Furthermore, all companies have capacity to compete. No switching costs and product differentiation raise the degree of competition because it is easy for them to go where the lowest prices are. This characteristic leads to price wars which is present in the industry. Industry growth is the only factor that lowers rivalry – growth is high with few stores opening so companies do not need to compete for market share. Power of Suppliers – Low There is low supplier concentration relative to the industry they sell to and a single supplier does not account for a large part of a retailer’s business.
It analyses the entity’s competitive situation by assessing its strengths, weaknesses, environmental opportunities and threats. Strengths HIH had the support of the public and its personnel and this could be an asset to management because they would have space for maximising potential of the company. HIH also creatively use re-insurance to free up funds otherwise stuck prudential margins and allow more funds for expanding investments. Weaknesses HIH’s main weakness is its lack of corporate governance, especially the lack of process and risk management within the company. A lack of process meant that there were no limits to authority and rules were not followed.
Proprietorship has three important advantages: it is easily and inexpensively formed; its subject to few government regulations and; its income is not subject to corporate taxation but is taxed as a part of the proprietor’s income. Limitations include: difficulty obtaining capital needed for growth; having an unlimited personal liability for business debts can result in losses that exceed the money invested in the company and; life of a proprietorship is limited to life of its founder. For these reasons sole proprietorship is used mainly for small businesses. A partnership exists when there are two or more persons or entities associate to conduct non-corporate business for profit. Partnership agreements define the ways that any profits and losses are shared between partners.
To get the maximum benefit from an independent internal control : Control values and Integrity from the top make it clear that it is unethical activities will not be accepted , and set the tone for the company's culture . There are several principles of management : 1. Establishment of responsibility : management is most effective when a single source may be responsible for the problem , including the authorization and approval of transactions. Weakness: LJB has only one accountant who serves as treasurer and controller , which can optimize the processes , but it creates an inherent risk . Cashier handled informally .
Discount Customers- Discount customers are also frequent visitors but they are only a part of business when offered with discounts on regular products and brands or they buy only low cost products. More is the discount the more they tend towards buying. These customers are mostly related to small industries or the industries that focus on low or marginal investments on products. Focus on these types of customers is also important as they also promote distinguished part of profit into business. Wandering Customers- These are the least profitable customers as sometimes they themselves are not sure what to buy.
Failure is just as easy as success. Kamaswami sees business as a serious job, not some half wit job or hobby. Siddhartha on the other hand, sees business quite differently. As he works for Kamaswami as a merchant, he doesn’t get emotionally into the business and has a somewhat disrespectful attitude toward the job. Siddhartha even sees it as a game, not caring if he succeeded or failed at his job.
This is extremely shortsighted and risky. They have all their economic eggs in the basket of their business. Plus, they lack the financial fluency to intelligently and effectively manage their wealth and invest it wisely. For this group, a lack of financial fluency often leads to poor decisions after they no longer have their businesses. They wake up one day without their business, and with nothing to show for their years spent building their business.
That theory justifies that the State government can do whatever is appropriate to assist the “infant” industry, this implies that he can subsidies the industry to reduce the costs or use barriers to protect it. This argument has few weaknesses. First, among all government assistances, the best form of assistance is not a tariff or other barrier to imports. Rather, a subsidy to initial production or to cost reductions sources is over time usually the best policy. Second, most of the time, for a promising industry, there is no need for any government assistance to the initial firms.
A Sole Trader is a type of business, but in this case it is slight different than any other out there, this one means being the owner of its own negotiations, investments, profits, but the sole traders can also have some employees (2-3) NO MORE THAN IT .This is one of the properties as an option as a dealer to choose among other types of businesses, but especially above everything there are advantages and disadvantages in being the owner of its own negotiations. Surprisingly it can be good and bad too. However a Sole Trader is good for an opening beginning of a business because you deal with your own decisions, organizations and you also gain profit (but you need to have some experience of it, or any knowledge about what you’re being involved in which is quite important to know). If being a Sole Trader you have to control yourself over the businesses and its profits, for it you will need a high responsibility in your life and principal in your business because you’re leading with serious negotiations. The owner of a Sole Trader can decide the way in which the business is to be conducted and has the flexibility to restructure or dissolve the business whenever it suits.
(n.d.). The cash method recognizes revenue on a cash basis only. This means that neither the revenue nor the expenses are acknowledged until after the cash is received. This is great for small businesses but is not very logical for large business. Large companies