AAB as case study business studies (f292)

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Sxoxo
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Hi, just wondering if anyone had any essays that they have done on any of the following questions.

how should the firm manage it's product portfolio and marketing mix in order to return to robust profitability?

How could AAB use the product life cycle and Boston matrix to improve their marketing mix?

evaluate the changes AAB should make to their product portfolio

assess the changes AAB should make to their marketing mix in order to improve their sales revenue

what recommendations should be made about adjusting the company's organisational structure to cope with further growth

evaluate the option of reorganising AAB into a more centralised, hierarchy structure

assess the possie impact on motivation of a change in AABs organisational structure

why is it important for AAB to have accurate accounts, and what do the accounts tell us about problems the firm might face in the near future

what is the importance of accurate financial accounting to AAB

what do the balance sheet and profit and loss account tell us about the performance of AAB

how ow can break even analysis be used to help AAB return to profitability

to to what extent will further growth be constrained by problems with quality and supply chain issues

commeny on the ways in which AAB could reduce their stock holding

evaluate the ways in which efficiency could be raised at AAB

discuss the relevance of the just in time approach to stock control for AAB

all of these are taken from the tutor2u booklet, any additional questions would be great
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nathcart
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are these the sort of questions you think will come up?
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nathcart
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Discuss how AAB might further improve its operational efficiency and minimise waste. (16)


In this question I will discuss the ways in which AAB could improve its efficiency. Efficiency is the relationship between inputs used and outputs achieved, to achieve highest efficiency possible, AAB must reduce and minimise waste which includes, minimal materials, labour, capital, floor space and time. There are many ways in which businesses can be wasteful such as using more resources then needed, making unnecessary mistakes, having excessive stock using up ore space then required, spending more money they is required, using more labour then required, spending excessive time on design and development and excessive movement of goods.


It is crucial that AAB reduces there cost as much as possible and this could be a large contributing factor to its loss making situation and returning back to profitability may allow them to be even more competitive on price in an already competitive industry. It may also put them in good stead to be able to borrow money of lenders to fund there expansion plans in the near future.

There recent investment in gatwick airport is one method they have used to reduce waste, however considering there main transport methods are shipping this may have been a mistake as the depot is further from many ports. However, saying this, there are very good transport links such as motorways and railways towards the rest of the UK which is handy for there current 60 UK retail shops. However, considering there further 30 franchises further a field and there other stockists, this may have been poorly situated, finished goods are travelling from suppliers in the far east all the way to british ports only to be breaking bulk, repackaged and shipped back over too countries situated near the supplier. One improvement to minimise was might be to rent or buy a depot overseas to break bulk out of Britain, this will minimise cost in various ways, one would be that shipping costs would be reduced (a main cause of there loss making situation) and also labour required in the depots may be considerably cheaper then in Britain.



Another way to minimise waste would be review and cut the amount of suppliers. AAB are currently using an excess of 100 suppliers in the far east. Deceasing suppliers would minimise and simplify ordering, shipping and handling costs for each of the suppliers. This would benefit the company as they can pay for lower unit cost through economies of scale, ordering in higher volumes, allowing them to pay cheaper prices for there products which inevitably allowed AAB to be more flexible on price which is important in such a flexible industry. Admin costs would also be reduced as they would have to deal with less suppliers, shipping would also be cheaper as they would be transporting higher volumes of goods. However, this may not be suitable as less frequent shipping may mean that the company would have to deal with higher volumes of stock, which is already a current problem and this would have storage problems in terms of cost. They would have to analysis to see what would be the best method.


An efficiency improvement method may be to implement the use of CAD (computer aided design). The use of software such as this would reduce the hors to develop new products improving there time efficiency and inevitably increasing there competitiveness. Due to the fact Elizabeths design team exclusively design all products this would allow them to stimulate products changing all sorts of aspects such as colour before prototypes even need to be made. This reduces time waste and also improves efficiency when ideas can be developed quickly and also bad ideas can be discarded quickly. It also allows them to rapidly respond to the market and to customer needs and also to improve products. If AAB have not already considered this method then this may be one important way they can reduce waste, in time and cost, designs can also be sent electronically to the far east so products can be put in to production faster.
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fryerdah
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Don't AAB have a centralised organisational structure?
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Sxoxo
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Guess so, them questions are taken from the tutor2u booklet
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nathcart
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(Original post by Sxoxo)
Guess so, them questions are taken from the tutor2u booklet
I'm not using the Tutor2u booklet just the APT booklet
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fryerdah
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If AAB change to a more decentralised structure then perhaps AAB could implement regions in terms of product this may result in employees putting more effort into the marketing mix of AAB's products as regions will be better informed on customer knowledge and thus potentially resulting in more cash cows and rising stars in the long term future as informed decisions will be made.

