Explain one internal cause of the business failure of MG Rover Group. The MG Rover Group was the last UK-owned mass-production car manufacturer in the British motor industry. The company failed in 2005. MG Rover Group did not produce new and improved cars and its existing brands, such as 'Triumph' and 'Rover', competed with each other. The original Mini, which was produced by MG Rover Group, sold in millions of units but never made much profit because of its high production costs. Also, UK consumer tastes were rapidly changing as they preferred new foreign cars.

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Explain one internal cause of the business failure of MG Rover Group - Edexcel - A-Level Business - Question 2 - 2018 - Paper 2

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Explain one internal cause of the business failure of MG Rover Group. The MG Rover Group was the last UK-owned mass-production car manufacturer in the British motor... show full transcript

Worked Solution & Example Answer:Explain one internal cause of the business failure of MG Rover Group - Edexcel - A-Level Business - Question 2 - 2018 - Paper 2

Step 1

Knowledge: Explain an internal cause of business failure

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Answer

One internal cause of the business failure of MG Rover Group was the failure to produce new and improved models. This failure led to a lack of competitive offerings in the market.

Step 2

Application: Contextualized examples

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Answer

The inability to innovate and release new models, particularly in light of changing consumer preferences, caused MG Rover to fall behind competitors. Additionally, the high production costs associated with their existing model, the Mini, further impacted their financial viability.

Step 3

Analysis: Develop a cause

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Answer

The failure to produce new and improved models likely led to poor sales as customers increasingly opted for superior options from foreign rivals. Consequently, the high production costs reduced profit margins, making it difficult for MG Rover to sustain operations in a competitive market.

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