Read the attached case study; Foxy’s Originals.
Respond to the following nine questions based on the case study.
1. Assess each distribution strategy from a qualitative point of view. Specifically, how does each distribution strategy support business objectives (i.e., profitability)? Is one riskier than the other? Do the owners have the skill sets to take advantage of such a strategy?
2. Identify all costs, other than variable costs, for the trade show distribution strategy. Categorize costs as investments or fixed costs (per trade show and for fiscal year [FY] 2014/2015).
3. If the partners decide not to attend trade show, what is the total available increased amount for the online marketing campaign for FY2014/15?
4. Do the variable costs for both products (necklaces and pairs of earrings) differ between trade shows and online sales?
5. Calculate the variable costs per order incurred at a trade show and the variable costs incurred per online order.
6. For each distribution strategy, calculate the unit contribution and contribution margin rate for each of the two product lines (necklaces and pairs of earrings). What is the weighted average contribution margin rate for an order at a trade show and for an online order?
7. Calculate Foxy’s break-even point for each distribution strategy.
8. Which distribution channel is projected to be more profitable in 2015?
9. Putting yourself in the position of Jennifer Ger and Suzie Chemel, what is your distribution strategy? Why?
Structure
This assignment should take the form of a written business report. To that end, the answers to the questions listed above should not be specifically identified under numbered subheadings. Instead, use the questions as prompts/guideposts around which you develop your report. All detailed calculations should be included in an appendix, while the results should be fully discussed in the report itself.
Format
• Length: 750 words maximum, excluding relevant appendices and calculations.
• Font type: Arial
• Font size: 12 points
• Citation guide: APA Style
