Business Studies 2022 HSC Sample Answers

A	By process of elimination : Perception and subculture psychological and sociocultural. Regulation refers to a govt factor influencing consumer choice, therefore, recession is the only one remaining.
C	Dismissal(A.K.A “fired”, layoffs, and retrenchments(redundancy) are all all against the choice of the employee, whilst resignation is voluntary and based of the will of the employee
C	Primary data refers to a business collecting customer data themselves through their own research/data collection methods. B uses both secondary sources, while A and D use a mix of primary and secondary sources. Because C lists primary sources for both, it is the most correct answer
B	A price skimming strategy occurs when business charge a higher rate at product release to capture the initially high demand of the market. The high price and extended warranty provides an illusion of high quality and customer care(due to the warranty). Adding an increased illusion of quality is mosty likely to be a direct result of quality expectations, and therefore, constitutes B being the correct answer.
D	Lifestyle, motivation and personality are all subjective and highly individualistic psychological/psychographic factors which vary between people. Thus, psychographic segmentation would apply
A	Profit sharing is a monetary reward, as it directly contributes to the income of employees. Examples of profit sharing can be giving employees a percentage ownership in the business. Since the value of an employees share is dependent of the entire business as a whole and not just themselves, the reward is group based.
C	A, B and D are all increased costs to the business as the manufacturer has to increase spending to implement the respective strategies. However, global sourcing would involve sourcing inputs from other suppliers at a lower cost, and hence, reduces input costs(C)
A	One of the integral costs of purchasing machinery is not just purchasing the machinery itself, but the cost of training your employees how to use it.Part of training employees to use machinery is to also teach them how to use it without injuring themselves, and is crucial in primary & secondary industries .Eg, Buying a new oven for your bakery and teaching employees how to use it, and how to use it safely.(A)
D	The workplace dispute cycle is : Negotiation, mediation, grievance procedures, involvement of courts and tribunals. Since the question describes a workplace dispute, the first step to handle it would be to use negotiation
D	By process of elimination : Superannuation, Code of Conduct and Union Membership are all related to HR and not applicable to this question. Therefore, D is the answer(relates to environmental sustainability)
D	The growth phase of the lifecycle sees the business seeing an increase in demand for their product, therefore constituting an increase in production. It also means the business will not raise prices as they have only just begun growing, but won’t reduce them either. Hence, D is the correct answer.
C	By process of elimination : B and D have nothing to do with goods/service differentiation with D being part of the outputs. That leaves A and C. Although providing premium tints in A provides differentiation, it does this for a good. The assistant provides a personalised service of assistance with shoes, which provides a differentiated service. Therefore, the answer is C
C	Lets break down the options : An improved economic outlook would require global consumers to be increasing their spending and their economies to be growing. This would provide a good opportunity for a business to expand due to increased demand. Low interest rates would also result in the business being able to access extra capital from their banks, reducing expansion costs. Therefore, C is the correct answer.
D	By process of elimination : Firstly, we have to identify the type of funds that are misused. In this case, it is equity from an investment. The ATO deals with tax, so it cannot be A. The Australian Securities Exchange(ASX) is merely the Australian share market, and does not enforce laws. The APRA deals with misconduct by banks ( like the GFC in 2008), so it cannot apply to the question. Therefore, D is the correct answer.
A	Since Heidi is a small business, she likely does not produce enough to benefit from a middle man such as a retailer. Therefore, the best way for her to sell excess chickens would be to sell directly to consumers
B	Raising prices for a product is always unwelcomed by consumers and often results in backlash, even if the prices are unreasonably low(as they would be with penetration pricing). Eg, 7-11 facing backlash in 2022 due to raising the price of a slurpee. Therefore, the answer would be B.
B	This question is quite tricky and is not referring to the market that the florist itself is part of, but the market that she is purchasing from. Since flowers are a raw material, she operates in a resource market.
D	Working capital is another word for liquidity. In this case, the business is making use of a sale and lease-back strategy, which comes under the liquidity management strategies.
C	Operations would have to give input as they have to account for input, transformation and output costs. HR would have to give input for the cost of employees, and finance would, rather obviously, have to give input for the contracts as they would be the KBF making it, and also the KBF that decides the budget.
A	Return on Equity in Year 2 : ⅗ = 0.6. Gross profit in Year 2 : 5/7 = 0.71. ROI has increased by 30% and gross profit is lower than the industry average of 78%.

