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4 (a) Outline one reason why cash would be important to On Your Bike - Edexcel - GCSE Business - Question 4 - 2020 - Paper 1
Question 4
4 (a) Outline one reason why cash would be important to On Your Bike. (b) Analyse the impact on On Your Bike of customers using social media to review the business.
Worked Solution & Example Answer:4 (a) Outline one reason why cash would be important to On Your Bike - Edexcel - GCSE Business - Question 4 - 2020 - Paper 1
Step 1
Outline one reason why cash would be important to On Your Bike.
Answer
Cash is crucial for On Your Bike as it ensures liquidity. Having cash readily available allows the business to meet immediate expenses such as paying suppliers, staff wages, and other operational costs. This liquidity helps avoid disruptions in service and maintain supplier relationships.
Step 2
Analyse the impact on On Your Bike of customers using social media to review the business.
Answer
The impact of customers using social media to review On Your Bike can be significant.
1. Brand Reputation: Positive reviews can enhance the brand’s reputation, attracting more customers. A strong online presence can lead to increased visibility, fostering customer loyalty.
2. Customer Feedback: Social media facilitates immediate feedback. On Your Bike can quickly respond to customer concerns or praise, enabling improvements in service based on direct input.
3. Marketing Tool: Reviews act as a form of marketing. Potential customers often trust peer reviews over traditional advertising. Thus, positive reviews can effectively serve as endorsements for the business.
4. Competition Analysis: Monitoring social media can provide insights into competitor performance. Understanding customer sentiment about competitors can help On Your Bike adjust its strategies to better position itself in the market.
5. Community Engagement: Active engagement on social media strengthens community ties. On Your Bike can use platforms to share promotions or events, fostering a community atmosphere and encouraging customer interaction.
6. Crisis Management: Negative reviews on social media can spread quickly. On Your Bike must manage its online reputation actively and respond to any criticism promptly to mitigate potential damage.