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    I don't know if my opinions are correct, can someone check it for me please

    There is an appreciation of £ against € in recent years, as SHL export to countries like Germany, it is likely that the exports sales will decrease and therefore reduce profits. On the other hand, SHL is exposed to inflationary pressure in China, which is likely to result in an increase in import prices and lower profitability. Therefore, SHL should try to bring their production back into the EU in lower their cost of production. They will also benefit from no import tariff. They should also try to export more to China as their products seem to be cheaper to buy due to depreciation of £, as a result increasing their export sales.
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    (Original post by elynnena)
    I don't know if my opinions are correct, can someone check it for me please

    There is an appreciation of £ against € in recent years, as SHL export to countries like Germany, it is likely that the exports sales will decrease and therefore reduce profits. On the other hand, SHL is exposed to inflationary pressure in China, which is likely to result in an increase in import prices and lower profitability. Therefore, SHL should try to bring their production back into the EU in lower their cost of production. They will also benefit from no import tariff. They should also try to export more to China as their products seem to be cheaper to buy due to depreciation of £, as a result increasing their export sales.
    No import tariff is only for trade with EU members right? So there will be tariffs if they import from the far east


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    (Original post by Schooledsam)
    Does nobody think demographics or social change could come up?
    It's definitely possible, although there isn't that much to say about considering the projected changes are minimal.

    Within the fashion market, probably the most important factor that will influence demand is social trends, which are changing consistently and will therefore make it hard for a firm like SHL, with a 110 days product development time, to meet these changes in demand. Getting it wrong can lead to overstocking the wrong product,using valuable space in their warehouse and (given the relatively inelastic nature of their product lines) might mean that even with substantial discounting they might not be able to sell their products, which could therefore impact on gross profit margins as stock holding costs increase and reduce the space available for more profitable lines. Demographics and the size of the population will also influence strategy, as SHL can see how the market size of various segments are either growing or reducing (for instance, by 2016 the 0-14 market is expected to grow by 5.2%, and although only a small growth this might prompt SHL to offer a slightly larger product range of their Harvey brand aimed at children – however, given the small changes in the UK population, demographics alone would be insufficient to pursue strategies bearing an aura of risk and substantial capital investment such as developing a sub-brand or purchasing an equity stake in the ‘mardidi’ brand). Overall, although both social trends and demographics are important to the fashion market, they’re not that significant for SHL considering their target market’s conservative tastes, and therefore it’s unlikely that, however discerning they are, they will be too swayed by changing fashion trends, with the projected changes highlighted in Appendix 2 being too small to concern a firm with such a niche market.
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    (Original post by raypalmer)
    No import tariff is only for trade with EU members right? So there will be tariffs if they import from the far east


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    If they move their production back into the EU and import the garment back into the UK, the still don't have to pay the tariff right?
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    (Original post by elynnena)
    If they move their production back into the EU and import the garment back into the UK, the still don't have to pay the tariff right?
    If production is takin place within the EU and the UK import from that country which is part of the EU, there is no tariffs, no barriers to trade


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    (Original post by raypalmer)
    If production is takin place within the EU and the UK import from that country which is part of the EU, there is no tariffs, no barriers to trade


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    Thanks a lot! Do you think my evaluation points are correct?
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    (Original post by elynnena)
    There is an appreciation of £ against € in recent years, as SHL export to countries like Germany, it is likely that the exports sales will decrease and therefore reduce profits. On the other hand, SHL is exposed to inflationary pressure in China, which is likely to result in an increase in import prices and lower profitability. Therefore, SHL should try to bring their production back into the EU in lower their cost of production. They will also benefit from no import tariff. They should also try to export more to China as their products seem to be cheaper to buy due to depreciation of £, as a result increasing their export sales.
    "increase in import prices and lower profitability."
    -Increase in import costs*

    "SHL should try to bring their production back into the EU in lower their cost of production"
    -You can argue this. How much are the costs lower in relativity to China? The EU have a proper legal structure which imposes high minimum wages to employees whereas China doesn't. Is this cost more expensive that the increased import costs they China has? What other effects? Lead time? Responsiveness to a change in demand? Quality?
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    (Original post by Need2Succeed_KH)
    "increase in import prices and lower profitability."
    -Increase in import costs*

    "SHL should try to bring their production back into the EU in lower their cost of production"
    -You can argue this. How much are the costs lower in relativity to China? The EU have a proper legal structure which imposes high minimum wages to employees whereas China doesn't. Is this cost more expensive that the increased import costs they China has? What other effects? Lead time? Responsiveness to a change in demand? Quality?
    This is very useful! Thank you
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    (Original post by elynnena)
    Thanks a lot! Do you think my evaluation points are correct?
    No worries, yes everything looks correct


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    (Original post by LazyBazooka)
    It's definitely possible, although there isn't that much to say about considering the projected changes are minimal.

