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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
If the pound increases in value against other currencies, it will make imports more expensive. Consequently, On Your Bike may have to raise prices to cover these costs, leading to a potential decrease in sales.
Step 3
Justify which one of these two options On Your Bike should choose.
Answer
On Your Bike should consider option 2, which is to start using e-commerce on its website.
Benefits of E-commerce
- Wider Reach: By establishing an online presence, the company can reach customers beyond its immediate geographical area, potentially attracting a larger customer base.
- Cost Efficiency: E-commerce may require lower overhead costs compared to maintaining a physical second shop, such as rent and utilities.
- Convenience: Customers prefer shopping online for convenience, especially for niche markets like cycling equipment.
Comparison to Opening a Second Shop
While opening a second shop may appear attractive for increasing sales, it involves significant costs, including leasing space and hiring more staff. In contrast, e-commerce can be scaled up or down as needed, allowing for better adaptability in a changing market.
Conclusion
Overall, investing in e-commerce aligns with current shopping trends and offers a scalable and cost-effective way for On Your Bike to expand its operations.