Discuss the likely reason why a business might be able to survive, whilst many of its competitors go bankrupt. Answer it like an Edexcel business GCSE question with one point, and... Discuss the likely reason why a business might be able to survive, whilst many of its competitors go bankrupt. Answer it like an Edexcel business GCSE question with one point, and following this is because, make 5 chains of reasoning.
Understand the Problem
The question is asking for a detailed discussion on factors that could allow a business to survive when its competitors might be failing. We need to present a point, followed by a reasoning chain that connects the point to the company's ability to withstand competition and economic pressures.
Answer
Strong brand loyalty can enable a business to survive while competitors go bankrupt.
A business might be able to survive while its competitors go bankrupt due to its strong brand loyalty. This is because a strong brand creates customer preference, which keeps sales high even in tough times. Therefore, when customers trust a brand, they continue to buy its products. This means the business can maintain revenue streams even when the market is challenged. Consequently, steady cash flow ensures financial stability. As a result, the business can cover costs and avoid bankruptcy. Finally, being financially stable allows the business to invest in its growth and adapt to market changes, while competitors struggle with financial difficulties.
Answer for screen readers
A business might be able to survive while its competitors go bankrupt due to its strong brand loyalty. This is because a strong brand creates customer preference, which keeps sales high even in tough times. Therefore, when customers trust a brand, they continue to buy its products. This means the business can maintain revenue streams even when the market is challenged. Consequently, steady cash flow ensures financial stability. As a result, the business can cover costs and avoid bankruptcy. Finally, being financially stable allows the business to invest in its growth and adapt to market changes, while competitors struggle with financial difficulties.
More Information
A business with strong brand loyalty often retains customers even in economic downturns, ensuring a consistent revenue stream which helps the company stay afloat amidst competition.
Tips
A common mistake could be failing to establish detailed links in the chain of reasoning, which can impact the quality of an answer.
Sources
- A guide on how to get a 9 in GCSE Edexcel Business Studies - thestudentroom.co.uk
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