Question 21 (9 marks)

Michael would like to open a new burger restaurant 

1. Outline a performance objective relevant to this business (2 marks) 

Criteria	Marks
Sketches in general terms the relevance of one performance objective to Michael’s business	2
Identifies a performance objective relevant to Michael’s business	1

As Michael is operating in the fast food industry, it is imperative to consider the relevance of speed as a performance objective in his business. This is because consumers expect that the service will be prompt and food will arrive shortly after being ordered. Consequently,  by having this goal, Michael can aim for reduced wait and lead times and faster processing times to satisfy this consumer demand and establish the business in the market.

Answers could also include:

Performance Objectives

• Quality
• Dependability
• Flexibility
• Customisation
• Cost

2. Recommend an appropriate inventory management strategy for this business (3 marks)

Criteria	Marks
Clearly provides reasons for adopting an appropriate inventory management strategy	3
Provides characteristics and features of an appropriate inventory management strategy	2
Identifies an appropriate inventory management strategy	1

An appropriate inventory management strategy is the Just in Time (JIT) system. This is beneficial as it allows the burger restaurant to reduce storage costs by ordering only a sufficient amount of products to meet consumer demand. Furthermore, the JIT system minimises the spoilage costs of their ingredients as they are perishable in nature, meaning they can become stale if not used quickly. This is crucial as the restaurant will have a high fixed costs during the establishment phase of the business life cycle, meaning that it must minimise costs elsewhere in order to remain profitable.

Answers could include:

Inventory Management Systems

• First in First Out (FIFO)
• Last in First Out (LIFO) – This is generally not recommended as the inputs being used are perishable
  

3. Michael is considering which process layout would be the most efficient for this restaurant. Compare each layout in terms of efficiency and profitability (4 marks) 

Criteria	Marks
Demonstrates a clear understanding of the differences between both process layouts in terms of efficiency and profitability	4
Demonstrates an understanding of the differences between both process layouts in terms of efficiency and profitability	3
Demonstrates some understanding of the differences between both process layouts in terms of efficiency and profitability OR  Sketches in general terms efficiency and profitability of both layouts	2
Provides some relevant information about profitability or efficiency	1

Process Layout 1 has limited flow in the kitchen, with the raw meat refrigerator and stove being next to each other but the burger assembly station and the finished burgers storage area being at opposite ends of the kitchen. This may cause technical bottlenecks that may increase Michael’s lead time and thus, reduce efficiency. However, process Layout 1 has more areas for seating, meaning that it has a greater capacity to serve dine-in customers and consequently, has greater profitability.

In comparison, the kitchen in Process Layout 2 follows a ‘production line’ approach by separating the facilities based on their order in the transformation process. In turn, this layout has greater efficiency than Process Layout 1 as it reduces the time taken to move the finished product between stations. Nonetheless, this layout is still likely to be less profitable due to the limited seating areas and capacity to serve dine-in customers when compared to Process Layout 1.

Answers could include:

• A discussion of space usage when comparing Layout 1 and Layout 2 – Layout 2 has more empty spaces that can be used for dine-in customers

Question 22 (11 marks)

1. Outline how an increase in the minimum wage rate could affect the business (2 marks)

Criteria	Marks
Sketches in general terms how the minimum wage rate could affect businesses	2
Provides relevant information about the minimum wage rate	1

An increase in the minimum wage rate could yield both positive and negative effects. A higher minimum wage rate translates to more workers being satisfied with their job due to larger remuneration packages and monetary incentives to work but in turn, this may compromise a business’s finances. This is because an increase in the minimum wage rate will increase expenses and this is often passed onto the consumer through higher product prices, which may significantly reduce consumer demand and profitability if a business is aiming to achieve cost leadership in their industry.

