Ara Institute AMBF503: Efficiency and Effectiveness Business Report

This report examines the financial downturn of the Akaroa Experience Show in 2017-2018. It uses both primary and secondary data, including financial statements and interviews, to identify the causes of the revenue decline. Findings indicate issues in strategic management, operations, sales, marketing, and human resources, particularly after the appointment of a new manager. Increased costs, decreased sales, and a rise in customer complaints are highlighted. The report concludes with recommendations to improve the company's performance, focusing on strategic planning, quality control, marketing effectiveness, and employee satisfaction.

Running head: EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
Efficiency and Effectiveness Business Report
The course code
Name of the Student and ID
Name of the University
Author’s note

1EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
Executive summary
The purpose of the assignment is to demonstrate the understanding of the strategic
management knowledge for the case study that has been provided. Both secondary and
primary information has been provided to study and understand the issues and provide
recommendations for the same. It has been observed that the new manager that has
been appointed by the owner of the company has taken some decisions which are the
reasons for the downfall of the company in the financial year 2017-18.

2EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
Contents
1. Introduction....................................................................................................................3
2. Findings.........................................................................................................................5
2.1 Information gathered from secondary data collection..............................................5
2.2 Results from the primary research...........................................................................8
3. Conclusions...................................................................................................................9
4. Recommendations.......................................................................................................10

3EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
1. Introduction
John and Mary Wheeler observed an opportunity in Akaroa, owing to their visit to
the Waitangi Marae. The couple had visited a light and sound show in the place which
was based on the historical background of Waitangi. They found it interesting and
enlightening as tourists wants to know about the historical background of a place that
has a culture of its own. The summer cruise had established a stop at the banks of the
Akaroa Peninsular which would draw a considerable amount of audience to the show.
The region is famous for its Maori and French history and thus the production was
decided to be based on this aspect of the culture. A partnership was setup by John and
Mary along with the NASDA staff and students. This partnership was called Akaroa
Experience Partnership and the students and staffs were responsible for scripting and
writing the songs etc. The company hired the students as the cast as well as to maintain
the backstage maintenance.
In the summer of 2012-2013, the company had seen a slow but steady growth of the
business, as 10 percent of the cruise guests were attracted and were a major part of the
audience. In three years the organisation grew and gathered considerable attention
from the promotions and marketing form the cruise. After reaching a stabilized place in
the market the owners of the organisation appointed a manager to look over the
business full time. This decision was also taken as the owners wanted to concentrate on
the previous event management business. For a considerable period of time the
company was facing a growth in the business but during 2017-2018, the company
started facing difficulties in the business. The owners of the company were not sure why

4EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
this downfall in revenue was taking place, thus they have asked to prepare a report on
four business functions of the company and based the research on both secondary as
well as primary resources.
The purpose of the assignment is to identify the cause of the revenue downfall of
the The Akaroa Experience Show as most of the factors associated with the business
seemed unchanged apart from the additional cost of the manager. The report was
request by the end of March 2018 and it is due by the end of June 2018.
Both primary and secondary data collection methods will be used in the assignment in
order to get a holistic perspective of the reason for the downfall of the company. The
researcher will use the company financial records and documents as a part of the
secondary research and an interview of the manager and the other people associated
with the company will be conducted in order to understand the insights of the company.

5EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
2. Findings
2.1 Information gathered from secondary data collection
Following are the facts that are gathered from the secondary data collection:
Financial Statements: these are the records of the company that portray the success
or failure of the achievement of the objectives (De Franco et al., 2011). The financial
records showcase the elements of the company and the amount of investment that has
been incorporated. The income statement shows the difference in the previous and the
current financial status of the company (Chen et al., 2018). Along with the income
statement the balance sheet is also a part of the final accounts that a company
prepares at the end of a financial year. By comparing the two financial accounts of the
previous and the current year the esuriency area can be recognized (Kim et al. 2016).
There is an increase in the COGS in 2017-2018 which has reduced the gross profit
further to $221,700, as there was already less sale. It has been observed that there has
been a staggering fall in the net profit in 2017-2018, the sales of the company has
reduced by 12.5 percent whereas several expenses like the marketing, administration
and interest expenses were observed to be higher than the previous year. In the further
breakdown of the expenses that is presented in the income statement it has been
observed that the food expense in the COGS is the factor that has increased by
$28,800 than the previous year. Therefore it can be said that the strategic management
of the company has not been effective as the expenses are significantly higher than the
ones in the previous year, the company have to strategies the marketing plan according
to a budget and effectiveness of the reach to the target market. There is a complete lack

6EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
of strategic management in the business process; there is lack of planning and
budgeting which can be a cause of the low revenue for the year. Furthermore on
studying the balance sheet of the company it has been observed that the amount of
total assets of the company has declined by $93,160. The term deposits has not been
included or added to the asset of the company in 2017-18.
Operations Management: Operations management is the function of the business
which is responsible for preparing the product or services of the company (Jacobs et al.,
2014). The operations of a business of the “Akaroa Experience Show” not only involve
the process of performing but also involve the procedure which leads to the
performance. Operations management is associated with the planning, organizing and
supervising of the business function. Form the operations management metrics it can
be observed that the number of tickets sold during 2017-2018 is lower than the previous
year. The manager of the show is supposed to look after the operations of the business
as it is a small scale operation, the dynamics of the target market has not changed but
the tickets sale has dropped despite of heavy investment in marketing indicates towards
a lack of effective management (Ates et al., 2013).
Sales and Marketing: Sales of the company is directly responsible of the revenue that
the company has earned in a particular financial year (Verbano & Venturini, 2013). In
this case the company revolves around selling the tickets of the show to the target
market (Ahmed & Rahman, 2015). The service of the company is the show that is
organized and the tickets are sold to the cruise guests and therefore the marketing
strategies implemented during the initial process was encompassing the target market
(Khan, 2014). When the sale of the ticket had started gaining popularity among the

7EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
guests of the cruise ship, the company pitched the show to the cruise company so that
they could take pre-bookings for the show and as a commission $3 was agreed upon
each ticket. The students would also publicize the show on the streets by performing to
sell extra tickets. However by studying the financial reports it has been indicated that
the amount that is invested in the Marketing of the show has increased from the
previous years. The metrics indicate that there is a significant rise in the complaints per
100 tickets sold. In the previous year the complaint recorded was around 0.5 and by the
end of 2017-18 this metric has risen to 3. Thus, it can be concluded that the quality
control of the show was not being monitored or evaluated to the full strength (Taiminen
& Karjaluoto, 2015). The marketing strategy of the company should focus on the
Product or service aspect of the marketing mix in order to fix the issues in the quality
(Ahmed & Rahman, 2015).
Human Resources: Human resources are the backbone of the company as they are
the ones who are responsible for efficiently performing the business functions. As is
discussed in the case study the company does not have a human resource department,
the students who are associated with the show and are the ones who are responsible
for the outcome of the show (Sheehan, 2014). John and Mary Wheeler were associated
with the operations of the company until they thought it was important for them to focus
on their event management business and appointed a full time Manager to look after the
business. But it has been observed in the records provided that the amount of
absenteeism has increased and so has the employee turnover rate has also
significantly risen. Employee turnover is the rate at which people join and leave the
organisation, high rate of turn over indicate that more and more people are leaving the

8EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
company (Saridakis et al., 2013). This is a major issue and can be one of the direct
reasons for the fall of the quality of the show, which has further led to the fall in the
sales revenue that has been discussed above.
2.2 Results from the primary research
The results of the primary research indicate some of the reasons for the rise in
the cost as well as in the overall revenue.
Financial Statements
Per person fee that was charged by Onuku Marae was increased to $8 in 2017-18
which is $3 per person rise.
Similarly the marketing expense was increased sue to the rise in the commission of the
cruise company $3 to $4.
On the other hand the manager also increased the ticket fee to accommodate the
expenses from $30 to $35.
Operations Management
Cost of the labor per hour was reduced due to the decision taken by the manager to
cover the hike in the marketing and promotion cost.
There was also another issue in the operations; the guests did not have any idea where
to buy the tickets from and where the buses were that would take guests to the show.
Sales and Marketing

9EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
There has also been a lag in the payment deposit by the cruise company.
The marketing mix of the organisation is one of the major barriers as it is not planned
and strategized based on logical reasoning, the fact that the website do not have a
booking option is an issue. The feedbacks form the guests have not been used by the
company to improve the performance hence this explains the increase in the number of
complaints that has been discussed above.
The company has been observed to have received negative reviews on the
performance on some of the influential platforms like Trip Advisor. This has led to the
reduced demand of the performance among the cruise guests.
Change of the promotion strategy cost around $10,000. This has been good only for the
local tourists as the banners are reaching out to them.
Human Resources
Reduced incentive for the cast members as the manager decided to promote the show
with the help of banners instead of the cast members performing to attract the people.
Furthermore, the cast members were being paid less per hour on the days of the show
as well; there was also a decrease in their commission.
The cast members were not happy with the managers’ decisions as the street
performance was a part of their involvement with the show.

10EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
3. Conclusions
It can be concluded from the above discussion that the decision of John and
Mary Wheeler to completely leave the company on someone new was wrong. As the
dynamics of the external business environment changed the decisions that the manager
took did not work out for the company. The rise in the commission of the place and the
cruise company can be accommodated with the rise in price of the ticket. The marketing
decision change was wrong as it did not attract enough people and it also cost the
company its cast as well as tickets as the quality of the performance kept on reducing
as the people were de motivated with the reduction in their wages. The performance of
the human resource are directly associated with the performance of the company. Thus
the company received negative feedbacks on their performance of the show. The rise in
the cost and the fall in the tickets sale are the reasons of the poor performance of the
company, the lack of strategic management and leadership in the company has led to
the downfall of the venture.
4. Recommendations
 The company requires strategic management decisions in order to deal with the
changing dynamics of the external business environment.
 The owners should assist the manager in taking the decisions as they
understand the business better
 The marketing decision has to revised
 The company should attract the cast members so that they are motivated and
their performance is consistent throughout

11EFFICIENCY AND EFFECTIVENESS BUSINESS REPORT
5. Reference list:
Ahmed, S., & Rahman, M. (2015). The effects of marketing mix on consumer
satisfaction: A literature review from Islamic perspective.
Ates, A., Garengo, P., Cocca, P., & Bititci, U. (2013). The development of SME
managerial practice for effective performance management. Journal of Small
Business and Enterprise Development, 20(1), 28-54.
Chen, C. W., Collins, D. W., Kravet, T. D., & Mergenthaler, R. D. (2018). Financial
statement comparability and the efficiency of acquisition
decisions. Contemporary Accounting Research, 35(1), 164-202.
De Franco, G., Kothari, S. P., & Verdi, R. S. (2011). The benefits of financial statement
comparability. Journal of Accounting Research, 49(4), 895-931.
Jacobs, F. R., Chase, R. B., & Lummus, R. R. (2014). Operations and supply chain
management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Khan, M. T. (2014). The concept of'marketing mix'and its elements (a conceptual review
paper). International journal of information, business and management, 6(2), 95.
Kim, J. B., Li, L., Lu, L. Y., & Yu, Y. (2016). Financial statement comparability and
expected crash risk. Journal of Accounting and Economics, 61(2-3), 294-312.
Saridakis, G., Muñoz Torres, R., & Johnstone, S. (2013). Do human resource practices
enhance organizational commitment in SMEs with low employee
satisfaction?. British Journal of Management, 24(3), 445-458.