SCSA Business Management and Enterprise Management

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.

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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.

Answers could include:

• innovation can change and improve how a business operates and/or manufactures, distributes and markets its products
• can occur when businesses change current processes involving the way they produce or deliver a product
• product innovation can also occur when businesses adopt new ways of producing, for example, using automation instead of hiring people
• innovation in a business's process can increase its efficiency and reduce costs of production, thereby increasing profit levels.

Answers could include:

• innovation can drive business growth and allow domestic businesses to expand into overseas markets, enhancing global market presence
• innovation can give businesses a competitive edge and ensure that they are visible in global markets as they offer new and different products/practices
• innovation can lead to a business's success in global markets when it engages with more technologies, for example to enhance its website/app to ensure a smooth online experience for its customers
• innovation may allow a business to use more technologically advanced methods for e-commerce, distribution/supply change, packaging and payment systems thereby allowing it to have an increased presence in global markets.

Answers could include:

• the way a business manages technology can impact the success of innovation. Management with a strategic outlook and relevant expertise may be able to engage with the innovation process better and ensure its success
• technological development may lead to disruptive innovation and, therefore, create a whole new market and disrupt the leaders in the existing markets
• technological discoveries or inventions may allow a business to do something they could not do before and give them the platform to change their business. The advancement of the internet allows businesses to sell their products online and digitise their distribution process.

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.

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• 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

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• 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.

Answers could include:

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.

Answers could include:

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.

Answers could include:

Currency fluctuations:

• currency fluctuations refer to changes that occur in the dollar value of one currency relative to another country's currency
• this is a source of financial risk as it puts the exporter at risk of losing money with changes to the dollar value
• currency fluctuations are influenced by economic factors, political and legal factors.

Non-payment of monies:

• non-payment of monies refer to when one party fails to fulfil their end of the agreed conditions of trade
• this is a source of financial risk as it puts the exporter at risk of supplying the goods and failing to be paid
• exporters might face challenges in enforcing payment through legal means if there are unfavourable laws or difficulty in accessing local legal systems in the buyer's country.

Answers could include:

Hedging:

• is used to minimise financial risk from exchange rate variations. It entails a business making an investment which makes a return that can be used to offset any losses from another investment
• forward hedging uses forward contracts between a buyer and seller to lock in a price or exchange rate for a future transaction
• option hedging is when an exchange rate is set which can be used instead of the current exchange rate at the time of payment. The exchange rate that is better for business can then be used.

Insurance:

• provides protection against risk for exporters selling their product to overseas markets
• can protect against bad debts, non-payment of monies and lost or damaged goods, for example, shipping insurance
• can assist exporters with ensuring smoother transactions and reducing any potential legal risks.

Answers could include:

• the International Labour Organisation (ILO) is a United Nations' agency dealing with labour issues, particularly international labour standards and decent work for all workers
• in sweatshops, workers are paid little for their work, are forced to work unpaid overtime with no breaks, and are punished for any mistakes or for working slowly. Woodyz and Beards R Us must ensure that they pay their workers fair pay
• Woodyz and Beards R Us should adhere to fair wages, and occupational and health regulations for their workers in order to ensure long-term business success and to maintain a good public image
• the ILO understands that children may have to work and Woodyz and Beards R Us need to ensure strict standards and prevent the exploitation of children
• Woodyz and Beards R Us need to be aware of the ILO's Minimum Age Convention which states that 13 to 15-year-olds should only engage in light work around their schooling; 15 years is the minimum age for work; 18 years is the minimum age for any hazardous work.

Answers could include:

Venture capital:

• this involves 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.

Secured loans:

• this type of finance is obtained from a bank or other financial intermediary that can be for short-term or long-term
• interest charges can be fixed or variable on the loan. The amount borrowed is paid back over a nominated period of time.

Financial institutions:

• these include banks, finance companies, merchant banks, life insurance companies and general insurance companies
• financial institutions provide various short-term and long-term loan options for Woodyz and Beards R Us.

Government:

• can offer financial support to businesses or industries by providing government grants
• the one-off payment to businesses is beneficial as they do not need to be repaid.

