Due to the increase in imported car sales, Gina Wilson started Eurocars. She hired workers and bought cars to sell. The business expanded steadily, and they soon had many cars at home and in Europe. They started selling more to individuals than dealers due to a higher turnover.
The problems with Eurocars are that manufacturers are slow to provide new cars, and there is a lot of administration work to be done and registration laws in place that make their work hard. They are also forced to use the promotions offered by the manufacturers of the cars they sell.
1. Is the business activity of Eurocars in the primary, secondary or tertiary sector? Explain your answer.
Eurocars’ business activity is in the tertiary sector, they are providing a service. They are not in the primary sector because they do not extract any natural resources, and they are not in the secondary sector as they are not producing or constructing anything, therefore we can deduce they must be in the tertiary sector.
2. Suggest examples of land, labour and capital that might be used by Eurocars.
The only land resource Eurocars uses is the office they work out of. They do not produce anything so they don’t use any natural resources.
The labour used by Eurocars consists of Gina, who started and runs the business, and the people she hired.
The capital used by Eurocars is the cars they buy then sell on. These cars are already manufactured, so they are not included in land.
1. The type of market that Eurocars is operating in.
Eurocars is operating in the consumer goods market, as they are selling durable goods (cars) in large quantities mainly to consumers. However, they were previously also operating in the capital goods market when they sold cars to dealers who would then sell them on again.
2. The types of customer it serves.
Eurocars serves mainly consumers’ wants. They also sell cars to other businesses so they can sell to the same customers.
4. To what extent is Eurocars affected by external factors?
Eurocars is affected by external factors such as the government and the producers of the cars they retail. They are affected by registration laws and other laws which hinder their work. There is also a lot of administration required as the cars have to be bought in Euros while Eurocars is based in Britain. The government, however, also affects them in a positive way, as they changed a law in order to increase competition in the sale of new cars, thus helping Eurocars.
The producers of the cars also affect Eurocars. They are often late in producing a UK-speciification car, and the producers’ promotions are forced onto Eurocars. All these things affect Eurocars to various degrees, while government factors feature heaviest they both help and hinder Eurocars, so it balances out eventually.