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QUESHDN 3 Lizzy gm {Lizzy} specializes in a fashion clothing business and has been in the industry for more than 2t] years. Lizzy sells fashion
QUESHDN 3 Lizzy gm {Lizzy} specializes in a fashion clothing business and has been in the industry for more than 2t] years. Lizzy sells fashion clothing in eight Asian countries through a variety of channels, including retail stores, online sales, and franchising. Lizzy differentiates itself from other fashion retailers by offering innovative, uptodate designs as well as excellent customer service and experience. Its business model is based on the 'fast fashion' ooncept. In the recent Board of Directofs meeting. the Chairman announced that Lizzy is considering acquiring a company called Rina in order to expand its business in a new geographical region of South America. The following are some of the details regarding Rizza: Rizza is a small fashion chain which retails mainly female fashion clothing. It offers a similar range of fashion clothing to Lizzy and all of its stores are in good locations. Rizza is a familyrun unlisted company which currently has 80 stores operating in three South American countries. The company has its own distribution centres. and it uses a range of local outsourced suppliers. Initial investigations have identied some poor working practices at many of Rizza's outsourced suppliers. Some staffs in Rizza lack technological skills. [Lizzy is aggressively operating in online shopping medium}. Average working hours in Rizza is 32 hours per week. {Current LiEy distribution centre staff work 4D hours per week}. All Rizza stores would be rebranded as Lizzy stores once it is acquired. It is proposed that Rizza's employees should be integrated into Lizzy's working culture. High standards of customer care and focus on staff's needs are both core to Lizzy's strong working culture. Uzzy will recruit and trains store staff to ensure that customer experience is optimized. Required: iii. Evaluate TWO (2) upside risks and THREE (3) downside risks on the proposal of acquiring Rizza to expand into South America. (15 marks)
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