1

THE SHRIRAM MILLENNIUM SCHOOL, NOIDA

COMMERCE PROJECT - 2024-25

Name: Parnika Adhlakha

Class: 11-C

Index No.: 14

Topic: Opportunities and challenges of different types of business

Submitting to: Ms. Pallavi

ACKNOWLEDGEMENT
 2

INDEX
 3

1) Introduction to business

2) Types of business organization

3) Advantages and Disadvantages of Sole Proprietorship

4) Challenges In Business (Plus Case Study)

5) Opportunities in Business (Plus Case Study)

6) SWOT Analysis

7) Strategies to Overcome Challenges and Exploiting Opportunities

8) Conclusion

9) Bibliography

Introduction to business:
 4

While there are many different ways to define a business, most definitions center
around the idea of an individual or group of individuals working in a planned manner
towards a certain goal. Businesses recognize the demands of their customers and other
businesses to generate goods and services using resources, or factors of production
(labor, capital, enterprise, and land). The goal of managers and owners of businesses
is to meet customer wants, enhance the value of resources, and ultimately increase
profitability in an ever-changing world.

Businesses are essential to promoting innovation, job creation, and economic progress
in the modern world. They create capital and effectively use resources to meet
industrial and consumer requirements, raise living standards, and aid in the growth of
society. Along with this, businesses also tackle social and environmental issues and
aid in community development.

Opportunities refer to favorable conditions in the business world, such as emerging

markets, technological advancements, and shifting consumer preferences, while
challenges are obstacles like market fluctuations, financial constraints, and operational
inefficiencies. The interrelated forces that propel an organization's growth and
prosperity necessitate calculated reactions and ongoing adjustments to effectively
manage obstacles and leverage prospects. Businesses promote resilience, sustainable
growth, and long-term success in a changing and competitive environment by
skillfully handling obstacles and grasping opportunities.

The research paper will conduct a thorough analysis of the current business
environment, looking at opportunities, problems, and strategic solutions. It will
outline common problems like access to capital and human resource constraints and
define business significance. Then I'll examine several business models, stressing the
benefits and drawbacks of each. Examples from real-world experiences, such as
Airbnb and Tesla, will highlight difficulties like lack of funding and technological
advancements. I'll also discuss opportunities like globalization and market expansion,
using successful companies like Apple and Amazon as examples. Nykaa's SWOT
analysis will guide tactics for resolving issues and taking advantage of opportunities,
highlighting the significance of flexibility and creativity for long-term company
success.
Types of Business Organizations:
 5

Sole Proprietorship: The most common business structure is the sole proprietorship,
which is run and owned by a single person acting as the sole proprietor. It is a popular
option due to its minimal legal requirements and simplicity; registration and annual
account submission to the Tax Office are mandatory. A license is required for specific
activities, and industry-specific laws, such as health and safety regulations, must be
followed. Successful lone proprietors demonstrate self-control, courage, and
flexibility to successfully navigate entrepreneurship on their own, even in the face of
unlimited liability and constrained funding options.

Partnership: With advantages over sole proprietorship, including shared ideas,

increased investment capacity, and diversified expertise, partnerships involve
individuals working together to establish businesses. Common in fields such as law
and accounting, partnerships allow for comprehensive service provision and
specialization, with partners filling in for one another when needed. Although it is not
legally necessary, a formal Deed of Partnership outlines management responsibilities
and profit distribution. However, because partners share liability, it is important to
choose carefully and, in certain jurisdictions, to consider Limited Liability
Partnerships (LLPs) for additional protection and continuity.

Private Limited Company: A company is a separate legal entity from its owners,
unlike unincorporated businesses like partnerships or sole traders. It can enter into
contracts on its own, keep distinct accounts, and live on even in the event of the owner
passing away or changing hands. Shareholders own companies collectively and
designate directors. The terms "Limited" or "Ltd" denote private limited companies,
which provide significant protection. Typically, the original owners, their relatives, or
their employees own shares of these companies. To establish such businesses, legal
formalities are necessary.

Public Limited Company: Large-scale businesses should use public limited companies
(PLCs) as they can leverage significant capital for expansion through initial public
offerings (IPOs). Unlike partnerships or sole proprietors, PLCs are private-sector
businesses despite having public ownership. At Annual General Meetings (AGMs),
professional managers are tasked with making decisions on behalf of Plc shareholders.
Placing "plc" or "inc." in their names makes them easily identifiable. Stock exchange
listings allow PLCs to acquire large amounts of capital and facilitate simple share
 6

trading, all while attracting investors through initial public offerings (IPOs). In PLCs,
ownership and control separation can give rise to conflicts between short-term and
long-term growth and profits. When a company, like Virgin Group and Richard
Branson, converts from plc to private limited company status, it signifies a strategic
decision to match management control and ownership for long-term planning.

