CAIE A-Level Business A2 7.1.2 Types of Structure Topic Practice

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Question 1

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Clean Delivery (CD)

CD manufactures and sells detergent which is used to wash clothes. Sales are made to households through a subscription service using postal deliveries to distribute the product.

International expansion

CD started to export its products in 2022 by setting up a subscription service in country C. Although this is not yet profitable, Gianni and Anna are satisfied with the sales growth. They are now planning to expand further by exporting to three other countries that have similar economies to country K. Gianni has also proposed that CD should open factories in two of these countries.

Organisational structure

CD has a hierarchical organisational structure based on the business functions of marketing, finance, human resources, operations and research. Gianni believes this structure has supported growth by ensuring consistency throughout the business. There are also ambitious plans for further international expansion. Anna now suggests changing to a geographical organisational structure.

Analyse two advantages to CD of changing to a geographical organisational structure.

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