Answers could also include:

• The impact of higher minimum wage rates on other HR Indicators
  • Changes in Staff Turnover
  • Absenteeism
  • Benchmarking Key Variables
  • Corporate Culture
  • Levels of Disputation
  • Accidents
• An improvement in labour productivity
• The impact of higher minimum wage rates on achieving other financial objectives:
  • Profitability
  • Liquidity
  • Efficiency
  • Growth 
  • Solvency
    

2. Outline how the minimum employment standards protect employees in Australia. Use examples in your answer (3 marks)

Criteria	Marks
Sketches in general terms, using examples, how the minimum employment standards protect Australian employees	3
Sketches in general terms how the minimum employment standards protect Australian employees	2
Identifies a minimum employment standard and provides some relevant information	1

The minimum employment standards protect employees from exploitation to improve safety outcomes and ensure their right to a work-life balance is maintained. For example, the minimum employment standard of maximum weekly hours (which is 38 hours per week for a full time employee) protects employees from being overworked and ensures their safety by avoiding the effects of exhaustion in high-risk industries like construction. Furthermore, the minimum employment standard of requesting flexible working arrangements safeguards the employment of working parents by allowing them to care for their school aged children whilst also fulfilling their employment duties for their business.

Answers could also include:

Minimum Employment Standards

• Offers and requests to convert from casual to permanent employment
• Parental leave and related entitlements
• Annual leave
• Personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave
• Community service leave
• Long service leave
• Public holidays
• Notice of termination and redundancy pay
  

3. How are performance appraisal of employees beneficial to employers? (3 marks)

Criteria	Marks
Clearly explains the purpose and benefit of performance appraisals to employers	3
Sketches in general terms the purpose and benefit of performance appraisals to employers	2
Provides any relevant information on the benefits of performance appraisals to employers	1

Performance appraisals of employees benefit employers in a developmental and administrative manner. From a developmental perspective, performance appraisals assist employers to identify the training needs of specific employees and recognise their individual performance achievements or areas for improvement. Administratively, performance appraisals benefit employers by informing their decision on employee rewards/promotions and assisting in long term HR planning by evaluating if current objectives are being met.

Answers could also include:

• Developmental – Provides an individual view for employee performance and addresses any concerns/lapses of skill
• Administrative Benefits – Provides a holistic view of the business and a means to evaluate the performance of employees as a collective

4. Explain the importance of carrying out an induction program for new employees (3 marks)

Criteria	Marks
Makes evident the relationship between carrying out an induction program and its importance for new employees	3
Sketches in general terms the importance of an induction program for new employees	2
Provides any relevant information about induction programs	1

An induction program is crucial for new employees as it allows them to assimilate into the company culture and understand their policies and procedures. In turn, this will allow employees to dramatically increase their productivity and reduce the possibility of accidents and higher staff turnover as they establish a good working relationship with co-workers and are adequately prepared and informed to fulfil their role.

Answers could include:

• Helps establish a good working relationship with co-workers and supervisors and provides a sense of belonging by enabling them to be secure and comfortable in the position
• A good induction program means new workers become effective team members and saves the business extra recruitment and selections costs

Question 23 (11 marks)

A gifts and homewares business sells goods such as candles, bags, cushions, soaps and jewellery.

They have provided the following financial information.

1. Calculate the efficiency (total expenses ➗total sales) of this business (1 mark)

Criteria	Marks
Correctly calculates the efficiency ratio for this business	1

Efficiency = 600,0001,500,000= 0.4=40%

2. Explain how the expense ratio can help this business determine their efficiency (3 marks)

Criteria	Marks
Makes evident the relationship between the expense ratio and how a business can determine their efficiency through benchmarking	3
Sketches in general terms how the expense ratio can assist businesses to determine their efficiency	2
Provides any relevant information about the expense ratio or benchmarking	1

The above expense ratio allows the business to determine what percentage of sales goes towards expenses (i.e. 40 cents from every dollar from sales is an expense). This ratio will allow businesses to benchmark against industry averages, its competitors, or against itself during different time periods to evaluate if they are performing at an optimal efficiency and consequently, reduce their expenses.

Answers could also include:

• Allows the business to determine how effectively resources are being used on a day-to-day basis

The family-owned business is considering expansion by opening two new stores. Their bank has given approval to borrow $3,000,00 at 4% interest to finance their expansion. 

3. Why is this level of gearing an important consideration for the lender to this business? (3 marks)

Criteria	Marks
Clearly explains why the gearing ratio of a business is an important consideration for lenders	3
Sketches in general terms why the gearing ratio of a business is an important consideration for lenders	2
Provides any relevant information about gearing	1

Gearing is an important consideration for the lender as it provides an accurate indicator of the solvency of the business by showing the extent to which a business relies on debt finance to sustain its operations. Consequently, it provides information like whether the business is able to meet its long term financial obligations on time to the lender, allowing them to adjust the interest rate accordingly to reflect the level of risk of the loan.

