Rapid Lunch (RL) is a privately held company specializing in
the delivery of freshly prepared breakfast and meals via bicycle. RL’s
philosophy statement is ‘ safe and hygiene food for all’. RL has signed up with
approximately 60 restaurants and coffee bars, relying on its team of dedicated
delivery personnel to fulfill customer orders promptly. Over the past three
years, RL has consistently operated profitably and currently commands the
largest market share in its industry.
The market for home-delivered, freshly cooked meals is
experiencing rapid growth, and concurrently, several new food delivery
companies are entering the arena. Unfortunately, RL has received some
complaints from restaurant owners regarding late and cold meal deliveries to
customers, resulting in negative reviews on various social media platforms.
In response to these challenges, RL's CEO is actively
exploring potential solutions. Two primary options under consideration are:
· Expanding the
fleet of bicycles and hiring additional delivery staff to meet the increasing
demand for meal deliveries.
· Investing in ten
new electric scooters and increasing the workforce to enhance the efficiency of
meal deliveries.
While RL remains profitable, the acquisition of new electric
scooters necessitates a substantial infusion of external capital, as the
company's internal funds are insufficient for this purpose. The major
shareholders of RL currently hold differing views regarding the preferred
strategy for achieving internal growth.
The CEO is committed to addressing the operational issues
and navigating the strategic decisions ahead to ensure RL's continued success
in the face of growing competition and evolving customer expectations.
Questions:
a) Define the term private
limited company [2]
b) With reference RL, explain two
advantages of holding the highest market share [4]
c) Explain one advantage and
one disadvantage for RL of using an internal growth strategy [4]
d) Discuss appropriate sources of
finance for RL to purchase new scooters. [ 10]
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