Susan

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Slide1:

1 Assess the situation Strategic Option 1 Strategic Option 2 Strategic Option 3 Strategic Option 4 Conclusion and Advise Option 1 : Consolidation of RSI and Lavish One Brand Identity Consistent with Sally’s mandate Cohesive Strategy Centralized decision-making structure Leverage Existing Resources Consolidated Financial Statement Different Operations Company-Wide Employee Bonus System Different accounting policies i.e. AR & Depreciation Different Client Base, Service and Atmosphere

Slide2:

2 Option 1 : Consolidation of RSI and Lavish - Quantitative Appendix A-C RSI: $204,972 Profit Margin = 27% RSI: $162,342 Profit Margin = 9% 2015 2014 RSI: $68,171 Profit Margin = 10% RSI: $154,426 Profit Margin = 9 % Consolidated: $167,695 (7%) Consolidated: $122,598 (5%)

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3 Option 2 : Franchising Aligned with board’s mandate for growth Allows fast expansion into new geographical markets Create reputable brand name Knowledge Share Potential of different values (i.e. quality control) Significant time investment by management Location Screening process can be time consuming and costly

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4 Option 2 : Franchising - Quantitative Franchising will help to develop a brand and network for RSI 8 franchisees required to break-even with start costs Ongoing Costs can be covered by only 5 franchisees Profitable when have >1 therapist $250,000 for operating manuals and marketing materials $65,000 for first year activity Strategic Fit Upfront Costs Break-even Analysis Appendix F

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