QCAA Business Repositioning a business

Answers could include:

Rationale:

• a joint venture involves two or more businesses pooling resources with the aim of achieving a common goal, while still focusing on their core business. This type of structure is often used to access new markets and to share expertise.

Benefits:

• businesses could share financial risks and resources, reducing the burden on each party
• gaining access of knowledge to local markets, which helps to navigate through cultural and regulatory difficulties
• each partner of a joint venture brings specific skills, assets and expertise to the venture, which should help the business reach goals more efficiently
• collaboration promotes innovation through a combination of the creative and technical capabilities of multiple parties
• combining resources allows for bulk purchasing, shared production facilities, as well as reduced costs. This allows joint ventures to achieve higher economies of scale
• local partners of a joint venture can help navigate complex legal and regulatory environments, ensuring compliance and potentially avoiding delays through penalties.

Answers could include:

Rationale:

• an acquisition occurs when one business takes over another to expand its market share or acquire valuable assets. This strategy allows businesses to grow quickly and establish a presence in new or competitive markets.

Benefits:

• the ability to quickly enter new markets through an already established brand
• the potential for cost savings through economies of scale, as operations can be streamlined which could result in a potential increase in profit
• an acquisition can enable a business to enter new industries or expand its product/service offerings, reducing dependence on a single market
• acquisition of well-known brands can enhance the company's overall reputation and market appeal which could result in increased sales
• by eliminating a competitor or acquiring a complementary business, the company can strengthen its competitive position in the industry
• acquisitions allow businesses to grow much faster by leveraging the established infrastructure, customer base and operational processes of the acquired company
• acquiring a company often includes its experienced workforce, saving time and resources on recruiting and training.

Answers could include:

Product features:

• global brands could adapt product features to meet local consumer needs and cultural preferences
• adapting features ensures products stay competitive and relevant
• products may need to be adapted to local considerations such as environmental or social factors
• local laws, as well as regulations, may mandate changes to product features
• consumers within most markets demand eco-friendly products, forcing most brands to adapt.

Positioning:

• brands might adapt their positioning to align with cultural values
• adapting their position ensures the brand connects with target audiences effectively
• adapting the location can prove vital to feature some affordability or such premium quality under market expectations together with consumer perceptions
• marketing messages can be adapted so they align with linguistic and cultural subtleties, language and communication styles
• businesses can choose to shift positioning to address social issues relevant in certain markets.

Answer(s) could include:

Financial gain:

• An increase in satisfied customers can lead to an increased market share, sales and repeat customers. Innovation can also lead to creating a delay in the decline stage of the product lifecycle resulting in greater profit for Matilda.
• Product innovation occurs if Matilda sources new and/or more products to sell. This may increase interest, sales and, in turn, profit.
• Process innovation occurs if Matilda is able to improve her processes through new technology. She could see productivity gains and better customer satisfaction, resulting in increased financial gain.

Expansion of global market presence:

• Innovation can be a driver of business growth. Therefore, Matilda expanding into the European market will enhance her global market presence.
• Innovation can give Matilda a competitive edge over her foreign competitors.
• Matilda's innovation can lead to her successful expansion into Europe and ensure that she is competitive in global markets through her business being new and different.

Increased market share:

• Innovation can assist with producing more appealing/innovative products and, therefore, increase market share for Matilda when she expands into the European market.
• Innovation can create a competitive advantage. A new product can create a consumer demand for the product, resulting in more products being sold and Matilda's business' market share increasing in the European market.

Answer(s) could include:

Timing:

• Timing can have an impact the success of innovation in terms of how it relates to customer purchasing cycles.
• Matilda has just read an ecommerce report in 2020 stating that European shoppers are spending more time shopping online. This means the timing is right for her to expand to Europe.
• It would be a good idea for Matilda to innovate her product, process and service while online marketplaces in Europe are attracting significant online traffic and high visitor engagement. This should lead to increased sales, thus success at this time is likely to be high and worth her investment in the innovation.

Cost:

• Investment in innovation, whether it is product, process or service, is costly.
• Money needs to be spent on research and development and can be significant. Therefore, it requires appropriate financial resources.
• Matilda has stated that she is willing to invest money into her business operations, so she has the best opportunity to be profitable.
• Matilda has seen a surge in online sales in 2020 and 2021. Therefore, she has income available to spend on innovation.
• If Matilda spends too much money on research and development, and innovation, and does not receive increased sales through the European market, she may be at risk of business failure.
• Matilda's financial investment in innovation may be important to her standing out from competitors in the European market, and be an important contributor to her success.

Answer(s) could include:

• Marketing through social media campaigns – researching and creating social networking sites used in Europe. This will be an easy and cost-effective way for Matilda to expand into the European Market.
• Adopting faster shipping technology. This will be positive for Matilda's business as it will improve customer satisfaction due to timely delivery of orders.
• Implementing safe payment methods – around the world customers are happy and confident utilising payment methods such as PayPal. This will assist Matilda expanding into the European market.
• Applying GPS delivery tracking systems – for both the business and the customer. This ensures the customer is updated via email or SMS, making them confident regarding the delivery of their order.
• Adopting e-commerce procedures. This will enable transfer of monies between currencies and countries instantly.
• Matilda can purchase relevant and reliable hardware and software for the business' needs. She can improve her website capabilities to change the language and/or apply different currencies. This will increase the business' reach to different countries where customers can make purchasing decisions using their own currency.

Answer(s) could include:

Availability of substitutes: Matilda needs to consider:
likelihood that customers will easily switch or use a competitor's product over hers.