Cooperative: Both producer/worker and consumer/retail cooperatives are common in

a variety of industries, most notably agriculture and retail. In bigger cooperatives,
members typically assign management responsibilities in addition to sharing profits,
responsibilities, and decision-making. Bulk buying and collective selling are
advantageous to agricultural cooperatives; cooperatives in general encourage
cooperation, the advantages of bulk buying, and fair profit sharing. Nonetheless,
obstacles encompass inadequate managerial abilities, insufficient capital, and possibly
sluggish decision-making. Cooperative structures encourage democratic decision-
making, shared ownership, and mutual benefits among members. Examples of these
structures include employee, community, and retail cooperatives.

Franchise: A franchise is a type of business arrangement in which an established

company, referred to as the franchisor, grants its franchisee the right to use its
branding, marketing plans, and operational techniques. It's not a legal structure per se,
but rather a two-party contract that gives the franchisee access to the franchisor's
systems and name. Franchises offer a ready-made business opportunity for
entrepreneurs looking to reduce startup risks as well as a means of rapid expansion for
multinational corporations.

Joint Ventures: In a joint venture, two or more companies work together on a novel
project while splitting the costs, rewards, and risks. Often, European companies
establish joint ventures with Chinese companies to take advantage of their market
knowledge. Successful joint ventures may lead to a merger even though they are not
one. They effectively take advantage of various strengths, cut expenses and risks, and
penetrate a variety of markets. However, there are obstacles like cultural disparities,
assigning blame for mistakes, and the possibility of partner failure. Joint ventures
create new companies with distinct legal identities for particular cooperative
endeavors.
 7

Advantages and Disadvantages of Sole Proprietorship

Advantages:
Numerous benefits are available to sole proprietors, such as the ease of establishment
without the need for necessary legal formalities, complete autonomy over operations
and profits, flexibility in setting work schedules, and the chance to develop personal
relationships with both clients and employees. This organizational structure makes it
easier to align with the proprietor's unique skills and interests. Notably, starting a
business as a sole proprietor requires no official registration, making it possible to
enter a variety of industries right away, including web design, art, and gardening.
Although independence has many benefits, it also necessitates a high level of self-
control and judgment. The powerful incentive that sole proprietors receive is that they
keep all profits. Because of this independence and clear compensation structure,
entrepreneurs are frequently inspired to choose sole proprietorship at first because
they value the flexibility and independence it provides.

Disadvantages:
A sole proprietorship gives people a great deal of decision-making freedom when it
comes to running their businesses, but it also has drawbacks that should be
researched. The owner takes full responsibility for all business debts, highlighting
how important personal accountability is. Obstacles such as competition from bigger
organizations, restrictions on specialization, and trouble obtaining funding are
common. Running a sole proprietorship can be lonely, and stress levels can rise as a
result of long hours and little free time. It is frequently difficult to secure outside
funding, which forces people to rely on their resources or take out high-interest loans.
Unlike larger organizational contexts where joint problem solving is common, sole
proprietors make business decisions on their own, which increases the risk to their
finances. Gaining insight into the complex workings of sole proprietorship reveals
both its positive attributes and the complex difficulties that come with taking on
entrepreneurial ventures.
 8

Challenges in business:
Human Resources: Compared to larger organizations, small businesses face greater
challenges in attracting and retaining qualified talent because of resource constraints.
Their limited resources frequently make it impossible for them to provide competitive
pay, all-inclusive benefits, and job security. As a result, top talent is drawn to larger
companies because of their stronger brand recognition and greater career
opportunities. Small businesses need to emphasize flexible work schedules,
professional development, and a positive workplace culture to reduce this disparity.
The fact that small businesses still find it difficult to compete with the advantages and
stability of larger corporations highlights the ongoing struggle in the small business
sector to attract and retain talent.

Access to Capital: As there are few options for funding and stringent lending
requirements, obtaining capital for startup and business expansion projects can be
very difficult. Higher interest rates are the result of traditional lenders, such as banks,
being reluctant to lend to startups or small companies with no track record. This is
done to reduce perceived risk. This restriction on capital availability may make it
more difficult to generate cash flow and reduce growth opportunities. Though they
may provide answers, alternative financing options like crowdsourcing and venture
capital frequently involve a significant amount of work and may have particular
requirements. As a result, a lot of small businesses find it difficult to raise the capital
they need for growth and operations.

