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Read the information supplied and answer the question which follows - Leaving Cert Business - Question 3C - 2019
Question 3C
Read the information supplied and answer the question which follows. Irish natural skincare businesses are using a combination of natural ingredients and science to... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the question which follows - Leaving Cert Business - Question 3C - 2019
Step 1
Discuss the benefits
Answer
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Sales Revenue Increase: Trading in the global market can significantly increase sales revenue for Irish natural skincare businesses. Given that Ireland has a relatively small population, targeting larger markets such as Asia and Europe, which have substantial populations, can provide enhanced sales opportunities.
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Economies of Scale: By producing and selling on a larger scale, businesses can decrease costs associated with production, which can lead to increased profit margins. This reduction in costs can allow for more competitive pricing.
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Niche Market Opportunities: Irish skincare businesses can explore niche markets internationally, such as luxury skincare, appealing to targeted demographics interested in natural ingredients.
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Learning from Competition: Engaging in international trade allows businesses to observe and learn from successful competitors in foreign markets, potentially leading to innovation and improvement in their own products.
Step 2
Discuss the challenges
Answer
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High Competition Levels: The global market is often saturated with competitors. Only the businesses that are most efficient and innovative will survive, posing a major challenge for entering the international scene.
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Complex Regulatory Requirements: There are significant legal and regulatory hurdles in foreign markets, including stringent cosmetic regulations; compliance can be resource-intensive.
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Cultural Differences: Different regions have varying skin types and cultural preferences that necessitate adaptations in products and marketing strategies, which may complicate product development.
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Logistics Issues: Operating internationally can involve complications related to shipping, inventory management, and effective communication across different time zones, which can lead to operational inefficiencies.
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Brand Awareness: Establishing brand recognition in new markets can be a daunting task, often requiring substantial investment in marketing and customer relations.
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Technology Dependency: Organizations must ensure a strong online presence and digital marketing strategy to remain competitive, which can expose them to vulnerabilities associated with e-commerce.