• Are there similar products being sold online at a similar price or lower?
• Do the competitors pose a threat to her business' success?
• Are her products new, innovative and of high quality, compared to others on the market?
• Are there better-quality products available?
• Are there products of better value?
• Can she create buyer loyalty in Europe, or will consumers easily change brands?

Bargaining power of buyers: Matilda needs to consider the bargaining power of the buyers in Europe.

• What is the bargaining position of the buyers? Can the customers drive down the price?
• What is the level of quality and service demanded by buyers in Europe?
• What are the buyer numbers in Europe? Europe has a large population, therefore a large number of potential buyers.
• Which countries in Europe will have more buying power? Many parts of Europe have a large middle class, hence the disposable income to purchase Matilda's products.

Advice:
Due to the fact that Matilda is going to be investing in innovation of her product, process and service, the huge population of Europe and the fact that more European shoppers are spending significant time shopping online, there is no reason why she should not trial an entry into the European market. Her product is unique, luxurious and of high quality, thus should negate the issue of availability of substitutes.

The e-commerce report also affirms 'online marketplaces in Europe have attracted significant traffic and seen high visitor engagement that has translated into sales'. Due to the fact that more Europeans are spending time at home and shopping online, it is worth Matilda expanding her business into the European market.

Inputs refer to the resources used to make a business’ goods or services, such as raw materials, equipment or labour. Some inputs at Samaah’s Foodz include the ingredients used to make the savoury foods that are frozen, as well as the freezers used to freeze and store the product. Additionally, the employees employed to stack the frozen savoury food items are an input.

One low risk strategy Sammah’s Foodz could use is communication, which is the transferring of information (about the change to introduce new technology to broaden products and reduce waste) to employees. The communication of this change should openly and honestly outline the reasons and benefits for changing, including to achieve the new goals of broadening products and reducing waste, as well as communicating consequences of not changing. By allowing employees to clearly understand the reasons for change in order to remain competitive, they are more likely to accept the change and thus employee resistance can be overcome.

Sammah’s could minimise waste through the implementation firstly of ‘reduce’, which involves minimising unnecessary resources that do not add value to the final product. By identifying areas of their production process that do not add value, such as excess packaging around their frozen goods, they could begin only purchasing the minimum necessary packaging, thereby reducing that wastage that results when customers throw this material away.

Next, they could utilise ‘reuse’ to identify materials such as packaging that would otherwise be discarded, and use it again. For example, they could develop a system in which customers return the packaging from their products in return for discounts. Sammah’s could then reuse this packaging again and reduce its wastage.

Finally, they could utilise ‘recycle’ by using materials that would otherwise be discarded and transforming them into new products. For example, offcuts from the ingredients they use in their savoury foods could be repurposed into new meals, such as creating a new frozen soup range with the offcut ingredients, thereby recycling them and reducing waste.

One advantage of Porter’s differentiation strategy for Sammah’s Foodz is that it means that they will be able to charge premium prices for their frozen savoury items as their competition don’t have these items. Moreover, another advantage of Porter’s differentiation strategy for Sammah’s Foodz is that they will be able to attract a more loyal customer base whereby customers can only buy those products from them. Therefore, this can lead to an increased number of sales from their loyal customers.

However, one disadvantage of Porter’s differentiation strategy for Sammah’s Foodz as they seek to increase their sales is that it could be expensive to implement a range of products that their competition don’t have and so this could ultimately take away from their ability to focus on actually selling the items of a perceived value. Furthermore, another disadvantage of Porter’s differentiation strategy for Sammah’s Foodz is that it may not be hard for other competing businesses to also introduce the products Sammah’s stocks, which could therefore lead to decreased sales.

Answers could include:

• sustainability aims to meet the needs of the business while seeking to protect and preserve resources and the environment for the future. This includes finding ways to reduce waste and recycling of more resources such as water, energy and paper
• CHF can also measure their carbon footprint and investigate carbon offsets. Sustainable practices can differentiate businesses in the market and be used to promote the CHF in a positive light to build CHF's customer base
• CHF's employees will feel ethical by working in a sustainable business. Sustainable businesses have been shown to improve staff morale and increase staff productivity and reduce absenteeism
• one way that CHF can be more sustainable is for it to be efficient with resources, recycling supplies and reducing waste. CHF can promote the business more through its website and social media and not through other advertising methods such as print material.

Answers could include:

• control of quality may involve quality assurance (QA), quality improvement (QI) and quality control (QC)
• QA refers to a set of activities designed to make sure the development and maintenance process is adequate so that a system can meet its objectives, for example, CHF could use QA to prevent defects throughout the production process
• QI refers to the effort taken to increase efficiency, actions and procedures, with the purpose of achieving additional benefits for the business and its users, for example, CHF could use Total Quality Management (TQM) to improve its production process
• QC refers to the process of checking and reviewing processes at the end to determine if the requirements of the business are being met, for example, it ensures that the final product meets a defined set of quality criteria and meets the requirements of CHF's customers
• maintenance of quality is essential for CHF to maintain its brand. A brand is often associated with a particular level of quality and any lowering of quality or perception of quality would result in a loss of consumer confidence in the brand resulting in a decline in sales and profits.

Answers could include:

Profit ratio:

• shows the percentage of net sales
• in 2022, this was 12% which means for every ＄1 of sales earned, CHF had ＄0.12 profit
• in 2023, this increased to 14%, which means for every ＄1 of sales earned, CHF had ＄0.14 profit
• ratio has improved in 2023 by 2%.

