Tiêu đề 1. Case 1.pdf ✅

AATIK TASNEEM | O/A-LEVEL | BUSINESS & ECONOMICS | +92 304 1122845 1 P2 - Case 1 - Specimen Paper (Case 1)
AATIK TASNEEM | O/A-LEVEL | BUSINESS & ECONOMICS | +92 304 1122845 2
AATIK TASNEEM | O/A-LEVEL | BUSINESS & ECONOMICS | +92 304 1122845 3 (a) (i) Helps to build a brand name. (ii) (1) A sole trader is a business owned and controlled by one person. (2) It has unlimited liability which means their personal assets are at risk in case the business defaults on a loan. (3) Example: In the case of Amir if he is unable to pay back the loans the personal house would be taken away to recover the time. (b) (i) 100 - (5 + 20 + 10 + 5 + 5 + 20 + 10 + 10) = 15% 15% x 600,000 = 90,000 (ii) (1) One reason why Amir conducted market research was to understand the competitive environment. (2) The research highlighted that there was a total of eight competitors and some have delivery whereas others are not selling Asian food. (3) This will help Amir to develop USPs against these companies as he is already struggling in this area and by identifying the gap it would help to boost the sales beyond $90,000
AATIK TASNEEM | O/A-LEVEL | BUSINESS & ECONOMICS | +92 304 1122845 4 8 MARKS Outline: (c) Def > Private Limited Company > A small to medium size business that is owned and controlled by members of the same family and close friends. Cannot sell shares on the stock exchange. One benefit is that it helps to gain limited liability > since currently the risk of debt is totally on Amir > in case the business defaults he will lose his house that is given as a collateral > if the business is a private limited company Amir's risk would be lower > easier get more finance > helps to launch new Asian products > increase market share above 15% > helps to generate more revenue > higher profit potential. One disadvantage of becoming a private limited company is the time and money it takes it set it up > Amir would need to complete paper work > produce article of association + memorandum of association > since he is managing the business alone as a sole trade this can lead to problems like inefficiencies in the operations > food deliveries might get delays + in order to convert the business extra cost is payed by compromising on advertising > this can damage the growth potential > limiting its ability to achieve its objective to increase market share. Answer: A private limited company is a small to medium size business that is owned and controlled by members of the same family and close friends. Cannot sell shares on the stock exchange. One advantage for Amir in transforming BH into a private limited company is the benefit of limited liability. As a sole trader, Amir's personal assets, including his home, are at risk if the business encounters financial difficulties. By incorporating BH as a private limited company, Amir would separate his personal assets from the business’s liabilities. This means that in the event of business default or bankruptcy, his personal assets would be protected, and his financial risk would be limited to the amount he has invested in the company. This can enhance BH’s ability to secure additional financing from investors or banks. This increased financial capability can facilitate the introduction of new product lines, such as Asian food, and help increase market share above 15%. With improved financial stability and investment potential, BH could potentially generate higher revenue and profit, enabling it to compete more effectively in the crowded market. One disadvantage of converting BH into a private limited company involves significant time and expense. Amir would need to undertake a range of administrative tasks, including completing paperwork, and preparing the articles of association and memorandum of association. As a sole trader managing all aspects of the business himself, Amir might face challenges in handling these new responsibilities efficiently. The conversion process could also divert resources and attention away from critical operational areas, such as food delivery services. As a result, the costs associated with restructuring the business might impact BH’s budget for other essential activities, such as advertising and marketing. This could hinder the company's growth potential and delay its ability to achieve its objective of increasing market share, as the focus shifts to administrative concerns rather than business expansion and customer acquisition.