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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: The increase in global demand for Ozzi Baby Food's products necessitates efficient operations to meet market expectations. This influences the scale and capacity of production required, prompting the need for a larger factory.
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Technology: Advances in production technology increase efficiency and product quality. These technological influences can drive the decision to automate the factory, impacting how products are manufactured.
Step 2
discuss the use of retraining and redundancy payments to help overcome employee resistance to these changes
Answer
To address employee resistance resulting from the changes, Ozzi Baby Food Pty Ltd can implement retraining programs that equip existing employees with the skills needed for new automated processes. This not only alleviates fears of job loss but also improves morale and productivity.
In addition, offering redundancy payments can provide financial support to employees who may be laid off, ensuring they have a safety net during this transition. This proactive approach can foster a more positive company culture and encourage those remaining to adapt to new operational changes.
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:
- Advantages: It allows the company to retain ownership and control of operations. The interest on the mortgage may also be tax-deductible.
- Disadvantages: The company incurs debt and must ensure stable cash flow to meet repayment obligations, which can affect liquidity.
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New Issue of Shares:
- Advantages: This option raises capital without incurring debt, improving the company’s balance sheet and providing funds without repayment obligations.
- Disadvantages: It dilutes existing ownership and control, potentially leading to conflicts with new shareholders regarding business direction.