Question 1b

It is apparent that the downturn in SmartWear’s performance can be in part attributed to external factors beyond the company’s direct control. A recent national newspaper article further confirms that the economic situation in Noria has made trading conditions tough for business. Therefore, a good understanding of those external environmental factors negatively affecting the SmartWear business model is essential so that action can be taken to remedy the current situation and improve the future prospects for the company and its investors.

The board of SmartWear wants to fully understand how the general environment is impacting on the company, as this will directly influence its ability to enable the business to succeed and prosper. The board has asked you to brief the board on this issue for their next board meeting.

Required:
Prepare a briefing paper to be presented at the next board meeting, which:

(b) Assesses the major risks presented by SmartWear’s current business model, and suggests appropriate mitigating actions to manage these risks. (10 marks)

Professional skills marks are available for evaluation skills by assessing the identified risks at SmartWear objectively. (4 marks)