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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
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Globalization: As Ozzi Baby Food expands its reach in domestic and global markets, globalization presents significant operational influences. Increased global competition can affect pricing strategies, supply chain dynamics, and market entry strategies.
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Quality Expectations: Customers today have heightened expectations regarding product quality, necessitating stringent quality controls and assurance processes for Ozzi Baby Food. This influences operational procedures to ensure compliance with safety standards and customer satisfaction.
Step 2
discuss the use of retraining and redundancy payments to help overcome employee resistance to these changes
Answer
To mitigate employee resistance during the transition created by the new factory purchase, the company can implement several strategies:
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Retraining Programs: Offering retraining helps employees acquire new skills required for positions in the automated factory. This not only prepares them for changes in job roles but also reassures them of their value within the company, reducing resistance associated with fear of job loss.
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Redundancy Payments: For employees who may not transition to new roles, offering redundancy payments can ease the financial burden, providing them with a safety net as they seek new employment. Clear communication about these payments is crucial to maintain trust and reduce anxiety among the workforce.
Step 3
compare the use of a mortgage to a new issue of shares to fund the factory purchase
Answer
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Mortgage: Using a mortgage to fund the factory purchase involves borrowing a large sum of money that will be paid back over time with interest. This option typically allows for greater control over the business since the founders retain ownership. However, it places a financial obligation on the company and can strain cash flow due to regular repayments.
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New Issue of Shares: Issuing new shares involves raising capital from investors by selling a portion of the company's equity. This can provide funding without the need for repayment, easing cash flow pressures. However, it results in equity dilution, meaning current owners will have reduced control and profit share. Additionally, gaining approval from shareholders for this option can be a lengthy process.