Explain how Ebac Ltd could benefit from exporting its products.
- Edexcel - A-Level Business - Question 2 - 2018 - Paper 1
Question 2
Explain how Ebac Ltd could benefit from exporting its products.
Worked Solution & Example Answer:Explain how Ebac Ltd could benefit from exporting its products.
- Edexcel - A-Level Business - Question 2 - 2018 - Paper 1
Step 1
Knowledge and Understanding
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Answer
Exporting products allows Ebac Ltd to increase its sales volume, leading to higher overall revenue. By reaching into new markets, the company can expand its customer base and enhance its revenue potential.
Step 2
Application
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Answer
Ebac Ltd exports 70% of its products (by revenue) to Continental Europe. The company is based in North East England and has been the market leader in Western Europe for water coolers since the mid-1990s.
Step 3
Analysis
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Answer
Exporting also opens up a larger market for Ebac Ltd, particularly for its specialized products like dehumidifiers. This provides opportunities for technical economies of scale, where increased production leads to lower costs per unit.