Answers could include:

Discretionary spending:

• Woodyz and Beards R Us would need to do accurate and timely market research to determine discretionary spending habits and patterns of current and developing global markets
• Woodyz and Beards R Us would need to determine consumer confidence levels in the new market to see if consumers would purchase Woodyz and Beards R Us products if brought to this market
• Woodyz and Beards R Us would need to identify where its target markets are where consumers have sufficient disposable income to afford its products when these are brought to the market.

Interest rates:

• these may have an impact on spending patterns in global markets and may impact global expansion, especially when it comes to 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 and reduce their costs
• Woodyz and Beards R Us can increase its level of investment but must be cautious if interest rates rise to enable it to manage its financial operations and global expansion.

Answers could include:

Merger:

Rationale: A merger occurs when two businesses combine to become one merged business with the view to gaining an operational or financial advantage.

Benefits:

• there is potential to still maintain some control of each of Woodyz and Beards R Us businesses while being more financially stable and with greater support
• there are increased financial benefits through better access to marketing which has the potential for increased profits
• there could be a potential to lower costs and increased profits, if both Woodyz and Beards R Us reduce their individual or combine their marketing and other operational costs
• Woodyz and Beards R Us could produce more products and in a greater variety, thus increasing their market share
• Woodyz and Beards R Us may enjoy greater efficiencies as they have access to shared facilities, resources and knowledge from both teams.

Joint venture:

Rationale: A joint venture would allow both businesses to develop a new project while still focusing on their individual core businesses.

Benefits:

• allows for the sharing of business' costs which allow Woodyz and Beards R Us to earn higher profits
• will enable Woodyz and Beards R Us access to a larger target market and customer bases which have already been established by each individual business
• this is an effective strategy because it does not change the existing businesses and can reduce the impact and demands on Woodyz and Beards R Us
• joint venture management can focus on the project instead of existing management taking on additional challenges or responsibilities
• once a project ends, the joint venture can be wound down and assets distributed according to joint venture ownership.

Answers could include:

Currency fluctuations:

• refers to changes in the exchange rate of a currency relative to another currency; these fluctuations can result in an exporter losing money
• exchange rates are determined by the supply and demand of a currency in the foreign exchange market
• factors that influence the supply and demand of a currency include a country's economic and political conditions, interest rates, inflation and market expectations.

Non-payment of monies:

• refers to a situation where one party fails to fulfil its obligation to pay money to another party
• can have significant financial consequences for the party owed money, especially if they rely on the payment to meet their own financial obligations
• to avoid non-payment, it is important to establish clear payment terms and conditions upfront, including deadlines, methods of payment, and consequences for non-payment.

Answers could include:

E-commerce:

• involves the use of websites where potential customers can view and purchase inventory
• allows a domestic business to enter global markets without having a physical presence in a target country
• the growth of e-commerce and the use of mobile devices have enabled better communication between staff, customers and suppliers around the world.
  Examples:
• customers can customise a business's website with a chosen currency and language to enhance their shopping experience
• businesses can use social media to sell their products online, allowing them to access a global market.

Distribution of products:

• technology can be used to communicate directly with customers globally through email and websites
• technology can be used to help track inventory and automate distribution in global markets
• technology in transportation will aid the transfer of products from domestic to international markets.
  Examples:
• GPS technology can be used to track data in real-time, making tracking faster and more efficient
• increased access to data and collaboration in supply chains using technology such as Zoom or Teams to assist.

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.

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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.

Answers could include:

• EduOz.com should have a presence amongst the main social media platforms like Facebook, Instagram, LinkedIn. The most common way companies do this is by creating a short video about the benefits of the product which pops up in people's feeds. At the end of the video, there would be a button where a prospective customer can click to find out more and proceed to provide contact details (phone or email).
• LinkedIn would be another very suitable, place where EduOz.com can create a campaign. LinkedIn also has a 'learning' section on its user interface. Perhaps EduOz may want to provide a free sample of an online topic for users to try. EduOz.com may also want to sponsor a popular podcast also.

Answers could include:

Product features (standardisation)

• English as a language has a global functionality. It is the most common language used in business, so it may make sense to standardise its course which would then negate the cost of making alternative versions in different languages.
• As business environments (political, economic, social, technological) change, online courses may also need to be updated. Therefore, having just one language to deal with would be easier and cost effective.

