Performance Vehicles (PV) Jack (a mechanic) and Jimmy (a car salesperson) set up PV as a private limited company in 2010. PV was initially financed through savings and a personal bank loan. The capital raised was used to PV bought previously owned cars at low cost, repaired any faults and sold them in its showroom. A business analyst was commissioned to produce a report into influences on new business strategies The report suggests that electric vehicles are a growing market. Jack does not want to retrain to work on electric vehicles. He decides to retire and sells his share of the business to Jimmy. Jimmy wants his business to become the market leader in modifying rare old cars to run on electric power. Jimmy has found a venture capitalist with extensive experience of new power technologies. Appendix 1: Data about the two-year contract to appear in the car restoration television programme (2015) - Niche audience of people who like car restoration. - $$\(\quad\)$$ Estimated viewing figures of 2 million worldwide. - $$\(\quad\)$$ PV will not receive a fee from the television company, but PV's logo and product placement will appear in every programme. - $$\(\quad \mathrm{PV}\)$$ is allowed to sell branded merchandise, made popular by the programme, on its website. Appendix 2: PV purchases land and invests in technology in 2016 - New industrial unit financed by mortgage. - Gearing ratio increases to $$\(75 \%\)$$. - New specialist technology financed by retained profit. - $$\(\quad\)$$ Quality improvements marketed as a unique selling point (USP). - $$\(\quad\)$$ PV reduces its marketing budget. Appendix 4: Extract from report into influences on new business strategies - Growing consumer interest in sustainable production methods. - Disposable incomes are rising fastest in the 18-30 age range. - Global agreement to reduce carbon emissions. - Advances in battery technology will reduce future cost of electric vehicles. - $$\(\quad\)$$ Large car manufacturers are investing heavily in research and development. - Criticism of governments for low investment in electric vehicle charging infrastructure. - Rising congestion charges / banning of petrol vehicles in some major cities. Advise Jimmy on the extent to which external influences will impact on the success of PV's future business strategy.
Exam No：9609_w23_qp_41 Year：2023 Question No：2
Answer:
Knowledge points:
6.1.1.1 the advantages and disadvantages of privatisation in a given situation
6.1.1.2 the advantages and disadvantages of nationalisation in a given situation
6.1.1.3 how a government might use the law to seek to control: employment practices, conditions of work (including health and safety), wage levels, marketing behaviour, competition, location decisions, particular goods and services
6.1.1.4 the impact of changes in political and legal factors on business and business decisions
6.1.2.1 how government might intervene to help businesses and encourage enterprise
6.1.2.2 how government might intervene to constrain business activity
6.1.2.3 how government might deal with market failure
6.1.2.4 the key macroeconomic objectives of governments: low unemployment, low inflation, economic growth
6.1.2.5 how macroeconomic objectives and performance of an economy can have an impact on business activity
6.1.2.6 government policies used to achieve macroeconomic objectives: monetary, fiscal, supply-side and exchange rate policies
6.1.2.7 the impact of changes in these government policies on business and business decisions
6.1.3.1 the impact of and issues associated with corporate social responsibility (CSR), e.g. accounting practices, paying incentives for the award of contracts, social auditing
6.1.3.2 why businesses need to consider the needs of the community including pressure groups
6.1.3.3 demographic changes at a local, national and global level
6.1.3.4 the impact of social and demographic change on business and business decisions
6.1.4.1 the impact of technological change on business and business decisions
6.1.5.1 the impact of competitors and suppliers on business and business decisions
6.1.6.1 the importance of international trading links and their impact on business and business decisions
6.1.6.2 how international trade agreements might have an impact on businesses
6.1.6.3 the role of technology in international trade
6.1.6.4 the advantages and disadvantages that a multinational might bring to a country
6.1.6.5 relationships between multinationals and governments
6.1.7.1 how physical environmental issues might influence business behaviour
6.1.7.2 how a business and its stakeholders may use an environmental audit
6.1.7.3 the impact of the growing importance of sustainability on business and business decisions
6.2.1.1 the meaning and purpose of business strategy
6.2.1.2 the meaning and purpose of strategic management: analysis, choice and implementation
6.2.1.3.1 blue ocean strategy
6.2.1.3.2 scenario planning
6.2.1.3.3 SWOT analysis
6.2.1.3.4 PEST analysis
6.2.1.3.5 Porter’s five forces
6.2.1.3.6 core competence framework
6.2.1.3.7 Ansoff matrix
6.2.1.3.8 force field analysis
6.2.1.3.9 decision trees
6.2.2.1 the meaning and importance of corporate planning
6.2.2.2 the meaning of corporate culture and its impact on business decision-making
6.2.2.3 the meaning and importance of transformational leadership
6.2.2.4 the management and control of strategic change
6.2.2.5 the meaning and importance of contingency planning and crisis management
Solution:
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