External environment
8. Give one example of how technology has changed production methods in an industry that you have studied. 9. Give one example of how technology has led to a recently introduced innovative product. 10. Explain one example of how environmental considerations have affected the strategy of a business. 11. Why should a business consider the political situation in a country that it plans to expand into? 12. Explain one problem that a business might experience if it did not account for different ethical standards in the countries it operates in.
Exam practice question STARBUCKS BRINGS ITS CULTURE TO VIETNAM The South-east Asian nation – known for its nerve-jangling strong coffee, often sweetened with condensed milk – has its own deeprooted coffee culture that could prove challenging to Starbucks, the Seattle-based coffee chain. The company launched a flagship two-storey store in Ho Chi Minh City in February. So far sales at the new location are exceeding expectations, according to Starbucks’ Chief Executive and Chairman Howard Schultz.
Starbucks decorated the downtown store with local art and artefacts to create a distinctly Vietnamese flavour. It also came up with a drink, the Asian Dolce Latte, to appeal to local palates. For food, it serves roast-duck wraps and French-style baguettes. But some say the chain could do more. One customer said, ‘Starbucks should use drip filters perched on top of glass mugs, the way the Vietnamese do.’ He added, ‘If Starbucks want to succeed in Vietnam, they have to change the way they serve,’ he said. Starbucks is attracted by rapid economic growth in Vietnam and the low costs of opening and running a coffee outlet. It is a market that has huge potential sales in a country of nearly 90 million people and a desire to buy in to global brands like Starbucks. There are challenges though; the regulatory framework around business start-ups is quite bureaucratic and there is some unease amongst local politicians about the opening of a Starbucks.
20 marks, 40 minutes 1. Define the term ‘economic growth’.
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2. Outline two reasons why Starbucks might be attracted to open outlets in Vietnam.
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3. Analyse two problems Starbucks might face when opening outlets in Vietnam. [4] 4. Evaluate the possible usefulness of a STEEPLE analysis to Starbucks as it tries to enter the Vietnamese market for coffee.
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Key concept question 20 marks, 40 minutes With reference to one or two organisation(s) that you have studied, discuss how increased globalisation and cultural change impacts on business strategy.
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