Business homework 16/01/23

Gregor McNulty 5m2

Describe the costs and benefits of having a varied product portfolio. (5) 

One benefit of having a varied product portfolio is that having multiple products
in different markets can spread your target market and increase your brand
recognition, making it more popular and most importantly increasing sales.

Another benefit of having a varied product portfolio is customer loyalty, customers

are more likely to buy a variety of products from a business they trust rather than
from two different companies where they haven’t shopped before. By doing this it
will build customer loyalty, making customers come back to purchase more products
from your business resulting in higher sales.

One cost of having a varied product portfolio is advertisement and marketing costs,
due to a high variety of products being sold by your business it will mean each
product will need to be advertised separately which will cost more than just having
one product in a particular market.

Another cost is bad publicity/brand image, if one of your products is seen to have
a bad image or a poor reputation this may have an affect on all your products,
leaving your company as a whole with a bad company image. Resulting in a decrease
of sales.

Another benefit is that it is easier to launch a product into a new market, due to
a high brand image because of the amount of markets your company reaches you will
have a better chance of your new product being recognised by consumers.

Explain the benefits of capital intensive production. (3) 

One benefit of capital intensive production is less wages/rates for employees, due
to production been made by machines wages won’t need to be paid for labour. This is
a benefit because it will save your company money which can be invested in
something else.

Another benefit of capital intensive production is the high work rate, when labour
is being carried out in a como at those working can only work a certain time
whereas machines can work 24/7 with no breaks, this suggests production is more
efficient and done at a faster pace.

Another benefit of capital intensive production is quality can be standardised,

when using capital intensive production each product produced can be made in
identical batches setting a standard of a product, whereas when using labour those
producing the products may make mistakes or become more tired over time.