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Monday, August 11, 2025

ITC JUNE 2022 SUGGESTED SOLUTION PAPER 4 PART I SAICA

Part (b) Describe the key business risks and potential opportunities that arise from the initiative to start a platform business (alternative 2) that the Imfundo board of directors should consider in evaluating this potential business strategy.

 Answer

Business Risks

  • Lack of Expertise: Imfundo is new to the platform model and may lack the skills to manage the technology and infrastructure, risking reputational damage and failure.

  • Legal & Data Security: The platform faces legal risks regarding educational reporting and data privacy (POPIA). A data breach would be a significant threat.

  • Pricing & Competition: Inappropriate pricing could deter training providers. Imfundo is also a late market entrant, competing with established online players.

  • Loss of Control: As an intermediary, Imfundo doesn't control the quality of content, which could damage its reputation if providers offer inferior courses.

  • Financial & Operational: The upfront investment is substantial, which is a major risk given Imfundo's current financial struggles. The company is also vulnerable to power outages (load shedding).


Potential Opportunities

  • Market Expansion: The platform model allows Imfundo to reach a large, underserved market in South Africa.

  • New Revenue Streams: Imfundo can earn fees from training providers and could also offer its own courses on the platform, diversifying its income.

  • Strategic Alliances: The platform could facilitate collaborations with leading global education providers, enhancing Imfundo's reputation and course quality.

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