r,r"t•

I
I Grade: A2

Bilasrai Kashinath Gadia (A level) Jr. College

Internal Assess ment- I (2022-23)
~
~
. •45 01inS
Ourataon.
Date:
Marks:20 .
Subject: Business . nature.
Teacher's Sig
Urban Boo Hive (UBH)
Co-working
After Amit Menda graduated from university, he started work for a business in the US. ~
business specialised In designing workplace environments that aim to Improve p~oducilVJty.
Whilst working in the US, Amit observed the growth of co-working. Co-working provides o~ce
space and support services for businesses. It offers a flexible solution for businesses wtuch 5
need an alternative to traditional long-term leasing or ownership of office space.
In 2018, using his knowledge and experience, Amit founded UBH, a private limited compa~. It
is based In country W, where co-workjng is still a relatively new Idea. UBH focuses on providing
office space to entrepreneurs and small businesses as and when they demand il UBH calls its
co-working centres 'beehives'. 10
There are three shareholders in UBH, all of whom are directors. Amit owns 50% of the shares
while the other two shareholders own 25% each.
A difficult economic climate
Until 2020, UBH's expansion was rapid. This internal growth was mainly financed by bank
loans. However, in 2020 UBH came close to failing. There was a recession in country W when 15
economic output fell by 10%. Many of UBH's small business customers became insolvent during
the recession. UBH was left with significant unused capacity and almost no working capital.
The government responded quickly to the recession and made the following changes to its
economic policies:
increased investment in infrastructure including road and rail transport .
20
reduced income tax
reduced central bani< interest rates
delayed payment of business and property taxes.
Amit believes thijl without these changes to economic policies UBH would have failed.
Marketing strategy
25
UBH'~ marketing strategy has targeted entrepreneurs starting new businesses and
established businesses. sma11,
Each UBH ~working centre (beehive) provides customers with shared kit . ..
snack vending machines. Customers are offered flexible contracts f chen faahties and
can either lease a hot desk (any desk available that day) a ded" r~m 1 day to 1 year. They
for the dur~tion of the contract) or a private office. Cust~ers ica ed desk (the same desk
3(
off various SIZes by the hour. All customers benefit from unlimited~nt also rent meeting
acllltles.
rooms
in ernet access and . .
.
~~~
1
 -~ ~
(~
l\ \' ,
l)lroctor has produced a sJtuaffonaJ
1"" l,fllrl<.,,,,g,ed details are gJeen below.
analysts f o r ~
~
~
"' . ,
c<Jfl c;apaclty utilisation fell to a low of 50%,
tn~ • follow
lng lhe recession, UBH opened 3 new
02O
ounn9 beehives. UBH now has 1 ~
~
· o'-~
2O21 o < «a
beeh iVS'rwoIn coun lrYaJlon
Jntem W. al corporallons ,,
ente red the mark et In direc t com
In 2021 • petlt ion with 9,-,,<"'
e<'-4<
~
uaH. r feedback shows a high level of saJlsfacJlo c; cP
n with UBH 's facil ities .
JOfller
custom e reedb ad< rates price , nexlble conlr acls and dista nce from key tran •o "'u,el
ci;:..,I/le three most lmporlant factors In spor t
~ e1asttcity of demand for leasing desk s
choosing a co-w orldn g
Is estimated to be -0.5 ..
cent re.
r.,osr new business sJart-ups are unaw are 45
SociJI ,nedia advert,smg has been the of Jhe bene fits of ~-w ork mg.
most cost -effe ctive met hod of
attra cting
custom,wger
Solll" ers. t,usinesses, lnduding multlnatlonals, mak
e use of co-w orki ng cen tres in
country w. However, they dem and prem
ium facllltles and mor e spa ce per
des k than
UBH curren tly provide. 50
Forecast market growth for co-working in
country Win 202 3 is 10% .
Table 1: Price per month for leasing
desk s at UBH and mark e t I ead er
I
I .
