Question Three-Wps Office

QUESTION THREE
### (a) Five Challenges That a New Enterprise Might Face

1. **Access to Capital**:
- **Description**: Securing sufficient funding to start and grow the business can be
challenging due to stringent lending requirements, high-interest rates, or lack of investor
confidence.
- **Impact**: Limited capital can restrict the ability to purchase necessary equipment, hire
staff, or invest in marketing efforts.
2. **Market Competition**:
- **Description**: New enterprises often face intense competition from established

businesses with loyal customer bases and more resources.
- **Impact**: High competition can make it difficult to attract customers and achieve market
penetration.
3. **Regulatory Compliance**:
- **Description**: Navigating through complex legal and regulatory requirements, such as

business registration, permits, licenses, and taxes, can be time-consuming and costly.
- **Impact**: Non-compliance can lead to fines, legal issues, or even business closure.
4. **Building a Customer Base**:
- **Description**: Attracting and retaining customers is crucial for generating revenue but can
be challenging for new businesses without brand recognition or a proven track record.
- **Impact**: Failure to build a customer base can result in low sales and hinder business
growth.
5. **Operational Efficiency**:
- **Description**: Establishing efficient operational processes, managing supply chains, and

maintaining quality control can be difficult for new enterprises.
- **Impact**: Inefficiencies can lead to increased costs, waste, and customer dissatisfaction.
### (b) Two Areas Included in the Body of a Business Plan

1. **Market Analysis**:
- **Explanation**: This section includes a detailed examination of the industry, target market,
and competitive landscape. It typically involves market size, growth projections, customer
demographics, and competitor analysis.
- **Importance**: Understanding the market is crucial for identifying opportunities, developing
effective marketing strategies, and making informed business decisions. It helps in assessing
demand, positioning the product, and identifying potential challenges and competitive threats.
2. **Financial Projections**:
- **Explanation**: This section includes detailed financial forecasts such as income

statements, cash flow statements, and balance sheets for the next three to five years. It also
covers break-even analysis, funding requirements, and financial ratios.
- **Importance**: Financial projections provide a roadmap for the business’s financial health
and sustainability. They are essential for attracting investors and lenders by demonstrating the
potential for profitability and financial stability. Accurate projections help in budgeting,
managing cash flow, and measuring performance against financial goals.
### (c) SWOT Analysis for a Business Enterprise

**Business Enterprise**: Starbucks
**SWOT Analysis**:
1. **Strengths**:
- **Brand Recognition**: Starbucks has a strong global brand and a loyal customer base.
- **Quality Products**: Known for high-quality coffee and a wide range of beverage and food
options.
- **Innovative Store Experience**: Offers a comfortable and appealing store environment,

promoting customer loyalty.
- **Global Presence**: Extensive international footprint with thousands of stores worldwide.
2. **Weaknesses**:
- **High Prices**: Premium pricing can deter price-sensitive customers.
- **Dependency on Coffee**: High reliance on coffee products, which could be a risk if coffee
consumption patterns change.
- **Complex Supply Chain**: Managing a complex global supply chain can be challenging and
costly.
- **Limited Food Menu**: Compared to competitors, Starbucks has a more limited food menu,
which might affect customer choices.
3. **Opportunities**:
- **Expansion into Emerging Markets**: There is significant potential for growth in emerging
markets.
- **Product Diversification**: Opportunity to expand the food menu and introduce new
beverage options.
- **Digital Innovation**: Increasing focus on mobile ordering, delivery services, and loyalty
programs can drive sales.
- **Sustainability Initiatives**: Growing consumer interest in sustainability can be leveraged by

promoting eco-friendly practices and products.
4. **Threats**:
- **Intense Competition**: Competition from other coffee chains, fast-food restaurants, and
independent coffee shops.
- **Economic Downturns**: Economic fluctuations can affect consumer spending on premium

coffee products.
- **Changing Consumer Preferences**: Shifts towards healthier lifestyles could reduce

demand for some Starbucks products.
- **Supply Chain Disruptions**: Issues such as climate change and political instability could
impact the supply of coffee beans and other raw materials.
By conducting a SWOT analysis, Starbucks can strategically leverage its strengths, address its
weaknesses, capitalize on opportunities, and mitigate potential threats to maintain its market
position and drive future growth.

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QUESTION THREE

### (a) Five Challenges That a New Enterprise Might Face

- Description: New enterprises often face intense competition from established

- Description: Navigating through complex legal and regulatory requirements, such as

4. Building a Customer Base:

- Description: Establishing efficient operational processes, managing supply chains, and

### (b) Two Areas Included in the Body of a Business Plan

- Explanation: This section includes detailed financial forecasts such as income

### (c) SWOT Analysis for a Business Enterprise

- Innovative Store Experience: Offers a comfortable and appealing store environment,

- Global Presence: Extensive international footprint with thousands of stores worldwide.

- High Prices: Premium pricing can deter price-sensitive customers.

- Sustainability Initiatives: Growing consumer interest in sustainability can be leveraged by

- Economic Downturns: Economic fluctuations can affect consumer spending on premium

- Changing Consumer Preferences: Shifts towards healthier lifestyles could reduce

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