Rio Textiles (RT) Carlos set up RT in 2010 with a small factory to weave and print fabrics used in the fashion industry. RT is located in Brazil, which is one of the world's largest producers of cotton cloth. However, Brazil Brazil is a middle-income country and is increasing its exports. One of Brazil's most important exports is soya beans, which make up much of the world's supply. Carlos believes there are several opportunities to diversify to allow for further growth and expansion. RT could enter different fabric markets, start to export its products or develop new products with its farm and factory resources. Carlos aims to achieve 'profit through diversification'. He wants to propose a new business strategy for Carlos is planning to undertake a PEST analysis but needs advice on this and other approaches he Appendix 1: Lean production - extracts from 2018 Operations report RT implemented lean production in its cotton processing factory which has increased efficiency. The cost savings which have resulted from introducing several lean production techniques have increased profit margins. However, there have been some supply interruptions from late deliveries of cotton. Annual labour turnover has increased by $$$5 \%$$$. Appendix 2: 2019 Brazil fabric industry magazine article Last week there was a take-over of three of the largest cotton farms in the north of the country by fabric manufacturer RT. The deal, thought to be worth $$$\$ 3.5 \mathrm{~m}$$$, will see RT secure its supply of cotton and enter the farming industry for the first time. Since its establishment in 2010 as a fabric printing firm it has grown so that it weaves its own fabric and now grows its own cotton. This should enable RT to increase its production and make it one of the top five fabric producers in the country. However, a business analyst commented that RT must be aware that managing farms is a very different challenge to managing a factory. Appendix 3: RT's 2021 investment in its new factory and machines - $$$\mathrm{RT}$$$ 's mortgage debt increases to finance the purchase of the factory. - RT's fabric production capacity increases by $$$66 \%$$$. - Machines costing $$$\$ 1.5 \mathrm{~m}$$$ are financed through a share issue. - $$$\quad$$$ Critical path analysis (CPA) helps manage the purchase and installation of machines. Advise Carlos on which approaches RT should use to develop a business strategy to achieve 'profit through diversification'.

Business

IGCSE&ALevel

CAIE

Exam No：9609_w23_qp_43 Year：2023 Question No：IGCSE&ALevelBusiness2023A20069

Answer:

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

9.1.1.1 the factors that determine location and relocation

9.1.1.2 the differences between local, national and international location decisions

9.1.1.3 the reasons for and impact of offshoring and reshoring

9.1.1.4 the impact of globalisation on location and relocation decisions

9.1.2.1 the factors that influence the scale of a business

9.1.2.2 causes and examples of internal and external economies and diseconomies of scale