Leon's Furniture Limited: Current Situation And Recommendations

You have selected a company. Conduct research on the company and identify their current situation. The latest annual report for the company is provided for your use. You will be presenting your recommendations to the company. Your job is to provide a report addressing he following information:

1. Business Mission
   1. What business is your company in?
   2. What business should they be in the future?
   3. What are the business capabilities?

2. Performance Objectives

1. How is the business performing currently? Provide three examples that support your statement.
2. From data in the financial statements provided calculate a GMROI for the company.
3. Identify two (2) performance measures under each of the following three categories and explain why the measures would be appropriate for the company:

1. Input
2. Output

• Productivity

3. Merchandise Flow
   1. Describe the merchandise flow for the company.

1. Make one (1) recommendation about changing the merchandise flow.

4. Category Management
   1. For the purpose of this section (category management) identify one (1) category that the company sells.

1. What type of merchandise does this category represent?
2. Where is the category in its’ life cycle?
3. Develop an assortment plan for the category.  Justify the choices you are making.

5. Branding Strategies

1. Debate about the mix of national brands and private label brands sold by the company.
2. Determine if the company should expand or contract the number of private label brands available. Justify your decision.
3. Determine the private brand strategy the company is following. Make a recommendation on whether to continue with this strategy or to change to another private brand strategy. Provide an example and justify the recommendation.

6. Pricing Strategies
   1. When setting prices, describe how the company takes into account

1. Cost
2. Demand

• Competition

1. Legal considerations

1. Make two recommendations on how setting prices could change.
2. What price adjustments does the company engage in?

1. Make two recommendation on possible price adjustments.
2. What pricing strategy is the company following?

1. Make one recommendation on changing the pricing strategy used.
2. How does the company currently use pricing (apart from pricing adjustments) to stimulate sales?

1. Make two recommendation on how the company can stimulate sales.

7. Customer Loyalty

1. As part of its CRM process, how is the company getting customer loyalty?

1. Make three recommendations on how the company can increase customer loyalty.

8. Summary
   1. Provided a summary of the analysis and recommendations you have compiled.
   2. Express an opinion on the future success of the company.

Leon’s Furniture Limited is the selected company to be discussed in this report. This business is located in Canada and is strongly growing business over years in operation. Leon’s is the biggest merchandise of furniture, appliances, mattresses and home electronics in his country Canada. Since Leon's is a strong foundation, it has a network of 304 Outlets Countywide from coast to coast. The annual report of 2017, reviews that Leon's Furniture Limited had a total sale of $2.65 billion annually and five powerful banners (Stewart, 2018).

Business Mission basically outlines the business activities and the future achievements to be made by the business. Leon's Furniture Limited is a business which offers home Furniture's services in Canada besides other services like selling of electronics appliances and mattresses countrywide. Therefore, this description qualifies the company to operate under Cyclical Consumer Goods and Services sector and in the industry of Store departments. Leon's Furniture's Limited is aiming to supply more quality and standards goods and service to the customer so as to improve the future revenue of the business (Craft, 2018). Also, the company is aiming to diversify in other areas in the future as the business grows with time and as the opportunities come.

Leon’s Furniture Limited is the capable business in utilizing all opportunities of business available in Canada. The revenue growth of 3.2%, net income growth of 15.6% and shareholders’ equity of 15.2% all this is from 2016 to 2017. This shows how the business is capable in the market.

The business currently has experienced growth in several sectors. First, the business has witnessed the growth of 3.2% in revenue collection and income growth of 15.6% in the 2016/2017. Secondly, the business outlets are well performing in their fields of specialization like the field of furniture's, appliances and home electronics and mattresses (Kumar, Saravanakumar, Balakrishnan & Saravanan, 2018). Finally, the business is offering community services support to the Canadians. The business provides health facilities and financial contribution to the community, like in 2017 the business supported Miracle’s Children Network and contributed funds to support 12 Canadians hospital.

From the financial statement of the company, the following are calculations of GMROI. This is achieved by Formula, (Total sales/average cost of the stock) x % of gross margin.

This calculation of GMROI is based on 2017 income statistic.

($ 1,261,112/419,838) x 3.2% = 0.0961%

Therefore, GMROI is 9.612%.

The following are measures which have put on place to calculate the companies input, output, and productivity. Use of profit production strategy is one used to measure the performance of the company. After calculation of the resources used finally the output is calculated and profit is realized.

