Robyns Hoods, Inc., buys plain organic cotton hoodies in large quantities from one vendor, and applies unique silk-screened graphics in-house. It then sells the hoodies to a number of boutiques. Robyns wants to be known for its greenness and graphics, and wants to see every college student (and wanna-bes) proudly sporting a Robyns Hood. The following data was gathered for the immediate past two years:

2017 2018

1. Number of plain hoodies purchased 324,000 405,000
2. Number of hoodies rejected for defects 3,240 5,346
3. Number of hoodies sold (Row 1 Row 2) 320,760 399,654
4. Units Sales Price (USP) $40.50 $41.25
5. Cost per hoodie $16.20 $14.50
6. Administrative capacity (number of customers) 6,480 6,075
7. Administrative costs* $1,944,000 $1,883,250
8. Administrative cost per customer (Row 7 Row 6) $300.00 $310.00

*Administrative costs depend upon the number of customers Robyns Hood has the capacity to serve, not the actual customers served (5,820 in 2017 and 5,670 in 2018)

Required:

1. What is Robyn Hoods, Inc.s strategy?
2. Calculate Robyns operating income for 2017 and 2018; show detail.
3. Prepare a strategic analysis of profitability (show detailed calculations for growth, price-recovery, and productivity components).
4. Suppose the market for high-end hoodies grew by 10% during 2018 (i.e. all increased in sales greater than 10% are the result of strategic actions by Robyns Hood, Inc.) Calculate the change in operating income from 2017 to 2018 due to growth in market size, product differentiation, and cost leadership. How successful was Robyns Hood at implanting its strategy?