Return on equity ratio:

• measures how much profit a business generates on capital invested
• in 2022, this was 8%. For every ＄1 of sales earned, CHF had invested ＄0.08 from capital
• in 2023, this increased to 11%. For every ＄1 of sales earned, CHF had invested ＄0.11 from capital
• ratio shows a 3% improvement in generating profits.

Expense ratio:

• shows the percentage of sales that is consumed by operating expenses
• in 2022, this was 60%. For every ＄1 of sales earned, CHF consumed ＄0.60 in operating expenses
• in 2023, this decreased to 55%. For every ＄1 of sales earned, CHF consumed ＄0.55 in operating expenses
• this ratio has improved by 5%, showing that CHF has reduced its expenses.

Answers could include:

Customs:

• when conducting business in another country such as Indonesia, CHF will need to consider cultural differences that may be presented
• cultural differences could include basic customs, mannerisms, and gestures. For example, if a salesperson for CHF approaches a meeting with knowledge of a customer's cultural background, then this salesperson's words, body language, and actions can all be adapted to better suit those of the customers in Indonesia
• understanding cultural differences and adapting to these differences will allow CHF to be better-liked by customers in Indonesia. This will enable CHF to grow their customer base, increase their sales and profits, and to operate successfully in Indonesia.

Business etiquette:

• the formality of address is an important consideration when dealing with colleagues and business partners from different countries. CHF can consider if team members in Indonesia prefer titles and surnames or being on a first name basis
• while it can vary across organisations, Asian countries such as Indonesia tend to use formal 'Mr/Ms Surname', while Australians and Americans tend to use first names
• CHF will need to be aware of business etiquette in the countries in which they choose to operate. This will allow CHF to operate successfully in Indonesia.

Answers could include:

Banks:

• offer a variety of deposit, investment and loan accounts to businesses
• the money collected from depositors and money earned from investments is used to fund loans to customers, such as to Tartology Ltd
• banks are presently offering all time low interest rates which Tartology Ltd could take advantage of.

Finance companies:

• provide loans for businesses
• a finance company gains its funding from banks and other financial institutions at a set interest rate and uses these funds to extend credit to customers like Tartology Ltd
• a finance company will earn profit by charging its customers a higher interest rate than what they are paying and may charge loan fees and other administrative charges
• unlike a bank, Tartology Ltd would not need to put up a deposit.

Other sources of external funding:

• Debentures – are issued by a company as a long-term loan to the debenture-holder. Debentures provide a long-term source of finance without the business losing any control. Debenture holders do not have a voting right so Tartology Ltd could raise funds without losing any control of the company.
• Share capital – the funds raised from selling shares in a limited company. This can generate a large sum of finance for the company. This is the main source of finance for limited companies. Should Tartology Ltd raise funds from selling more shares, the company would increase the number of shareholders to whom profits are distributed.
• Venture capital – investment in small to medium-sized businesses that have a strong growth potential, normally at the start of a business idea. The amount borrowed can be paid back over a number of years.

Answers could include:

Ethical practice means a business is operating in accordance with the rules or standards for right conduct or practice.

Minimum standards of labour by the International Labour Organisation (ILO), including the use of child labour:

• the International Labour Organisation is a United Nations agency dealing with labour issues, particularly international labour standards and decent work for all
• in sweatshops workers are paid little for their work, are forced to work unpaid overtime, with no breaks, and are punished for slow work and mistakes. Tartology Ltd must ensure they pay New Zealand workers fair pay
• an ethical approach for global businesses relying on cheap labour working in poor conditions is to collaborate with local unions – if a global business continues to exploit workers to keep its profit margin, it will not maintain long-term success due to a poor public image
• Tartology Ltd should adhere to fair wages, occupational and health regulations for long-term business success.

The role of corporate social responsibility:

• the voluntary commitment of businesses to include in their business (corporate) practices economic, social and environmental considerations which are beyond those required by legislation
• the role of CSR is for Tartology Ltd to achieve its business goals in the context of the broader system in which it operates, thus giving due consideration to the community and environment of a range of stakeholders
• a business that considers ethical and environmental issues relating to its business activity acts morally towards its stakeholders
• Tartology Ltd could create and publish an ethical code of practice
• Tartology Ltd should conduct its business ethically and legally, such as without bribery or corruption
• Tartology Ltd could consider sponsorship and providing donations to causes that target its market.

Environmental sustainability:

• sustainability aims to meet the needs of the business while seeking to protect and preserve resources and the environment for the future. This includes reducing use, waste and recycling of resources such as water, energy and paper.
  Tartology Ltd can manage this by having an e-business arm
• Tartology Ltd can measure its carbon footprint and investigating carbon offsets. Sustainable practices can differentiate businesses in the market and be used to promote the business in a positive light
• employees will feel they are contributing to society by working in a sustainable business. Sustainable businesses have been shown to improve staff morale and increase staff productivity and reduce absenteeism
• Tartology Ltd needs to be efficient with resources, recycling supplies and reducing waste.

Answers could include:

Currency fluctuations:

• the change that occurs in the dollar value of one country’s currency relative to another country’s currency
• currency fluctuations can result in Tartology Ltd losing money and this should not be a smaller risk since ‘the Australian Dollar has been on par with the New Zealand Dollar’
• Tartology Ltd will need to have greater financial/economic understanding of both local and export market financial environments, and the interactions between these two environments.

Non-payment of monies:

• these refer to not being paid for the goods or services supplied to the export market
• this can cause difficulties for Tartology Ltd to recoup monies offshore as opposed to onshore: this could include legal, time, cost, effort and the knowledge to do this
• there is less influence/assistance for institutions such as the ACCC due to jurisdiction, influence; hence greater individual business risk for Tartology Ltd
• there is greater risk in terms of Tartology Ltd having the correct legal documentation to minimise potential financial risk
• there is increased complexity of supply chain; hence Tartology Ltd’s understanding and development of systems to know/record/trace where the monies come from and go to and the point at which monies are owed and by whom.

