Clothing Company (CC) CC is a public limited company. It operates its own branded clothing retail stores only in the US. CC has been a popular choice with both customers and investors. Revenue and profit were consistently high until 2008. CC used to have only four main seasonal ranges: spring, summer, autumn and winter. As digital marketing and fast fashion became more popular, CC struggled to meet the changing needs of its customer base. Originally, clothing was sourced from manufacturers, based in low-income countries, which used flow production. Developing an operations strategy for survival and growth The directors of CC are concerned that the business may fail. They believe it needs a new and distinctive operations strategy to reduce costs and increase efficiency. Appendix 1: CC's marketing objectives in 2010 - To increase sales volume by $$\(20 \%\)$$ by 2019. - To revise CC's pricing strategy. - To expand CC's customer base. Appendix 2: Changes to CC's marketing mix in 2012 Appendix 3: Examples of customer feedback in 2013 'CC clothing used to be good quality. My new jumper fell apart in its first wash!' 'I don't know what counts as fashion these days, but I don't like it.' 'There's always something new every time I visit the website.' 'I was going to buy a shirt in a CC shop, then I found it much cheaper on the website.' Appendix 4: Financial data: 2008 -2020 Advise CC on an operations strategy to enable its future survival and growth.
Exam No：9609_m24_qp_42 Year：2024 Question No：2
Answer:
Indicative content
AO1 Knowledge and understanding
Knowledge \({ }^{\star}\) (max 1 mark) can be awarded for any relevant business knowledge about operations, including:
- The transformational process (inputs, outputs, added value, factors of production)
- Efficiency, effectiveness, productivity and sustainability
- Capital and labour intensity
- Operations methods (job, batch, flow, mass customisation)
- Inventory management (types of inventory, buffer, re-order level, lead time, supply chain management, JIT and JIC)
- Capacity utilisation
- Outsourcing
- Location
- Scale of operations (economies and diseconomies of scale)
- Quality management (quality control, quality assurance, TQM, benchmarking)
- The meaning and purpose of an operations strategy
- The influence of human, marketing and finance resource availability on operations decisions
- The changing role of Information Technology (IT) and Artificial Intelligence (AI) in operations management
- The need for flexibility with regard to volume, delivery time and specification
- Process innovation: changing current processes or adopting new ways of producing products or delivering services
- The main features of an ERP programme
- How ERP can improve a business' efficiency in relation to: inventory control, costing and pricing, capacity utilisation, responses to change, workforce flexibility, management information
- The aims and purposes of lean production (Kaizen, quality circles, simultaneous engineering, cell production, JIT manufacturing and waste management)
- Operations planning (network diagrams, critical path analysis)
Award \({ }^{D E V}\) for any explanation of relevant business knowledge, up to a max of 2 marks.
AO2 Application
Application \({ }^{A \text { PP }}\) (2 marks) can be awarded for applying knowledge of operations/operations strategy, to CC.
Award one \({ }^{A R \mathrm{PP}}\) for each application of knowledge.
- John Dee replaces Sulwar in 2020
- The share price remains low, but stable
- A new and distinctive operations strategy to reduce costs and increase efficiency is needed
- CC operates its own branded clothing retail stores only in the US
- CC has been a popular choice with both customers and investors
- CC used to have only four main seasonal ranges: spring, summer, autumn and winter
- Competition from online only retailers has reduced CC's market share
- John is set an objective to restore CC's brand reputation
- Any relevant data from Appendix 1-4
AO3 Analysis
Analysis of the impact of CC's operations strategy (
A1
and
\(\square\) and \(\square\) ) including:
- Human resources availability - are younger graduates able to understand the original target market - does their visior align with an original brand reputation and John's strategy
- Marketing availability - will marketing graduates be able to create an original but improved marketing strategy which does not create the same problems 2010-16
- Revenue has dropped by \(25 \%\) since 2008 (and profit has dropped by \(90 \%\) ) - does CC have the available funds to invest in new marketing techniques/AI/IT
- Methods of regaining lost customers using the operations function
- Improving flexibility and innovation within operations; increase sales volume - to increase customer retention
- The use of and ERP programme - cost/benefit analysis of this and the effects of this on CC
- Introduction of lean production - cost benefit analysis of this and the effects of this on CC
- Any other relevant operations methods
AO4 Evaluation
Evaluation \(\square\) and and \(\square\) ) including:
- A judgement about an operations strategy for CC to enable CC's survival and growth
- Judgement may depend upon: market research findings, external influences in the US (PEST), internal and external influences on CC (SWOT), the reactions of potential competitors in the US, the extent of the investment to meet the new strategy
- Weighing up of the relevant arguments for the different future strategies
- The board of directors (and shareholders) level of risk that they would be willing to accept
Accept all valid responses.
