City of Glasgow College CBI Case Study PDF

Lecturer’s Name: Steph Murdoch Date: Nov 2024 Student’s Name: Course/Class: NQ Contemporary Unit Title:...

Lecturer’s Name: Steph Murdoch Date: Nov 2024 Student’s Name: Course/Class: NQ Contemporary Unit Title: Unit Number: HE9E 46 Business Issues Assessment Outcome: One & Two 1 Number: Form of Assessment Candidate Choice Assessment Type Open Book Assessment Submission In Person Controlled Conditions You are able to use any Opportunity for Additional Pass Grade resources to complete this Remediation Information assessment however the (if appropriate) work must be yours. Time Limit Within 2.5 Hours The work submitted in this unit is entirely my own work Signature Declaration......................................................................... After your assessment has been marked, you will be able to read your feedback and advice on how to prepare for re-assessment. This section is for Staff Use only: Date Result Attempt Remarks/Feedback/Advice Initials Signature of Lecturer BEFORE SUBMITTiNG THIS ASSESSMENT YOU SHOULD ENSURE YOU COMPLETE THE CANDIDATE CHECKLIST AND YOUR SUBMISSION COVERS ALL APPROPRIATE POINTS Question / Outcome Candidate Checklist Markers Use: Define an SME. 1. Provide an acceptable definition of an SME 2. Link definition to examples from the case study Explain the key 1. Choose at least three features of an SME. features of an SME 2. Show where the case study links to the features 3. Show how some of these features differ from large organisations Explain the 1. Identify at least two characteristics of a characteristics per stage. business at each stage 2. Identify FIVE’s current of the life cycle stage in the life cycle. 3. Link the current stage to examples of characteristics from case study Outline the key 1. At least two objectives objectives of a should be provided for business appropriate each stage of the life to each stage of the cycle. business life cycle. 2. Link the current life cycle stage to examples of objectives from the case study Explore the internal 1. Describe at least two and external internal and two external challenges that influences FIVE face. businesses may face. 2. Describe two challenges facing an SME for each stage of the life cycle. Explain the role of the 1. Define at least four functions and activities business functions. within a business, and 2. Describe how each of how these change in these functions activities relative importance. and importance change through the different stages of the business life cycle. Analyse business 1. Identify at least two strategies appropriate strategies FIVE could for different stages of adopt in its current stage of the business life cycle. the life cycle 2. Give reasons for your choice of strategies. Read the following case study and answer all of the questions that follow. Case Study — FIVE – (1/3) After years of watching his mother run a small fine art gallery in a mid-Scottish town, Douglas Train was given the opportunity of a lifetime when his mother announced that she had decided that it was time to take things a little easier and sell up. With years of study at College and then University, plus two years of experience as a management trainee in a large supermarket chain, Train felt prepared for the challenge as he set about raising the money to buy his mother’s business. Laura Amsdon, a close friend from Business School, agreed to join up with him. With Laura’s savings and borrowings from her parents, his own savings, which had been bolstered by selling his car, and with generous lending terms from his mother, the two took over the business. The first two years were difficult, recession had hit the town in which the art gallery was based and this was compounded by high rent and rates in a modern shopping centre. Both partners had always hoped to self-finance any changes through expansion of the business but change was forced early on and in 2011 they had to relocate to a retail/workshop unit. While they immediately halved their overheads they found themselves on the outskirts of the town with no natural footfall in the new location so new streams of income would be needed quickly. Plans were quickly reviewed and an online gallery would become key to future success, and the idea of coffee shops in the galleries was identified as a way of pulling in customers. The new business unit was spacious, cheaper and the gallery still had a loyal customer base on which to build. While the plans for an online business were key, Amsdon and Train felt that a retail unit was also a major part of the business. ‘When you are a bricks-and-mortar retailer people know you are a far more serious player’, said Amsdon. But luck was to be on their side when unexpectedly the local authority moved a large proportion of its staff to a large warehouse facility nearby bringing a much needed localised market. The fine art gallery would now also be a mid to up market coffee shop complementing the up market gifts and sculptures ranging from £20–£500, picture framing services, art featuring limited edition prints many averaging from £200–£500 and original works with the value of up to £10,000. The new space also offered opportunities to be more flexible and build relationships with artists as a viable venue for exhibiting their work. Meantime, work continued on developing the online