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Marketing-QA49 Online Services

Question 1: A financial analysis of the market competitive environment can be done and the following information (data, figures on market share, market size etc.) can be searched for if provided in the case
 
• Market and segment size (unit and $), structure and growth, and industry production capacity
• Company and competitor market and segment shares (unit and $)
You can then organize the data (numbers/figures from the case) into an excel spreadsheet to make it look like this example
 
Question 2: Conduct a market-oriented financial analysis, which can include
 
• Industry value chain (for input costs, prices and margins)
• Vertical versus horizontally stratified industries (relative to margin capture)
• Industry price experience curve and company cost-learning curve
• Industry cost-competitive practices re. sub-contracting, outsourcing, offshoring, etc.

 
Question 3: For growth rates, an index number can be calculated to express trends in financial items, as follows
 
This calculation must be used with actual values and cannot be used with percentages. (This index number calculation also can be used with financial information to indicate trends.)
 
Information is available in Case Exhibit 7 on the prices of Coral Divers accommodations. In the case section on “Greenwell’s Options” it is stated that “Greenwell’s booking ran 90% of capacity during high season (September through May) and 50% of capacity during low season (June through November)” Some analyses can be done regarding the revenue generation from various items (e.g., vacations packages, day diving) as shown in Case Exhibit 6. (Look for size and growth rates of each item and calculate % contribution to total revenue.) Some analysis can be done re. extra revenue that could be generated if bookings, especially in the low season, could be increased from 50% of capacity. Perhaps also, some extra revenue could be generated through price increases (without at this time considering the types of customers who would pay increased prices and the services that they would require.) Rascals in Paradise pricing and services information is given in the case.
 
Question 4 (part a-d):Where information can be found, company product line, and company geographic, customer segment, or large customer-channel sales, profits and profitability analysis can be done. 80/20 analysis can be used where there are large numbers of products, geographic areas, customer segments or customers-channels. If information is available over some time trends can be calculated as index numbers based on the calculation: Analyses can be carried out as follows
 
A. Product or product line sales revenue, profits and profitability can be sought. Where there are a number of product lines they can be rank-ordered, e.g., by sales revenue, and 80/20 analysis carried out.
(In a real situation it may be necessary to examine the taken-for-granted product categories used by the accounting department. These categories may not relate directly to the customer segments that the company is selling to. Some sorting out of product accounting may be needed in order to get appropriate and correct information.)
 
B. Customers are the other side of the company’s customer-product relationships. Individual distributor customers, customer segments, e.g., geographic or customer group, also can be assessed for revenue, profits and profitability.
C. Product castings can be carried out here. Operations activity costs analyses can be left out
D. Breakeven analyses can be carried out where information is available.

Product code: Marketing-QA49

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