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

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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

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

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Using the data in Extracts B and C, assess the likely effects of decreases in UK corporation tax rates in March 2020 on UK restaurant chains, such as Jamie Oliver’s.

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

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

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

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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

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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

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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

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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

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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.

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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.

Read extracts A to H before answering questions

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 extracts E to H before answering questions

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 aging - 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.