outlet. ‘We worked hard and put in long hours’, Amsdon adds. Case Study — FIVE – (2/3) It paid off as turnover for the business trebled within the first year of moving to the new premises, and online sales grew and now account for 60% of sales. Last year the company posted profits of £110,000 on sales of £0.9m. With signs of recovery in the economy, the partners decided to open a second gallery in one of Scotland’s more affluent towns three years ago. Their commitment to bricks and mortar retailing combined with the aim of offering a welcoming environment in which to enjoy original and limited edition fine art from the UK’s, and more specifically Scotland’s, most innovative and talented artists, was now a major part of the wider business strategy. Growth has been fast and the company now has six sites in Scotland including a new flagship gallery that opened in Edinburgh in 2016. ‘Why the change of name to FIVE?’ ‘That’s a good question’, Amsdon answers. ‘It was quite simple when we moved we gave ourselves five years to get it right. Maybe we haven’t, but I think we’ve made a decent go of it.’ A lot of FIVE’s business is from a faithful hardcore customer base — a dedicated network of repeat buyers. This network is no accident as FIVE have spent a considerable amount of effort building a customer database; regularly contacting customers via e-mail and newsletters to let them know of new works, limited editions, exclusive customer evenings and special offers that may be of direct interest to them. The hands on approach of Amsdon and Train over the last five years has become difficult to maintain across six busy galleries. Each gallery now has its own manager and staff are expected to be as proficient at selling coffee as they are at selling art. All staff are also expected to be knowledgeable about the art they sell and the artists whose work they sell. But Amsdon and Train are still involved in making sure that the galleries are on trend and take the lead on all buying decisions with the exception of the decisions relating to the coffee shop part of the business. They are proud of the partnerships they have with some of the leading fine art publishing houses, who represent some of the UK’s leading contemporary artists, providing FIVE with access to artists, their original work and limited edition prints. These partnerships also enable celebrity appearances by the artist, as well as helping to develop showcase events and exhibitions, something that they both enjoy. In addition, they have championed the work of local artists in all of their galleries, which is something they are particularly keen on. Having reached the five year mark the partners are now embarking on more ambitious plans. With thoughts of two more stores in Scotland — Glasgow and Aberdeen and expansion in England the partners certainly have their worked cut out for them. More people will be needed; currently there are 30 staff in the business Case Study — FIVE – (3/3) and a more structured management team will probably be required to support further development. In addition, the expansion will need to be funded and they are in deep discussion with one Business Angel regarding finance for their ambitious plans both online and in bricks and mortar. For the first time ever they will have to yield some equity and perhaps some control. However, the two are optimistic that the fit with the Business Angel is a good one and that she will bring expertise to the company that will be of considerable benefit. Amsdon and Train are aware that branding is a major component of the success of what they’re about and readily acknowledge the difficulties this presents for the different sides of the business. While having an online presence, FIVE hasn’t exploited yet, according to its owners, the world of social media and are in discussions with a social media agency to look at and manage this aspect. ‘We have a story to tell about us, the art we sell and our brand in general’, says Amsdon, ‘but we’re just not sure how to get the message across.’ ‘We know that art is a discretionary purchase and that people buy art because they love it. We just need them to love us too.’ [CASE STUDY ENDS] Answer the questions – referring to the “FIVE” case study throughout. 1. (a) Provide an acceptable definition of an SME. (b) Link definition to examples from the case study 2. (a) Choose at least three features of an SME.  (b) Show where the case study links to the features. (c) Show how some of these features differ from large organisations. 3. (a) Identify at least two characteristics per stage. (b) Identify FIVE’s current stage in the life cycle. (c) Link the current stage to examples of characteristics from case study. 4. (a) At least two objectives should be provided for each stage of the life cycle. (b) Link the current life cycle stage to examples of objectives from the case study. 5. (a) Describe at least two internal and two external influences FIVE face. (b) Describe two challenges facing an SME for each stage of the life cycle. 6. (a) Define at least four business functions. (b) Describe how each of these functions activities and importance changes through the different stages of the business life cycle. 7. (a) Identify at least two strategies FIVE could adopt in its current stage of the life cycle (b) Give reasons for your choice of strategies.