,
, Hot desk
l>edlcated desk
Private office

UBH ($)
300
2500

150
I
j

I Market leader ($)

I 140
280
2300 --: --
55
Amit is aricemoo that capacity uHllsatlon
across UBH's 10 beehives averages 80% com
to lhe farget ol 100%. He has asked the pared
marketing strategy to increase sales and marketing departmentto propose changes to the
reach target capacity.
llanaging CO-.Vondng centres and Human Resourc
e Management (HR M)
Amit has de . '(
day-lo-oay!::~~onty to cen~ managers to make decision 60
lecllrily. issues and hrnng of employees such as cleas about local advertising,
ners, IT technicians and
::, UBH beehive also has aeustomer relationship man
ager. UBH encourages its beehives to
inc lud ~'talks to PIOm
andotebusin facili
theiress tiesceand
adVf Incr
sess eas
IBHemp1oYees have ReXlb/
ions. e customer interaction. Recent
events 65
'
8
~
~rig?"1llidivldua1ProJects ,ernpioYment COnlracts. Emp
loyees can spend 5% of their lime
: : 0ur Peopfe are our lnlere st st. All new recruits receive extensiv
~Yto 1ar:w~ua1 to rum, O:,re;:: :1'8°91h 811d we are e training. UBH's vision
committed to providing opportunities
c atteoges: en al. Our team is energetic with an entrepr
eneurial spirit, 70
 "lllD HD~'
Goin g publi c?
) . a loss in 2020 , UBH return ed to profit
In 2 UB
After mak~ g next 18 mont hs. As well as 021
open ing Beeh ive UB~ ~as ambit ious expansion
plans fo~ f 2~22 and 10 more in 2023 . Office 811
buildi ngs are expe~ slve Ins aimin g to open 3 more
centres_ ,n tion of long- term lease s and joint
inves tmen ts with landlo rds ~unt ry W so UBH uses
a com~
uaHw ma e d to inves t $16m to finan ce this expan
111ne sion . ° reduce cash outflows.
. . ,·n favou r of chan ging UBH to a publi
Amit ,s . c limite d comp any (pie)
:~;ck
sale to the publi c by early 2023 . The other
excha nge flotat ion is likely to be very high.
·
two share holde rs warne
UB1t could ff
o er ·ts h
d Amit that the s tares
r I
f
cos O a
rhe Finan ce Direc tor predi cts that intere st rates in coun try W will Incre ase from 2%
'023. Table 3 prov ides data from UBH 's to % by
lates t financial state ment s. 4
Tabl e 3: Extra cts from UBH 's finan cial
state ment s
I
2021 ($m) 2020 ($m)
1come state ment Reve nue
14.4
\
6
Profi t/loss for the year 1.5
\
(3)
Dividends paid \
0.5 0.2
;3tement of Non- curre nt liabilities
\
12 9
:mcial position I
end of year) Shar e capital 2 2
Retained earnings
\
Trade receivables
3.5
1.1
2.5
0.7
' 120
Cash and cash equivalents 0.7 0.1
Current liabilities 3 4.5
I
 fj-l,'
-~
Sfrategles for tho futuro
.
Amit COnd uc t e d a strategic analysis of UBH to Identify strategic options. A summary of Pc"
F IVe Forcec 1 t· ''~t· ------
- ''0 r op ion 2 Is shown In Appendix 1. 'ti. ----
\ \ .~.\.\,).';\.,s:. ~<:. ~ -,,<:.\.~'-""'~
The boa rd has to make a decision betwe en the following two s tra te gic options.
'')s,,).c;,,~s:..,,.,, .,,, ~.,..,s:.~ . I
Strategic 01:tion 1: Expand into country Z . ······J .o..tJ.t>,..f.•···
Open beehives which offe r tile same fa cilities o s tho se In co untry W. E c onomic growth in country
j Z is high. There are fe w busine sses offering co-working c entros In country Z. .....~ -.~~1
Strategic option 2: Ta rget large busine ss custome rs In country W ..!?,.~
Develop high specification beehives to attract multlna tlonal and other large business customers .
Premium facilities will be required and centres will need to be located near international transport
hubs within country w.
Table 4 contains a summary of strategic choice technique data .
Table 4: Summary of data from strategic choice techniques over 5-year period
Strategic option 1: Strategic option 2:
Expand fnto country Z Target large business
customers In country W
• Rapid economic growth • Multinational investment in
countryW 140
Restrain Ing • Political instability • High cost
forces • Brand development required
Capital cost $6m $10m
Accounting rate 10% 15%
of return (ARR) 145
Decision tree:
Expected
monetary value $2m $6m
Probabfllty of
success 60% 70% 15
>pendlx 1: Porter's Five Forces for option 2: Target large business customers In country
Threat of new entrants
Buyer power
• High capital costs to enter market
• Limited land available for expansion
• High product differentiation
Threat of substftutes
Supplier power
• Substitute services available from
landlords, hotels and conference centres • Corporate clients have financial Power
• Digital technologies offer new ways of
working
\ .
