MY FRIEND'S BOOKSTORE PLAN

My Friend's Bookstore Plan

My Friend's Bookstore Plan

Describe what would happen to the cash position and cash flow of My Friends' Bookstore if the owners decided to open another store?

If the owner of the college decided to open another store to give stiff competition to the My Friends Bookstore, then they would face some serious and urgent cash needs. In order to remain competitive and dominant. My friend's Bookstore would need to go an extra mile. If the owner had launched another store just to compete with their store then that store would be willing to give more discounts and attractive offers to attract customer towards their store. So, in order to counter the aggressive moves of the owner's backed store, my friends Book store also needs to be aggressive. Here, by aggressive I mean lower your profit margin, increase discounts, increase promotional activities etc and these all activities need a large of cash. When the store has a need to invest in these activates, then they are left with lesser cash in hand and would be predicting to have future stream of cash flows. So, we can say that if the owner had opened another store to compete with the My Friends Bookstore then this store would have to invest more cash in different activities, just to remain competitive and that would result into a position of short of Cash and increase in expected cash flows.

Is My Friends' Bookstore a good candidate for franchising? Explain and defend your answer?

I believe My Friends Bookstore is a good candidate for franchising. Franchising is a method of distributing goods or services to consumers. The franchise system owns the right to the trademark of the business. The franchisee purchases the right to use the trademark and operating system (Franchising lingo ...