Minimal Resources - Advantages and disadvantages table in A Level and IB Business Studies

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Created by: SBDL
Created on: 29-12-12 12:52

Minimal Resources

Advantages

lower costs means he can lower his selling price. This may attract and encourage more customers who are price sensitive, especially as there are other competitors possibly charging a higher price
lower costs means he can take out a reduced loan. A lower loan means low interest rates and reduced cash outflow.

Disadvantages

Minimal resources equals lower quality which may be questioned as customers be find themselves unhappy. This would cause his reputation to be tarnished making it even more difficult to build customer base = negative word of mouth.
safety is paramount in a business such as this and accidents may occur more frequently due to more quality. Customers can sue, causing him to deal with litigation and insurance premiums.

Evaluation

resources can not be compromised as this can cause harm to his imagealso this destroys the proposed USP

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