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

Length:  4 pages (1171 words) | Citation Style:  None | Subject:  Business - Companies | Type: Essay | Paper: #64405469 | Author:  

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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 or tactical marketing program.

Recommendations  We know that the ranch can handle at least $4M in sales with the current staff and part time employees. At present, Circle R has not branched out into the Wedding and Wedding reception venue, largely because the margin is lower than corporate parties. However, due to corporate spending trends, Circle R needs to increase revenue.

The following are recommendations for Circle R: 1) Instead of investing $20,000 into the upgraded website, invest $40,000  reserving $15-20K for aggressive online marketing and pay-per-click advertising. 2) Ensure that the web presence is viable, active, and fun  use as many videos of…[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 October 26, 2014, 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 October. 2014. <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 October. 2014, http://www.paperdue.com/essay/case-4-circle-r-ranch-case-9-fikes-products-79384