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Transcription of this question: 2.Himalayan TrekkingHimalayan Tækking (HT) is a trekking (mountain walking) agency based in Nepal. It has beenoperating guided treks for tourists in Nepal, Tlbet and Bhutan for over 20 years. With a duration Ofbetween one and three weeks, HI’ offerings include treks to the Everest Base Camp, tours to Buddhistsites in Tibet, and treks even to the inaccessible Kingdom Of Bhutan. Brand loyalty is very strong,with repeat bookings from many clients (trekkers).The market for trekking has been growing very rapidly with many new businesses setting up to meetthe increased demand for “adventure” holidays. In this competitive market, HI’s unique sellingproposition (USP) is to provide an unforgettable wilderness experience in a socially and ethicallyresponsible manner. It only uses locally produced food and local guides and trekkers camp withoutwasting too many resources. All clients have to sign a contract to agree that they will act in a sociallyresponsible manner throughout the trek. Though it always had a strong sense Of social responsibility,HT had not promoted this aspect Of the business until the management realized that changes inattitudes towards social responsibility could be used to gain competitive advantage.HI”s brochure states that:• It is a market leader in adventure tourism for Nepal, Tibet and Bhutan. It caters to a wide range Ofclients from experienced to inexperienced trekkers.In recognition Of protecting the fragile environment, economic systems and cultures it treks in, HThas been awarded a global quality standard.By employing local guides and using locally produced food, HT adds much value to the localregion _• It only employs staff that have previous social and environmental experience.• It financially supports a non-governmental organization (NGO) for Nepali orphans by giving 5%Of its turnover to Child Environment Nepal (CEAO.Selected financial information for HT for 2013:Annual fixed costs (trekking permits set by $800 000overnments in Ne a’, Tibet and Bhutan)Average variable cost per trekker (food, localides, trans ort costs)Average price charged per trekkerNumber Of clients (trekkerssloooo300(b)(c)(d)(i)(ii)(i)(ii)Define the term unique selling proposition (USP).Identify two external stakeholders Of HT.Calculate how many clients (trekkers) HT would need to meet its targetprofit figure Of S400000 per year (show all your working).Using the financial information provided, prepare a fully labelledbreak-even chart for HTfor 2013.In 2014, the following changes occurred:annual fixed costs increased by 20 %• rising fuel costs of flights increased average variable costs by per trekker.The average price charged per trekker remained the same (S 10000) as did thenumber Of clients (300).(i) Taking these changes into account, calculate the new break-even quantityand margin Of safety for HI’ in 2014 (show all your working).(ii) Explain one possible response from HT to the change in the break-evenquantity and margin Of safety calculated in part (i).Examine why changing attitudes to social responsibility might be importantfor[2 marks][2 marks][3 marks][6 marks][4 marks][2 marks][6 marks]

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