DOC Flashcards
Location
This refers to the geographical position of a business, such as the farmland that BON hires to host
its music festivals (lines 8-9). The location decision is a crucial one, and will depend on both
quantitative and qualitative factors. The location of a business or its operations can have profound
implications on the profitability and survival of the organization.
Trade Credit
Trade credit can be a useful tool for Before One PLC (BON) in managing its cash flow and enhancing operational efficiency. Here’s how it relates to BON:
Improved Cash Flow: Trade credit allows BON to purchase supplies or services on account without immediate payment. This deferment of payment can help BON manage cash flow better by using the cash on hand for other critical operations or investments.
Strengthen Supplier Relationships: By utilizing trade credit, BON can build trust and strengthen relationships with suppliers which might lead to more favorable terms or discounts in the future.
Inventory Management: Trade credit can facilitate better inventory management. BON can order necessary goods without immediate cash outlay, aligning inventory purchases more closely with revenue generation.
Crowdfunding
This is a way of raising finance by asking a large number of individuals each for a small amount of
money to finance a new business or project. This is the opposite of the traditional method of
borrowing a large sum of money from a small number of lenders or financiers. Crowdfunding may
serve as a viable source of finance for BON to support relatively new and lesser-known music
performers.
STEEPLE Analysis for BON
Socio-cultural: BON needs to consider changing cultural trends and demographics to cater to diverse audience tastes at their music events. Engaging with different cultural groups can enhance attendee experiences and expand their market.
Technological: Advancements in digital ticketing, event streaming, and social media engagement are crucial. Adopting cutting-edge sound and lighting technologies could also enhance concert experiences.
Economic: Economic fluctuations affect consumer spending on leisure activities like music festivals. BON must strategize pricing and promotions to attract attendees even during economic downturns.
Environmental: Implementing sustainable practices is essential. BON should consider waste management, use of renewable energy, and minimization of the environmental footprint of their events.
Political: Changes in government policies on public gatherings, especially post-COVID-19, could affect event planning. Political stability also influences the locations chosen for new festivals.
Legal: Compliance with health and safety regulations is non-negotiable. Intellectual property rights concerning music and merchandise need stringent adherence.
Ethical: Ethical considerations include fair treatment of employees, ethical sourcing of materials, and transparent marketing practices. Prioritizing these can enhance BON’s reputation and foster trust among stakeholders.
Financial Motivation
This refers to the use of monetary payments to reward and/or motivate people in organizations.
Examples for BON include salaries and fringe benefits (for permanent employees), wages (for
temporary employees), commission (for agents), and possibly bonuses (for freelancers).
PROS OF CSR
Brand Reputation → Positive image. Can develop brand-loyalty. Positive-word of mouth, can lead to increased number of sales. It is also a strong competitive advantage.
Reduced risk of legal redress. By implementing CSR which include ethical objectives and practices. The risks of regulatory compliance issues, especially in terms of the environment which are increasing, are reduced. It also helps mitigate other risks such as bad publicity and being subject to public scrutiny. Or victims of environmental advocacy groups.
Build stronger business relationships. Demonstrate that their purpose goes beyond increasing shareholder value. The business has a bigger impact on stakeholder’s lives.
Long term competitiveness and sustainability. Incorporating CSR practices into its
business strategy can help BON to enhance its competitiveness and long-term
sustainability and resilience in a rapidly changing industry. Green technologies → identify opportunities for efficiency gains and cost savings while also
contributing to the well-being of communities and the planet. This can lead to increased
trust and support from all stakeholder groups, which is crucial for BON’s long-term
competitiveness and sustainability.
CONS OF CSR
Greenwashing. BON’s initiatives may fail to build trust and credibility.
Financial challenges, especially if the ROI is uncertain or takes time to materialize.
Trade-offs with profitability – The directors and shareholders of BON may be concerned that prioritizing CSR initiatives could divert human and financial resources and efforts away from its core business activities, i.e., planning and running music festivals. Hence, giving CSR greater importance can potentially weaken the profitability and competitiveness of BON in the music festival industry. BON may face pressure to prioritize short-term financial goals over long-term sustainability objectives, particularly if shareholders prioritize immediate returns on investment given the losses in recent years due to the COVID-19 pandemic (line 17).
Limited impact or scope – Despite BON’s own efforts to implement CSR practices, the impact or scope of these initiatives may be limited due to external factors that are dynamic in nature and beyond the company’s control.or global economic conditions
(lines 61 – 62) that mean customers prioritise lower prices over greener technologies.