Competition: Larger companies with more resources, a more recognizable brand, and
economies of scale pose a serious threat to small businesses. Due to cost savings from
bulk purchases and effective production techniques, these benefits enable larger
businesses to offer lower prices and make significant investments in marketing, R&D,
and cutting-edge technologies. Furthermore, a devoted client base is drawn to them by
their well-established brand reputation, which makes it difficult for smaller companies
to expand and acquire market share. Small businesses need to concentrate on strategic
innovation and niche targeting to stand out from the competition and draw in a loyal
customer base if they want to survive.

Economic Fluctuations: Events like recessions and inflation have a big influence on
businesses. Reduced consumer spending brought on by lower disposable income
 9

lowers sales and revenue during recessions. Operating costs rise in tandem with
inflation as the cost of goods, services, and raw materials rises. In both cases,
companies are forced to modify their pricing policies, exercise caution when handling
cash flow, and possibly even fire staff members. These changes in the economy have
the potential to seriously impair profit margins, impede growth, and jeopardize the
viability of businesses, especially small ones with tight budgets. To manage these
swings and guarantee company resilience, flexible tactics, and accurate economic
forecasting are crucial.

Technological Advancements: The rapid pace at which technology is developing

poses a lot of difficulties in today's business environment. To remain competitive,
businesses must constantly invest in new infrastructure and systems, which can put a
strain on their finances, particularly for smaller businesses. Furthermore, the
incorporation of cutting-edge technologies calls for continuous training and
development initiatives for staff members to guarantee competent operation and
upkeep. Reduced competitiveness, possible obsolescence, and operational
inefficiencies can result from a failure to keep up with technological innovation. Thus,
to capitalize on the advantages of technological advancement and preserve a
competitive edge, businesses need to strategically allocate resources to employee
training and technology adoption.
 10

Case Study showing the potential impacts of the listed challenges on

businesses and how they overcome them:

Airbnb: Dealing with Technology Advancements

Being a disruptor in the hospitality sector, Airbnb had to balance keeping up with the
rapid changes in the industry with utilizing technological advancements. Through its
peer-to-peer platform for lodging rentals, Airbnb transformed the way people travel.
However, staying relevant in rapidly changing digital environments requires constant
innovation. Modern technology was essential for improving user experience,
protecting data, and streamlining processes. However, controlling these developments
necessitated large financial outlays and calculated choices. Airbnb also had to deal
with competition and regulatory scrutiny, which highlighted how difficult it is to
manage technological change in a fast-paced business environment. Despite
contemporary challenges, Airbnb continues to be a shining example of leveraging
technology to propel business success through adaptable changes and creative
solutions.

Tesla: Lack of Capital during Start-up:

Tesla, founded by Elon Musk, has transformed the automotive sector with its cutting-
edge electric cars and sustainable energy offerings. But even with its revolutionary
breakthroughs, Tesla has had trouble getting funding. Elon Musk's audacious plans for
the growth of Tesla and the creation of novel technologies required large financial
outlays. Conventional lenders frequently hesitated to offer financing because they
were hesitant to take on the risks involved in such innovative endeavors. As a result,
Tesla's expansion was largely dependent on alternative funding sources, such as
equity offerings and joint ventures. The fact that Musk is a shrewd strategist and can
raise money from a variety of sources has helped Tesla overcome its financial
limitations and move closer to its aspirational objectives.
 11

Opportunities in Business:
Market Expansion: To grow their customer base and revenue streams, companies can
investigate new markets, industry niches, or geographic areas. This can entail focusing
on niche markets or broadening the range of products offered.

Globalization: Reaching a wider audience abroad can provide access to resources,

talent, and new markets. Businesses can diversify their risk and benefit from
economies of scale thanks to globalization.

Strategic Partnerships: Working together with other businesses or groups can open up
possibilities for pooling resources, knowledge, and access to markets. Additionally,
innovation and market penetration can be aided by strategic alliances.

E-commerce and Digital Transformation: Businesses can reach customers worldwide,

optimize operations, and provide individualized experiences by utilizing digital
technologies and e-commerce platforms.

