ITC JANUARY 2022 SOLUTION PAPER 4 QUESTION 1 1 © SAICA 2022

Part (a) Discuss six key business risks that C2C is currently facing.

Answer

Six Key Business Risks for C2C

1. Financial Trouble: C2C is struggling financially, with decreasing profits and a lot of debt. They are close to breaking a loan agreement, and the bank won't lend them more money, which could lead to major financial problems.

2. Stiff Competition: The company is losing customers to new competitors like low-cost airlines and trains. C2C's high prices and luxury service aren't as appealing to people as they used to be.

3. Operational Issues: The company is facing multiple problems, including the risk of strikes from underpaid drivers, rising fuel costs, and an aging bus fleet that could be a safety hazard.

4. Bad Reputation: The company is in a legal fight with fired employees over unfair dismissals. Also, the CFO's actions, like giving a bursary to a union leader's daughter and hiring her father-in-law's company without a proper bidding process, could be seen as unethical and harm C2C's reputation.

5. Regulatory Penalties: Due to these questionable actions, the company may have broken some laws, which could result in fines and other penalties.

6. COVID-19 Impact: The pandemic has hit the company hard, causing fewer people to travel. Future lockdowns or restrictions could make this problem even worse.