Answers could also include:

• Gearing indicates the level of liabilities within the business and allows lenders to determine if it safe to loan
  

4. Using the financial information provided, explain why the business should use debt finance to acquire the two new stores (4 marks)

Criteria	Marks
Clearly provides reasons for why the business should use debt financing to acquire the two new stores, with reference to the financial information provided	4
Explains why the business should use debt financing to acquire the two new stores, with reference to the financial information provided	3
Sketches in general terms the use of debt financing to acquire the two new stores	2
Provides some relevant information on debt financing	1

The business is encouraged to use debt finance for the new store acquisition as its current efficiency ratio is only 40%, which is 10% lower than the ideal ratio of 50%. This means that its current expenses (including interest expenses) are relatively low and thus, the firm has the capacity to take on more long-term debt to finance its growth. The firm has also been able to acquire a very low-interest rate and currently possesses $1.8 million in owners equity and generates $500,000 in net profit, As a result, the business can use a portion of its equity to pay back the loan (evident in its 1.1:1 gearing ratio), making debt financing a viable option due to its solvency.

Answers could include:

• The calculation of other financial ratios (profitability, liquidity ratios) to support your answer 

Question 24 (9 marks)

A business wishes to introduce new products into the market.

1. Outline one promotion strategy this business could use to launch the new product range (2 marks)

Criteria	Marks
Sketches in general terms one appropriate promotional strategy the business may use to launch a new product range	2
Provides any relevant information on an appropriate promotional strategy	1

Advertising is a key promotional strategy that the business can use to inform customers of their new product range through a mass medium like TV’s, Social Media or Radio stations. This will allow the business to expand their reach and reduce their per unit promotional costs through economies of scale.

Answers could also include:

• Sales promotion
• Personal selling
• Relationship marketing
• Publicity and Public relations
  
  

2. How will the business know that their marketing plan has been successful for a new product range? (3 marks)

Criteria	Marks
Clearly explains how the business can determine its marketing plan has been successful through monitoring and controlling	3
Sketches in general terms how the business can determine its marketing plan has been successful through monitoring or controlling	2
Provides any relevant information on monitoring or controlling	1

A business will know if its marketing plan has been successful through effective monitoring and controlling. As such, the business can qualitatively and quantitatively ascertain the success or failure of its new product range by comparing planned results against actual results and benchmarking them against pre-set marketing objectives, industry standards or its competitors.

Answers could also include:

• A movement from the establishment to growth phase on the product life cycle
• Achievement of marketing objectives
  • Increase Sales
  • Growth in Market Share
  • Expansion into New Geographic Factors
  • Expansions into New Markets
  • Increased Customer Satisfaction
    

3. Why should this business adopt a marketing approach instead of a selling approach? (4 marks)

Criteria	Marks
Clearly justifies why the business should adopt a marketing approach instead of a selling approach	4
Explains why the business should  should adopt a marketing approach instead of a selling approach	3
Sketches in general terms the marketing approach and selling approach	2
Provides some relevant information about the marketing approach or selling approach	1

The business should adopt a marketing approach as it is more receptive to consumer needs with the aid of market research. In turn, this will propel business success by understanding what the consumer wants out of their new product range and positioning it in a manner that drives consumers to fulfil their desires of buying the product. In contrast, the selling approach is difficult to implement as it focuses on the consumer after the product is made. Consequently, it may harm the business upon releasing its new product range due to the extensive advertising and personal selling costs required to maximise sales and ‘convince’ consumers of the need for its product.

Answers could also include:

• Marketing approach – focuses on building customer relationships, quality and satisfaction
• Selling approach – focuses on creating the product without customer needs in mind; it requires persuasive sale techniques and extensive communication

SAMPLE ANSWER:

