Cima Gbc Report

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Team Name

CASE CRACKERS
Report Title CeeCee in the next 5 years

University Nanyang Technological University Team members Chen Xinyi Lee Wai Hon Gabriel Liu Xinyi Yeo Shi Yuan

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TABLE OF CONTENTS
Page 1. Executive Summary ………………………………………..3 2. Introduction ……………………………………………….. 4 3. Strategic Analysis…………………………………………..5 3.1 Company Analysis 3.2 Industry Analysis 3.3 SWOT analysis

4. Financial Analysis…………………………………………..8 4.1 Financial Ratios

5. Issues Analysis and Recommendations………………..10 5.1 Prioritization of Issues 5.2 Core Competencies Issues
5.2.1 5.2.2 Distributor‟s Strike Failure of the New Online IT System

5.3 Diversification and Marketing Plans
5.3.1 5.3.2 Celebrity Marketing Expansion into Jewellery Range

5.4 Child labour accusations

6. Achievability of the five-year plan………………………..22 7. Summary of Issues and Recommendations …………... 23 8. Appendices…………………………………………………24

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EXECUTIVE SUMMARY

This report aims to prioritise, analyse and evaluate the current issues plaguing CeeCee. The report begins with a strategic and financial analysis of CeeCee and the industry. The 4 main issues CeeCee face have been categorized into 2 broad categories, namely issues that threaten core competencies and plans relating to expansion and marketing. The issues that threaten core competencies are more pressing issues that CeeCee should address, given the highly tangible impact and risks present which will threaten business profitability. For the first issue regarding the distributor‟s strike, the team recommends that in the short run, CeeCee should engage an alternative distributor and re-evaluate their distribution model in the long run. The second issue - failure of the online IT sales system, can be dealt with by employing an external agency to recover the debts and improving the controls inherent in the system.

With regards to diversification and marketing plans, CeeCee should implement the celebrity marketing proposal as the expenses are not substantial in relation to their sales. However, Kool may not be the best spokesperson for CeeCee. Next, CeeCee should reject into the second proposal of expansion into the jewellery range as the proposal is not operationally feasible despite the positive net present value and the small capital outlay required. The final issue is the ethical implications from child labour accusations. A moral analysis utilizing the beliefs of the 6 major ethical systems demonstrated that CeeCee should abide by the law and discontinue the use of child labour.

Finally, the achievability of the five-year plan is evaluated. After taking into account the issues plaguing CeeCee, the ending cash balance is positive. Thus, the five-year plan is feasible. The excess cash balances that CeeCee has can be further utilized for expansion or other proposals.

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INTRODUCTION

CeeCee, founded in 1989, is a high street fashion retailer specializing in trendy and affordable female fashion. By adopting a just-in-time system for fast turnarounds with short production runs and limited inventory, CeeCee positions itself as a trendy and exclusive fashion retailer. Though it only has a market share of about 15%, it has the highest gross margin at 60.1% compared to its main competitors.

CeeCee has devised a five year plan that will aim to achieve the following milestones by 2014: Number of shops – Increase by 30% to 800 in 2014 Sales revenue – Increase by 85% to €5156m in 2014 Operating Profit – Increase by 95% to €1237m in 2014

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STRATEGIC ANALYSIS Company Analysis

CeeCee has adopted the „fast fashion model‟ to differentiate itself from other high-street retailers, departmental stores and value retailers and has built a strong customer base. This model was possible as CeeCee possess core competencies in the form of short product life cycles and fast creation of new designs. The model also relies on having a sophisticated IT system and also...
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