IGCSE, A Level Business Student Forum

5. Analyse the disadvantages of specialization for car manufacturer. [6]

Possible Structure:
[KN]
[AN]
[AN+]

[KN]
[AN]
[AN+]

[KN]Dependency on suppliers.
[AN] Specialization in the production of a particular type of car will require specific components/parts and if there is a delay in receiving those parts will lead to a disruption In the production line.
[AN+] Businesses will have to bear extra costs and might face losses if production stays disrupted for a long time.

[KN] Very Niche Market.
[AN] There will be a limited consumer base who would want a special car or who could afford such a car.
[AN+] This can be problematic to businesses if demand for specialized cars falls or a powerful competitor enters the market.

[KN]Limited customer base.
[AN]Specialized car manufacturers are targeting a certain limited customer base(this may be because of people's affordability of cars).Thus this may not be beneficial as small changes in customer base may lead to lower sales.
[AN+]This limits a business's ability to grow as lower revenue will mean no further expansion which may lead to restricted growth.

[KN]High costs of production
[AN]Producing and manufacturing a specialized car is very expensive and a business must be earning well to be able to deal with such costs.Thus manufacturing specialized cars might not be a beneficial business idea.
[AN+]Thus this is not the best path for production for new businesses as such high costs of production from the start may discourage production and the business might fail

[KN]boredom for workers
[AN] repetition the same task daily can cause boredom for the workers
[AN+] which will cause lack of motivation decreasing efficiency
[KN] lack of adaptability
[AN] when workers get specialized in doing one task daily they will have a hard time taking up a new role or responsibility
[AN+] making it difficult to respond to changes in market or customer behavior

[KN] Specific target market
[AN] An specialized car manufacturer means the company is specialized in producing one type of product
[AN+] When there is an small change in demand the company would be slow to respond thus losing on potential customers

[KN] Higher cost of production
[AN] with specialized workers the company has to pay an higher amount to that employ as he is expert in what he does
[AN+] leading up to less market share as the competitors cost of production would be less

[KN] Reduces chances of innovation
[AN] Specialized workers are likely produce standard car parts rather than adding new features to it therefore a car manufacturer may have to train workers or employ new workers
[an] which may lead to high costs.


[kn] Increase boredom
[an] as workers only perform one task, they may get bored and inefficient which can effect the quality of cars adversely
[an] hence low customer satisfaction, poor brand image

[KN] Limited Product Range
[AN] Due to specialization the car manufacturer van only focus on one variety of cars e.g 4 wheeler, sedan or crossovers etc. This results in less customers.
[AN+] Due to this he can lose customers to his competitors and also more risk due to the car manufacturer being focused on a specific market e.g luxury so if it's demand falls the business would face its downfall.
[KN] More exposed to market changes
[AN] Due to smaller consumer base if the demand/market for their specialized vehicle dies they may face financial challenges.
[AN+] As they are operating in a niche market the car manufacturer is dependent on its products so a change in consumer preferences can lead to financial instability.

Maham fatima wrote: ↑Tue Oct 24, 2023 9:58 pm [KN] Reduces chances of innovation
[AN] Specialized workers are likely produce standard car parts rather than adding new features to it therefore a car manufacturer may have to train workers or employ new workers
[an] which may lead to high costs.


[kn] Increase boredom
[an] as workers only perform one task, they may get bored and inefficient which can effect the quality of cars adversely
[an] hence low customer satisfaction, poor brand image

In the second point . The disadvantage you mentioned in the knowledge point can be improved as generally the chance of boredom of workers to happen in specialized car manufacturing industry is less than 20% and it's rare that it results in inefficiency as all the big giants in the car manufacturing industry are specialist's e.g Buggati or Paggani. So I think it would be better to write another point in place of this.

(Kn) limited innovation (an) the manufacturer will almost exclusively focus on one type of car resulting in not being able to respond to changes in taste and fashion(an+) which will result to be a hedge in their competitiveness
(Kn)specialisation not up to mark(an) if the quality of the cars isn’t significant or near it’s competitor’s quality there will be a great loss in competitiveness (an+) further reducing sales and hence revenue since the target audience will j shift to its competitors

[KN]narrow customer base
[AN]leads to less sales as less customer available
[AN+]lead to lower benefits to the business as they could be selling at a higher quantity in a bigger market (lower profits, sir afzal have mercy)

[KN]it also lowers the scope for innovation
[AN] this would hinder their chances of adjusting to a new market
[AN+] this would lose customers and lower revenue results from this

[kn] workers do not multitask, more labour has to be hired for each and every task
[an] increases cost of production
[an+] lower profit margins
[kn] it is likely that no new idea enters the business
[an] reducing competetiveness
[an+]decreased sales

[kn]Competition between the manufacturers increases
[an] the firms will have increased competition as more specialization takes place and the businesses would reduce their prices as compared to their competitors which may make it difficult to set premium prices
[an+]which would make it very easy for businesses to lose competition

[kn] they would have to source their raw materials by specific suppliers
[an] this would disturb the process if deliver of products is late customers may spread a bad word of mouth
[an+] declined sales

5. Analyse the disadvantages of specialization for car manufacturer. [6]

[KN]Lack of productivity in employees
[AN]Due to repetition of the same tasks, employees feel boredom and a lack of motivation
[AN+]Efficiency and productivity are reduced, causing defects in quality of output, further increasing costs, reducing consumer satisfaction and damaging the brand image.

[KN]Small customer base due to demographic target audience.(also depends on customers demand and purchasing power clash with prices)
[AN]as car manufactures mainly focus in production of one area, if demand falls, there is a chance of loss of both existing and potential customers
[AN+]low sales, damage inn brand image and loss of customer satisfaction and loyalty(not sure if this is the right point really..)

[KN] increased Competition
[AN] there is competition from other specialised manufacturers, which can lead to reduction in prices and profitability.
[AN+] This competition can lead losing customers and lower Profits results.

[KN] less range products available
[AN] Due to specialisation the car manufacturer would be making other machines with less quality.
[AN+] thus reducing the output of the firm and can lose customers thus demand falls rapidly

Decrease quality of product or process
When the persons have specialization in their jobs then they think that there is no need to monitor the quality of the product because according to them, they have are expert in their job. This kind of thinking may affect the quality of the product.
therefore causing damage to brand image

Limited skill set
Specialization often means focusing on a specific area or task, which can lead to a narrow skill set. They may struggle to perform tasks outside their area of expertise, which can limit their ability to take on new challenges or roles
therefore this can limit career opportunities and make it difficult to adapt to changes in the job market.