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Ozzi Baby Food Pty Ltd have developed a trusted reputation in domestic and global markets due to their safe and sustainably-sourced product range - HSC - SSCE Business Studies - Question 25 - 2021 - Paper 1
Question 25
Ozzi Baby Food Pty Ltd have developed a trusted reputation in domestic and global markets due to their safe and sustainably-sourced product range. This has led to a ... show full transcript
Worked Solution & Example Answer:Ozzi Baby Food Pty Ltd have developed a trusted reputation in domestic and global markets due to their safe and sustainably-sourced product range - HSC - SSCE Business Studies - Question 25 - 2021 - Paper 1
Step 1
outline TWO operations influences affecting this business
Answer
Operations Influences
1. Globalisation
The globalisation of markets means that Ozzi Baby Food Pty Ltd must meet international standards and expectations. This can influence operational decisions, such as sourcing ingredients responsibly and ensuring supply chains are sustainable. Collaboration with global partners can enhance product reach but may also require adapting operations to meet diverse regulatory standards.
2. Environmental Sustainability
As consumers become increasingly aware of environmental issues, the company’s operational strategies must reflect sustainable practices. This includes reducing waste and investing in eco-friendly packaging and sourcing methods, which can fundamentally affect production and procurement processes.
Step 2
discuss the use of retraining and redundancy payments to help overcome employee resistance to these changes
Answer
Overcoming Employee Resistance
Retraining Payments
Retraining is essential for ensuring that existing employees can transition into new roles or adapt to new technologies. By providing training programs, the company will foster a culture of growth, enhancing employee morale and reducing resistance. Moreover, investing in personnel shows a commitment to their development, which can increase loyalty and job satisfaction.
Redundancy Payments
While job losses may be unavoidable during this transition, offering redundancy payments can ease the burden for affected employees. This demonstrates the company’s ethical stance and mitigates negative perceptions surrounding job eliminations. Providing financial support can lead to better employee relations and help maintain a positive reputation among retained staff.
Step 3
compare the use of a mortgage to a new issue of shares to fund the factory purchase
Answer
Financial Strategies Comparison
Mortgage
A mortgage allows Ozzi Baby Food Pty Ltd to borrow funds from a lender, creating a debt obligation that needs careful management. The benefits include retaining ownership and control of the company, as the outside influence of shareholders is minimized. However, risks involve:
- Interest rate fluctuations affecting repayments
- The potential for increased financial strain during economic downturns
New Issue of Shares
Issuing new shares may provide immediate funding without increasing debt levels. This can attract investments, but it dilutes existing shareholders’ equity. Advantages include:
- No repayment obligation, reducing immediate financial strain
- Access to a wider pool of resources and opinions from shareholders
Ultimately, the decision hinges on the company’s long-term strategic goals and current financial health.