AO1 Knowledge and understanding
Knowledge \({ }^{\star}\) (max 1 mark) can be awarded for any relevant business knowledge about operations, including:
- The transformational process (inputs, outputs, added value, factors of production)
- Efficiency, effectiveness, productivity and sustainability
- Capital and labour intensity
- Operations methods (job, batch, flow, mass customisation)
- Inventory management (types of inventory, buffer, re-order level, lead time, supply chain management, JIT and JIC)
- Capacity utilisation
- Outsourcing
- Location
- Scale of operations (economies and diseconomies of scale)
- Quality management (quality control, quality assurance, TQM, benchmarking)
- The meaning and purpose of an operations strategy
- The influence of human, marketing and finance resource availability on operations decisions
- The changing role of Information Technology (IT) and Artificial Intelligence (AI) in operations management
- The need for flexibility with regard to volume, delivery time and specification
- Process innovation: changing current processes or adopting new ways of producing products or delivering services
- The main features of an ERP programme
- How ERP can improve a business' efficiency in relation to: inventory control, costing and pricing, capacity utilisation, responses to change, workforce flexibility, management information
- The aims and purposes of lean production (Kaizen, quality circles, simultaneous engineering, cell production, JIT manufacturing and waste management)
- Operations planning (network diagrams, critical path analysis)
Award \({ }^{D E V}\) for any explanation of relevant business knowledge, up to a max of 2 marks.
AO2 Application
Application \({ }^{A \text { PP }}\) (2 marks) can be awarded for applying knowledge of operations/operations strategy, to CC.
Award one \({ }^{A R \mathrm{PP}}\) for each application of knowledge.
- John Dee replaces Sulwar in 2020
- The share price remains low, but stable
- A new and distinctive operations strategy to reduce costs and increase efficiency is needed
- CC operates its own branded clothing retail stores only in the US
- CC has been a popular choice with both customers and investors
- CC used to have only four main seasonal ranges: spring, summer, autumn and winter
- Competition from online only retailers has reduced CC's market share
- John is set an objective to restore CC's brand reputation
- Any relevant data from Appendix 1-4
AO3 Analysis
Analysis of the impact of CC's operations strategy (
A1
and
\(\square\) and \(\square\) ) including:
- Human resources availability - are younger graduates able to understand the original target market - does their visior align with an original brand reputation and John's strategy
- Marketing availability - will marketing graduates be able to create an original but improved marketing strategy which does not create the same problems 2010-16
- Revenue has dropped by \(25 \%\) since 2008 (and profit has dropped by \(90 \%\) ) - does CC have the available funds to invest in new marketing techniques/AI/IT
- Methods of regaining lost customers using the operations function
- Improving flexibility and innovation within operations; increase sales volume - to increase customer retention
- The use of and ERP programme - cost/benefit analysis of this and the effects of this on CC
- Introduction of lean production - cost benefit analysis of this and the effects of this on CC
- Any other relevant operations methods
AO4 Evaluation
Evaluation \(\square\) and and \(\square\) ) including:
- A judgement about an operations strategy for CC to enable CC's survival and growth
- Judgement may depend upon: market research findings, external influences in the US (PEST), internal and external influences on CC (SWOT), the reactions of potential competitors in the US, the extent of the investment to meet the new strategy
- Weighing up of the relevant arguments for the different future strategies
- The board of directors (and shareholders) level of risk that they would be willing to accept
Accept all valid responses.