Text 2 captures the powerful feelings of awe and wonder that accompany an individual’s realisation about the power of literature. Fforde creates a tone of intense excitement throughout the extract through his use of cumulative listing and italicisation. “On all the walls, end after end, shelf after shelf, were BOOKS… hardbacks, paperbacks… handwritten manuscripts, EVERYTHING.” The listing creates a building sense of suspense that shows the vast nature of the library, while the italicisation indicates the narrator’s tone of awe, showing that they are overwhelmed with wonder at the scale of the library. This wonder is amplified further by their realisation of the power of literature depicted through the auditory imagery when they are listening to the books and “heard… the rumble of machinery, people talking, traffic, seagulls…”  The list of such a diverse range of sounds immerses readers in the vast array of experiences that can be captured by literature, and is used to show the narrator’s amazement at the range of worlds that literature can transport readers into. The powerful sense of wonder felt at this realisation is expressed through the metaphor of “clouds (sliding) back from my mind and a crystal-clear understanding of the nature of books (shining) upon me.” Images of light and clarity evoke the intense, positive emotional response felt by the narrator, while the final exclamatory statement – “these books were alive!” – further expresses their awe and exhilaration at this realisation.

Answers could include:

• Products – goods and/or services 

– branding 

– packaging 

• Place/Distribution 

– channel choice – intensive, selective, exclusive 

• Global Financial Management

– exchange rates 

– interest rates 

– methods of international payment 

– payment in advance, letter of credit, clean payment, bill of exchange 

– hedging 

– derivatives

A suggested structure for this response is as follows:

1. Executive Summary
2. Marketing Strategies for Global Market Expansion

1. Product Packaging 
2. Product Branding

      3)    Channel Choice 

      4)    Global Financial Management Strategies

1. Strategy #1
2. Strategy #2

     5)   Conclusion/Recommendations

It is recommended that you use the DPEEL structure in your body paragraphs:

Definition

Point

Explain

Evidence

Link

A short snippet (a sample executive summary and one body paragraph) is shown below:

To the managers of Bee Sticky Pty Ltd

1. Executive Summary

Bee Sticky Pty Ltd is an established manufacturing business that seeks to expand its current operations into new geographic markets. 

However, the SWOT analysis conducted indicates that current packaging is not effective in maintaining product quality during the distribution process. To alleviate this, Bee Sticky Pty Ltd should implement product packaging strategies to mitigate the risk of damage during transportation whilst also employing branding strategies to project their superior ‘high quality honey’ image.

Due to the opportunity presented by falling bee populations overseas, Bee Sticky Pty Ltd is also recommended to implement a selective channel choice to ensure a balance between the adequate penetration of global markets and maintaining its premium brand image.

In order to successfully expand, Bee Sticky Pty Ltd must also be aware of its weaknesses, like a lack of experience in foreign payment systems, and threats, namely fluctuations in the Australian dollar. Nonetheless, these can be adequately managed by adopting less risky payment methods such as payment in advance and utilising hedging.

2. Marketing Strategies for Expansion

Marketing strategies are crucial for the successful expansion of businesses into new geographic factors. Bee Sticky Pty Ltd is recommended to adopt such strategies to ensure a smooth transition to international operations

a. Product Packaging

Product packaging refers to the physical appearance of the good, including its container and design. Bee Sticky Pty Ltd could utilise product packaging strategies to address its weaknesses and highlight its strengths in the international market. As the current product is experiencing frequent breakages during transportation, Bee Sticky Pty Ltd may wish to redesign its packaging in a way that minimises damage. This can be done through the use of bubble wrap or loose packing peanuts in each box to absorb the impact of any accidental drops. Furthermore, Bee Sticky Pty Ltd should also implement more premium materials, like glossy or matte finishes, into their product packaging to highlight the honey’s superior quality relative to competitors. Thus, by utilising product packaging strategies, Bee Sticky Pty Ltd can address its weaknesses and further establish a competitive advantage through quality in international markets.

QUESTION 26 (20 MARKS)

Answers could include:

Strategies in Human Resource Management

• Leadership Style 
• Job Design – general or specific tasks  
• Recruitment – internal or external, general or specific skills 
• Training and Development – current or future skills  
• Performance Management – developmental or administrative  
• Rewards – monetary and non-monetary, individual or group, performance pay  
• Global – costs, skills, supply  
• Workplace Disputes – resolution – negotiation, mediation, grievance procedures, involvement of courts and tribunals 

Effectiveness of Human Resource Management

• Indicators 

– corporate culture

– benchmarking key variables 

– changes in staff turnover 

– absenteeism 

– accidents 

– levels of disputation 

– worker satisfaction 

Human resource strategies refer to the measures and processes implemented within firms to improve both employee and employer outcomes. These strategies are crucial to a business as HR indicators like levels of disputation and worker satisfaction can influence the productivity, professionalism and cohesiveness of an organisation’s workforce and influence other key indicators like absenteeism and staff turnover, which often attracts a significant cost. Canva has successfully employed HRM strategies like monetary and non-monetary rewards to minimise workplace disputes and enhance worker satisfaction, resulting in significant improvements in employee retention rates. Similarly, IKEA has reduced disputes and worker satisfaction through recruitment methods that focus on finding applicants that align with their core values, further driving sales and greater productivity growth. Thus, HRM strategies that reduce disputation and improve worker satisfaction are crucial to a business as it improves productivity and underpins long-term business growth.

