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Text 3 Miles Ahead is a bicycle retailer which was set up in 2001 by entrepreneur, Reg Patel - OCR - GCSE Business - Question 18 - 2021 - Paper 1
Question 18
Text 3 Miles Ahead is a bicycle retailer which was set up in 2001 by entrepreneur, Reg Patel. Reg started with one shop, but the business has gradually expanded. Th... show full transcript
Worked Solution & Example Answer:Text 3 Miles Ahead is a bicycle retailer which was set up in 2001 by entrepreneur, Reg Patel - OCR - GCSE Business - Question 18 - 2021 - Paper 1
Step 1
Step 2
Analyse two benefits for Miles Ahead of using market segmentation.
Answer
Benefit 1: Using market segmentation allows Miles Ahead to tailor its marketing strategies to specific consumer groups. By understanding the demographics of customers, such as age and lifestyle, Miles Ahead can create targeted advertising campaigns that effectively reach their audience, increasing sales and customer loyalty.
Benefit 2: Market segmentation can improve customer satisfaction. By analyzing different segments, Miles Ahead can identify gaps in the market and adjust its product offerings accordingly. For instance, offering bicycles designed for different age groups ensures that customer preferences are met, leading to higher satisfaction levels.
Step 3
Analyse one benefit for Miles Ahead of each of the following organisational structures. Tall organisational structure.
Answer
A benefit of a tall organizational structure for Miles Ahead is the clear hierarchy it establishes. With multiple layers of management, employees know their chain of command, leading to improved communication and accountability within the business. This structure can also facilitate professional development and support effective supervision of employees.
Step 4
Analyse one benefit for Miles Ahead of each of the following organisational structures. Flat organisational structure.
Answer
A benefit of a flat organizational structure for Miles Ahead is enhanced communication and faster decision-making. With fewer layers of management, teams can interact directly, which can foster innovation and responsiveness to market changes. This agility allows the business to adapt more quickly to customer needs and preferences.
Step 5
Recommend which type of organisational structure would be the most appropriate for Nessa to use at Miles Ahead. Give reasons for your answer.
Answer
I recommend that Nessa use a flat organizational structure for Miles Ahead. This structure would promote better communication among staff and enhance collaboration, essential for a rapidly evolving retail environment. Furthermore, with fewer management layers, Nessa can react more swiftly to customer feedback, potentially improving satisfaction and sales.
Step 6
Discuss the advantages and disadvantages of being a sole trader in the context of business ownership for Miles Ahead in the future.
Answer
The advantages of being a sole trader include complete control over business decisions, which allows for swift changes in strategy to respond to market demands. Additionally, sole traders often have easier access to funding and lower administrative costs.
On the downside, the sole trader structure poses risks such as unlimited liability. This means that in the event of financial difficulties, personal assets could be at risk. Furthermore, as a sole trader, Nessa may face challenges in raising capital for expansion, limiting business growth opportunities.