Case Study Alison Mitchell joined The Look three months ago. The Look is a high street clothes retailer that is mainly based in the UK, but has some stores in continental Europe. Alison is a management trainee who recently finished her history degree at university. She has just come back from a management presentation in which the annual results of the company were announced. She left feeling slightly worried and a little confused. I know the economy has been doing badly and this has hit customer spending. Customers are worried about their jobs, which is not surprising given the high unemployment figures, and many of them have had their wealth hit hard by falling house prices. The economic climate is making everyone a little more cautious. This year's profits for the company were nearly £6 million, which is higher than our competitors. But the board of directors is apparently unhappy with this return, given the investment that has been made into the business. It wants a significant improvement in the coming year and stressed our role in making sure this happens. Six million is hardly a small number, but apparently it's not enough! We're now looking at cost-cutting measures including switching more to suppliers based in Vietnam. There are also plans for revenue growth by opening up stores in emerging markets, such as Russia and India. The growth rates of these economies are much faster that the UK and the board thinks that this opens up opportunities, although I don't think the weak value of the pound will help the expansion plans. In the UK, we've been told to prepare for a difficult future and look for ways of working more closely with our stakeholders to push up our profit margins. What I don't understand is why none of the economists seemed to predict this downturn. What's the point of studying economics is you can't do anything with it?' Questions 1. All businesses are involved in a transformation process that aims to add value as it converts inputs into outputs. Outline the transformation process that The Look undertakes and explain how a retailer can and value doing this.
Case Study Alison Mitchell joined The Look three months ago. The Look is a high street clothes retailer that is mainly based in the UK, but has some stores in continental Europe. Alison is a management trainee who recently finished her history degree at university. She has just come back from a management presentation in which the annual results of the company were announced. She left feeling slightly worried and a little confused. I know the economy has been doing badly and this has hit customer spending. Customers are worried about their jobs, which is not surprising given the high unemployment figures, and many of them have had their wealth hit hard by falling house prices. The economic climate is making everyone a little more cautious. This year's profits for the company were nearly £6 million, which is higher than our competitors. But the board of directors is apparently unhappy with this return, given the investment that has been made into the business. It wants a significant improvement in the coming year and stressed our role in making sure this happens. Six million is hardly a small number, but apparently it's not enough! We're now looking at cost-cutting measures including switching more to suppliers based in Vietnam. There are also plans for revenue growth by opening up stores in emerging markets, such as Russia and India. The growth rates of these economies are much faster that the UK and the board thinks that this opens up opportunities, although I don't think the weak value of the pound will help the expansion plans. In the UK, we've been told to prepare for a difficult future and look for ways of working more closely with our stakeholders to push up our profit margins. What I don't understand is why none of the economists seemed to predict this downturn. What's the point of studying economics is you can't do anything with it?' Questions 1. All businesses are involved in a transformation process that aims to add value as it converts inputs into outputs. Outline the transformation process that The Look undertakes and explain how a retailer can and value doing this.
Chapter1: Making Economics Decisions
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Transcribed Image Text:Case Study
Alison Mitchell joined The Look three months ago. The Look is a high street clothes retailer that is
mainly based in the UK, but has some stores in continental Europe. Alison is a management trainee
who recently finished her history degree at university. She has just come back from a management
presentation in which the annual results of the company were announced. She left feeling slightly
worried and a little confused.
I know the economy has been doing badly and this has hit customer spending. Customers are
worried about their jobs, which is not surprising given the high unemployment figures, and many
of them have had their wealth hit hard by falling house prices. The economic climate is making
everyone a little more cautious. This year's profits for the company were nearly £6 million, which
is higher than our competitors. But the board of directors is apparently unhappy with this return,
given the investment that has been made into the business. It wants a significant improvement
in the coming year and stressed our role in making sure this happens. Six million is hardly a small
number, but apparently it's not enough! We're now looking at cost-cutting measures including
switching more to suppliers based in Vietnam. There are also plans for revenue growth by
opening up stores in emerging markets, such as Russia and India. The growth rates of these
economies are much faster that the UK and the board thinks that this opens up opportunities,
although I don't think the weak value of the pound will help the expansion plans. In the UK, we've
been told to prepare for a difficult future and look for ways of working more closely with our
stakeholders to push up our profit margins.
What I don't understand is why none of the economists seemed to predict this downturn. What's
the point of studying economics is you can't do anything with it?'
Questions
1. All businesses are involved in a transformation process that aims to add value as it converts
inputs into outputs. Outline the transformation process that The Look undertakes and explain
how a retailer can and value doing this.
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