IGCSE, A Level Business Student Forum

[KN] Cheaper way to expand.
[APP] WSS has sold its franchise to 10 shops in country Z which means the franchisees pay to open and run the shops rather than WSS paying for new equipment and machinery for its outlets.
[AN] This lowers financial risk for WSS compared to opening more company owned shops ...

[KN] Businesses are not allowed to make false or misleading claims.
[APP] A2Z Designs makes handmade jewellery. If azhar advertises the jewellery as pure gold and says that it will never lose its shine.
[AN] A2Z would be breaking marketing laws if false claims are made and this could lead to fines ...

Advantage
[KN] Being able to sell shares on the stock market
[APP] Since CHINO is looking to open a coal mine which needs lots of investment in getting the mine on lease & machinery, it needs large sums.
[AN] This helps the company get enough capital to invest in the equipment for mining and they ...

[KN] Can only sell shares to friends and family.
[APP] Pshirts cannot sell shares to the public to raise extra money for expanding into other countries.
[AN] This limits the companies ability to put money into expansion and also reduces cash available for marketing or production. It might slow down ...

[KN] Unlimited liability
[APP] If BMT owes money both brothers must use their personal assets to pay the debts.
[AN] This means that their homes or savings could be lost and they might avoid taking risks like expanding production. It could also make it harder to borrow money because money lenders ...

[KN] Limited liability.
[APP] If Cutter faces financial losses or debts then the family owners are only responsible for the companies money and not their personal savings.
[AN] This protects the family’s personal assets which encourages them to take proper strategic risks such as launching new ...

[KN] a sole trader does not have much money to invest.
[APP] am expanding grocery store needs a lot of money for more branches and stock and staff.
[AN] the owner has limited money and he might struggle to open new stores. he might take loans with high interest which can reduce his profits and this ...

[KN] Being a sole trader means the business is owned and controlled by one person

[APP] For a mobile phone retailer being a sole trader allows him to choose which brands or models to sell and set his own prices. He can also respond quickly to customer demand and adjust stock fast.

[AN] Full ...

kn : entrepreneurs make their own decisions.
app : Hameed can choose which furniture designs to make without asking anyone else. he can sell anything he wants like coffee tables and dining tables.
An : This allows him to be creative and try unique designs which might be liked by the customers. In ...

[KN] Nuwans shop is small so his employees can give more attention to each customer.
[APP] His trained staff can give their opinion and advice on the right cricket or tennis products for each person who wants to buy. which something a large retailer with many customers might not do.
[AN] This makes ...

[KN] : Samira needs to go through how much it will cost to start delivering like buying scooters, fuel or hiring delivery people.

[APP] : If the costs are higher than the extra money earned from more customers then the service could go in loss.

[AN] : If she hires a delivery driver she has to pay ...

[KN] : The Government could provide training to help workers become more skilled at the job.
[APP] : Learning will make the workers trained and skilled and the workers can produce engines faster and with fewer mistakes.
[AN] : higher productivity will reduce costs and will help the HGH compete ...

[KN] : VXH may have grown quickly because it uses specialisation in its factory.
[APP] : All the workers focus on one specific task in producing the soft drinks which increases their speed and skill in the part of the process.
[AN] : This would lead to faster production fewer mistakes, and higher ...

[KN] To check if Kara's business has the ability to pay back the loan from expected profits.

[APP] Karas business plan will show the bank her costs cashflow and how she will manage expenses.

[AN] This help's the bank decide that if kara would be able to repay the loan and this reduces the risk of ...

KN : Primary sector businesses extract natural resources like farming and fishing.
APP : it is important to extract natural resources as without Raw materials the factories cannot produce goods as the economy depends on the primary sector to start.

KN : Primary sector helps in creating jobs for ...