Revenue growth

This is the flow which shows how the company makes availability of the product to the customer. Leon's sells product directly to the client without using middlemen. This is because it has 304 outlets countrywide which are used supply furniture, mattresses and electronics appliances. This Merchandise flow it enhances direct interaction with the customers, therefore, change of this can bring negative effects on the company’s profit so is good to maintain it.

One of the categories the management is keenly on it, is the furniture and home electronics appliances. Therefore, because the services offers it belongs to the consumer goods and services sector under the industry of store departments in Canada. Furniture and home electronic appliances are the main product of the company's lifecycle (Taleizadeh & Sadeghi, 2018).

These are strategies used by the company to promote its products and make them unique to the customers (Varadarajan, 2018). The business has advanced to e-commerce business in partnership with Shopify, which is an online flat form. The business should continue with this branding system of e-commerce because the world has become more digital and frequent use of virtual store in the e-commerce market (Soltani, Pieters, Young & Sun, 2018).

Leon’s company uses pricing strategies to attract more customers than their competitors. The price of the product by Leon's company makes sure that company sales increases. This is realized in the profit made by the business (Hafezalkotob, Mahmoudi & Wee, 2018).

The price of the product can be influenced by the market demand, therefore, forcing management to change the price of the products and services.

The company uses different strategies to price their products in the market. The company uses supply and demand forces in the market, also the cost of production and legal requirements are used as the main factor in setting the price.

The company can promote its sales using pricing strategies and other alternatives. These alternatives which can be used by Leon's Furniture Ltd includes: promotional strategies, use effective after-sale service, use of branded gift to the customer and use of digital marketing in e-commerce.

The business can say it have experienced customers’ loyalty when most customers have shopped with the business frequently over a period of time. This means the business offers quality and standards products and services to the customers and that is why frequently come back after the first sale (Hwang & Mattila, 2018).

The following means can be recommended to Leon's company to increase customer loyalty in the business.

• Offer conveniences. This by making customer’s life in the company easy, simpler and faster in delivering the services. Be ready to answer customer’s questions frequently.
• Requesting the advice and respond to it from other loyal customers in the business. Business requires feedback from the customer to improve the next step in its operation.
• Reward customers. Rewarding customers motivates them to come back again and again to the business.

In summary, this analyses was very encouraging to the business and all other parties involved. The financial report of 2017 has outlined this growth of the business in term of the asset, cash flow and management responsibility to the company. The following are the Recommendation:

• The business should improve on effective use of branding and pricing strategy in the marketplace.
• The company is recommended to increase more stakeholder from different background.
• The company should implement future strategies on how to handle business loopholes.

References

Craft, J. L. (2018). The common thread: The impact of the mission on ethical business culture. A case study. Journal of Business Ethics, 149(1), 127-145.

Hafezalkotob, A., Mahmoudi, R. & Lee, H. M. (2018). Wholesale-retail pricing strategies under market risk and uncertain demand in the supply chain using evolutionary game theory. Kybernetes, 47(6), 1178-1201.

Hwang, Y., & Mattila, A. S. (2018). Is It My Luck or Loyalty? The Role of Culture on Customer Preferences for Loyalty Reward Types. Journal of Travel Research, 57(6), 769-778.

Kumar, M., Saravanakumar, K., Balakrishnan, S., & Saravanan, R. (2018). Multi-objective optimization of CNC turning parameters using genetic algorithm and performance evaluation of nanocomposite coated carbide inserts. International Journal of Data and Network Science, 2(4), 99-108.

Soltani, A., Pieters, J., Young, J., & Sun, Z. (2018). Exploring city branding strategies and their impacts on local tourism success, the case study of Kumamoto Prefecture, Japan. Asia Pacific Journal of Tourism Research, 23(2), 158-169.

Stewart, F. L. (2018). 17. A history of Canadian corporate law: a divergent path from the American model?. Research Handbook on the History of Corporate and Company Law, 451. Taleizadeh, A. A., & Sadeghi, R (2018). Pricing strategies in the competitive reverse supply chains with traditional and E-chanels: A Game Theoretic Approach. International Journal of Production Economics, 20(4), 489-520.

Varadarajan, B. (2018). Branding Strategies of a Private International School. The Qualitative Report, 23(4), 932-948.