Staff turnover refers to the rate at which employees leave the business voluntarily to be replaced by new employees. An effective rewards strategy is vital to a business as it reduces the levels of disputation by fairly remunerating employees for their work and improves worker satisfaction by incentivising productivity and increasing extrinsic motivation. Moreover, by resolving these indicators, firms will benefit from lower staff turnover and significantly reduce its training, induction and lost productivity costs. For example, Canva’s high remuneration packages of $100,000 AUD for graphic designers in 2018, almost double the industry average of $54,000, was able to provide prospective and existing employees with a desirable and innovative work environment that was conducive to teamwork and greater job satisfaction. As a result, Canva in 2019 saw a 7% decrease in days lost due to workplace disputes and a 13% increase in worker satisfaction in their annual business performance audit, which boosted productivity and generated over $15 million AUD in sales from premium templates. Furthermore, Canva employs non-monetary rewards like free dining spaces/catering and flexible work arrangements that gained the firm the title of the ‘Best Place to Work in Australia’ award in 2017.  This further translated to a reduction in staff turnover, reaching a peak of over 95%  in their employee retention rate in 2019 and a $1.8 million AUD after-tax profit due to reduced training expenses. Hence, it is crucial for businesses to employ HRM strategies that reduce levels of disputation and improve worker satisfaction in order to increase profitability and enhance staff turnover outcomes.

QUESTION 27 (20 MARKS)

Answers could include:

Operations Processes

• Inputs

 –transformed resources (materials, information, customers) 

 – transforming resources (human resources, facilities)  

• Transformation processes 

– the influence of volume, variety, variation in demand and visibility (customer contact) 

– sequencing and scheduling 

– Gantt charts, critical path analysis

 – technology, task design and process layout 

– monitoring, control and improvement  

• Outputs 

– customer service 

– warranties 

Operations processes refer to the activities taken to add value to a product by transforming inputs into ‘sale-worthy’ outputs. As the operations process is considerably influenced by external factors, it is crucial that these processes can adapt to the demands of the market in order to gain a sustainable competitive advantage and ensure business longevity. Apple is a business that has been successful in gaining such a competitive advantage through its premium transformed resources and renowned customer service outputs. Similarly, IKEA utilises automated sequencing and scheduling technology to ensure projects are completed in a timely manner, further enhancing customer satisfaction and ultimately, their competitive advantage. As a result, operation processes that sustain a competitive advantage are pivotal in enhancing long-term business success and maintaining/expanding a firm’s customer base.

Inputs refer to the resources used in the transformation process and can be categorised into two areas – transformed (inputs that are changed during the operations process) and transforming resources (inputs that facilitate change during the operations process). The appropriate selection of inputs in the operations process will ultimately dictate the quality and competitive advantage of a product or service in the market. As a result, the use of these inputs in the operations process holds great significance in determining the success or failure of a product range. For example, Apple’s operations process sustains its competitive advantage through the use of premium transformed resources (materials) like stainless steel and Ceramic Shield glass. In turn, this allows the firm to differentiate itself from competitors like Samsung and establish its position as the world’s most valuable global brand in Kantar’s 2022 list with a market capitalisation of $2.31 trillion USD. Additionally, Apple’s metal usage program also imposes the use of 99% recycled tungsten and 98% recycled rare earth elements, making the iPhone’s materials sustainably sourced. Consequently, this has allowed Apple to erode the market share of its competitors by 4% in 2022 through its competitive advantage. This was accomplished by attracting environmentally conscious consumers, further resulting in increased profitability and improving its already attractive reputation as a socially responsible corporate citizen. Thus, having inputs and an operation process that is conducive to sustaining a competitive advantage can assist firms by improving profitability, enhancing its reputation and extending its customer base.