BUSS1001 UNDERSTANDING BUSINESS

Semester 1, 2016

CASE STUDY
Assume:
The Healthy Potion (HP) business has been operating for a total 10 years, with the current owner for 5 of those years. The business has been a great investment. The original $500,000 loan has been repaid and it has accumulated an equal amount in surplus funds. The business has also expanded and there are now 5 additional shops spread throughout Australia, all in shopping malls.
The owner believes that she is ready for an expansion of the business in a major way. The business has been built on the (real or perceived!) reputation of the health benefits of the Chinese herb. A year ago, the owner estimated that about 70% of her sales were from repeat customers who purchased a drink at least once per week. But, whilst the level of sales has continued to grow, the number of repeat customers has been dwindling and she estimates that they are now only about 40% of your current customer base. She has observed a number of her former regular customers purchasing freshly squeezed juice from a fresh juice outlet located close to one of the stores. She wonders whether she should grow the business into that (fresh juice) market. She believes that the addition of the herb to the fresh juice might be a great selling point for that product. She has engaged you to write a report (see below) on growing the business in this way.

Your report should contain:
1. An introduction to the report (5%)
2. A strategic analysis of the current position of HP – i.e. without any entry into the fresh juice market (45%)
3. An outline and discussion of the strategies that should be considered in growing the business into the fresh juice market. (25%)
4. Provide a recommendation on a strategy outlined in 3 above. Provide a justification for that recommendation. (20%)
5. A conclusion to the report (5%)

Marking Criteria:
Arguments used in discussions and recommendations.
Research used, both academic and non-academic.
Comprehensiveness of the strategic analysis and growth strategies.
Application of relevant key concepts and frameworks.

The quality of the logical arguments and evidence that A-CA-R has been used where appropriate.