Case 4 circle R ranch case 9 fikes products website cases http ebooks narotama ac id files Effective 20Small 20Business 20Management 20An 20Entrepreneurial 20Approach 20 10th 20Edition Cases 20 20Effective 20Small 20Business 20Management 20An 20Entrepreneurial 20Approach 20 10th 20Edition

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Case 4  Circle R Ranch

Background - Circle R Ranch is located about 10 miles north of Dallas, Texas. It specializes in hosting conventions, corporate meetings, and other events with an authentic Western-style theme including BBQ food, hayrides, country music, and other specialized services as needed. It is known for its exemplary customer service. The recent recession, however, showed a decline in annual sales of almost 40%, from $4 million to $2.5 million. In addition, the add on items that are higher in margin (ice sculptures, rodeos, fireworks, staged gunfights, etc.) are being ordered less and less due to the declining budgets of companies themselves. Circle R is debt free, but the owners are seeing their margins reduce drastically.

Financial Analysis  A typical year for Circle R grosses about $4 million. The organization has no debt, so its expenses are related solely to staffing, utilities and particular food and supplies ordered for particular events. The recession resulted in a 38% decline in annual sales and a reduction in ordering of high-profit add ons. We can assume that this 38% decline was over at least 4 years, or about 9.5% per year. If we project this out, we find that there will be a point of diminishing return for the owners, who already work at least 50 hours a week each. Let us assume that the FT staff of 12 employees makes a living wage, which including payroll taxes equals a bit over ? million ($532.896,000); utilities and insurance are likely about 20% of gross, or $400,000,000. Thus, we have current costs of approximately $933,000. These costs are likely to increase annually by at least 5%, not to decline. This results in at least an additional 1.2% margin reduction after utilities for projections.

Identification of the Issues  There are several issues Circle R faces: 1) Declining sales due to recessionary times; 2) Internal cannibalization of sales from higher-priced, more profitable add-ons to basic, lower end offerings; 3) Increased costs for employees, food and equipment; 4) Loss of sales due to inadequate web presence; 4) Lack of aggressive strategic…[continue]



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APA Citation

"Case 4 Circle R Ranch Case 9 Fikes Products Website Cases Http Ebooks Narotama Ac Id Files Effective 20Small 20Business 20Management 20An 20Entrepreneurial 20Approach 20 10th 20Edition Cases 20 20Effective 20Small 20Business 20Management 20An 20Entrepreneurial 20Approach 20 10th 20Edition" (2012, April 21) Retrieved March 26, 2015, from http://www.paperdue.com/essay/case-4-circle-r-ranch-case-9-fikes-products-79384

MLA Citation

"Case 4 Circle R Ranch Case 9 Fikes Products Website Cases Http Ebooks Narotama Ac Id Files Effective 20Small 20Business 20Management 20An 20Entrepreneurial 20Approach 20 10th 20Edition Cases 20 20Effective 20Small 20Business 20Management 20An 20Entrepreneurial 20Approach 20 10th 20Edition" 21 April 2012. Web.26 March. 2015. <http://www.paperdue.com/essay/case-4-circle-r-ranch-case-9-fikes-products-79384>

CHICAGO Citation

"Case 4 Circle R Ranch Case 9 Fikes Products Website Cases Http Ebooks Narotama Ac Id Files Effective 20Small 20Business 20Management 20An 20Entrepreneurial 20Approach 20 10th 20Edition Cases 20 20Effective 20Small 20Business 20Management 20An 20Entrepreneurial 20Approach 20 10th 20Edition", 21 April 2012, Accessed.26 March. 2015, http://www.paperdue.com/essay/case-4-circle-r-ranch-case-9-fikes-products-79384