Knowledge points:
1.4.1.1 the objectives of businesses – private sector, public sector, and social enterprises
1.4.1.2 the importance of business objectives
1.4.1.3 corporate social responsibility (CSR) and the triple bottom line – economic (financial), social and environmental objectives
1.4.1.4 the relationship between mission statement, aims, objectives, strategy and tactics
1.4.2.1 the different stages of business decision-making and the role of objectives in the stages of business decision-making
1.4.2.2 how objectives might change over time
1.4.2.3 the translation of objectives into targets and budgets
1.4.2.4 the need for communication of objectives and their likely impact on the workforce
1.4.2.5 SMART (specific, measurable, achievable, realistic, time-limited) objectives
1.4.2.6 how ethics may influence business objectives and activities
4.1.1.1 the use of factors of production: land, labour, capital and enterprise
4.1.1.2 the stages of the transformational process: inputs to outputs
4.1.1.3 the contribution of operations to added value
4.1.2.1 the importance of efficiency, effectiveness, productivity and sustainability
4.1.2.2 measurement of labour productivity
4.1.2.3 the impact on a business of measures to improve sustainability of operations
4.1.3.1 the benefits and limitations of capital intensive operations
4.1.3.2 the benefits and limitations of labour intensive operations
4.1.4.1 differences between methods – advantages and disadvantages of each method
4.1.4.2 the problems of changing from one method to another
6.2.1.1 the meaning and purpose of business strategy
6.2.1.2 the meaning and purpose of strategic management: analysis, choice and implementation
6.2.1.3.1 blue ocean strategy
6.2.1.3.2 scenario planning
6.2.1.3.3 SWOT analysis
6.2.1.3.4 PEST analysis
6.2.1.3.5 Porter’s five forces
6.2.1.3.6 core competence framework
6.2.1.3.7 Ansoff matrix
6.2.1.3.8 force field analysis
6.2.1.3.9 decision trees
6.2.2.1 the meaning and importance of corporate planning
6.2.2.2 the meaning of corporate culture and its impact on business decision-making
6.2.2.3 the meaning and importance of transformational leadership
6.2.2.4 the management and control of strategic change
6.2.2.5 the meaning and importance of contingency planning and crisis management
9.3.1.1 the influence of human, marketing and finance resource availability on operations decisions
9.3.1.2 the changing role of Information Technology (IT) and Artificial Intelligence (AI) in operations management
9.3.2.1 the need for flexibility with regard to volume, delivery time and specification
9.3.2.2 process innovation: changing current processes or adopting new ways of producing products or delivering services
9.3.3.1 the main features of an ERP programme
9.3.3.2 how ERP can improve a business’ efficiency in relation to: inventory control, costing and pricing, capacity utilisation, responses to change, workforce flexibility, management information
9.3.4.1 the aims and purposes of lean production
9.3.4.2 Kaizen, quality circles, simultaneous engineering, cell production, JIT manufacturing and waste management as operational strategies to achieve lean production
9.3.4.3 the limitations of operational strategies to achieve lean production
9.3.4.4 the links between lean production and inventory control, quality, employees roles, capacity management and efficiency
9.3.5.1 the need for planning operations
9.3.5.2 network diagrams as tools to plan operations
9.3.5.3 the main elements of a network diagram: activities, dummy activities, nodes
9.3.5.4 network diagrams as means of performing Critical Path Analysis (CPA), including identification of the minimum project duration and the critical path, calculation of total and free float, interpretation of the results of the analysis of a network, how minimum duration and floats might be used in project management
9.3.5.5 the benefits and limitations of CPA as a management tool
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