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Sportyz Goodz Ltd is a retailer that has been operating for the past 20 years in Australia - HSC - SSCE Business Studies - Question 25 - 2017 - Paper 1
Question 25
Sportyz Goodz Ltd is a retailer that has been operating for the past 20 years in Australia. The directors have provided the following information: - In 2013 the bus... show full transcript
Worked Solution & Example Answer:Sportyz Goodz Ltd is a retailer that has been operating for the past 20 years in Australia - HSC - SSCE Business Studies - Question 25 - 2017 - Paper 1
Step 1
Outline ONE strategic role of financial management
Answer
One strategic role of financial management is to ensure that the business has enough liquidity to meet its short-term obligations while also financially planning for long-term growth. This involves managing cash flow efficiently to enable operational activities and to capitalize on growth opportunities, thus benefiting the shareholders with sustained profits.
Step 2
Recommend TWO strategies to improve financial performance
Answer
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Cost Reduction Strategy: By analyzing operational expenses and identifying areas where costs can be reduced without affecting quality, Sportyz Goodz can improve profitability. For example, renegotiating supplier contracts or optimizing inventory management can lead to significant savings.
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Diversification Strategy: Expanding the product line or entering new markets can spread risk and increase revenue streams. By diversifying, the company can target broader customer demographics, which can lead to increased sales and a stronger market position.
Step 3
Explain the importance of monitoring and controlling the business’s marketing strategy
Answer
Monitoring and controlling the marketing strategy is crucial for assessing the effectiveness of marketing campaigns and ensuring alignment with business objectives. By regularly reviewing marketing performance metrics, Sportyz Goodz can make necessary adjustments to respond to market changes or customer preferences quickly. This ensures that resources are allocated effectively, maximizing return on investment and enhancing overall financial performance.