Product name (standardisation)

• A uniform policy on the product name can enable a consistent and coherent brand message across various cultures.
• However, care must be taken to ensure that the name does not cause offence to local culture, and that the translation is not embarrassing. This may damage the brand quality of the product.

Answers could include:

Levels of education

• EduOz.com may need to make a decision to target recent school leavers who are just out of high school, or perhaps adults who already have a formal qualification and want another skillset in order to become entrepreneurs.
• The market segment of EduOz.com would have to have a basic level of English literacy if they are to understand most of the topic content, as it is written in English.
• There may need to be some translation of some key words so that students are able to understand certain key concepts.

Customs

• Customary greetings to students could be included in some course content that is suited to local cultures of international students, such as 'As-Salaam-Alaikum' (peace be with you) for Islamic countries or 'nihao' for the countries that have Chinese speaking students (Mandarin and Cantonese).
• EduOz.com developers will have to be careful not to stereotype certain cultures and seek advice as to the best way to communicate with students from diverse cultures.

Business etiquette

• The EduOz.com course could include content for entrepreneurs looking to do business in other foreign countries, so it would pay to learn about the way different culture's view notions of introductions/relationships, business card provision, being on time/punctuality, gifts, socialising expectations, working hours, handshakes and dress codes.

Communication protocols

• EduOz.com developers need to pay attention to how they convey their messages. For instance, some cultures may value directness and brevity, while other cultures may prefer a more indirect and nuanced communication.
• Even though the course a written in English, understanding the importance of subtle non-verbal communication between cultures is crucial in international business.

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Level of consumer demand

• Price: from an economic point of view, price can determine the level of demand for goods and services. EduOz.com must consider at what price customers in international markets are willing to pay.
• Scale of demand: it is estimated that by 2025, one billion students from around the globe will be actively seeking education and skill development.
• Economic growth: owners should monitor GDP levels in the various countries they would expand to. Increased GDP may mean more availability of disposable income, which makes it fertile ground to establish operations there.
• Product quality: the online education platform must be able to work well in all operating system and internet browser contexts (e.g., iOS, Windows, Chrome, Mozilla, Safari). The quality of the product must also be dynamic so that it works on desktops and mobile devices.
• Marketing: EduOz.com's branding efforts could also influence demand if people are persuaded to believe in the benefits the online product may provide them. Perhaps some testimonials from satisfied customers may be appropriate in establishing credibility.

Competitor activity

• 'Globally, the online learning industry is increasing rapidly with many regional education hubs being established by competing international learning institutions'.
• Competition within the Southeast Asian online education industry would be fierce. Competitors from Southeast Asian regions may have a significant competitive advantage in that they would have the resources available to translate into different languages, including Mandarin.
• Aspects of the competitor activity could be to scan those that are offering similar online learning products and the degree of market share they are currently holding.
• EduOz.com would want to know who the new and old players in the market are. As well as growth rates of all the competition in order to evaluate who are the biggest threats.
• Competitor activity in terms of marketing strategies would be a very important measure of feasibility, such as the occurrences where pricing wars happen or social media platforms where a high volume of advertising is taking place.

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The AANZFTA:

• provides a platform for ongoing economic engagement between the three parties through a range of agendas, economic cooperation projects and business outreach activities
• promotes greater certainty for Australian and New Zealand service suppliers and investors, including certain legal protection for investment in ASEAN territories
• provides new opportunities for Australian and New Zealand exporters to tap into international supply chains in the ASEAN region
• reduces or eliminates certain forms of tariffs between the three parties.

Answer(s) could include:

• Competition: there could be increased competition in Australia from foreign-owned businesses so that Australian businesses would have more competitors to compete with locally.
• Market share: market share in Australia could be reduced due to overseas competitors, thus Australian owned businesses would suffer as a result.
• Competitiveness: Australian businesses could become less competitive due to higher labour costs in Australia.
• Regulatory complexity: small to medium businesses may find it difficult to navigate any regulatory complexity associated with exports FTAs.

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Level of demand by consumers: refers to consumers’ desire and willingness to pay a price for a specific good or service. Feasibility of expansion will be impacted by:

• the number of potential customers and frequency of purchase
• the ability of customers to purchase products (disposable income).
  There must be sufficient potential customers or possible percentage of market share to warrant the investment of expansion.

