ExpertACCA · Question 47 · Syllabus A: The business organisation and its external environment
Section B (Syllabus A)
Scenario: 'AeroFarms Global' is a commercial vertical farming startup based in the UK. They grow high-yield crops indoors using hydroponics and LED lighting. They are planning to expand into a developing nation that currently relies heavily on traditional outdoor agriculture. The host nation's government is offering tax breaks for tech investments, but local traditional farmers are protesting the entry of AeroFarms, fearing it will destroy their livelihoods. Furthermore, the host nation has a highly volatile currency.
Based on the scenario and your knowledge of the external environment (Syllabus A), select the FOUR correct statements regarding AeroFarms Global's situation.
Section B (Syllabus A)
Scenario: 'AeroFarms Global' is a commercial vertical farming startup based in the UK. They grow high-yield crops indoors using hydroponics and LED lighting. They are planning to expand into a developing nation that currently relies heavily on traditional outdoor agriculture. The host nation's government is offering tax breaks for tech investments, but local traditional farmers are protesting the entry of AeroFarms, fearing it will destroy their livelihoods. Furthermore, the host nation has a highly volatile currency.
Based on the scenario and your knowledge of the external environment (Syllabus A), select the FOUR correct statements regarding AeroFarms Global's situation.
Answer options:
The tax breaks offered by the host government represent a positive Political/Legal factor in a PESTEL analysis.
The local traditional farmers represent a stakeholder group with high interest but potentially low formal power, requiring a 'Keep Informed' or 'Keep Satisfied' strategy depending on their ability to lobby.
The volatile currency of the host nation introduces significant macroeconomic exchange rate risk for AeroFarms Global.
AeroFarms Global's technology acts as a disruptive substitute to the traditional agricultural supply chain in the host nation.
The protests by local farmers represent a purely technological barrier to entry.
AeroFarms Global operates as a public sector organization because it deals with food supply.
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