The owners of a mobile-phone repair company are preparing objectives for the next financial year. The company repairs Huawei and other smartphones for local...
Question 1 Report
The owners of a mobile-phone repair company are preparing objectives for the next financial year. The company repairs Huawei and other smartphones for local customers. It currently has a 6% share of the repair market in its town, but the owners want to increase this to 7.5%. They have also set an objective to train two more employees so that repairs can be completed more quickly. The following figures were recorded by a local business adviser, who asks the owners to select answer choices using evidence rather than assumptions.
(a) State two reasons why the company may set a market-share objective. [2]
(b) Define an objective. [2]
(c) Calculate the percentage increase in market share needed to reach the target. [2]
(d) Define market share. [2]
Answer Details
(a) A market-share objective can help the business increase sales revenue, compete more effectively, become better known and attract more customers. A larger market share may also give more influence with suppliers. Any two gain credit. [2]
(b) An objective is a target set by a business. It gives the business a planned, measurable outcome to achieve. [2]
(c) The rise is:
\[7.5\%-6\%=1.5\text{ percentage points}\]
To find the percentage increase from the original share:
\[\frac{1.5}{6}\times100=25\%\]
The required increase is 25%. [2]
(d) Market share is a business's sales as a proportion or percentage of total sales in a market. [2]
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