Explain one internal cause of the business failure of MG Rover Group - Edexcel - A-Level Business - Question 2 - 2018 - Paper 2
Question 2
Explain one internal cause of the business failure of MG Rover Group.
Extract E
The business failure of MG Rover Group
MG Rover Group was the last UK-owned mass-pr... 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
Understanding an internal cause of business failure
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
One internal cause of the business failure of MG Rover Group was its failure to produce new and improved models. This lack of innovation meant that the company could not compete effectively against rival manufacturers, leading to declining sales.
Step 2
Contextualized example
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The company struggled to roll out updated versions of popular models like the Mini, which sold well historically but became outdated. As consumer preferences shifted towards newer foreign models, MG Rover's inability to adapt resulted in poor sales.
Step 3
Analysis of the cause
96%
101 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
This failure to innovate led to a significant drop in consumer interest and sales, ultimately resulting in poor profit margins. With high production costs and low sales volume, the company found it increasingly difficult to sustain profitability, contributing to its eventual collapse.