It is also apparent that employees will be more involved in the decision making process and this will not only improve the way in which decisions are made but also motivation of employees as being able to make decisions is seen as a motivator (Herzberg and Mayo). However changing to a decentralised structure could mean that the family business is not maintained and this is not what Javier and Elizabeth want, however if AAB want to return to robust profitability then perhaps this risk is the only way in which to achieve an even greater reward as motivation is vital for a successful business.

We also notice that employees will be delegated more meaningful tasks if decentralised which could also enhance motivation of the workforce as employees will be given a greater amount of responsibility which is seen as a motivator by Herzberg.
Any more ideas? Would it be better to make the structure more decentralised? There is no point delayering as AAB are trying to expand so this would not reduce costs.
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fryerdah
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Perhaps due to the fact that AAB have implemented both new systems and a depot at the same time they have left out the all important concept of training and so meaning the employees don't know how to operate the new systems which has perhaps resulted in incomplete orders or potentially products being repackaged incorrectly. Javier needs to understand that although the short term costs of training will be expensive that training will help employees to understand how to perform these meaningful tasks thereby motivating the workforce and so improving orders and efficiency in the later future.

Could also talk about AAB implementing better stock control system to benefit from JIT and this too would improve overall efficiency. Liking your ideas.
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Sxoxo
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(Original post by fryerdah)
Don't AAB have a centralised organisational structure?
And no, AAB have attempted to decentralised power and authority within the firm, this can be seen by the company being split into deprecate sections. Advantages of this are that it will speed decision making and contribute to delegation. As AAB have managed to have both there personnel director and finance director in all 3 sections of the company to keep policies consistent.

It isn't typically hierarchical, can be seen as a flat structure - thus leading to a shorter chain of command and delaying. This all suggests that the managers have wide spans of control; which can be seen by the retail stores director who as the business continues to expand will be controlling more and more store managers. This can lead us to believe that AAB is fairly democratic or even laissez-faire.

This is pretty much taken out of tutor2u just a little less wordy
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fryerdah
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The whole of my class has been taught that the structure is centralised due to the fact that they are 'interlinked companies' Javier has control over Gemma Joyce and Peter Thompson who are responsible for the other two company's but notice how everything falls under Javier so must be centralised also communication only goes one way so autocratic leadership Javier makes all of the decisions as is 'the driving force' so cannot be lassiefair. communication can only flow down the organisational chart if decentralised then would be able to flow both ways. I thought AAB could perhaps implement a decentralised approach in terms of product where local customers trends would be able to be identified which could in turn improve marketing mix. AAB is centralised in my opinion. The book doesn't say that it is decentralised it says they have attempted to decentralise authority. Doesn't mean the structure it'self is decentralised. The structure is centralised. If decentralised the would be in different regions away from head office. Everything goes under Javier.
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Minhdosing
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Honestly!! There is no right or wrong answer. It all depends on your arguments and evaluation. If you can make point relevant to the case study you can still got full mark even if not a lot of people have the same idea
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fryerdah
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That's true. What questions do you think we will have on the finance section. I was thinking perhaps how different stakeholders will react to seeing the accounts.
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Minhdosing
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Yeah !!! My teacher also guess the question about stakeholders, because it must be a reason for the balance sheet and profit and loss account appear in the pre- case study. Last year I do F292 and they did not have any accounts, and then the question is about break even, which was predicted. I am pretty sure that it might be stakeholders or budgeting.
What do you think about the operation question?


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fryerdah
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The operation question? How AAB could improve efficiency within the distribution process or How they could benifit from JIT?
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1hameedhussain
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what does figure 1 represent exactly? IT's obviously not the profit and loss account for the whole business is it
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Shady778
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(Original post by 1hameedhussain)
what does figure 1 represent exactly? IT's obviously not the profit and loss account for the whole business is it
Why do you say that it isn't the P&L for the whole company?
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CowsGoWoof
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Has anyone got an electronic version of an apt pack or the tutor2u one they could email me, I cleverly lost mine... >.<

PS just message me asap pleaseeeee <33333
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1hameedhussain
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(Original post by Shady778)
Why do you say that it isn't the P&L for the whole company?
well the figures are less? or is it just for the mattresses?
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1hameedhussain
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15 years ago Javier and Elizabeth took a risky decision to become a retailer as well as an importer and wholesaler. Discuss the implications of this change for AAB’s marketing mix. (16)

for this question would i have my introduction, paragraph 1 which would be the advantages paragraph 2 disadvantages then conclusion or would the layout be different? thanks
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Minhdosing
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(Original post by 1hameedhussain)
15 years ago Javier and Elizabeth took a risky decision to become a retailer as well as an importer and wholesaler. Discuss the implications of this change for AAB’s marketing mix. (16)

for this question would i have my introduction, paragraph 1 which would be the advantages paragraph 2 disadvantages then conclusion or would the layout be different? thanks
I think the question is about marketing mix so it links to 4Ps not the advantages or disadvantages. However you could mention the advantages and disadvantages to see whether each P is appropriate but remember dont talk about it too generally
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