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State one characteristic of an entrepreneur - OCR - GCSE Business - Question 18 - 2021 - Paper 1
Question 18
State one characteristic of an entrepreneur. Analyse two benefits for Miles Ahead of using market segmentation. Benefit 1: Benefit 2: Nessa is thinking about ... show full transcript
Worked Solution & Example Answer:State one characteristic of an entrepreneur - OCR - GCSE Business - Question 18 - 2021 - Paper 1
Step 1
Step 2
Analyse two benefits for Miles Ahead of using market segmentation.
Answer
Benefit 1: Market segmentation allows Miles Ahead to tailor their marketing strategies specifically to different customer groups. For example, by identifying distinct segments such as casual cyclists and professional racers, they can advertise more effectively, addressing specific needs and preferences.
Benefit 2: Additionally, by focusing on market segments, Miles Ahead can improve customer satisfaction. Understanding the different demographics and purchasing behaviors can lead to better product offerings and enhanced customer service, resulting in increased loyalty and sales.
Step 3
Analyse one benefit for Miles Ahead of each of the following organisational structures.
Answer
Tall organisational structure: A tall organisational structure offers clear lines of authority and communication, which can improve management control over employees and ensure that tasks are completed in an efficient manner.
Flat organisational structure: In contrast, a flat organisational structure encourages greater employee independence and flexibility. This can lead to faster decision-making and greater responsiveness to market changes, which is beneficial for a growing business like Miles Ahead.
Step 4
Recommend which type of organisational structure would be the most appropriate for Nessa to use at Miles Ahead. Give reasons for your answer.
Answer
I would recommend a flat organisational structure for Nessa at Miles Ahead. This structure fosters a more agile environment, making it easier for employees to communicate and collaborate across different levels. Given the need for quick adaptations in a competitive market, this would enhance operational efficiency while also boosting employee morale and involvement.
Step 5
Explain what 'limited liability' means for shareholders. At least one example must be included in the type of business ownership for Miles Ahead in the future.
Answer
Limited liability means that the shareholders of a company are not personally liable for the debts and liabilities of the business beyond their initial investment. If Miles Ahead were to operate as a limited company, for instance, shareholders would only risk losing the money they invested in shares and not their personal assets. This encourages investment as it minimizes the financial risk for shareholders.