Explain two ways (apart from a joint venture) that the partnership could use to achieve its objective of a 10% annual increase in its profit over the next 5 years
Recommend which way is most likely to be successful. Justify your answer
Knowledge [2 × 1] award 1 mark for each relevant way identified Application [1] – award 1 mark if relevant reference made to the business Analysis [1] – award 1 mark for relevant development of point(s)
Evaluation [2] – justified decision made as to which method is likely to be most successful to help it achieve its objective of 10%
For 6 marks must explain why it is the better option (comment on its feasibility or why more appropriate)
Points might include
• Target new markets / segments [k] such as make items for different sports [app]
• Develop new products [k] to attract new customers [an]
• Increase sales revenue [k] by advertising / attract more customers [an]
• Change price [k]
• Improve Efficiency methods [k] so cutting waste [an];
• Automation [k] replacing some of its 12 employees [app] so lower wage cost [an]
• Find cheaper supplier [k] which lowers cost of sales [an]
• Merger / takeover [k] as buy supplier to get cheaper materials [app] which could lower cost of sales [an].
Application might include: sports products/ clothing, 12 employees, materials, full capacity. Developed example:
They could advertise [k] so attracting more shops to stock their products [app] increasing
sales revenue [an]. Alternatively, they could increase prices. [k] However this could reduce competitiveness as customers will look for cheaper options elsewhere so advertising is better [eval].