Consumption patterns: refers to the process by which individuals identify, purchase and consume products and services to satisfy their needs. Feasibility of expansion will be impacted by:

• changing trends of consumers
• consumers looking for alternative products
• changing consumption patterns due to political motivations or wealth rise in developing nations, where consumers can now afford to purchase products which they previously could not afford
• seasonal and holiday events that affect consumption patterns.
  Businesses need to look for changes in these patterns for an opportunity to gain market share.

Competitor activity: refers to the number of competitors in the market and their market
share of a product. Feasibility of expansion will be impacted by:

• competitor activity that supports market entry, such as fewer competitors, products that are not easily copied or substituted, dissatisfied customers, no choice or value for money, competitors missing a market need or niche
• competitor activity that makes market entry difficult includes: the size, market dominance and wealth of competitors; an established brand which is part of a country’s culture; competitors who possess strong working relationships with suppliers and retailers.
  Businesses must be satisfied that their products/services can compete with existing
  suppliers and that their products/service cannot be easily copied to the same standard.

Chef@Home could introduce lean management, which is an ongoing management philosophy, whereby they seek to reduce wastage in each area of the business while still providing quality and value to customers. They can adopt the ‘pull focused’ principle whereby they only prepare and package the required amount of meals as demanded by customers, perhaps after they order it online. This will minimize wastage in terms of over-production of pre-made meals that will not be sold and thus have to be discarded. They can also minimise waste in regards to time through adopting the ‘flow’ principle, and minimising any wait times in their preparation and packaging of meals. Reducing starts and stops and bottle necks will minimise time that may otherwise be wasted improving the efficiency of operations.

Forecasting is a materials management strategy that uses data from the past and present and analysis of trends in attempts to determine future events. An advantage of forecasting is that it allows Chef@Home to identify what needs to be produced, in what quantities, how and when. This will result in “all inputs from local suppliers” actually being used and not wasted, thus assisting to improve efficiency of operations as Chef@Home is able to better utilise their resources. Moreover, Chef@Home using forecasting to order inputs from local suppliers in advance avoids the risk of having to outsource to other suppliers as they do not have enough inputs currently to supply boxes. As a result of this, Chef@Home will be improving the effectiveness of its operations as it is able to order inputs in advance to ensure all inputs are from local suppliers, this improving the business objectives of all locally sourced inputs.

However, a disadvantage of forecasting is that it will represent a cost to Chef@Home if the wrong quantities are calculated as it will lead to overproduction or underproduction. Overall, forecasting would be good to improve operations as it ensures that all local sourced inputs will be used.

A strength of sourcing from overseas suppliers is that this would allow Chef@Home to have reduced expenses, as typically overseas suppliers charge lower costs due to paying lower labour costs, hence passing on the difference to customers. Thus, this would help to increase Chef@Home’s net profit figure, hence they would have more capital for expansion, assisting Chef@Home to expand their business allowing for competitiveness to increase because they are able to operate and ship to a wider range of locations, due to this growth. However, a weakness of Chef@Home sourcing from overseas suppliers is that given the nature of the product, food, being perishable there is a risk that the ingredients could go bad given the travel time to ship them to the Chef@Home headquarters prior to being packed. Thus, this would likely increase waste at the business as they would have to discard a large amount of their inputs, increasing waste and thus limiting efficiency at Chef@Home. However, another strength is that by globally sourcing inputs Chef@Home may be able to purchase inputs which are unavailable locally. Thus, they may be able to offer a wider range of meals to customers in their boxes with these exotic ingredients. Thus, this would likely allow Chef@Home to create a point of difference from competitors, this allowing for a competitive advantage. However, a weakness of Chef@Home globally sourcing their ingredients is that they are not displaying social responsibility and sourcing inputs from local suppliers to promote local jobs in the community. Thereby this may damage the businesses reputation, as in an age of conscious consumers, many customers want to buy from businesses who support local jobs. Thus, through Chef@Home globally sourcing inputs they may lose competitiveness along with lowering percentage of market share.

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.

