Management - Business Simulations - Essay Example

The month end bank balance of ?7687 is decent enough to start with and is sufficient to meet the immediate cash needs as compared to the level of business activity. The slightly higher fixed costs of ?826 are indicative of the initial spending in research and networking which is absolutely crucial at this stage to take the business into the future. This is a step in the right direction at this stage. There is a net loss of ?778 and at this stage it is quite expected as the sales effort starts showing results only after some time.

Besides, from the Time spent breakup (Appendix 1.2), it seems that the sales effort is greater than the overall marketing effort at this stage, since building cash inflow is a priority at this stage. The idle time shows that here is pressure to build up business and this is translated into sales activity which is more action oriented than the marketing activity. The same trend continues in February and is depicted in March ’13 report. In March’ 13, the bank balance is more or less maintained, indicative of even cash inflows and outflows.

However, the expenditure and time on the marketing and product research activities shows an increase. The customer research and competition research is complete and the product redesign based on the research has been completed y this time. The business breaks even in the month of March 13 which is shown in the April 13. The bank balance is maintained and the business shows strong growth signs. The sales are increasing and the bank balance is building up with increase in new orders. The production time is increasing and the idle time is decreasing.

The business has made a small profit of ?45. However, this trend is reverted the very next month owing to higher overheads in terms of spending business website. The website though a cost, is the right decision at the right time for the business, since, an online presence with the traditional marketing as well as supply chain management methods was hugely complemented by the same. Since at this time, the number of sales enquiries from traditional marketing methods is too low to sustain the business (Appendix1.3). The sales effort and its effectiveness has been maintained and is evident from the fact that the product stock at the end of the month is zero for a considerable period of time that is from Jan’ 13 to Feb’14.

This apart from sales effort is also indicative of good inventory planning. However, by month May 13, due to lack of orders, the production capacity was idle for the most part. The scenario seems to be a result of overemphasis on research and planning at the expense of sales effort in recent past. The management was advised to give some more focus to the core activity of selling. This showed some result in the very next month, when the orders from previous month exceeded an amount of ?2870 and this is where the business starts making profit on a sustainable basis.

The production capacity is utilized to a great extent and the idle time minimized. The growth in profit continues and by August, the production targets are being met. The Marketing team was advised to work out the possibilities of a long term business opportunity. The effort showed results in the form of the first customer contract by August 13 (Appendix 1.4). By September