Business Development And Evaluation Of Debt And Equity Financing

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The Healthy Potion business (HP) specialises in producing and selling a unique drink called Healthy Potion, which includes cold water with some special concentrate from northwestern China. Recently the business has been developing well and making significant amount of profits. In order to maximise this return and minimise the risk of relying on the profit earned from one product, the business is willing to broaden their product range and have put aside $200 000 for this investment. This case study will give in an in depth strategic analysis for new business development and evaluation of debt and equity financing.

Strategic Analysis
In order for HP to continue receiving significant profits the SWOT analysis can be used to identify HP’s internal strengths and weaknesses as well as it’s external opportunities and threats. (Ji, K. 2015)

SWOT Analysis:
Strengths Weaknesses
The unique beverage attains its ingredients from northwestern China, which enhances product quality and authenticity. Also the healthy aspect of the product allows HP to have the competitive advantage, as according to Coca Cola (2014) consumers are more demanding for beverages to be pro-health. In addition, having only one product to focus on allows the business to incur fewer expenses. Due to the ingredients being obtained from China HP is unable to take advantage of a popular cost-saving inventory management technique called Just-In-Time and will instead have to rely on sale forecasts as a

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