Five Force s • f . icwor k for developing its
Evalu ate the usefulness to l/UJI of Porte r's
1111111
Q.I ys,s us a r,m
busin ess strntc gy.
,.., ,,.r..~✓.. rf-.r.. ......
........l.,u. l:.~.L ..~.........r'·
0. k'..~:....6.-r..r:.r:J...... r::to.~,p-,;7.r./. ·... <fP-11'-r,- ~- _ _ ./ ,,'") "
· • .......... .. .. . r. :n ..r.~" ""--'
- •• ..... ~ , ..
a .. .r.r. .e,~~.A?.,ui.:1...... .,1,.i:u.l.u..~s. r
...... fta.~ . . . . m . a.A'.I.Ud·..........s.1.~B.l.t.iu?.s.... ,.......!.JJ.'.t. .....
....:l& ...~•"·.a/.:....~ ...•f:?;t;.M.J .....~h..1.Ul.6,.,,... ..'llu. ~.a/......~../../.t.b
..r.b./.uLci"!7·······
... .A.~-~·-/?.-'?..~~.r.. .....Q..44, ...... 5.o/ µ.H.1.·... ,,.r;,.(N.~. . .. . . . . .......... . ............... . . . . . ..... ....... .
.. .
.... j.r1. ......tl,~ ....../:t.t:<!.q,./.-: ..... ~.A ~~ ......<1'4.Q:-4 r.J.tf.
·1'··.. ~.e..... c:.R._/1..1.,!;o,/.,, ...<.. arP.6. .........
R.~. t;;/.: ; .•...•<J/1.;,fe~e1:1.:t.t..~.ti.Q.a
....,:..n. .........
...~.£ .....d.~ ll .... a.ll.d...... ,d. ~...~>::
.:t:.~r.r:r:.d..r ..··ti~.~····.at.·"'.-.t. .•... & ..e•.•••a,,ii:
,{~✓•• •••• .z.......l.....r..r•••.•:r.£.r.A-~............ ..
Ml.f1tdd.... .A. . ~k.,e.•.. :./.,e.£a'~...../4..rnr....... .r/.t.✓.
.e.c:6..... .
... /~L ... . u.li.tl.......<:1.r........ • ?JI. . . .
.,. l_ l' I ................................................................. .
..... ~. tlJ/~.ho.11.. ............................................................... L' ~ ~
r.. I --.L · c/.. .... ./.1.f.tjf. · ............. .
~.AJ.,-;,.. /;r,j./:t?, ..f....... ...D. ...~.•••. (ft..t.ll.1...... s..
LJ j..
•....• Cd ... :-lJ:J.€. .....-f.-.~ .~.~ ...~~ .........
I✓ ll _J ,, _ _ .J...... ,__/
.ld.....6:r.... U.,.i.r:........
.f.o..d.l'r..e..d....... /...am.,f.'..e/.r.J:tCJa ..-,, ....l l ! l , ~ •.a.,;L,da'.ac······r
....
.....er.v..<M.i.gk,k...... .
..~b.~.L1......a..s:.. ,.A2.a4!t•··alf.er.1J.ta.f.1.'c.e....:.te..tVJ.C.e. ..1:•••••• i:M.2
W.«x.l.u.'.a.J·······r;f.$.········
_..w..fil.r1.6........C(/f.(/••••• J.'l/.......~.....Y.l!f../..~.t..P../,IU.t1.l......6......L1'.-:
-····hf..t:. ....t.iifl.Yi.d.......h..(l.K ..~...; .. i:a ................ .
....q,, .....w../J.Q.Lf?...,,.... w.l.z1.C..h. .....1-'.s. ...... w..ff
••e....aa.«t......l!.1u:i..9/.l.'/:;r.......,,.;:...........
...f..Jd~.a.1.r.'.1t..r:..W,····l-·r.emsti::rc. ...~.....1r.u.l.Af
R.a.a,./.....c""l:?.Z-,li!-IZl'#.r.t..C..
...'-rY.::::.W..'1.t..1£,:.cf"······tU:1tl........!fllUJ.t!..4_...-,/2·r..«.a:14.lt.
./fil.m.~r.:J:......l!t..«.J?...e ....
.....h;. ...... l..~£&...iA?-'i':~r····!.,:!J,lt/.e,......J,.~.i..rJ..e~c.......-"f..r
... A?.. ~•• J........
