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1. Sara and Omar both run their own business. Sara runs an advertising agency that provides online advertising services to female entrepreneurs in Jeddah and beyond. She currently services 90% of female entrepreneurs in Jeddah and its surroundings. Omar runs a professional matching app that currently services Saudi Arabia but he would like to expand regionally and globally. His current market share in the professional matching market is 10% of his potential market. Sara earns revenue through the customers she arranges advertising for, Omar allows for advertisers to use his platform and charges for the advertising banners and the clicks on the advertisements. He has earned SAR1,000,000 in revenue and made SAR120,000 profit. Sara has earned SAR250,000 and made SAR75,000 profit.

1. Provide a relevant assessment and argument for who you consider to be more successful.

2. Support your argument with relevant calculations

3. Which cost object do you suggest Omar and Sara should use for their respective businesses, and why?

4. Omar is planning to switch to a primarily fixed cost-based cost structure. Advise him with regards to his decision, and support your advice with relevant arguments.