AQA A Level Business Studies
Topic questions Business economics Product decisions: portfolio analysis & the product life cycle
5 questions · 85 marks · about 1.5 hours
Product ‘X’ was the market leader in a low growth market.
New promotions by competitors lead to rapid growth in the market.
However, Product ‘X’ still retains its market leadership.
In terms of the Boston Matrix, Product ‘X’ has changed from:
Read the information below and then answer the questions that follow.
Bell Ltd
Bell Ltd is a UK-based food manufacturer with 27 branded products in three main markets:
sweets
snacks
drinks.
The company has been very successful over many years, increasing its market share in each market. It has responded to market changes by investing in the development of new products such as low-sugar and vegetarian ranges. It monitors the sales and costs associated with each of its brands.
100% of shares in Bell Ltd are owned by four members of the Bell family who also have management roles in the business. The owners feel long-term strategic decision making at the company is more effective than if it was a public limited company.
Bell Ltd actively manages the trade credit offered to retailers who buy its products, such as chasing any overdue payments and minimising the period of credit it offers to them. By building long-term relationships with suppliers, it has secured favourable credit terms from them.
Speckles is produced by Bell Ltd and used to be a leading brand of sweets in the UK. In terms of the Boston Matrix, Speckles is now a ‘dog’. It was recently announced that Speckles would be discontinued. A social media campaign against this decision claimed that Speckles was an iconic brand from people’s childhoods and should be saved.
Table 1 Financial data for the Speckles brand
| Year | 2019 | 2020 |
| Sales revenue (£’000) | 40 | 20 |
| Cost of sales (£’000) | 25 | 16 |
| Gross profit (£’000) | 15 | 4 |
Calculate the Gross Profit Margin for Speckles in 2020.
Analyse how Bell Ltd’s cash flow is improved by the way it manages its payables and receivables.
Analyse how the ownership structure of Bell Ltd might have contributed to the success of its strategic decision making.
Should businesses always stop the production of products classified as ‘dogs’ in the Boston Matrix?
Justify your view.
Despite a significant increase in its sales revenue, a product’s market share falls from 60% to 50%.
This product is a
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