Sustainability Initiatives: Adopting sustainable practices offers chances for cost

savings, brand differentiation, and access to environmentally conscious customers in
addition to being consistent with social and environmental values.
 12

Case Study of businesses that have successfully leveraged

opportunities to grow:

Amazon:

The transformation of Amazon from an online book seller to a major player in the
world shows how good it is at grabbing chances. Through diversifying its product
offerings and capitalizing on technological advancements, Amazon has emerged as a
prominent player in the domains of digital streaming, cloud computing, and e-
commerce. Its worldwide presence makes it possible to enter new markets, and its
unwavering commitment to innovation guarantees operational excellence. By
reducing risks, diversification promotes resilience. Robust financial performance is a
result of repeat business being driven by strong brand value and customer loyalty.
With its ability to recognize and seize opportunities, Amazon has cemented its
leadership position in the market and is a prime example of success in today's
business environment.

Apple Inc.:

Under Steve Jobs' direction, Apple Inc. is another prime example of opportunity
leveraging done right, branching out from computers into iconic products like the
iPad, iPhone, and iPod. Apple is a leader in design and innovation, leading the way in
digital music and smartphones. Product diversification, building brand loyalty, and
commanding premium prices are some of the individual benefits. Its customer base is
expanded globally through its expansion, and its ecosystem of services, software, and
hardware brings in a substantial amount of money. Effective supply chain
management promotes profitability and growth investment by guaranteeing quality
and cost control. Apple's adept handling of opportunities strengthens its standing as a
leading global player in technology, propelling innovation and market supremacy.
 13

SWOT Analysis:

SWOT Analysis on Nykaa:

Strengths:
 Strong Brand Presence: Nykaa has become a well-known beauty and cosmetics
retailer in India, enjoying a high level of consumer recognition and brand
reputation.

 Broad Product Selection: To accommodate a variety of consumer tastes, the

brand provides a large selection of skincare, makeup, haircare, fragrances, and
wellness products.

 Omnichannel presence: Nykaa has an omnichannel presence, meaning that its

products and services are accessible to customers through a variety of channels,
improving convenience and accessibility. It operates both online and offline
stores.

 Private Label Portfolio: Nykaa's private label line of high-quality, reasonably

priced cosmetics and beauty products helps to keep customers and build brand
loyalty.

 Customer Engagement: It uses its online platform to interact with customers by

providing tailored advice, reviews, tutorials, and beauty tips. This increases
customer satisfaction and loyalty.

Weaknesses:
 Restricted International Presence: Due to its primary concentration in India, the
business has limited access to foreign markets and growth prospects.

 Dependency on Third-party Brands: Despite having a wide selection of

products, Nykaa is largely dependent on third-party brands, which may restrict
its ability to control product differentiation, pricing, and availability.

 Challenges with the Supply Chain: The company may encounter difficulties
with supply chain management, such as inventory control, shipping, and
product sourcing, which may have an effect on the availability of products and
 14

client satisfaction.

 Competition: Nykaa faces fierce competition from both online and offline
businesses in its highly competitive market. To stay at the top, it must
consistently innovate and set itself apart.

Opportunities:
 Market Expansion: In order to reach a larger customer base and penetrate
underserved markets, it can look into ways to increase its footprint in tier II and
tier III cities in India.

 International Expansion: The brand may think about extending its reach outside
of India into other countries, using its online platform and strong brand
recognition to gain access to new markets and sources of income.

 Product diversification: Nykaa can expand the range of products it offers by

adding new brands or categories to better meet the changing needs and tastes of
its customers.

 Enhanced Digital Engagement: In order to increase customer engagement and

sales, Nykaa can incorporate interactive content, personalized
recommendations, and augmented reality for virtual try-ons into its online
platform.

Threats:
 Economic Uncertainty: Nykaa's sales and revenue growth may be impacted by
economic downturns or shifts in consumer spending, which could have an
effect on the company's overall performance.

 Regulatory Shifts: It's operations and compliance may be impacted by changes

to laws pertaining to taxes, e-commerce, or retail, which could have an effect
on the company's profitability and growth objectives.

 Counterfeit Products: The market's overabundance of fake beauty products

threatens the company’s reputation as a brand and the confidence of customers,
so strict controls are needed to guarantee the genuineness and caliber of the
products.