Answers could include:

• consistency: enables Giacomo and Chris's business to communicate a consistent message to customers in all markets, resulting in stronger brand awareness and positioning
• low risk: Giacomo and Chris could use marketing strategies, such as promotion and advertising
• lower cost: Giacomo and Chris's business will be able to achieve economies of scale by using the same advertising and packaging. Multiple teams for research and marketing strategy will not be needed, a centralised team of people will develop marketing strategies for all markets, thus saving time and money
• easier to manage: Giacomo and Chris should use a standardised approach which will be less complex than working with multiple advertising agencies, marketing teams and different strategies
• better differentiation: Giacomo and Chris should use a consistent global brand for their business so it will stand out from the competition as consumers will see the same logo, colours, product name and advertising.

Answers could include:

Adaptation:

• means Giacomo and Chris could modify their existing business slogan to better suit the needs of the target audience or to reflect changes in the business's brand identity or values
• should be done carefully by Giacomo and Chris to ensure that the modified version still maintains the essence of the original slogan of their business, while reflecting the changes that have occurred
• Giacomo and Chris's business should ensure that the adapted slogan is consistent with the rest of the brand identity and messaging, including visual elements, tone of voice, and brand personality
• can be a useful strategy for keeping Giacomo and Chris's business's brand fresh and relevant, and for maintaining a strong connection with the target audience over time.

Answers could include :

Level of demand by consumers:

• ability and number of Giacomo and Chris's business's potential customers, including frequency of purchase
• Giacomo and Chris's business's potential customers must be able to afford the product
• the lack of interest may limit Giacomo and Chris's business's products and/or size of other potential markets
• Giacomo and Chris's business would need to have sufficient potential customers to warrant investment of expansion.

Consumption patterns:

• Giacomo and Chris need to be aware of the changing trends of consumers and that consumers may be searching out more authentic cultural experiences
• consumers may be looking for more alternative regimes/treatments when it comes to wellness treatments
• wealthier countries may consume more luxury or 'wants' and this may be beneficial for Giacomo and Chris's wellness business
• Giacomo and Chris need to be aware that consumption patterns may change depending on a country's economic conditions.

Competitor activity:

• refers to the number of competitors in the market and their market share
• an analysis of Giacomo and Chris's business's competitors should include importers, local businesses and any online sellers
• competitor activity that will support Giacomo and Chris's market entry could include few competitors and the unavailability of wellness centres
• competitor activity that will hinder Giacomo and Chris's market entry could include many competitors and the presence of well-established wellness centres.

Answers could include:

Skilled communicator:

• it is important for Giacomo to identify the best method of communication in the different markets, situations and people
• Giacomo needs to process and have the ability to exchange information accurately and timely, and to actively listen
• Giacomo needs to understand that it is more difficult in a cross-cultural setting due to language barriers, but if multiple languages can be spoken to convey messages this is an important advantage.

Socially aware:

• Giacomo needs to have an awareness of relationships, thus leading to the ability to understand the needs of his team members
• Giacomo needs to develop an understanding of other social and cultural customs which will enable him to establish trust and long-lasting business relationships
• Giacomo needs to use his emotional intelligence to be able to perceive and understand complex emotions and to regulate his own emotions to communicate well in new markets.

Skilled decision maker:

• it is essential for Giacomo to know when to make decisions quickly if required, but also be able to balance the risk in decision making to avoid damage to the business
• this trait is needed in a new cross-cultural setting as there is no history of past actions and performance to follow or provide advice
• the situation/cross-cultural context is new/different/more complex; therefore, Giacomo will often be required to make decisions quickly, and often in the absence of full or limited available information.

Future thinker:

• Giacomo needs to have a long-term vision of where the business is headed, so incremental planning can take place and the business is proactive, rather than reactive in its responses
• the ability for Giacomo to see the larger global picture, implement the vision on a global scale, and being open to possibilities which would provide an inclusive work environment required in a new cross-cultural setting
• Giacomo needs to be able to motivate people by explaining to them how their daily achievements or setbacks will contribute to the future success of the business.

Responsible:

• Giacomo needs to be independent, accountable, accept authority and be more aware that actions have consequences
• this trait is needed in a new cross-cultural setting to understand where pre-established ideas or the 'same old' consensual view of reality cannot be relied upon, to understand where adaptation or new ideas are required, and to demonstrate that they can think for themselves, often seeing new perspectives, real purpose and outcomes
• Giacomo needs to have the ability to take control and be answerable in a new cross-cultural setting.

