - GCSE Business - Question 6 - 2020 - Paper 1
Question 6
6 (a) State one market segment that On Your Bike has targeted. (b) Outline one impact on On Your Bike of an increase in the value of the pound. To expand its busin... show full transcript
Worked Solution & Example Answer:6 (a) State one market segment that On Your Bike has targeted - Edexcel - GCSE Business - Question 6 - 2020 - Paper 1
Step 1
Step 2
Outline one impact on On Your Bike of an increase in the value of the pound.
Answer
An increase in the value of the pound may lead to higher import costs for On Your Bike. This is because the company may have to pay more for bikes imported from other countries, thereby reducing profit margins.
Step 3
Justify which one of these two options On Your Bike should choose.
Answer
In choosing between opening a second shop or starting e-commerce, On Your Bike should consider the benefits of e-commerce.
Firstly, opening a second shop involves significant upfront costs such as rent, staff salaries, and utilities. In contrast, e-commerce typically has lower costs as it eliminates physical location expenses and can cater to more customers at a larger geographic reach.
Secondly, e-commerce allows On Your Bike to tap into a growing market of online shoppers, which has expanded significantly in recent years. With many consumers preferring the convenience of online shopping, this could lead to higher sales volumes and customer satisfaction.
Lastly, in the current climate where consumers appreciate flexibility and home delivery options, e-commerce would enable On Your Bike to adapt quickly to market trends. Given the potential for broader customer reach and lower operational costs, On Your Bike should choose to start using e-commerce on its website.