2020 HSC Business Studies Report answer with planning PDF

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Summary

This is the answer to the 2020 HSC business report Question 27 with planning layout and correct formating. Includes relevant theory material....

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PLAN Key words→ Increase market share, deliver throughout NSW, address concerns of Eucafuels Ltd, Timely, awareness Physical distribution issues → transport, inventory (characteristics/features) 1st Promo strat → advertising (support argument to use) addresses 2nd issue Changes to OP for volume and quality → SCM 1st issue, Quality management/inventory management (EOS - link to PDI) 2nd issue (provide reasons in favour for...)

Icecream R Us business report... Executive summary: Icecreams R Us (IRU) is a small business seeking expansion of delivery from Newcastle to across NSW. To do so, Eucafuels Ltd (EF)is required as a major service station chain to ensure this occurs. During negotiations EF highlighted 3 areas of concerns for IRU, including timely delivery, awareness of ice creams and volume/quality. To address the aforementioned, its crucial to explore the physical distribution issues of transport and inventory during the delivery of IRU products. Alongside a promotion strategy of Advertising to confirm the awareness of products sold at EF as well as possible changes to the operation process to achieve volume and quality through quality, inventory and technology management.

Physical Issues of Distribution: Transport Transport relates to the method used to deliver the Icecream to customers. For IRU this presents as a major physical distribution issue, as consideration of size of trucks, the cost and how quickly products can be delivered must be identified. This ensures NSW outlets are getting IRU products in a timely manner. Inventory Inventory is another important physical issue of distribution to take into account. As increasing the availability of IRU products will generate more sales, IRU must balance the costs of holding stock versus the cost of not having stock on hand. Holding stock will allow IRU to meet any sudden increases in demand, but the major risks being obsolescence.

Promotional strategy: In IRU’s current position of trying to increase market share and seek help from EF. It is within the businesses best interest to invest capital towards a promotion strategy. One of the areas of concern for EF was awareness of the ice creams being sold at EF outlets. A promotional strategy would provide the opportunity to increase awareness of the business and its products. Advertising is an element of the promotion mix that can assist IRU to achieve its marketing goals. Referring to a paid, non personal message communicated through mass mediums. Advertising can be used to inform those that live in NSW about the availability of products at EF outlets, as well as reminding existing customers in Newcastle about the Business. Alongside this, advertising may also persuade customers to purchase the products. A major benefit of advertising for IRU is its flexibility. This means, depending on the budget, advertising can be altered to ensure financial obligations are also met. For example advertising can become costly through mediums such as television, radio and billboards. Electronic marketing, also referred to as E-Marketing can be implemented. As a growing practise, its a highly effective method of advertising which readily engages potential customers, whilst providing the lowest cost.

Social media advertising (SMA) allows IRU to have a direct relationship with Customers, which in turns encourages repeated purchases and provides an advantageous opportunity to gain attraction. SMA is conducted through platforms such as facebook, twitter, instagram and tiktok which are all free to use. Concluding a SMA promotion strategy would undoubtedly assist IRU to reduce concerns regarding customer awareness.

Operation Process Recommendations: As marketing and operations are interdependent, IRU can benefit from adjusting its operation process to address the concerns of EF regarding increasing volume whilst maintaining quality. Volume Expansion to NSW directly impacts on the volume of products. Hence the transformation process needs to be adjusted to efficiently convert inputs to outputs. In order to do so a larger sum of resources are required as well as technology used to transform.

c Co C 1 2s Q t 1

Q 2

q u a n t i t y

Firstly, transformed inputs can be sourced using cost-leadership principles. Namely, IRU can benefit from economies of scale as the increase in produce required, decreases the cost of each unit required. As seen in the diagram on the left, Q2 is at a significantly lower cost due to higher quantity. EOS will allow IRU to source enough inputs to be used in the transformation process at low costs.

Secondly volume can be addressed through implementing technology in transformation. Established Technology such as computer aid manufacturing not only speeds up the operations process to increase volume but relates to quality as technology creates consistency within products. Quality When increasing volume, quality must be managed to ensure it is not lost. For IRU, the most beneficial way to ensure the quality of ice cream products is to integrate a quality management system. By monitoring, controlling and improving the transformation process, IRU can meet quality expectations of the Businesses, EF and consumers. Monitoring the transformation process involves analysing qualitative and quantitative data. As such lead times, maintenance cost and customer feedback. Controlling any issues that arise via conducting inspections at various stages of the ice cream production process. Finally, Improvement which is an ongoing aspect in order to create a defect free operation process that can produce high volume and quality....