Tiêu đề Section 4.pdf ✅

AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 1 SECTION 4 8 MARKS 8 MARKS / (O/N 2023, V3), Q6, a (a) Analyse two ways in which operations contributes to added value in a business. [8] OUTLINE Def > Added value > Difference between the price of a finished good and the cost of the inputs in making it. Method 1 > Efficient production > sourcing high quality material + implementing high quality machinery > superior end product > product meets customer expectations > example: High quality material + machinery = superior cars > charge a premium > increase profit margin > reinvest to sustain this process. [HOWEVER] efficiency can result in loss of flexibility > process are done in a certain way > can't adapt with market changes > can't accommodate with customer demand > miss out on market opportunities > difficult to compete. [Operations] Method 2 > Marketing operation = build a brand > developing a marketing campaign allows to highlight the business commitment to quality + reliability >example: promoting its development on new technology + innovative products > establish itself as the market leader > builds a brand name > get consumer loyalty > charge higher prices + without losing sales > more revenue + profit > reinvest to sustain these activities. [HOWEVER] risk of overselling + misrepresenting > unrealistic expectation and failure to meet them can damage that image > loss of trust > loss of sales > difficult to sustain these programs. [Marketing]
AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 2 FULL ANSWER [8/8 MARKS] Added value is the difference between the price of a finished good and the cost of the inputs in making it. Added value can be achieved in different ways building a car in an innovative way or building the brand of a business One way to add value in a business is through the efficient production process, where raw materials are transformed into finished products in a manufacturing business. This can be achieved by sourcing high-quality materials and implementing high quality machinery from reliable suppliers, ensuring that the end product meets or exceeds customer expectations. For example, in the automotive industry, a manufacturing business adds value by using good quality suppliers, advanced robotics and assembly line techniques to produce new cars. These robots can work quickly and precisely, leading to a more efficient production process and a higher-quality end product. This makes the product more attractive to the clients and the company is able to charge premium on their product because of it. This leads to increasing the profit margins through which the business can continue to sustain buying these expensive raw materials and purchase high quality machinery to ensure the same quality. [However] focusing heavily on the efficiency of the production process in a manufacturing business is the potential loss of flexibility and customization. While an efficient production process can lead to cost savings and faster output, it may limit the ability to quickly adapt to changing customer demands or market trends. For example, if a manufacturing business relies heavily on automated assembly lines to produce standardized products, it may struggle to quickly reconfigure its production process to accommodate custom orders or changes in product specifications. This lack of flexibility could result in missed opportunities to meet customer needs and compete effectively in dynamic markets. Another way to add value in a business is through effective marketing operations that promote the business's reputation for quality and establish a unique selling proposition (USP) to differentiate it from competitors. This can be achieved by developing compelling marketing campaigns that highlight the business's commitment to quality, reliability, and customer satisfaction. For example, a technology company may focus its marketing efforts on showcasing its innovative products and excellent customer service, establishing itself as a leader in the industry. By effectively communicating these qualities to consumers, the business can create a strong brand image and cultivate customer loyalty. This loyalty allows the company to charge a high price of its products without losing sales. This results in more revenue and more profits. [However] focusing too heavily on marketing operations to add value is the risk of overselling or misrepresenting the business's products or services. While effective marketing can enhance the business's reputation and attract customers, if the marketing messages create unrealistic expectations or mislead consumers about the true value of the offerings, it can lead to dissatisfaction and damage the brand's reputation in the long run. For example, if a company promotes its products as being of the highest quality but fails to deliver on this promise, customers may feel deceived and be reluctant to purchase from the company again. This can result in a loss of trust and credibility, ultimately undermining the business's ability to add value through its marketing efforts.

AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 4 FULL ANSWER [12/12 MARKS] Supply chain management is regarded as different stages involved in making, distributing and selling a good or service, beginning with the raw material, through to production of parts, to the distribution and sale of the product. Effective supply chain management will ensure that good quality raw material is bought and proper quality checks are performed which helps to ensure product quality. This is achieved by be ensuring timely delivery of the spare parts and batteries along with performing quality checks on the assembly lines to prevent defects and delay. As a result, the production process runs smoothly and consumers receive cars without defects which will improve customer confidence and loyalty which leads to an improvement in the reputation of the business. This USP of quality helps the car manufacturer to build a brand name and allows them to charge a premium price for their cars while maintain sales. This combination of high prices and stable sales results in higher profits which can be reinvested to procure high quality spare parts and offering best customer service which are crucial to maintain this quality and ensuring customer satisfaction. [However] developing an effective supply chain management system takes times and is expensive. Implementing and maintaining a sophisticated SCM system requires substantial investment in technology, infrastructure, and personnel training along with ensuring compliance with regulations and standards adds complexity and cost to the process. These factors can lead to higher operational expenses and longer lead times, which may impact the company's competitiveness in the market. With the cars being expensive and delivered late it would be difficult to increase sales against traditional petrol-powered cars that are not only cheaper but more readily available. In addition to the that since electric car markets are becoming more competitive due to the governments supporting their consumer it would make it difficult to retain sales. A drop in sales would reduce revenue and can result in lower profits making it difficult to expand and invest in other operational areas like marketing and HR to sustain quality. [EVAL] Therefore supply chain management is an important operational activity as it ensures that the cars are produced on time and maintain their quality. However, this depends on the quality and reliability of the supplier. Can SCM ensure that there is a constant supply of the correct components available in the correct location at the correct time to allow production to continue? Specialist electric car batteries are not as widely available as other types of batteries so may need more effective SCM than other businesses. Unless high quality suppliers are not available the effectiveness is limited. Supply chain management is not the only operational activity that ensures success. Marketing is another operational activity for an electric car manufacturer because it allows to create a strong brand image and customer loyalty. Through strategic marketing campaigns that highlight the unique features and benefits of electric vehicles, a company can position itself as a leader in the industry and build a loyal customer base. For example, Tesla's marketing emphasizes the environmental benefits of electric cars, as well as their cutting-edge technology and performance. By effectively communicating these messages to consumers, Tesla has been able to create a strong brand image associated with innovation, sustainability, and luxury. This, in turn, has helped Tesla attract a dedicated following of customers who are passionate about the brand and its products, leading to repeat purchases and positive word-of-mouth referrals which results in higher sales and profits for the company. This money is usually contributed in boosting the share prices and has attracted investors which help to secure funding for future expansions. [However] One drawback is of high cost. As more companies enter the electric vehicle market and invest in marketing efforts, the competition for customer attention and market share intensifies. This can lead to a scenario where companies are spending significant resources on marketing campaigns to differentiate themselves, potentially resulting in escalating marketing costs and diminishing returns. This can reduce the ability to generate profits and makes it difficult to invest in promotions or even new product development to stay competitive. [EVAL] Therefore supply chain management is not the only important operational activity and marketing plays an equally important role in the success of an electric car brand due to its ability to create a brand name. However, this depends on the level of finance available to conduct market research. Unless the car manufacturer understands the needs and is willing to invest in market research, they won’t be able to figure out what kind of price customers are willing to pay or what features are more valuable for the customers (speed, luxury interior, service cost etc.).