Answers could include:

Economic activity:

• inflation – if a country is experiencing high inflation, interest rates are likely to increase, which may affect the consumers’ disposable income to purchase a product or service
• consumption patterns and income levels influence pricing and distribution strategies
• completing an environmental scan to scope competitor’s activity in New Zealand, e.g. research competitors’ technology/infrastructure capabilities and strategic directions
• Tartology Ltd should be aware of how many competitors are in the market, its positioning and the basis of its competition and should be aware of the consumption patterns of its target market in New Zealand.

Discretionary spending:

• there would be a need for accurate and timely market research to determine discretionary spending habits and patterns of current and developing global markets; consumer confidence levels
• consumers must have the purchasing power to make a product or service viable
• Tartology Ltd would need to identify where its target markets are with disposable income to afford its products.

Interest rates:

• this may impact spending patterns in global markets and may impact global expansion, for instance in the development of infrastructure
• when businesses have access to finance with lower interest rates in other countries, they are able to more easily manage their repayments/reduce their costs
• Tartology Ltd can increase its level of investment as ‘interest rates are at an all-time low’ enabling it to finance operations/global expansion.

Currency fluctuations:

• the change that occurs in the dollar value of one currency relative to another country’s currency – a country’s currency is an indicator of the strength of the country’s economy
• transactions in foreign currencies are affected by variations
• can have an impact on the product and/or distribution costs to consumers in the New Zealand market. This can tend to have greater impact on chocolate tarts, especially if these are deemed to be luxuries
• the probability of currency fluctuations in the short-term have been researched ‘the Australian Dollar has been relatively on par with the New Zealand Dollar’ and this should result in very little impact for Tartology Ltd.

A government business enterprise is owned by the government, acting as a source of government revenue. Thus, the government business enterprise, such as Australia Post, main objective is maximising profits in order to generate revenues collected by the government.

One entitlement issue for a redundant employee is to receive a redundancy package. This refers to a sum of money paid to redundant employees typically based on years of service to FilmsAU. Redundancy packages are a legal requirement and can also be used to encourage voluntary redundancy in certain situations. Another entitlement issue is to receive accrued wages are owed as a result of work that has been completed prior to the day on which the employee becomes redundant. This will be part of the broader process of finalising the payments owing to the employee that will also include unpaid long service leave and unused annual leave.

The human resources manager could employ a persuasive management style when making the decision on who is to become redundant and communicating with them. This is appropriate because this is where the manager would try to provide additional information to those filmmaker employees as to why they have been made redundant, in order to ‘sell’ the decision to them. This may help lead to better understanding within the redundant filmmakers, and could lower any resentment that they may have during the period when they lose their job. As this features the use of centralised decision making it means that the human resources manager is directly responsible for making the decision as to who becomes redundant, as it may be inappropriate for employees to provide input as to who should lose their jobs as a result of their positions no longer existing. Moreover, it sees the usage for one-way communication / top down communication, meaning that those employees who have been made redundant are not allowed to have input or question the decision, which makes decision making faster for the human resources manager, potentially saving them time when deciding who should be made redundant if no input is given, so that they can start expanding overseas faster.

Therefore, a persuasive management style is appropriate, as through the use of centralised decision making and one way communication they are able to make decisions on who is to become redundant quickly and directly communicate to the filmmakers losing their jobs and becoming redundant, without wasted time.

Answer(s) could include:

Acquisitions:

• This is where one business buys another to expand into new or greater markets. This is used as a growth strategy as it can create a bigger, more competitive and cost-efficient organisation.
• Two businesses together are more valuable than they are apart, combining skills, expertise, technology, capital and market share.

Mergers:

• Merging with a foreign business can help gain access to overseas markets.
• Asset sales may be carried out if there are double ups in equipment, buildings, vehicles and other assets.
• This should lead to overall cost reductions and increased profits.

Joint ventures:

• This allows both businesses to develop a new project while still focusing on their core business.
• Joint ventures allow for the sharing of business costs, target market and customer bases that are already established individually by each business.

Answer(s) could include:

• A business with an established brand name may already have a loyal customer base, reputation and presence within the market.
• Training, equipment and expertise is provided.
• Significant economies of scale and potential global advantages in large-scale advertising are possible

Answer(s) could include:

• It is cost effective and more efficient by using a specialist in the nominated field to be outsourced.
• A business can focus on its core competencies by outsourcing activities that are not core to the functions of the business.
• Costs could be reduced, such as labour costs
• Outsourcing might give a business access to technologies and developments in which it may not have the expertise in producing quality output.

Decision making is the skill of having a goal or objective and making a selection from a range of alternatives to try and achieve that goal. Sam has used this by recognising that costs could have increased due to wages or salaries for her instructors, thus she had to make the decision to change the roster and reduce the number of hours of work for most instructors. As a persuasive manager, Sam would have used a centralised decision-making process.

One dispute resolution process that Perfecto Pilates may use to resolve the dispute at the pilates and yoga studio is arbitration. This is a dispute resolution process which involves an independent third party such as the Fair Work Commission hearing the arguments of the disputing parties and making a legally binding decision. The employees and the managers would each have an opportunity to speak about the impact of changing the rosters in a way that reduces overall working hours for staff. Arbitration is a more formal dispute resolution process which often takes place in a court-like setting with the aim of providing a final decision at Perfecto Pilates to resolve the dispute that is currently occurring.

