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A level AQA business essay ' To what extent will a business have lower profits by adopting the Elkington triple bottom line approach' FULL MARKS!!!$10.35
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A level AQA business essay (2017 paper 3 Q23) ' to what extent do you think a business using Elkington triple bottom line to assess its overall performance will have lower profits.' FULL MARKS A* 25/25.
marked by teacher and written this year so marking is accurate and current.
766 words.
To what extent might the greater use of digital technology enable the business to increase market share - FULL MARKS!!
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AQA
Business Subjects
Unit 1 BUSS1 - Planning and Financing a Business
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A business has recently started to use Elkington’s triple bottom line to
assess its overall performance. To what extent do you think the business is
likely to have lower profits as a result of this?
Elkingtons triple bottom line is a model used to measure sustainability. It has a
focus on profit, people and the planet. Performance of these areas are assessed
and reported back to stakeholders.
On one hand Elkington’s triple bottom line model could increase profits, if the
business prioritises profits in the business model (over planet and people) and
places importance on increasing them. For example a business may do this by
implementing added value on some products via marketing – charging higher
prices for some goods than other companies as the company has a positive brand
image and its good are high quality. They may also do this by using a labour
intensive approach over a capital intensive one – this could increase profits by
reducing high start up costs of using machinery and reducing waste as high
quality products are produced.
On the other hand focusing on profits in Elkington’s triple bottom line may
decrease profits as the company could be criticised for adopting a ‘stakeholder
concept’ where shareholders focus on profits and their needs are prioritised.
Hence they may need to balance the importance of the planet and people along
with profits so that spending may be increased on these alternate two areas
decreasing profits.
As stated above Elkington’s Triple bottom line also focuses on the planet. By
adopting this approach the business may actually increase profits as customers
may be more attracted to the brand if its seen to be ‘environmentally friendly;
hence the brand has a good brand image and customers return to the brand
increasing sales revenue. One way which a business may improve the impact on
the planet that they have using Elkington’s triple bottom line as a means of
assessment is by adopting a lean production approach. This means maximising
profits whilst minimising waste during production. By minimising waste fewer
raw materials would be wasted- hence operational costs may decrease along
with costs per unit hence profits may increase by using Elkington’s triple bottom
line.
However by adopting a more ‘lean’ approach the company may actually end up
spending more due to having to produce or source environmentally friendly
goods. This would be costly as a lot of research and development would have to
go into this process if the businesses knowledge on sustainable goods were
limited and other areas of the business such as marketing for example using
environmentally friendly packaging to promote goods would have to be modified
to support the planet – potentially decreasing profits.
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