Question
Read the given details carefully and answer all questions English Furniture is Planning strategy for next 5 years and is currently operation in 4 regions
Read the given details carefully and answer all questions English Furniture is Planning strategy for next 5 years and is currently operation in 4 regions North, West, East and south. The current business scenario is described in the following table.
Region | No. of outlets | Comments |
North | 10 | 35% of national sales here, but economically depressed |
West | 5 | Stiff competition |
East | 3 | Potential growth area |
South | 14 | Planning restrictions on new outlets |
The company has decided to assign Resources to the extent of $ 80 million with the following objectives:
- Sustain profitability in short term (PROFIT)
- Increase market share (MARKET SHARE)
- Minimize risk (RISK)
The company has come up with the following details:
.
Value of strategies with benefits measured on common scale
.
Also the following weightages are given:
Within-criterion weights for Market share
North: 10 West: 50 East: 100 South: 60
Within criterion weights for Risk
North: 10 West: 20 East: 100 South: 30
Across-criteria weights are assigned as follows:
Profit: 50 Market Share: 100 Risk: 50
The Production manager is proposing package A as follows:
In the North: Reduce to 3 outlets
In the West: Maintain the status quo
In the East: Expand to 10 outlets
In the South: Maintain the status quo
The Marketing Manager is proposing a package B as follows:
In the North: Maintain the status quo
In the West: close down operations
In the East: Expand to 4 outlets
In the South: Expand to 16 outlets
.
Required Questions:
Question 1: Correct Calculation of the benefits for the proposed package B
Question 2: Recommend with reasons the best package including costs and benefits
Costs (Sm) Benefits Profits Market Sm share Risk Strategies NORTH REGION (1) Reduce to Three outlets (2) Status quo 22 (6) 100 0 100 1000 28 (-3) 0 WEST REGION (1) Close down operation (2) Status quo (3) Expand to six outlets (4) 100 (-2) 54 (-9) 0 16 EAST REGION (1) Status quo (2) Expand to four outlets (3) Expand to 10 outlets 2 25 40 (3) 100 (0) 91 (-30) SOUTH REGION (1) Status quo (2) Expand to 16 outlets (3) Add three town center outlets (65) 100 (50) 100 (35) Costs (Sm) Benefits Profits Market Sm share Risk Strategies NORTH REGION (1) Reduce to Three outlets (2) Status quo 22 (6) 100 0 100 1000 28 (-3) 0 WEST REGION (1) Close down operation (2) Status quo (3) Expand to six outlets (4) 100 (-2) 54 (-9) 0 16 EAST REGION (1) Status quo (2) Expand to four outlets (3) Expand to 10 outlets 2 25 40 (3) 100 (0) 91 (-30) SOUTH REGION (1) Status quo (2) Expand to 16 outlets (3) Add three town center outlets (65) 100 (50) 100 (35)Step by Step Solution
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