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Illustrate how the introduction of technology affects an enterprise's (i) Business costs and (ii) Business opportunities. - Leaving Cert Business - Question C - 2004
Question C
Illustrate how the introduction of technology affects an enterprise's (i) Business costs and (ii) Business opportunities.
Worked Solution & Example Answer:Illustrate how the introduction of technology affects an enterprise's (i) Business costs and (ii) Business opportunities. - Leaving Cert Business - Question C - 2004
Step 1
Business costs
Answer
The introduction of technology significantly impacts business costs in several ways:
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Initial Capital Investment: Businesses are required to invest in new technology, leading to higher upfront costs. This includes purchasing necessary equipment, software, and training employees.
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Reduction in Labor Costs: Automation and technology can reduce the number of workers needed to perform tasks. For example, robotic systems and automated machinery streamline production processes, leading to cost savings.
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Operational Efficiency: Technology improves operational efficiency, which can reduce material waste and optimize production processes. Better quality control minimizes costs related to defective products.
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Maintenance and Upkeep: While technology reduces some costs, it may lead to expenses in maintaining and upgrading systems. Companies must allocate resources for routine maintenance, which can add to overall operational costs.
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Risk of Obsolescence: Firms face the risk of their technology becoming outdated, which might require further investment to keep up with industry standards. Failure to upgrade can lead to loss of competitive edge.
In summary, while the introduction of technology can lead to a higher initial investment, it can also result in long-term cost savings through increased efficiency and reduced labor needs.
Step 2
Business opportunities
Answer
The impact of technology on business opportunities is profound and multifaceted:
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Market Expansion: Technology allows companies to reach a broader audience, as they can market products online and utilize e-commerce. This opens up new geographic markets that were previously inaccessible.
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Product Development: New technologies can lead to the creation of innovative products or services. Businesses using advanced research and development tools can create products that meet emerging consumer needs.
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Improved Customer Engagement: Digital tools, such as social media and customer relationship management systems, facilitate better communication with customers. This enhanced engagement can lead to greater customer loyalty and repeat business.
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Data-Driven Decision Making: With the adoption of analytics and big data technologies, enterprises can analyze consumer behavior and market trends more effectively. This insight helps in making strategic decisions that capitalize on market opportunities.
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Collaboration and Flexibility: Technologies such as cloud computing enable remote work and collaboration across teams and locations, increasing organizational agility. Businesses can respond more quickly to changes in the marketplace.
In conclusion, technology presents numerous opportunities for enterprises to innovate, improve operational performance, and create new revenue streams.