    Within the fashion market, probably the most important factor that will influence demand is social trends, which are changing consistently and will therefore make it hard for a firm like SHL, with a 110 days product development time, to meet these changes in demand. Getting it wrong can lead to overstocking the wrong product,using valuable space in their warehouse and (given the relatively inelastic nature of their product lines) might mean that even with substantial discounting they might not be able to sell their products, which could therefore impact on gross profit margins as stock holding costs increase and reduce the space available for more profitable lines. Demographics and the size of the population will also influence strategy, as SHL can see how the market size of various segments are either growing or reducing (for instance, by 2016 the 0-14 market is expected to grow by 5.2%, and although only a small growth this might prompt SHL to offer a slightly larger product range of their Harvey brand aimed at children – however, given the small changes in the UK population, demographics alone would be insufficient to pursue strategies bearing an aura of risk and substantial capital investment such as developing a sub-brand or purchasing an equity stake in the ‘mardidi’ brand). Overall, although both social trends and demographics are important to the fashion market, they’re not that significant for SHL considering their target market’s conservative tastes, and therefore it’s unlikely that, however discerning they are, they will be too swayed by changing fashion trends, with the projected changes highlighted in Appendix 2 being too small to concern a firm with such a niche market.
    Wow this is amazing, never would hav thought of these points


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    Hi, can anyone think of any benefits and drawbacks of SHL investing into mardidi? Or even into the teenage market as a whole?
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    Can anyone tell me some negatives of SHL's financial position? My teacher thinks evaluating their position could be a question but it all looks pretty positive to me.
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    can someone tell me if gearing is really necessary to this case study?
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    Does anyone know the price earnings ratio or dividend yield, keep getting stupid answers!
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    (Original post by cav0rting)
    Can anyone tell me some negatives of SHL's financial position? My teacher thinks evaluating their position could be a question but it all looks pretty positive to me.
    Is your teacher referring to a question on whether SHL is a successful business or not??

    Their financial position does have some issues:

    Key point being that their level of cash has been very poor, in 2012: £4000 and 2013 £107,000, this therefore makes SHL vulnerable to any sudden changes in costs. Additionally it would suggest that they would have to borrow finance to pay for the 'sub-brand' for instance.

    A prime cause of this being the level of dividends (£1.5m) etc...
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    Does anyone know what the absolutely key ratios to know are? There are way too many for me to remember!!
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    (Original post by phookwillers)
    Does anyone know what the absolutely key ratios to know are? There are way too many for me to remember!!
    Gross profit margin
    Inventory days
    Gearing
    Interest rate cover
    Debtor days
    Creditor days
    ROCE
    Dividends per share

    I'm struggling myself to learn them:/

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    So, I've prepared vague answers for the following:

    Strategy to improve SHL's efficiency
    Impact of a change in exchange rate/interest rate/taxation on SHL
    Whether SHL should invest in Mardidi/new teenage brand
    Likelihood of SHL meeting £70m revenue objective
    Whether SHL's stakeholders view it as a successful business
    Evaluate the financial position of SHL
    Benefits to SHL of outshoring

    Could someone please tell me if I am missing any potential obvious questions?
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    Cavorting could you send me the answers you have on those please, really confused and need to get my he's around this or I'll fail! 😭
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    (Original post by cav0rting)
    So, I've prepared vague answers for the following:

    Strategy to improve SHL's efficiency
    Impact of a change in exchange rate/interest rate/taxation on SHL
    Whether SHL should invest in Mardidi/new teenage brand
    Likelihood of SHL meeting £70m revenue objective
    Whether SHL's stakeholders view it as a successful business
    Evaluate the financial position of SHL
    Benefits to SHL of outshoring

    Could someone please tell me if I am missing any potential obvious questions?
    I think you're along the correct lines.. maybe these two?

    Possibility - should SHL pursue aggressive growth through the sales of Harvey franchise

    Should SHL continue to invest in sponsorship as it seeks to achieve its objectives for 2016 ( not sure)

    Hope that's helpful

    Also could you help me how to answer:

    Evaluate the financial position of SHL

    Likelihood of SHL meeting £70m revenue objective
 
 
 
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