Haefren Baum Business Analysis
Business Analysis
Last Four digits of student ID: 1491
Name of Business: Haefren Baum
Nature of Business: High-end furniture retailer
Marketing Analysis:
Haefren Baum is a furniture retailer, established in 1965 and was incorporated in 1970. Haefren Baum receives its merchandise from Wiegandt GmbH Cologne, a nearby manufacturer, whose business relationship equals over twenty-seven years. The company has one retail location in Cologne, Germany and three recently constructed outlet stores in nearby suburban areas. Demand and product sales are influenced by consumer discretionary income. In 1993, an economic bust in the German economy resulted in a major dip in GDP. Demand for the industry is cyclical and is influenced by the overall economy. There is no evidence of seasonality. In response to the German economic downturn in 1993, the company began to open outlets with wide selections and lower prices to maintain sales volume. This was a trend used by all in the industry, but sales volumes were not affected and remained flat. As the German economy recovered, Haefren Baum’s business began to see fierce competition from European furniture retailers. This was a concern for the Wiegandt, who saw its retailers losing market share, and began aggressively advertising its brand. The strategies involving aggressive branding and offering wider selections at lower prices proved to be unsuccessful, mainly due to the influx of competition.
Operations Analysis:
Haefren Baum being a retailer needs a large amount of inventory and assets in order to generate sales. To turn profits, the company needs to be efficient in both inventory management and asset turnover. Recently, the Haefren Baum is showing very high values for inventory days, and an overall decline in its TAT and FAT ratios. Figures for total and fixed asset turnover steadily decline from 1993-1995. These figures could be a result of the expansion and building of outlet stores, as well as slower sales. Total assets
Last Four digits of student ID: 1491
Name of Business: Haefren Baum
Nature of Business: High-end furniture retailer
Marketing Analysis:
Haefren Baum is a furniture retailer, established in 1965 and was incorporated in 1970. Haefren Baum receives its merchandise from Wiegandt GmbH Cologne, a nearby manufacturer, whose business relationship equals over twenty-seven years. The company has one retail location in Cologne, Germany and three recently constructed outlet stores in nearby suburban areas. Demand and product sales are influenced by consumer discretionary income. In 1993, an economic bust in the German economy resulted in a major dip in GDP. Demand for the industry is cyclical and is influenced by the overall economy. There is no evidence of seasonality. In response to the German economic downturn in 1993, the company began to open outlets with wide selections and lower prices to maintain sales volume. This was a trend used by all in the industry, but sales volumes were not affected and remained flat. As the German economy recovered, Haefren Baum’s business began to see fierce competition from European furniture retailers. This was a concern for the Wiegandt, who saw its retailers losing market share, and began aggressively advertising its brand. The strategies involving aggressive branding and offering wider selections at lower prices proved to be unsuccessful, mainly due to the influx of competition.
Operations Analysis:
Haefren Baum being a retailer needs a large amount of inventory and assets in order to generate sales. To turn profits, the company needs to be efficient in both inventory management and asset turnover. Recently, the Haefren Baum is showing very high values for inventory days, and an overall decline in its TAT and FAT ratios. Figures for total and fixed asset turnover steadily decline from 1993-1995. These figures could be a result of the expansion and building of outlet stores, as well as slower sales. Total assets