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.
Ebac Ltd is Europe’s leading manufacturer of bottled water coolers and domestic dehumidifiers. It is... show full transcript
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 of Exporting Benefits
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Answer
Exporting allows Ebac Ltd to increase sales volume and revenue, as products are sold to a larger customer base outside the UK. This can enhance the overall profitability of the company.
Step 2
Application of Ebac Ltd's Operations
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Answer
Ebac exports 70% of its products by revenue to Continental Europe. The company has manufacturing operations in the North East of England, leveraging lower labor costs, making it competitive in international markets.
Step 3
Analysis of Market Opportunities
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Answer
Exporting provides a larger market for Ebac's specialist products like dehumidifiers and water coolers, which increases potential sales revenues. This expansion can also lead to technical economies of scale, allowing Ebac to lower costs and enhance efficiency in production.