.... /e::iJ. .....lit6..e. .....d .....fll.3••••••drr ...a.du .(l.~ ~'W -e.....a~ ....~
w.odf.1..°ff..................
....l,:u:.ol....E...>::.....t!.9-ll.rJ.sl..:.it:1-.....a..aal....o/.fo..i:u....ad.......
....... /4QJ.1.Led......~L~b ...cL. ................
.....$.-/J.flLU......./J.1.w.a.l✓..e.J0·····d1.1.~ ...../:rt. ...... f-.M
.....fU:.<U..'t.a.R..l.e....... .u.o.td.(l('......h.(a.l(.e.......f.:.l. ••••• :s ..r:.i!.lll..... J.9.c....lit.r.lJ,····
r.&.y. . .
.....p..h.~.......-J:1J.e.......S..f(.//l-/<.£.r..; ......r.Y,.tiM.!J, . .s?......J.Q.~......c.fl..;;...w-<
.<?• .o.r.kt.~ ...........
.....s.p.rd.t..e..1...7 .....f?.rJ.ti?J: .... #,-1.t.. . al.....a.1:2......d.Y ..«. 11. ~. a.:..e......... .;J••••••
.....d.1..s. ......f/tr.u!r,t;.a/........<J,.'jj-.e.J.... p..r ?.~..~ e . J .•..•••
,1/......u.t) /4.J............
....~a. 4/i ll... p.:,.:~.f#. . . l..~.~Lu.li.c..~ ...lfaw.~"9'····
-lfzL:c....l.':ea?.a/./.1.~ ...
.... f:cg,,e. ......1/;::.......i.6e.....d.r.~.n.6......t:¥.l.'!?....•.aa:f........c.t1.r
-f?'7..r..fi'li-;""······dt.:Q..n.4......
4,1.:fl.d..ls....... J.a..Y..e.......J.!.ff1,; ...;..a.{Uf.c./.J.../f!-f7..W..f
1/
...a,l;,.......Q.~r.p.a.¥,c,,f.e.....
..aa.cl.....C'tcJ..Kl......12.r;/,bl.t;J.....k.o/j-···•Plau.......b;,,tt.d:..e..J(-y1t..e.1? '""...~/'"')
.s:I..V.:e......f.a.d...
..a.lld.....m ~.. .r.Z c,;i, o.7""•'-••
• • . .........
~ .. ···.&Jar /Jo- /~. ,,j 1- L. ,,
..;........................~.w .,..~.~ ...... o.47···~
ce.;.
(I
~~ _ . .J •,; •• • I ......... . .... .
.. .(.;.l]./.f:.J..J.........fr/..S., J:I.. / a, i"J .. ·••h•~ r O /1 1,,, ,1 ' _,, ,N-, _M
... <..r.. K • .4;."'·••1'W• .. ••f u·~ 1./.l.'wf,f;. .t I':; .I.. ~
•• • .......~ •.;f•""'-••
- / - I•~•••· • • • ~..... • ........~... .. .......... .
...,a. .......¥,&1./2.~ o a. · ,Ii~ - - / ·--~
_,/ ~
.... 7.7·····(?J•t:K. •••••o.a ll.fil; .a., •••• ,M,-.,
..... ~"'f.- .. •••• .....-.. ~ ••••• a ........ ..... . ~..l'rJ -
I'
I

·····•&,_f.u..5........
....cA11.d. ....1.~.LJ
I I r..
pr:.e. . .
.. .o/_lf..U..~.Q./.l. ......qA

./a-.c.e ...... rz.n.~1.~ , $ 1J1,l(,/£tM:l.:e./f-··· ...((.,1..~

/_·.r.: ..... r!.tf!.W,.::::~::::::".ma&. . . t:l~ ... .s..h.:tt.&.~-~
.a.t..~/1./2...... ~ [
........Cl...~.l.d. ..... :i..~a'"'-.cl....... .h.A;l .......c..o..«1-fJ•!.e.i::fi>. .. ~................
,:7""• ,
.. (;i.w.fi..:r.:e. ........ ¥, . . . /1.w. .....m.a..r.k.e.l:.......c:..1.:tr.1..q,f.tJ.,t?........ ~.......~..r:.~............
....w.kr:.f.t..~..t. ...... /h. ..... flf).h..?..r.J. .... -p.uh. ...... Hu!...rn ......al.:.....Q.¥.J, •.•.~.v.lJ.... ,.•....