To improve the corporate culture, the manager at Perfecto Pilates could change from using a persuasive management style to using a consultative management style. Shifting from one-way communication would help staff to voice their concerns to Sam directly before decisions are made, helping to avoid lengthy disputes and building a culture of openness and honesty. Moreover, this would help staff to feel more valued so instead of being resentful, interactions would be more positive and inclusive, helping to build a culture that values trust and social relationships at Perfecto Pilates. The consultative management style's centralised decision making would still allow Sam to retain authority while enhancing the quality of the decisions that are made, helping to build an innovative and positive culture.

Corporate social responsibility (CSR) refers to a business' commitment to going above and beyond their legal obligations to address social, environmental and economic concerns.

It is important to consider elements of CSR when implementing change as, for instance, Sam communicating the change to employees allows them to feel recognised by management and, despite the dispute, this could still ensure that employees have a greater understanding of the need for the new roster. This might increase their motivation and support for the change. Additionally, without considering CSR elements such as the local employment concerns of the general community by decreasing hours of work, businesses such as Perfecto Pilates will have a negative reputation. This could mean that the change fails or is viewed in a negative way.

Conversely, by demonstrating CSR considerations when implementing change, the change is more likely to succeed as key stakeholders will believe that their views have been considered. Therefore, CSR considerations are important when implementing change as they help to determine the way in which the change will be perceived.

Eshan’s breads could use Just In Time, which involves the right number of inputs arriving just as they’re needed for production. By ensuring their ingredients to make bread like flour, oil and sugar only arrive as they’re needed for production, this can reduce the amount of ingredients in Eshan’s inventory that may spoil and become unusable, thus reducing wasted inputs and the costs associated with this wastage, which is an optimal use of resources, improving efficiency of inputs at Eshan’s Breads.

An automated production line (APL) refers to a process where raw materials enter and finished products leave with little to no human intervention. This can reduce the time and labour resources used as the APL will quickly transfer the bread through the entire production process without requiring manual handling or manual mixing of ingredients etc., which optimises resource use and reduces inputs required to produce their bread, thus improving efficient management of its processes. Furthermore, this will allow them to reduce wastage (as an APL is often very accurate) in the form of low-quality bread, cracked eggshells and improve the quality of their product, meeting customer expectations, reducing level of wastage and increasing sales of their bread, thus meeting its objectives and therefore improving effectiveness.

One quality management strategy that could be used to improve effective management of outputs (the produced good/service being bread) is quality control. As quality control refers to the evaluation and checking of bread by highly trained quality control teams, this will ensure that Eshan’s Breads are able to produce crisp and fresh bread as desired in their business objectives. Through inspection and removing the sub-standard bread before reaching the supermarkets, restaurants and catering businesses, Eshan’s breads are able to achieve their objectives of increasing customer satisfaction through removing faulty or undesirable bread. This will ensure that Esha’s Breads is able to maintain a good quality reputation and this leading to an increase in sales, revenue to achieve business objectives of profit (expense deducted from revenue) where quality is under constant surveillance.

Answers could include:

Discretionary spending:

• an increase in discretionary spending benefits SNO's business operations as clients are willing to spend more money with them
• Australian clients will be willing to spend more on an international holiday especially as young travellers who probably have to save significantly in the lead up to their trip
• given the situation with a strong AUD compared to JPY, Australians travelling in Japan have increased discretionary spending for activities including affordable skiing, visiting many cities and experiencing the local culture
• SNO's clients will have an increased budget for travel in Japan and they will be able to engage with luxury experiences as a result.

Currency fluctuations:

• SNO's business operations will be influenced by currency fluctuations as changes in currency values can impact on their overall business
• fluctuating exchange rates can decrease SNO Tours' competitiveness in the global marketplace. A strong domestic currency can make a company's products more expensive abroad, while a weak currency can make competitors' goods cheaper in the domestic market. They have identified that this can be used to their advantage in Japan in the current market conditions
• the current strong AUD compared to the JPY will benefit SNO as it will be less costly for them to operate in Japan, whereas if the currency fluctuates and the JPY strengthens it may become more costly for SNO.

Answers could include:

Corporate social responsibility (CSR):

• can invest in local communities, create jobs and provide economic benefits through tourism. This could mean supporting local artisans, farmers and businesses
• can promote respect for local cultures, traditions and heritage by educating travellers about the significance of local customs, landmarks and wildlife, as well as support projects that preserve cultural sites
• could use sponsorships and donations to support local community events to enhance their business brand image
• could fund conservation projects or support local charities to foster goodwill in the community to increase brand image.

Environmental sustainability:

• can invest in carbon offset programs or adopt renewable energy sources to minimise their carbon emissions. For instance, airlines are working on improving fuel efficiency and exploring sustainable aviation fuels (SAF)
• can adopt sustainable practices in areas such as waste reduction, water conservation and energy efficiency in hotel management. For example, using energy-efficient lighting, choosing accommodation for clients that offer water-saving systems and providing all information for clients online
• could promote responsible tourism and eco-friendly destinations by encouraging customers to visit less crowded, nature-preserving destinations and provide information on how to travel responsibly. They can also partner with cities in Japan that are committed to preserving local ecosystems and wildlife
• could educate clients about the environmental and social impacts of their travel choices. This could include offering eco-friendly travel options, providing tips on reducing carbon footprints and promoting responsible tourism through marketing campaigns.

Answers could include:

Internal source of funding:
Retained profit

• Retained profit is an internal source derived from business activities. SNO Tours has retained earnings that can be reinvested in the business in order for them to grow. This could be a long-term funding plan.

