Business to review checklist
- unit 4: what’s the point of the 4 Ps?
- unit 2: HR strategies
A unique selling point (USP) refers to a feature that is unique to a product. TFC’s USP is that their products are taxed at a lower 7% which makes it more affordable compared to competitors. A USP is important for TFC because it helps them gather market share; their product has to be sufficiently differentiated from market leaders to convince consumers to chose their new product over well established products from competitors. Another reason a USP is important for TFC is to gain external financing easier. For example, people invest in crowdfounding when a new product is desirable; TFC’s USP of cheap products makes them desirable to invest in by crowdfunders because it is a product they want to use.
3/4
- I don’t know what a marketing mix is…
- should focus on price and promotion and product Price
- their USP is their low cost
- they should focus on getting price leadership on their product
- disadvantage: this also means that they may have to sell more units to break even
- this negatively impacts their profitability
- that being said, they did market research to identify that this product is a need, which implies as long as it is promoted sufficiently it should sell Product
- it mentions in the case the case that they must continually innovate to create differentiated products
- because reducing prices is something that competitors can copy easily
- so they need to focus on product and R&D!!
- they can focus on making environmentally sustainable products to target an eco-conscious product
- the downside is of course the R&D expenditure
- they are small private company so they don’t have access to internal financing, so this will need to come out of external finances which can accrue debt; bad for small company
- also requires a culture of kaizen (continuous improvement)
- which is good because it motivates employees to create something better (the culture)
- can help them with their goal of customer satisfaction
- R&D cost center : (
Proti-Munch
Roscas
productivity rate measures how well a business turns raw materials into a product. it can be calculated as a percent of the total output divided by the total input.
b (i) total contribution = unit price - variable cost = 5-2= 3
quantity sold = 100 000 / 5 = 20 000. 20 000 * 3 = 60 000
b (ii) 60 000 - 1000 - 15 000+ 70 000 - 25 000 = 89 000
c (i) payback period = 3 years and 1.3 months
c (ii) ARR = (total revenue - cost) / years of use / cost * 100% = 13.3%
2 a) cooperatives have limited liability. they are owned by a group of people → work on the principle of sharing and welfare; any surplus is distributed amongst all members
3 a) Fixed cost is an expense to a business that does not change as the unit of production changes. Fixed costs can include marketing costs
b) an advantage of using job production is that they can tailor their party dresses according to customer needs and preferences. Since they sell directly to customers, this helps them make an extremely personal product that they can justify selling for higher prices because competitors cannot match their product. A disadvantage job customization is that they do not get access economies of scale. Because each product is slightly different, they cannot predict order quantities as well and don’t get purchasing economies of scale which caps their profitability.
c) access to connections and resources ⇒ i.e. capital! avoid mistakes that the business angel knows of, can help expand quicker and easier. disadvantage: diluting equity and therefore decision making ability. Juan says Carol needs to redelegate design if Carol cannot agree with can create conflict
two methods of primary research include conducting surveys to gather data about a particular market demographic. another method of primary research is to conduct focus groups.
b(i) 12 000 (ii) 3000 units (iii) 15000 c) The increase in rent would reduce their profitability, and the increase in sales would increase it. If their sales increase more than their rent, then their profitability increases. (OH read the case…)
3
a) public sector refers to a business that are regulated by government. businesses in the public sector include education and healthcare. (1 mark) revised: public sector refers to business that is owned and regulated by the government to provide essential goods and services to a country. the government controls aspects of the product such as price b)
4 a) cost-plus markup pricing strategy refers to selling a product b) social media marketing is a form of BLT promotion in which a firm pays social media firms to put out ads to a particular market demographic. an advantage of social media marketing is that it can reach many people, given how popular social media is. Another benefit is that positive reviews of the product can blow-up, and promote the product through word-of-mouth which is a cheap method to get BLT promotion. ⇒ link back to case : (