Answers could include:

The Australian New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) is the free trade agreement that Australia solely has with New Zealand.

Features of the ANZCERTA:

• all tariffs and quantitative import or export restrictions on trade in goods originating in the free trade area are prohibited
• the agreement includes provisions for free trade in services, allowing most services to be traded without restrictions between Australia and New Zealand
• goods and occupations are mutually recognised, removing technical barriers to trade and facilitating the movement of skilled personnel between Australia and New Zealand
• Trans-Tasman food standards are harmonised, reducing compliance costs for industry and regulatory barriers
• the 2013 Protocol on Investment reduces investment costs, providing greater legal certainty and higher screening thresholds for investors in both countries.
• products that meet the ANZCERTA Rules of Origin criteria can be traded duty-free between Australia and New Zealand
• the ANZCERTA aims to strengthen the economic relationship between Australia and New Zealand through mutually beneficial expansion of free trade and reduced trade barriers.

Answers could include:

• access to a larger customer base across Australia and New Zealand would lead to higher sales of greeting cards and revenue for AuraAsh Designs
• enhanced brand visibility and recognition on an international scale will allow AuraAsh Designs to attract more customers and business opportunities
• a global brand can instil confidence in customers, leading to increased trust and loyalty towards the brand
• reduced dependency on a single market, providing financial stability and mitigating risks associated with market fluctuations
• establishing a strong global presence can differentiate AuraAsh Designs from competitors and position them as a leading brand in the greeting card industry
• potential for cost savings through bulk production and streamlined operations, leading to improved profit margins for AuraAsh Designs
• exposure to diverse markets can inspire new ideas and innovations, helping AuraAsh Designs stay ahead of trends and customer preferences in the greeting cards industry
• having a global brand will increase AuraAsh Designs' ability to attract and retain quality staff from different regions and allow the business to bring in diverse perspectives and expertise to the company.
  Accept other relevant answers.

Answers could include:

Just-in-time (JIT):

• just-in-time is an inventory control technique which focuses on minimising inventory as a business only receives inputs only when these are required in the production process. This allows a business to reduce holding costs, increase efficiency, and eliminate waste
• AuraAsh Designs can implement JIT by closely coordinating with local suppliers in New Zealand to deliver raw materials and card-making supplies precisely when they are needed for production. However, this requires the business to accurately forecast their demand and a responsive supply chain with their suppliers
• by using JIT, AuraAsh Designs can lower its holding costs as inventory is minimised, leading to reduced warehouse space requirements and associated expenses. This is particularly beneficial for AuraAsh Designs to manage different seasonal demands for their greeting cards when expanding into the New Zealand market.

Just-in-case (JIC):

• just-in-case is an inventory control technique that involves a business maintaining a level of reserved stock to guard against unexpected variations in demand, supply chain disruptions, or other uncertainties which may arise
• AuraAsh Designs can implement JIC by setting aside a certain quantity of inventory beyond what is expected to be sold in the immediate future. This reserved stock then acts as a safety net in case of unexpected events or changes in demand
• JIC helps maintain customer satisfaction by preventing AuraAsh Designs running out of stock during peak seasons or special occasions. However, JIC increases expenses incurred for storing inventory as AuraAsh Designs would require additional space for storage when expanding into the New Zealand market.
  Accept other relevant answers.

Answers could include:

Technology that assists business in the expansion into global markets:

• AuraAsh Designs can effectively reach their target audience in New Zealand if the business investigates and creates popular social networking sites. This would be an easy and cost-effective way to expand AuraAsh Designs' presence in the new market
• implementing technology that results in faster shipping solutions will improve AuraAsh Designs' customer satisfaction by ensuring timely delivery of orders. This positive experience can enhance AuraAsh Designs' reputation and encourage repeat consumers
• using GPS tracking for deliveries keeps both the business and customers informed. Customers receive updates via email or SMS, which boosts their confidence in the delivery process and enhances their overall experience
• AuraAsh Designs can invest in reliable hardware and software to meet their business needs. Enhancing their website to support multiple languages and currencies will increase their reach, allowing customers to make purchases in their preferred language and currency.