External sources of funding:
Financial institutions

• SNO Tours could seek funding from a bank or finance company willing to lend them money in the short term. This is more likely to have a short-term gain but might incur higher fees and charges.

Venture capital

• SNO Tours could seek funding from a venture capitalist to privately invest in their business. This would be a long term investment plan and would require performance measures and markers. The money would be repaid based on agreed terms.

Secured loans

• A secured loan requires collateral to be secured as a condition of a loan. SNO Tours would be liable to have their assets repossessed if they were unable to meet the conditions of the loan.

Government

• SNO Tours could investigate government loans or grants available to their company. The application process and receipt of funds could be a lengthy process.

Share capital

• SNO Tours could issue shares to private investors to raise funds for their global expansion; however, this option is not available to the public.

Recommendation

• Refers to one of the sources of funding described and states a valid reason for its choice.
  Accept other relevant answer.

Answers could include:

Stability of foreign governments:

• a lack of political stability in Japan would affect SNO Tours business operations. Unstable countries may experience riots, protests, looting and general disorder, which will disrupt business operations, whereas countries with a more stable government will be more attractive for SNO Tours' business operations
• the Japanese government is politically stable making it a safe and stable country to travel to, they have a strong rule of law, a reliable legal system and a well-functioning market economy
• SNO Tours should assess how stable the Japanese government is; for example, know what type of government the country has, how the business may be impacted by changes in the government and also the legal environment within that country.

Relationship of foreign governments with the Australian government:

• the diplomatic and economic relationship of Australia and Japan will impact on SNO Tours' business operations. It is to the company's advantage that the two countries have shared democratic values, a focus on regional security and common economic interests
• both countries are partners in organisations like the Asia-Pacific Economic Cooperation (APEC), the Trans-Pacific Partnership (TPP) and the United Nations this strengthens their strategic ties beyond just economics
• if the relationship becomes strained or issues come to light, SNO Tours should have an exit strategy for the company's retreat from Japan.

In operations management, quality refers to achieving a standard of excellence in a finished good or service that is provided or delivered to an end customer, e.g. at Surf ‘n Stuff they want to improve the quality in the standard of excellence of their finished product of swimwear by reducing defective outputs. Less defective outputs improves quality as more outputs achieve a standard of excellence.

Effectiveness refers to meeting goals and objectives whereas efficiency refers to the best use of resources. Operations management is the business of producing desired goods and services to satisfy customer needs so effectiveness can refer to set objectives in sales/quality, whereas efficiency refers to elements such as reducing waste or increasing productivity. On the other hand, the two terms are similar in that they can both be used to frame business objectives. For example, a business might set the objective of improving efficiency by 5%, and they can also set an objective of improving effectiveness by reducing wastage by 3%.

Computer aided design is the use of technology by a firm to create and design products which may be then made. At Surf n’ Stuff they would be able to use computer aided design to create different swimwear products and new surfboard shapes using technology. This would be able to design boards with correct sizing and volume. Such as it may be able to create a longboard with the height of 9,2 and the correct volume and dimensions all through the use of technology. This then allows them to see whether this board will look good and whether it needs to be produced Rather than simply producing it and then realising it is not a good product which would be extremely inefficient. Instead using computer aided design will benefit Surf n’ Stuff even potentially allowing for individual customer orders to be created online. Which they can then show to customers what their board will look like to ensure the utmost level of satisfaction. As efficiency is the ability to increase outputs with the same or less inputs. The use of computer aided design will reduce inputs in the production process as less is wasted due to being able to pre check designs online rather than producing them and hoping they are up to standard. This then lowers inputs and can even save time for the same amount of outputs. Thus, increasing their efficiency as a result.

Surf ‘n Stuff could use the principle personal mastery to create a positive culture for change because it’s where an individual (employee) is committed to self-improvement and becomes a lifelong learner. For example, workers at Surf ‘n Stuff could take additional training to develop their skills and knowledge regarding the sale of surfing equipment. This may lead to employees feeling more confident in their abilities and skills at Surf n’ Stuff. Thus, creating a positive culture to change, as the employees will be more open and accepting of change (e.g. new product lines) if they feel as though they are equipped to deal with it.

Surf ‘n Stuff can also use the principle systems thinking as it involves evaluating the performance of a business as a whole, and as a part of the wider environment, rather than as separate units. This may lead to integrating different parts of Surf ‘n Stuff such as operations finance, human resources etc. together. Thus, creating a positive for change as elements at Surf ‘n Stuff will be working together and supporting each other to improve whole business performance, making them more accepting of change as they are all working together.

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Outsourcing: is the business practice of hiring an outside organisation to perform services or create goods that were traditionally performed by the business's own employees and staff.
Benefits of outsourcing:

• cost effective and more efficient by using a specialist in the nominated field to be outsourced
• allows the business to focus on their core competencies
• lowering costs
• avoid costly investments
• improve customer focus
• able to take advantage of lower pay and conditions in other countries.

Acquisition: when one organisation purchases most or all another organisation’s shares to gain control of that organisation.
Benefits of an acquisition:

• increased customer base that could result in greater market share for the business
• increased financial benefits
• reduced research and development costs
• reduced competition, economies of scale, greater efficiencies, and the potential for increased profits.

Joint Venture: business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.
Benefits of a Joint venture:

• takes advantage of local knowledge of the market or labour expertise
• there could be savings in costs and time with a business that is already established in the market
• increased expertise amongst staff which may generate business ideas.

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Documentation

• documentation can be used to manage risk. Documentary letter of credit and documents against payments can be used to protect against payment default by importers/customers
• documentary letters of credit act as a guarantee from a bank that the payment will be paid in full
• documents against payment occur when an exporter uses their bank to send a bill and any documents that will allow the buyer to collect the goods to the customers bank.