...Q.Y.:'.. .Q<.fJ. .....dt,.t .. cr,.a/.. 1.,<;a.d.~(?......1...'~ ......... ~ .......0..az::../c.r;u/- ,If..................... .
...lt.....elf.~.... .fu.i/;.£......1::fu..n:i. .... B.R.£..e.&...... ~~.... J.rrl.Ucw.~.... ..
t f _/ , _;,' I '.
.. .a.r.f..~<.S.........i1...cf...C......... f.t:.tt. ..g, ....... .t.e/. .~.tC..~.£-c::......cR.m.p.~.t':~J~.a...... J ...... ..
.... /l.:. .... d.s.~ .... ~ ...1..t1./a.K.t.r.J...s......i1:i.e.02 ... 1..~......~ .... /2,~er. ..8?. ..... ..
..... fi..e.....f1 ..a.k.11..e.c......ct.!.......i. ...d..f?:e.s. .........-/:i:uz ........l.kl~.'k.~... ~~
....if..:-............................................................................................................................................................
.....C!..~ ....Lh......a/.i......(l.f!..<.1.e&.f.~.....~~'14...,.,...'2 ..~
././.::....b. ..../.J.<;../.:..... el'J..al'.Lr.7 ..Q . . ~.....a.ll..(l.~/..~ ......s.u.e/2......~.......... .
...s..w..eT...,<..../!.c.::r..1.;c .......e..n..S! ••~••••au1,<.ac/4.1: ......~.'1::::=«.!~..............
.... /~[L.e ......,/.t..e.1.of........d.j..e...... cd..f..9.......c~..q..W..~.q.(...... ~ .....d..~J!.I..~.~
••••Ct;/./.J.r.2t2l::. .••••.6.1e.......6/.e. ..,;r.a•.. ~.......k.a/.:,..d....(ll{.2••• :tlu'.r.... p..(i..r.:.&tr..:,P...
...../.:r,.'it.R......../a:L.(;.f;. .....( l . 1 1 . ~ . k.......................................................................................
......T.b.1!.r. ...M.°tf.···!J.IJ.aJ.;:p..1.'J......O::l..':tf····.at./..1.a....,A.r:..t:.u:l::l. ..f;';. ••••••a!.k.s.e.l.e4'
...,.u......l.b.M...~ed...........u/.,;d.g4:r.:rr:n...r............~l~.......J.:e.4J.s:.....
.....J./1 .......cJ.a.4g.1,.°1;. . Sl..tu/.......~ ......41~L.i:......a.a.r:;.d..'tL.c..&af.......
......p:i.MJ:J.. t . . h.. ~..~·········Uf-·d.sal.w:i...-:;.......................................
f.. .........:.......
....:/l.!J.......<Ul.4~.l~....... ~:q;:·f e. .......<.-t..1.d.e..11£..,... 4. . . . /.:&..........
.... /22.(tlJ.~.e.t.5. .....~.aJ. .....L.tJ..c .....r.a;;..~.&..1.Z/.:...... .a.i.J..d. ....... ll...d... .................
...... /..1.2.Cf!/.2:J,/J.~./::.-e, ....... a.Y.:......~..r..a.t:zr............ I.Y.J..~af1:~ £. ..../a./,rt.✓.:.1.t.1.a/.r.!M
$.t.
~ . .. ..T.
.. ~ I.. ..
~.;!J/
A
. . .7--:il. ... ~ f~Li.<?..l..Ja......'); ..e. ...;..fo1:.c.e.......au,u1.J,jrf!.Li.......
.....-±r.it:/,;.i(}/.(}.f.P.l.s......... ~............{(J./.k/..e,er.. .....<:z.J.d.d:. ......~ ....................
~ . /(.J.{Jl:/4.d::. ...J!l..~.fii~..b,0./l..........J..al.::.. .r.}.«..LJ. .....4 ..&../... ......isd!l... ..wl;.tJd:
..b.......a/aA'...if.....!.s:.....@.tl....../.k... . .b.tLl'i1.J..ll..s:.s:......k. . . . . d.e.cla/:.&, .....;t;'/r.::.....
. .r&.....W..l..f?.b..e..r.:. ....a.-X::........fl..f?..1.::7 .......La..f?.&'.~.......a.l:.......~..................
,JYJ.(lt:.A.!$..f......Si.~.lz~A..r···~k ......a}j¥.c:l:.1.i..fZ.S.......a.a.e.....m£.t
. ...............................................................................................................................................................
······••
··············• .........................................................................................................................................................
...,,.,,,,,...