Practise explaining why businesses fail, linking cash-flow problems, weak finance, competition and market change to case consequences.
Rabanne aims to be the best provider of fragrances for men and women throughout the world. Therefore, it uses a range of methods to make sure it will achieve this aim.
Explain one reason why some businesses fail.
A01-3 marks
Award 1 mark for identification of a reason why some businesses fail, plus 2 further marks for explaining the reason.
- Poor cashflow can lead to failure (1) from a lack of finance (1) to pay suppliers and other debtors (1)
- Prices could be too high and therefore not competitive (1) which could result in a fall in demand (1) leading to a lack of revenue (1)
NB No marks are awarded for a definition.
Answers that list three reasons with no explanation will get 1 mark only. Accept any appropriate response.