Franchise Case Study

1) Setting up and running a business and franchise have their similarities but are very different. when starting up a business you start it with the hope of success but nothing can really guarantee whether the business will be successful or not. there is also a huge risk when starting up a business financially, depending if its started under a limited or unlimited liability. if the business were to fail this could have a large impact on the owner. although this is the case in businesses it is a whole different case with franchising. when franchising the buyer of the franchise known as the franchisee is buying a franchise from the seller known as the franchisor. in most cases franchisees purchase a franchise whose franchisor is already running a successful business. therefore there is a guarantee on the business being successful. By selling off a franchise the franchisor will gain from a larger economy of scale but it also means it would be difficult for the frachisor to control the activities of all its franchisees. Running a franchise is similar to running a business but there is a huge risk for the franchisor in selling off its company name and logo to a franchisee because if franchisees do not follow the franchisors protocols or do not meet expectations it could result in harming the reputation of the franchise.

2) Whether a team has the best players or the average players doesn't determine the success of the team. Using the Forbes website and the Business of Baseball website, the Washington Nationals, which were known as the Expos, are most likely to be sold to a rival bidder. The teams overall statistics are not very impressive. By looking at Forbes we can also see that the Washington Nationals also generate the lowest revenue in the league. Another team which is not doing very well in the league are the Tampa Bay Devil Rays, but if we were to compare the two teams we can see that the Tampa Bay Devil Rays generate $110 million in revenue which is greater than what the Washington Nationals make, putting them in a worse position. the other statistics of the Washington Nationals are average but because of their revenue, they are most likely to be bought by a rival bidder. Revenue can be increased through selling team products such as t-shirts, mugs, hats etc. and charging other fees around their stadium. Due to the revenue they generate, the Washington Nationals are the most vulnerable team to be sold to a rival bidder such as Portland Oregon.



3)

a) the Premier League can use their position to expand their franchise in different countries. just as how there is an English Premier League they can expand the Premier League such as the Irish Premier League and the Indian Premier League for example. they both do not have English soccer teams but are still part of the Premier League franchise. By opening different premier leagues all over the world the Premier League franchise can expand their brand.



b) the football clubs in the original premier league which is the English premier league are known all over the world because of the expansion of the Premier League and different broadcasting stations in different countries. this basically will act as a reputation boost for the clubs in the Indian and Irish premier league. The clubs in the Indian and Irish premier league will also be known by the English premier league but the franchising of the premier league will act as an increase for the reputation of the English soccer clubs.

Ethical Objectives and Corporate Social Responsibility

1) define

a) Ethics: are the moral principles that guide decision making and strategy.

b) Morals: are concerned with what is considered to be right or wrong, in society's point of view.

c) Corporate Social Responsibility: are responsibilities of businesses that act morally towards thier stakeholders such as thier employees and the local community.

d) Social Auditing: is a way to ensure that socially responsible objectives are being implemented.



2) Give three examples of unethical business behavior.

• financial dishonesty: delibratly misenterpretating a business to make money
• environmental neglect: harming the environment
• exploitation of workforce: mistreatment of staff

3) What are the disadvantages and advantages of businesses who behave ethically?

Advantages of behaving ethically are:

• having an improved corporate image:- enahanced image and reputation of business
• increased customer loyalty:- customers are more likely to be more loyal to businesses that do not act immorally or unethically.
• cost cutting:- possible to reduce certain costs of production through ethical behaviour
• improved staff motivation:- ethical and moral behaviour can boost employee motivation and by doing so increase productivity and loyalty.
• improved staff morale:- ability to recruit high quality staff who are motivated to work for businesses that behave ethically and morally.

Disadvantages/Limitations of ethical behaviour are:

• compliance costs:- refers to high costs of acting ethically
• lower profits:- if the compliance costs can not be charged to the customer using the product then profitability will fall. can also be referred to ethical dilemma.
• Stakeholder conflict

4) How does CSR help a business compete?

Businesses that act in a a socialy responsible way gain a better image as a business and so do thier products. this means that it will result in people buying more of thier products, Ex. The Body Shop. Due to the businesses success the business will then get more investors.

5) Why is a social audit undertaken by business?

Businesses undertake a social audit to make sure thier objectives as a socially responsible business are being met. the social audit is an assessment of how the businesses objectives are affecting the society.

Fullers case study

Task 4:

Fullers is a large brewery, ehich earns more capital than local breweries, and buying small breweries would benefit the stakeholders or wouldn’t hardly affect them. The impact on the stakeholders will vary due to the popularity of the beer. If the brewery Fullers bought had well demanded beer, then it is highly likely that Fullers will earn a lot of money from it. However if the brewer was not demanded then an acquisition would either not harm the stakeholders or affect them and the company. Gales was a highly demanded beer by the locals, all the pubs and markets, therefore Fullers buying Gales brewery was a good decision and has increased profits made by the company and more capital for the stakeholders. Because Fullers has gained a lot more profit due to this acquisition, the stakeholders will also receive a larger amount of money. However, in the long run the stakeholders could be affected because Fuller has closed down Gales brewery and moved productions to Chiswick. This could change the taste in the beer and decrease the demand for the beer, or the price of beer might increase due to transportation costs or other factors.

Fullers case study

Task 3:

Economies of Scale would be the best reason for the acquisition because through the acquisition the company can expand its product sales and make more of the product than they were producing before the aquistion. When a firm acquires another firm it is gaining a larger scale of operations, such as more labor and more equipment. In Fullers case, buying Gales has helped expand production and gain a larger margin of profit for the company.

Michael, Mehul, Talal, and Faisal. Fullers case study

Task 2:

· Capacity is relevant to this case study because fuller has increased the amount of beer that its selling by buying the Gales brewery. Gales brewery has been selling its beer to the local pubs and markets, when Fuller bought Gales brewery they started selling Fullers beer to the same pubs and markets. The local pubs will, most probably, not stop selling beer because of the buy-out. In theory, Fuller has increased its capacity because of the firm's capital assets. By buying Gales brewery, Fuller now owns another business that sells its product enabling it to expand its capacity.

· Economies of Scale can be relevant to this case study because Fuller scale of production/operations has increased due to the acquisition. Because Fuller now owns Gales brewery it has more people working and more equipment for production. Economies of scale are the advantages of larger scale production that results in lower cost per unit produced. Fuller in this case has gained economies of scale from their acquisition, and the acquisition has been proven to be good. As of September 2006, its profit has increased by a third to 10.9 million euros. This can also help Fuller to compete against other top beer brewers in its region.

· Fuller buying Gales brewery has given it access to supplies and distribution networks. Meaning that they don’t need a new mean of distribution for their beer in the local region. If Gales brewery was transporting the beer using trucks, or a specific transportation route, Fuller will be able to use the same route for distributing its beer. The beer that was being provided to the local pubs will now be changed, but the pubs have to sell beer meaning that they will be forced to sell Fullers beer.