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Question 1

Benefit of using a market map

Answer 1

1)Market maps help businesses identify gaps in the market
2)Once identified business can conduct R+D
3)And design a product that matches characteristics of
4)product is likely to be unique
5)Lack of direct competition
6)Business can increase selling price without a significant fall in demand
7)increase sales revenue and gross profit

Question 2

Drawback of using a market map

Answer 2

1)Market maps are based on consumer opinions
2)To ensure decisions based on opinions are valid
3)Business needs to collect dat from a large sample
4)This may require a large number of researchers
5)To collect and analyse data and display in a market map
6)If business recruits researchers it will significantly increase cash outflows
7)If cash outflows is greater than cash inflows
8)It may lead to a negative cash flow

Question 3

Importance of cash

Answer 3

1)a business does not have enough cash
2)they will be unable to pay their day to day bills
3)such as payments to suppliers
4)They will then me forced to sell non current assets
5)this will disrupt their daily operations
6)and increases their chances of failure

Question 4

Limited liability benefits

Answer 4

1) Limited liability means that the owners are not responsible for any debt that cannot be paid by the business
2) This therefore attracts more investment as there is reduced risk of investment
3) Leading to an increase in capital invested in the business
4) The business can build capacity (say how from case study)
5) Improved accessibility (service) or output (factory)
6) Increased opportunity to sell more goods
7)increase sales revenue
8)increase gross profit
9)increase operating profit

Question 5

Limited liability drawback

Answer 5

1)The owners are not risking their personal possessions
2)So if the business is unable to pay (through sale of assets)
3)Then the supplier or bank lose the amount owed
4)This increases the risk of lending cash to the business
5) Or increases the risk of offering trade credit
6) Making banks and suppliers less likely to lend
7)struggle to get trade credit or loan
8)limited expansion