Common Reason for Niche Cake Business Failures: Rapid Growth
TITLE
‘The main reason why many niche cake manufacturing businesses fail is that they grow too quickly.
ESSAY
Title: The Impact of Rapid Growth on Niche Cake Manufacturing Businesses
Introduction:
In the realm of business studies, the growth trajectory of a niche cake manufacturing business can be a critical factor in determining its success or failure. This essay examines the assertion that many niche cake manufacturing businesses fail due to growing too quickly. By evaluating the potential implications of rapid growth on such businesses, we can gain insights into the challenges they face and the strategies they should consider when expanding.
AO1 Knowledge and Understanding:
To provide a comprehensive analysis, it is essential to have a clear understanding of niche businesses, cake manufacturing processes, and factors contributing to business failure. Niche cake manufacturing businesses target a specific segment of the market with specialized products, emphasizing quality and uniqueness.
AO2 Application:
When applying the concept of rapid growth to a niche cake manufacturing business, it becomes evident that scaling too quickly can have detrimental effects. For instance, expanding production without ensuring consistent quality control measures can lead to a decline in product standards, affecting customer satisfaction and loyalty.
AO3 Analysis:
1. Fast growth may overwhelm the business, leading to a loss of focus on critical functions and an increase in risks, such as product diversification.
2. The rapid expansion can strain employees and managers, causing stress, fatigue, and burnout, ultimately affecting operational efficiency.
3. Inadequate service due to increased output demands can result in lower customer satisfaction and a damaged brand reputation.
4. Insufficient resources to accommodate new clients or launch new products can lead to operational inefficiencies and financial strains.
AO4 Evaluation:
1. The excessive pace of growth can strain cash flow and hinder long💥term sustainability if quality standards are compromised.
2. Failure to address marketing strategies and competitive threats can undermine business growth and viability.
3. Effective quality control and marketing efforts are crucial for sustainable growth in the niche cake manufacturing market.
Conclusion:
In conclusion, the rapid growth of niche cake manufacturing businesses can pose significant challenges that may lead to failure if not managed effectively. By understanding the potential pitfalls of quick expansion, businesses can adopt strategies to maintain quality standards, manage growth, and sustain long💥term success in a competitive market environment.
[Word Count: 420]
SUBJECT
BUSINESS STUDIES
LEVEL
A level and AS level
NOTES
‘The main reason why many niche cake manufacturing businesses fail is that they grow too quickly.’ Evaluate this view. Indicative content Responses may include: AO1 Knowledge and understanding • Knowledge of business failure/growth / niche/manufacturing businesses. AO2 Application • Developed application of business failure/growth to a niche cake manufacturing business 💥 . • Limited application of business failure/growth to a niche cake manufacturing business 💥 . 9609/12 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2023 © UCLES 2023 Page 26 of 27 Question Answer Marks 6(b) AO3 Analysis • Fast growth can mean a business loses focus on essential functions and take too many risks – e.g. product diversification • Fast growth can lead to significantly increased demands on employees and especially managers💥 stress, fatigue, burn out • Inferior service may result in lower levels of customer satisfaction as attempt is made to produce more • Output demands may outpace capability • A business might accept new clients without resources to meet the demand • A business might launch a new product with inadequate research and development – not ready for market • A business might expand into unfamiliar/ fragile markets and territories – suffer significant losses • A business might fail to account for and control overhead costs – that increase disproportionately in relation to growth • Too fast growth can result in cash shortages and/or long💥term damage to the brand and customer relations of a business AO4 Evaluation The following examples illustrate how the levels and marks within levels are applied. The annotations are shown in bold. Developed evaluative comments (EVAL L2 3 marks) • Growth that is too quick is likely to undermine the success of any business, particularly if the managers are not skilled enough to see that fast growth places enormous pressure on some aspects of the business, such as cash flow. • Businesses that grow very quickly may assume that profit💥making in the short term means success, but if the quality of the products deteriorates due to unskilled workers the long term viability of the business is not guaranteed and the business might fail as quickly as it grows. • Without effective marketing and quality control and a recognition of the threat of competitive ‘copy💥cats’ a business may be quickly undermined and fail.’ Only developed evaluative comments applied directly to the context of a niche cake manufacturing business can move to EVAL L3 5 marks.