Business Performance Report Task 1 Business Capstone PDF

Preview

Summary

After simulation, a Business Performance Report will be expected....

Description

RXM1: Business Performance Report

The Cycle Shop Business Performance Report Student ID: 001303465 Date: 05/30/2021

C1. Business Overview The Cycle Shop started as a small business with an innovative approach to manufacturing bikes. With today's technological capability of 3D printing, the Cycle Shop can manufacture a bike in less time than traditional manufacturing. The cost of producing a 3D bike is much less than large-scale production. Because of this, the Cycle Shop can compete in the new market by offering lower prices and a new way of selling the product. The approach to selling the bikes is simple, with only a few prototypes for the customer to choose from in the recreation, mountain, and speed categories. The shop's first three prototypes were dubbed the Outing, Racer, and the Mountaineer. However, throughout all six quarters, several design changes took place. By Q6, the shop saw a profit with four new bikes: Outing II, Cruiser, Racer (comeback trial), and the Mountaineer Pro. The additional choices brought in more customers, and the easy way of selling becomes popular with employees. Once the customer decides on the type of bike they wish to purchase, the shop worker gets specific measurements from the customer and sends those along with the order to a processing location. A 3D printer will create a bike from a digital model. The new bike is then shipped directly to the customer or one of The Cycle Shops' pickup locations. This way of designing and building bikes required that we purchase two 3D printers every quarter to keep up with sales, and it also enabled The Cycle Shop to expand business within six quarters. The Cycle Shop started with one location in Bangalore. In Q3, we opened Rio de Janeiro, Q4 New York City, and in Q5, we went worldwide with Amsterdam. During the six quarters, we had many successes and a few failures. In the 3rd, 4th, 5th, and 6th quarters the shop had the most productive sales staff in the industry. In the 4th & 5th quarters, we had the highest balanced scorecard in the industry, and the 4th quarter saw the highest demand in one market segment with a 51% market share in the mountain category. By the 5th quarter, our shop had generated more than 1 million in sales, and we had the highest brand judgment in recreation and speed with the Outing II and the Racer. Quarter 6 was the turning point for the shop making a profit. We saw highs and lows in Market Performance, starting with a gradual climb to the top in Q3 to a steady drop in Q4, 5, & 6. Market Share also dropped in the last two quarters, and our overall Market Appeal dived as well. In retrospect of the climb to success followed by a steady decline, our shop can only determine that the cause may have stemmed from our ad campaigns and some of the changes with existing brands.

PAGE 1

RXM1: Business Performance ReportBusiness Performance Report Template

C2. Financial Analysis 1. Store Expenses and sales force: At the end of Q2, our Market Share was not in line with our business objective, and our Gross Profit needed to increase. We decided to open a store in each quarter to improve these numbers. We also focused on salesforce retention by increasing annual pay for employees in each store almost every quarter.

End of Q2

End of Q4

2. Pricing We entered Q4 with the goal of increasing our Gross Profit. To accomplish this, we made changes to our product line and lowered our prices substantially. The strategy we implemented saw a 43% increase in Gross Profit from Q3 to Q4.

3. Use of loans and cash The company decided to take out a 1,000,000 loan with the bank to increase our operating profit. In Q1 – Q4 our operating profit remained negative. Using a loan for this strategic venture is better than involving the company’s expenses, which were more than our operating profit.

PAGE 2

RXM1: Business Performance ReportBusiness Performance Report Template

C3. Ethical Decision-Making The Cycle Shop received warnings from the International Advertising Federation regarding at least four

brands throughout the simulation. The warnings stated, "none of your ads meet the minimum requirements of this target segment. You are advised to develop a new advertisement to better meet your target segment's needs." The warning was a problematic for us to address. For the first half of the simulation, we heeded the warnings and attempted several different advertisements that we felt met at least the minimum requirements of the targeted segments. In the next quarter, we received the same warning. We reviewed the target segments and felt that we addressed the needs as described, but again, in the next quarter, we received the warning. We changed our target market at some point in the simulation and again received the warning. After many attempts to change the opinion of the IAF, we no longer considered the warning to be of importance. Had this been a real-world business, there may have been an ethical implication or monetary repercussion. Had this been a real-world business, we would have had the ability to hire an outside advertising firm.

PAGE 3...