Business Objectives & Strategy (Edexcel A Level Business): Exam Questions

Read the following extracts (E to G) (opens in a new tab) before answering

Holly and Andy are considering creating a mission statement for The Wonky Table

Assess the potential benefits to The Wonky Table of having a mission statement

Read the following extracts (E to H) (opens in a new tab) before answering

Assess two distinctive capabilities that provide Ryanair with a competitive advantage in the airline market

Read the following extracts (A to D) (opens in a new tab) before answering

Assess, with reference to Porter’s five forces, whether the ‘bargaining power of buyers’ represents the most significant external influence on easyJet plc.

Read the following extracts (E to H) (opens in a new tab) before answering

Assess the usefulness of SWOT analysis for Bluebells’ continued success.

Read Extracts A to D (opens in a new tab) before answering.

Assess whether the distinctive capability of innovation is the main reason that Brompton has a competitive advantage.

Extract A

Vidsy

Vidsy is a digital marketing company. It creates video adverts designed to be shown on social media platforms, such as Snapchat and TikTok.

Vidsy was founded in 2014 by Alex Morris, Archie Campbell and Gerard Keeley. They manage the company and own 60% of the shares. Vidsy operates an online content platform intended to help companies create more effective video adverts for all social media platforms.

Vidsy employs a global community of over 7,000 digital creators. For each advertising campaign it selects specific creative teams who work together online using Vidsy’s digital platform. Each team is managed by one of Vidsy’s offices sited in London or New York.

The business has grown rapidly since 2014 and its clients include companies such as Coca-Cola, Unilever and L’Oréal. Turnover increased from £220000 in 2015 to £6.9m in 2021.

Vidsy’s mission statement is: “We’re on a mission to build the global creative ecosystem for brands and creators to thrive on digital, together.”

(Source: adapted from https://vidsy.co/)

Extract B

Vidsy – selected financial information from its annual report 2021

(Source: adapted from https://pomanda.com/company/09263514/vidsy-media-limited)

Extract C

Labour turnover in the technology sector

(Source: adapted from https://devskiller.com/attrition-rate-in-tech/)

Extract D

London-based video advertising platform Vidsy picks up £12m funding

Vidsy obtained £12m from venture capitalist Access Entertainment in October 2021. It used the funds for expansion and further development of its platform and services. As a result of this investment, Danny Cohen, the President of Access Entertainment, joined Vidsy’s Board.

“The digital advertising market is growing at extraordinary speed and brands need a dynamic, creative and cost-efficient solution in order to reach consumers most effectively. Vidsy delivers this, combining premium creative standards with deep understanding of the digital landscape and a cutting-edge technology platform. We believe that the company will continue to grow at a rapid pace. I’m looking forward to joining the Board at this exciting time for the business and working with the visionary team at Vidsy,” said Danny Cohen.

(Source: adapted from https://www.uktech.news/news/londonvideo-ad-platform-vidsy-funding-20211011)

Assess whether Vidsy's directors should focus purely on shareholder returns in the company's business decisions.

Extract E

PulseTech plc

PulseTech plc is a UK-based public limited company that designs and sells wearable technology products, including fitness trackers and smart health monitors. Its products are sold online and through electronics retailers in the UK, Europe and North America.

PulseTech's strategy focuses on innovation and data analytics. Its products allow users to track physical activity, sleep patterns and heart rate. The business invests heavily in research and development (R&D) to differentiate its products and maintain a competitive advantage.

Extract F

PulseTech plc – selected financial information (2023)

PulseTech's directors are under pressure from shareholders to improve profitability, following a slowdown in revenue growth during 2023.

Extract G

Production capacity and outsourcing

PulseTech currently assembles its products at a factory in Eastern Europe. The factory is operating at 92% capacity utilisation.

Demand forecasts suggest that sales could increase by up to 30% over the next two years if PulseTech launches a new health-monitoring device. To meet this demand, PulseTech is considering two options:

• Expanding its existing factory

• Outsourcing production to a specialist electronics manufacturer in Asia

Outsourcing would reduce PulseTech's control over production but could lower unit costs.

Extract H

The global wearable technology market

The global wearable technology market has grown rapidly over the past decade. The market was valued at $61.3bn in 2020 and is forecast to reach $150.6bn by 2030, representing strong long-term growth.

Growth is driven by increased health awareness, advances in sensor technology and the integration of wearable devices with smartphones and health apps.

However, the market is characterised by:

• Rapid technological change

• Short product life cycles

• High levels of research and development spending

PulseTech's senior managers must decide how best to position the business to benefit from future market growth.

Assess the likely importance of research and development (R&D) to PulseTech plc's future competitiveness.

Read the following extracts (A to D) (opens in a new tab) before answering

Warby Parker’s main corporate objective is to grow the business. The management is considering two options, either to develop a new range of contact lenses for the high income market, or to start selling glasses in the low income market

Evaluate these two options and recommend which one is most likely to achieve Warby Parker’s main corporate objective

Read the following extracts (E to H) (opens in a new tab) before answering

Buy it Direct has set the objective of increasing its sales revenue. It is considering two options, either to adopt a strategy of market penetration in the UK Electrical Household Appliance market or diversification

Evaluate these two options and recommend which one is most likely to achieve Buy it Direct’s objective of increasing its sales revenue

Read the following extracts (E to G) (opens in a new tab) before answering

Holly and Andy are considering ways to increase profits. They could either extend their premises upstairs or offer external catering to local businesses

Using the data in Extract G and SWOT analysis, evaluate each option and recommend to Holly and Andy which one might be better for them to increase profits

Read the following extracts (A to C) (opens in a new tab) before answering

To achieve its aim of increasing its market share of the global wearable technology market, Tended Ltd could produce a new smartwatch or launch a marketing campaign for ‘Tended Protect’

Evaluate these two options and recommend which one is most suitable for Tended Ltd to achieve its aim of increasing its market share

Read Extracts E to H (opens in a new tab) before answering

When reviewing Peloton’s corporate strategy, its Chief Executive has identified technology as the most important PESTLE factor to prioritise. Other directors consider prioritising social factors as more important.

