Photo AI
XYZ Ltd has been sourcing, packaging and marketing frozen vegetables in NSW for the past 20 years - HSC - SSCE Business Studies - Question 26 - 2010 - Paper 1
Question 26
XYZ Ltd has been sourcing, packaging and marketing frozen vegetables in NSW for the past 20 years. Until recently XYZ Ltd has had 20% market share and its eight dome... show full transcript
Worked Solution & Example Answer:XYZ Ltd has been sourcing, packaging and marketing frozen vegetables in NSW for the past 20 years - HSC - SSCE Business Studies - Question 26 - 2010 - Paper 1
Step 1
Outline TWO external influences that could have been sources of change in this business.
Answer
-
Economic Factors: Changes in economic conditions such as shifts in consumer spending or inflation can greatly impact market dynamics. Increased costs of production or decreased consumer spending can lead to reduced market share.
-
Competitive Environment: The entry of new competitors or aggressive marketing strategies from existing competitors can alter market share. XYZ Ltd may have experienced increased competition, prompting a need for strategies to regain its footing.
Step 2
Discuss ONE product strategy that the business could use to achieve its marketing objective.
Answer
A viable product strategy for XYZ Ltd is to enhance product differentiation. By introducing unique frozen vegetable options, such as organic or ready-to-cook varieties, XYZ Ltd can attract health-conscious consumers and those seeking convenience, thus improving market share. Marketing campaigns that emphasize these unique features can further aid this strategy.
Step 3
Propose and justify ONE effective cash flow management strategy and ONE effective profitability management strategy to solve the problems of XYZ Ltd.
Answer
For cash flow management, XYZ Ltd can implement a stringent inventory management system. This involves closely monitoring stock levels to minimize excess inventory costs, ensuring that cash is not tied up unnecessarily.
For profitability management, the business can review pricing strategies by conducting a market analysis to optimize pricing without compromising demand. Offering seasonal promotions or bundling products can also enhance profitability by increasing sales volume.