Insurance

• provides protection against risk to exporters selling their products on credit
• types of insurance include export credit insurance, political risks insurance, transit or shipping insurance
• Insurance can prepare for possible bad debts, insure against non-payments and loss or damage to goods or mitigate unexpected losses.

Hedging

• a method used to reduce losses from exchange rate variations
• entails a business making an investment which makes a return that can be used to offset any losses from another investment
• two forms of hedging are forwards and options
• forwards are when the exporter and the customer sign a contract that sets an exchange rate for the transaction. When a payment is made the agreed exchange rate will apply
• options are when an exchange rate is set which can be used instead of the current exchange rate at the time of payment. If the exchange rate is better for the business, it can be used in the transaction instead of the agreed rate.

One way Allygant Attire could improve its corporate social responsibility within its operations management system is through ensuring that it ensures the environmental sustainability of its inputs. This means that the business should ensure that the formal wear it procures to complete its hiring service is produced in a manner that does not harm the environment, such as through the use of sustainable materials – rather than plastics and poly-synthetic materials that could instead harm the environment. And so, this could be improved through ensuring that Allygant properly inspects its suppliers, so as to ensure that their production of formal wear is done in an ethical and environmentally sustainable manner – and if it is not, then Allygant could then change its supplier to one that does abide by such practices.

One restraining force for Allygant Attire in relation to developing their website to enable online services is employees. This is because the development of their website will involve closing six of its stores, which will require many staff to be made redundant. Therefore, employees will resist this change as it could negatively impact both their job and financial security.

Furthermore, another restraining force for Allygant Attire is financial considerations. This is because the development of their website will require the business to advertise their online services, which has already seen them spend a large amount of money. As net profit is key to a business’s survival, a large expensive like this could hinder Allygant’s ability to make a profit, therefore possibly discouraging this change.

Lewin’s Three-step Change Model provides a scaffold to employees to use when implementing a change to unfreeze, change and refreeze. This allows managers at Allygant Attire clear steps to follow which may facilitate the significant changes to be implemented. For example, managers will understand that they will just have to unfreeze, explaining to employees why the closure of stores is necessary to ensuring business success in online spaces. Another benefit of using the Three-step Change Model is that it ensures a change can be embedded within the culture, policies and activities of a business into the future. This means that once the website is developed, Allygant Attire does not revert to focusing on the shops found at shopping centres but continues to review the online website to ensure it can be successful and remain in the business into the long-term.

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Financial gain:

• innovation could allow Fizzology to charge premium prices to their unique, new drinks like the business' kombucha and fizzy flavoured teas. This will allow Fizzology to increase profit margins
• Fizzology could enjoy higher revenue growth if the business offered low-sugar and organic drinks. These drinks could attract health-conscious consumers and increase the business' overall sales revenue
• if Fizzology uses innovative manufacturing technologies (such as energy-efficient machinery), this could reduce costs and improve the speed of production. This would allow the business to streamline its production process and reduce operational costs, allowing higher profits to be earned.

Expansion of global market presence:

• innovation allows Fizzology to differentiate itself, creating a competitive advantage in the Australian and global market by offering unique, healthier drinks and eco-friendly packaging that meet current consumer trends and tastes. Fizzology can do this by offering their kombucha range, fizzy flavoured tea drinks and reducing sugar in their popular Fizzology flavoured drinks
• with many new products tailored to global consumer trends and tastes, Fizzology could expand its reach. Fizzology could also appeal to international customers across the globe more effectively
• brand image plus loyal clients may come from Fizzology striving to be ecologically mindful in processes and packaging. By launching items that reflect wants from consumers for health plus sustainability, Fizzology may get global praise for its sustainability, quality and uniqueness.

Increased market share:

• innovation can attract new customers, build brand loyalty and help the business compete against established global brands. Introducing low-sugar, organic drinks caters to health-conscious consumers, providing a distinct market edge with the potential to increase profit
• innovation can help Fizzology tap into new markets as well as a new customer base that prioritises sustainability, health and special product offerings. For example, launching certain kombucha drinks can attract younger, more eco-conscious consumers valuing ecological responsibility.

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Step 1: Create urgency/create a sense of urgency – create a sense of urgency by convincing team members of the need to act immediately by demonstrating the potential risks. There needs to be a compelling case for change, so people understand why change is necessary. Fizzology needs to:

• communicate the risks of not adapting its product range. If it does not adapt its product to be healthier or show environmental consciousness in its packaging and processes, it may lose market share and fall behind competitors
• highlight the growing consumer demand for healthier and sustainable products, motivating resistant team members to recognise the necessity for change
• collate research and data on consumer trends and behaviour and link it to sales results directly impacting the success of Fizzology
• build support for the new initiatives so that the sense of urgency is shared – so much so that the team members would no longer be happy with the current state of the business.

Step 4: Communicate the vision/enlist a volunteer army – share the vision throughout the business, clearly and consistently by using multiple channels to build understanding and support for the vision. Fizzology needs to:

• win the hearts and minds of its team members in order to get everyone on board with the new vision; a business that creates drinks that are healthy and upholds environmental and sustainable processes and practices
• communicate the vision and strategy clearly to all levels of senior and middle management through staff meetings and email updates
• provide training and information sessions on the new products, so that team members have a shared understanding about the benefits of the new product range
• use clear and consistent messaging to address concerns about job security and emphasise how the innovation will benefit employees and Fizzology's future success as a business.