Evaluate these two PESTLE factors and recommend which one Peloton should prioritise when developing its future corporate strategy.

Read Extracts A to C (opens in a new tab) before answering

Porter’s Strategic Matrix suggests that a car manufacturer can grow the sales of its electric cars by either focusing on differentiation or cost leadership.

Evaluate these two options and recommend which one is the most important for the successful growth in sales of its electric cars.

Extract E

Beiersdorf

Beiersdorf is a German multinational company that manufactures personal-care products. It employs 20,000 people in more than 160 countries. It is a public limited company (plc), but is controlled by the German businessman Michael Herz, who owns 50.49% of the shares. The company’s headquarters and manufacturing centre is in Hamburg, Germany. This factory supplies businesses, such as Tesco, in its UK and European markets.

Beiersdorf’s best-selling skincare brand is Nivea. The Nivea brand benefits from high levels of consumer trust based on quality products. Beiersdorf has built on this by launching several new Nivea skin care products. Nivea is a global brand with consistent names, products and packaging.

(Source: adapted from https://www.beiersdorf.com/about-us/beiersdorf-global (opens in a new tab))

Extract F

The UK Men’s Skincare Market

The UK men’s skincare market has experienced a steady annual growth rate of around 5% over the past few years. This growth is expected to continue, with forecasts predicting that the market will have a value of £750m by 2025. Factors contributing to this growth include the rising popularity of skincare routines, the influence of social media, and the increasing availability of high-quality men’s skincare products.

Several key trends are shaping the UK men’s skincare market. These include growing demand for natural and organic products, environmentally friendly packaging and products tailored to individual skin types.

(Source: adapted from Mintel, UK Men’s Skincare Report 2023 and Euromonitor International, Men’s Grooming in the United Kingdom, 2023)

Extract G

The euro to £1 exchange rate June 2024 to January 2025

(Source: adapted from https://www.xe.com/currencycharts/?from=GBP&to=EUR)

Extract H

Beiersdorf’s new cutting-edge factory

In 2023, Beiersdorf invested heavily in its new production site and fulfils the highest environmental and technological standards. At almost €300 million, the new site in Leipzig (Germany) is the largest investment Beiersdorf has ever made in a production site.

The new production site uses state of the art technology. It utilises semi-automated and automated tube filling and labelling machines to reduce chance of human error and improve quality.

It has a capacity of up to 450 million products per year and started producing in September 2023. It uses a cutting-edge system which facilitates faster, more standardised, and automated global business processes.

(Source: adapted from https://www.beiersdorf.com/about-us/beiersdorf-global)

When making business decisions, Beiersdorf's Chief Executive believes that Beiersdorf should focus only on its shareholders. Other Directors argue that Beiersdorf should consider all its stakeholders.

Evaluate these two options and recommend which one Beiersdorf should choose when making business decisions.

Extract E

Company profile: Sweetcraft Ltd

Sweetcraft Ltd is a family-owned business based in Burnley, Lancashire, specialising in traditional boiled sweets, toffee, and fudge. Founded in 1992, the company employs 72 people and generates annual revenue of approximately £9.8 million.

Operating from a single site, Sweetcraft sells through independent retailers, farm shops, garden centres, tourist attractions, and its website. The business has built a reputation for high-quality, handcrafted products using traditional recipes, priced 40-60% above mass-market equivalents.

The core customer base consists of older consumers valuing traditional British confectionery. The company has developed a growing gift range, with seasonal assortments popular for Christmas and Easter.

Co-founders Sarah and Michael Chen remain hands-on in operations. Sweetcraft faces rising ingredient costs, competition from larger manufacturers, and difficulties attracting younger consumers.

Extract F

Financial performance 2022-2024

Additional data (2024)

• Non-current assets: £3.2m

• Current assets: £1.8m

• Current liabilities: £1.4m

• Long-term loans: £1.5m

• Rising cost of sales (sugar, glucose syrup, butter, packaging) increased from 60% to 65% of revenue

• Competitive pressures and retailer price sensitivity limited price increases

• Operating expenses rose due to higher energy costs, wage inflation, and digital marketing investment

Source: adapted from Sweetcraft Ltd financial statements

Extract G

Operations and workforce challenges

Sweetcraft's factory operates at 68% capacity, producing around 780 tonnes annually using traditional batch production with semi-automated packaging. Production is highly seasonal, peaking before Christmas and Easter. During peaks, the factory runs extended shifts with up to 20 temporary workers. Outside peaks, underutilisation causes fixed cost inefficiencies.

Labour turnover averaged 24% in 2024, above the industry average of 15%. Employees leave for higher-paid positions in nearby distribution centres. The workforce is ageing - 45% of production employees are over 50 - and the company struggles to attract younger workers.

Sarah Chen commented: "We're competing with logistics operators offering higher wages. Our traditional sweet-making roles require specialist skills that are increasingly rare. Training takes time and impacts productivity."

Extract H

Strategic options

Sweetcraft's management has identified two growth strategies:

Management is divided. Some argue contract manufacturing offers lower-risk capacity utilisation, while others believe protecting the Sweetcraft brand and pursuing direct sales creates greater long-term value.

Source: adapted from strategic planning documents

Using the information provided and your knowledge of the confectionery industry, recommend which strategic option (Extract H) Sweetcraft Ltd should pursue. Justify your recommendation.