Northbridge Retail Ltd is a UK-based omni-channel homeware business selling through 48 stores and an online platform. Revenue rose from GBP 124.3m to GBP 132.5m in the last year, but operating margin fell from 8.4% to 7.6%. Management attributes this to heavier promotional discounting and higher logistics costs.
The firm is deciding whether to prioritise faster e-commerce expansion or improve in-store profitability first. Customer survey data shows younger segments value speed and flexible returns, while older segments value in-store support and product advice. Inventory days have increased to 62, and cash tied up in stock has become a major board concern.
Department heads disagree over priorities: marketing wants extra digital spend, operations wants warehouse automation, finance wants tighter stock controls, and HR wants a retention package for experienced store managers.
Answer all questions. Use the case context where relevant.
1. Explain one way customer segmentation could improve decision quality for Northbridge. (4)
2. Analyse one likely impact of stronger brand positioning on demand. (6)
3. Analyse one reason why improving capacity utilisation may increase productivity. (10)
4. Analyse one likely consequence of weaker liquidity for short-run decision making. (10)
5. Assess whether improving employee retention is likely to raise long-run operational performance. (10)
Read the case and answer both questions.
6. Assess whether management should prioritise tighter inventory control ahead of further promotional activity. (15)
7. Evaluate the extent to which the marketing mix should be redesigned to improve both margin and market share. (20)
8. Evaluate the view that improving financial performance should be the first priority, ahead of operational and human resource improvements. (25)