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Timing:

• timing for product development is important in order to align with consumer trends and tastes. If Fizzology can launch new products that meet current market tastes for more healthy and eco-friendly beverages, it might catch consumer interest and build brand loyalty with speed. However, if Fizzology launches products too early or late, it risks missing chances. That leads to poor sales and missed opportunity
• if Fizzology does not adapt to the current trends and the tastes it may risk other competitors establishing themselves with similar products. However, rushing such process could lead to poorly developed products that fail to meet consumer expectations as well as tastes
• launching products ahead of competitors can give the advantage of being into the market first, allowing Fizzology to establish brand leadership into niche segments such as kombucha and fizzy tea drinks. However, if it delays entry to the market, established competitors might already have caught an important share of the market, making it difficult for it to compete
• timing can be impacted by government regulations and industry standards. Investing in research and development at such a time can position Fizzology ahead of compliance requirements as well as improve their sustainability credentials.

Costs:

• innovation requires substantial upfront investment, including hiring experts, acquiring technology and conducting trials
• high costs could then strain Fizzology's financial resources plus impact on profitability in the short term
• the total costs of innovation can be huge; businesses need to invest in research, prototype development, testing, and also the actual creation of new production processes. In the event Fizzology does not allocate enough budget or needs to then cut the research and the development spending due to financial constraints, the quality of innovation could possibly suffer, resulting in underdeveloped products that may fail among consumers
• innovation investments take time to gain returns financially. Fizzology may need to stop if costs are too high across a longer time frame, leading to lost opportunities. It can also damage Fizzology's reputation
• introducing newer products will usually require investment in new machinery, training for staff, as well as sourcing sustainable materials for these products
• financial forecasting and cost analysis are key to ensure the innovation and the production remains profitable for the business. If Fizzology can effectively increase production and purchase resources in bulk, the business' overall cost per unit decreases, contributing to higher profit margins.

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Threat of new entrants:

• this force looks at how easily new entrants can go into the market and disrupt existing businesses
• high barriers to entry, including high capital needs or strict rules, can reduce the threat, while minimal barriers can add to threats
• new competitors that enter into the market can increase the competition, driving the prices down and reducing the market share. Several barriers such as economies of scale and strong brand loyalty can help Fizzology overcome that threat
• existing big brands may deter other new entrants to the market
• new entrants that offer similar ecologically friendly and health-conscious products could now limit Fizzology's ability for establishing itself on a global scale
• Fizzology could focus on markets that have high entry barriers. Such markets have strict regulations and also important start-up costs; their new kombucha and fizzy tea products can give Fizzology a competitive edge over new entrants that are less resourceful.

Bargaining power of buyers:

• this force is to do with the influence in which customers hold over any business
• it can also relate to the number of buyers, switching costs, purchasing size and price sensitivity
• buyers gain power when they have lots of options or when switching costs are minimal, allowing buyers to demand reduced prices or superior-quality products
• consumers and retailers have increased bargaining power due to access to multiple alternatives, especially in the soft drink industry. Buyers may demand lower prices or higher quality, forcing Fizzology to continually innovate and maintain competitive pricing
• to reduce buyer power, Fizzology should emphasise the uniqueness of its kombucha and fizzy tea flavoured drinks and promote its environmental and sustainable processes through its marketing campaigns. This will improve its chance of successful expansion.

Rivalry among competitors:

• this force examines the amount and strength of competition within the industry
• high rivalry results from factors like numerous competitors, industry growth or similarity of products offered in the market
• established global brands with significant resources can intensify competition through competitive pricing, extensive marketing and product innovation. This would be prevalent in the soft drink industry with high profile brands
• Fizzology may need to allocate substantial resources to marketing and research and development to maintain relevance
• Fizzology should focus on countries where the market for sustainable and low-sugar drinks is underserved and differentiate its brand by continuously innovating and responding quickly to changing consumer trends and tastes if they are to expand successfully.

Recommendation:

• while the global market presents challenges, such as big soft drink brands being highly competitive, the rising demand for health-conscious and environmentally-sustainable products aligns with Fizzology's new focus
• expansion is feasible if the company targets countries where its unique kombucha and fizzy tea flavoured drinks can differentiate it from its competitors
• it could be argued that with high profile brands with huge resources it may not be feasible to expand globally and that Fizzology should focus on being successful in the Australian market.

A public listed company is an incorporated business with many shareholders that is listed on the Australian Securities Exchange (ASX). The owners of Blue Berry Juice may wish to change from a partnership to a public listed company to pay company tax on revenue, which is usually taxed at a lower rate than personal income tax, which is what revenues for partnerships are taxed on, thus, to maximise Blue Berry Juice’s profits. Another advantage is Blue Berry Juice may receive increased funding from the Australian public purchasing company shares, which was impossible as a partnership. Hence, Blue Berry Juice could raise more money to facilitate the business’s expansion into overseas markets. Another advantage is public listed companies are incorporated with limited liability, meaning the owners of Blue Berry Juice are not personally responsible for all business debts, which is not the case for partnerships, hence benefits the owners.

Porter’s differentiation strategy involves Blue Berry Juice offering a unique service or product feature, that is of perceived value to customers, and thus they are able to charge higher prices for it. For example, Blue Berry Juice could offer healthy fruit juices that have unique flavours that other competitors don’t sell, such as ‘Boost Juice’. This would not [be] available at other competitors. Because they are able to charge premium prices, this can increase Blue Berry Juice’s revenue, and thus their profit. This ultimately gives them more money to pay their shareholders (owners) regular sums of money in the form of dividends, which can also increase the value of the shares over time in capital gain due to increased popularity, meeting their shareholders expectations.