OCR F297 Case Study

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Pros:
Less advertising costs, only have to advertise one profit center rather than two
Potential increased sales, as they are selling all off their services/products in one store
Purchasing economies of scale, will likely be purchasing more stock so will likely get a large discounts

Cons:
Increased risk of developing a bad reputation, at current if there is a problem with one profit center it would not impact the other.
The current profit centers are specialized, Maillot Jaune sells on road bikes whilst Peddlers does rentals and off road bikes.
May lose some of their loyal customer base, and would have to invest in raising the reputation and awareness of the new store

Thanks this is really helpful, i considered economies of scale but thought that the buying would probably already be centralised and therefore they would already be benefiting from economies of scale, i couldnt find anything to suggest different in the case :/

Reply 81

northbrad30

Original post by harriet6250

My teacher said as long as it is a assumption they cannot penalize you for it. I am only assuming this to be the case and because they do not specifically state it isn't my teacher said it would be a valid point.

Reply 82

harriet6250

Original post by northbrad30

Okay thanks sounds good :smile:

Reply 83

luuketaylor

Original post by EmilyLauren1994

My business teacher went on a course led by the guy who writes the papers and he said he doesn't waste time and make diagrams and spend time making sure numbers work for them not to come up and for students not to use them. He also told us this guy said he hates it when students don't use the numbers he has provided. So remember to put in numbers where ever possible. So it is a 99% chance the 13 marker will be the decision tree and not anything to do with ratios :smile:

Golf Shop

Short Pay Back Period - 3 years 10 months also 7% ARR in comparison to the 13 years it will take to pay back the solar panels and they have -12.8% ARR

Diversification

Achieving Break Even

More Advertising - In the case study it doesn't mention anything about how they market themselves so my teacher has told us to bring this up

You could also explain that because its evidently a seasonal business, and how UK summers aren't that great this will put people off going to campsites for their holidays and therefore this will have a significant impact on the amount of money the Rockingham Forest Peddlers will make per month. and then go on to saying it may not be realistic to have RF Peddlers to break even by the end of 2014 peak season etc :smile:

Other than that we haven't spoken about objectives much!

How did you work out the ARR for the solar panels as 12.8%? Because we're not given a time period for the panels, I assume you used the 5 years but wouldn't that yield an ARR of 12% not 12.8? e.g. 1200* 5= 6000-15000=-9000/5 =-1800 / 15000= -0.12* 100= 12%

Reply 84

rdrd

I have the APT analysis and when she is talking about figure 1.. She says the figures on the page are revenue and you need to work out the profit.. This has confused me.. Anyone have anything to say

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Reply 85

Devina-S

Original post by luuketaylor

The ARR for solar panels is 8%(just for RF peddlers outlet) when taking the life of a solar panel to be 30 years

Reply 86

Rennie Akoni

Hey Guys!!

Struggling with this question " Discuss the most effective initiatives CCL could implement in order to achieve their objective of "becoming the number one bicycle retailer in the East Midlands"

It's such a vague objective, they could be number in terms of sales, market share, reputation or anything. So Stuck..HELP PLEASE

Reply 87

Ollymurslove

Original post by Rennie Akoni

I'd talk about different ways they can be more successful. Mention how its vague and the objective is not SMART so it depends how the measure success. I'd mention the 4 promo strategies mentioned in the case study, but then I'd mention that the net profit margin would definitely need to be increased for them to expand or anything!

Reply 88

Ollymurslove

What is fiscal policy? What's the difference between it and monetary policy? Or is the same thing?!? Help!

Reply 89

ebduff

Original post by Ollymurslove

What is fiscal policy? What's the difference between it and monetary policy? Or is the same thing?!? Help!

Fiscal refers to tax and government spending

Monetary refers to interest rates, exchange rates and inflation :smile:

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Reply 90

drplease

I look at the APT questions, and I feel most of those questions will not come up, they are pretty bad questions....... So I think should I even bother practicing them....

Reply 91

Devina-S

Original post by drplease

I look at the APT questions, and I feel most of those questions will not come up, they are pretty bad questions....... So I think should I even bother practicing them....

the more practice the better imo

Reply 92

dholmes2013

Original post by MoBusinessGuru

Does anyone know why CCL should merge the two brands Malliot Jaune and Peddlers into a single identity - Summit Cycles?

Reasons for:
- Will provide a competitive advantage, as it may appear as a new business, and will distinguish and deffierentiate CCL from the competition
- This will secure customers, leading to revenue and profits, as they may perceive the new brand as superior to others, and pay higher prices
- An effective brand name is essential for brand loyalty

Reasons against:
- The names are already well-established (MJ since 1981) and associated with successful businesses
- The different brands sell different products - would they all have to stock more products? This is stupid given that they are well-established
- May imply to customers that the business has changed, so they may leave for competitors
- Could harm objective of becoming #1 in East Midlands
- There will be one-off costs e.g. shop signage, stationery, changing the memorandum and articles of association (Ltd. company documents)

Overall, CCL should NOT merge the brand names, as there is no obvious reason to change
:smile:

Reply 93

dholmes2013

sorry, laptop froze and put 5 smilies in by mistake there haha

Reply 94

dholmes2013

Original post by revise7869

Has anyone got reasons to why CCL SHOULD go ahead with the diversification of the golf shop?

Also I was told a question on stakeholders might come up as well as objectives

There really are not many reasons for the diversification, but all you can do tbh is use what Ned has said in the case study:

- There are synergies between the two businesses in retail management and merchandising (evaluate this by saying that the synergies are weak and minimal)
- The skills required to sell bicycles and golfing equipment are the same (evaluate this by saying the product knowledge is different = staff training)
- The golf shop should lead to higher revenues and therefore increased profits for CCL, to rise the dangerously low 2.76%

Reply 95

dholmes2013

And yeah, a question we have done is 'To what extent will CCL's stakeholders view it as a successful business?' and for objectives we've done 'How can specific objectives contribute to CCL's success?' and 'To what extent are the objectives realistic?'

Reply 96

akspop

Original post by dholmes2013

What would your plan be for these 3?

Reply 97

ChristinaFay

Hey does anyone know how I would answer "to which extent would different stake holders regard ccl as a successfull business" or "to which extent is CCL a successful business"