 Competitive Pressure: The Business’s profitability and market share may be

impacted by fierce competition from both domestic and foreign players in the
beauty and cosmetics industry, which could drive down prices and margins.
 15

Analyzing strategies for overcoming challenges and exploiting

opportunities:

The findings of the SWOT analysis would provide Nykaa with valuable insights to
develop strategies that circumvent obstacles and take advantage of opportunities.
Through advertising inquiries and partnerships, Nykaa can persistently expand into
important markets with high demand for luxury goods to address limited global
nearness. Fortifying its portfolio of private names and elite organizations is one way
to reduce dependence on third-party brands. Enhancing supply chain management can
improve item accessibility and stock control. Nykaa can set itself apart through item
advancement and customized interactions to counter competition. Taking advantage
of opportunities involves expanding globally, diversifying product offerings,
improving digital engagement, and focusing on underserved markets in India. By
aligning its strategies with these findings, Nykaa is able to maintain its
competitiveness in the beauty and cosmetics industry, grow its market position, and
spur growth.
 16

Conclusion:
The research project offers a thorough examination of the business environment,
highlighting how crucial it is to recognize obstacles and take advantage of chances for
long-term development. Important insights into the dynamic nature of the
contemporary business environment are obtained by investigating various business
structures, opportunities, and challenges. In order to increase competitiveness and
spur growth, businesses can strategically leverage their strengths and opportunities
while mitigating weaknesses and threats. Nykaa's SWOT analysis serves as an
excellent example of this. I now have a deeper understanding of the dynamics at play
in the business environment thanks to a thorough examination of various business
frameworks, challenges, and opportunities. When I reflect on this research, I see how
complex the business world is and how crucial it is to maintain creativity and
adaptability.
 17

Bibliography
Ackerman, K. (2021, December 10). Case study: Airbnb - Future Sensor - Medium.
Retrieved from Medium: https://medium.com/future-sensor/case-study-airbnb-
7f4e2a66184c
Aggarwal, T. (2021 , September 29). How NYKAA works | NyKAA Business Model &
How you can replicate it. . Retrieved from JungleWorks:
https://jungleworks.com/how-nykaa-works-nykaas-business-model-how-you-
can-replicate-it/
Borrington, K., & Stimpson, P. (2018). Cambridge IGCSE and O Level Business
Studies Fifth Edition. London: Hodder Education.
Chaffey, D. (2023, february 27). Amazon marketing strategy business case study |
Smart Insights. Retrieved from Smart Insights :
https://www.smartinsights.com/digital-marketing-strategy/online-business-
revenue-models/amazon-case-study/
Fernando, J. (2024, May 9). Globalization in business with history and pros and cons.
Retrieved from Investopedia:
https://www.investopedia.com/terms/g/globalization.asp
Forms of business organization: partnership, LLP, HUF, important aspects. (2019,
September 9). Retrieved from Toppr-guides:
https://www.toppr.com/guides/commercial-knowledge/business-and-
commercial-knowledge/forms-of-business-organizations/#:~:text=In%20a
%20proprietary%20business%2C%20the,life%20independent%20of%20its
%20owners.
FridarG, & Gichuki, F. (2024, April 2). Advantages and Disadvantages of becoming a
sole trader [Comprehensive]. Retrieved from Your Company Formations:
https://www.yourcompanyformations.co.uk/blog/sole-trader/
Garton, D. (2024, May 23). Tesla Financial Analysis: Stock analysis and capital
structure. Retrieved from Investopedia:
https://www.investopedia.com/articles/markets/052316/tesla-stock-capital-
structure-analysis-tsla.asp
 18

Globalization helps spread knowledge and technology across borders. (2018, April 9).
Retrieved from IMF:
https://www.imf.org/en/Blogs/Articles/2018/04/09/globalization-helps-spread-
knowledge-and-technology-across-borders
Lobo, A. (2021, December 13). A case study on Tesla, Inc : The world’s most exciting
Automobile company. . Retrieved from Medium: Medium.
https://medium.com/@ashleylobo98/a-case-study-on-tesla-the-worlds-most-
exciting-automobile-company-535fe9dafd30
Mario. (n.d.).
Mario. (2023, February 11). The 38 biggest business challenges growing companies
face. Retrieved from mariopeshev: https://mariopeshev.com/the-biggest-
business-challenges-growing-companies/
Stimpson , P., & Farquharson, A. (2021). Business for Cambridge International AS &
A Level Fourth edition. Cambridge: Cambridge University Press 2021.
Surridge, M., Gillespie, A., & Mills, I. (2022). Business Management for the IB
Diploma Programme. London: Hodder Education.
The challenges of growing a business - and how to meet them. . (n.d.). Retrieved from
infoentrepreneurs: https://www.infoentrepreneurs.org/en/guides/the-challenges-
of-growing-a-business---and-how-to-meet-them/
Vazques, N. (2023, November 18). Case analysis on Apple Inc [Slide show].
Retrieved from SlideShare: https://www.slideshare.net/slideshow/case-analysis-
on-apple-inc/263564482