E-commerce, security and privacy issues:

• it is crucial for AuraAsh Designs to stay current with security software and ensure that customer information is not publicly shared. Regular updates can help AuraAsh Designs protect against any new threats and vulnerabilities
• poor security practices and privacy breaches can cause loss of income and customer data, which can severely damage AuraAsh Designs' reputation. This can result in a loss of customer trust and a subsequent decline in sales
• AuraAsh Designs could invest in secure online payment methods, such as PayPal, to ensure secure transactions. This requires allocating funds towards privacy and security software, which can provide customers with a peace of mind when they make purchases through AuraAsh Designs' website
• to safeguard against potential security and privacy threats AuraAsh Designs should regularly review and audit their policies and procedures. This proactive approach can help the business identify and address potential vulnerabilities.

Answers could include:

• increased brand recognition: by establishing a global brand Rayz Umbrellas would benefit from heightened brand recognition on an international scale. This increased visibility would enable the company to tap into new markets more effectively, as consumers around the world would be familiar with the brand and its offerings
• higher sales and market share: Rayz Umbrellas could potentially experience higher sales volumes and market share in various regions, strengthened by the trust and recognition associated with a well-established global brand
• economies of scale: establishing a global brand allows Rayz Umbrellas to achieve economies of scale in production, distribution, and marketing activities. With a larger customer base spanning multiple countries, the company can optimise its operations by producing umbrellas in larger quantities, negotiating favourable terms with suppliers, and implementing cost-effective distribution channels
• marketing: a global brand enables Rayz Umbrellas to use its marketing resources more efficiently, as advertising and promotional campaigns can be standardised across different markets, leading to cost savings and enhanced profitability.

Answers could include:

• understanding the consumption patterns of target markets allows Rayz Umbrellas to tailor its product offerings to meet specific consumer preferences and needs. For example, if consumers in a foreign market prioritise compact and lightweight umbrellas for travel purposes, the company can develop and market products that align with these preferences
• by aligning its offerings with local consumer demand, Rayz Umbrellas can increase the likelihood of success in foreign markets and differentiate itself from competitors
• analysing consumption patterns provides insights into the demand and growth potential of target markets. By identifying regions where there is a growing demand for high-quality umbrellas, Rayz Umbrellas can prioritise expansion efforts in markets with significant growth opportunities
• understanding consumption trends allows the company to allocate resources effectively and invest in markets where the potential for long-term success is highest
• Rayz Umbrellas should consider the cultural, environmental, and economic factors that vary across different regions. For example, in coastal regions with a sunny climate, there may be a higher demand for beach umbrellas offering superior UV protection
• by considering these factors, Rayz Umbrellas can adapt its product offerings and marketing strategies to resonate with local consumers and address specific environmental conditions
• understanding cultural preferences and values enables the company to develop marketing campaigns that resonate with target audiences and build brand loyalty over time.

Answers could include:

Adapt:

• Rayz Umbrellas could consider adapting the product name to align with the cultural and linguistic preferences of the foreign target market
• they need to ensure that the name is easily pronounceable and doesn't have any unintended meanings or connotations in the local language
• Rayz Umbrellas should research competitor names and preferences of the target market, which could reveal whether certain types of names are more appealing or attractive to the local audiences.

Standardise:

• if Rayz Umbrellas' product name has a universal appeal and translates well across cultures, standardisation may be a more viable option as it will enable consistent consumer messaging, operational efficiency, and easier and faster global expansion
• standardising Rayz Umbrellas product name could translate to global brand recognition and cost efficiency
• standardising the product name means Rayz Umbrellas would reduce the costs associated with rebranding efforts, including marketing materials, packaging, and promotional campaigns.

Answers could include:

Purpose:

• includes a business's culture, values, ethics, competitive advantage, future goals and agenda
• define how each of these applies to the business's stakeholders, employees, distributors, suppliers, shareholders and the community at large.

Examples:

• at Rayz Umbrellas, our mission is to provide protection from the elements while enhancing the outdoor experience for our customers
• the business strives to offer innovative and high quality umbrellas, which combine functionality, durability and style.