Answer :
1.1.1 Nathoo Handbags applied a related diversification strategy by adding luggage bags to their product range. This is evident from the scenario where it states, "The management of NH has increased their product range by adding luggage bags." Related diversification involves adding new but related products or services to the existing business. In this case, luggage bags are related to handbags as they both fall under the category of bags and accessories.
1.1.2 Intensive strategies offer several advantages for businesses, including:
- Market Penetration: By intensively promoting and selling existing products or services in current markets, businesses can increase their market share and customer base.
- Product Development: Intensive strategies also involve improving and enhancing existing products or services to meet changing customer needs and preferences, thereby maintaining competitiveness.
- Market Development: Businesses can explore new market segments or geographic regions to expand their customer base and revenue streams.
- Diversification: Intensive strategies allow businesses to diversify their product offerings or enter new markets while leveraging existing resources and capabilities.
2.1.1 The sector in which the selected business operates is the retail sector. This is evident from the scenario description of Nathoo Handbags, a company that sells handbags and luggage bags to customers.
2.1.2 Two challenges experienced by the business may include:
- Competition from online retailers offering similar products at lower prices
- Changing consumer preferences and fashion trends impacting sales
2.1.3 The challenges can be classified according to the three business environments as follows:
- Economic Environment: Competition from online retailers impacting sales and pricing strategies.
- Social/Cultural Environment: Changing consumer preferences and fashion trends influencing product demand.
2.1.4 The extent of control the business has over each business environment identified in QUESTION 2.1.3 may vary:
- Economic Environment: Nathoo Handbags may have limited control over the economic environment, as it is influenced by external factors such as market competition and consumer spending habits.
- Social/Cultural Environment: While Nathoo Handbags can respond to changing consumer preferences through product development and marketing strategies, it may have limited control over broader social and cultural trends.
Hope this helps!
1.1.2 Intensive strategies offer several advantages for businesses, including:
- Market Penetration: By intensively promoting and selling existing products or services in current markets, businesses can increase their market share and customer base.
- Product Development: Intensive strategies also involve improving and enhancing existing products or services to meet changing customer needs and preferences, thereby maintaining competitiveness.
- Market Development: Businesses can explore new market segments or geographic regions to expand their customer base and revenue streams.
- Diversification: Intensive strategies allow businesses to diversify their product offerings or enter new markets while leveraging existing resources and capabilities.
2.1.1 The sector in which the selected business operates is the retail sector. This is evident from the scenario description of Nathoo Handbags, a company that sells handbags and luggage bags to customers.
2.1.2 Two challenges experienced by the business may include:
- Competition from online retailers offering similar products at lower prices
- Changing consumer preferences and fashion trends impacting sales
2.1.3 The challenges can be classified according to the three business environments as follows:
- Economic Environment: Competition from online retailers impacting sales and pricing strategies.
- Social/Cultural Environment: Changing consumer preferences and fashion trends influencing product demand.
2.1.4 The extent of control the business has over each business environment identified in QUESTION 2.1.3 may vary:
- Economic Environment: Nathoo Handbags may have limited control over the economic environment, as it is influenced by external factors such as market competition and consumer spending habits.
- Social/Cultural Environment: While Nathoo Handbags can respond to changing consumer preferences through product development and marketing strategies, it may have limited control over broader social and cultural trends.
Hope this helps!
