Report on Improving Business Performance at The Shop at Bluebird

This report provides a detailed analysis of The Shop at Bluebird's business performance, focusing on operational challenges and potential solutions. The introduction highlights the importance of improving business performance for revenue and productivity growth. The report examines The Shop at Bluebird's current operations, identifying key issues such as long customer queues, high alteration/refund orders, and the need for expansion. It proposes solutions including the implementation of self-checkout machines, construction of changing rooms, and establishing new store locations. The report explores investment appraisal methods like NPV, payback period, performance matrix, and SAFe criteria to evaluate project feasibility. A project appraisal summary table is provided, and recommendations are made based on the analysis. The report concludes with a summary of findings and recommendations for The Shop at Bluebird to enhance its business performance, increase customer satisfaction, and drive revenue growth.

IMPROVING
BUSINESS
PERFORMANCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................2
Business performance analysis..................................................................................................2
Problem identification at The Shop at Bluebird..........................................................................2
TASK 3............................................................................................................................................4
Investment appraisal method ......................................................................................................4
Implicating project appraisal techniques for The Shop at Bluebird ...........................................6
The Shop at Bluebird Projects Appraisal Summary table ..........................................................6
Implementing the best result and analysis of the same ..............................................................6
TASK 4..........................................................................................................................................10
Continuous improvement tools.................................................................................................11
TASK 5..........................................................................................................................................11
TASK 6..........................................................................................................................................13
TASK 7..........................................................................................................................................13
CONCLUSION .............................................................................................................................20
REFERENCES..............................................................................................................................21

INTRODUCTION
Improving business performance plays a crucial role as it help business venture to
increase their productivity and revenue. Owners, top managers focuses on implementing new
changes but they do not find the right step to start the process (Zeithaml, Bitner and Gremler,
2010). In order to implement the change process, business venture need to consider the internal
and external environment and should implement the change process accordingly as it will meet
their organizational goals and objectives.
The organization undertaken for the present study is The Shop at Bluebird which deals in
clothing apparels and provides a unique luxury experience to customers. Mentioned enterprise
deals from womenswear to menswear, beauty to lifestyle and brings new products every season
in order to satisfy customers wants. This present document has been prepared in order to
understand the contribution of operational function with the development and implementation of
the business strategy.
TASK 1
The organization considered for making this report is The Shop at Bluebird which was
incorporated in the year 1923. The shop is located at King's Road which is one of the
inspirational place and stretches through Chelsea and Fulham. Different event usually hosted
throughout the year and the road becomes the centre of attraction for public. On the other side,
cited firm has researchers who constantly focuses on bringing new collection for customers in
both men and women segment.
Further, the apparel shop generally gives a luxury experience to individuals and
organization designers loves to edit their work after a certain time period and brings all new
designs every season (Berthon and et.al., 2012). This eventually attracts public towards the shop
and this is the reason of their increasing goodwill and popularity within London. The Shop at
Bluebird having specialization in:
 Womenswear
 Menswear
 Western outfit
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The price of their products are also reasonable and organization emphasizes on giving
quality of products to their customers. This is also a major reason of their increasing popularity
and with it cited firm is able to meet their goals and objectives.
TASK 2
Business performance analysis
Currently, cited firm having their effective operations within UK only and the owner of
the store is planning to expand the operations to different parts of city. This will lead to
convenience for customers as they will be getting the same product at organization different
outlet as well. Further, cited venture having a large customer base and with the establishment of
another outlet, firm will be able to increase the chain of their loyal customer base (Ataman, Van
Heerde and Mela, 2010).
Moreover, cited firm focuses on unique pricing strategy as this strategy helps them to get
positive upfront as compared to the ventures who are working within the same industry. Further,
with certain construction work in coming time period, organization will be able to develop
effective brand image, productivity and turnover.
Problem identification at The Shop at Bluebird
However, cited firm is facing some major problems in conducting their operations and
this is leading them one step behind in the competition which exist in this dynamic environment
(The shop at Bluebird, 2016). Further, poor performance in past few quarters has impacted their
2
Illustration 1: The Shop at Bluebird Outlet at King's Road

operations upto quite an extent and the owner of organization has to solve this issue as soon as
possible (Douglas and Craig, 2011). Thus, at the time of inquiry, it is found that The Shop at
Bluebird facing some major operational issues and these issues have been discussed down under:
The Shop at
Bluebird
Problem Solution proposed Operational
strategy area
PROJECT 1 Increasing customers Establishment of new store Construction
development
PROJECT 2 Long ques for payment Development of Self Checkout
machines
Technology
Capacity
PROJECT 3 High alteration or refund
order
Installation of changing room and
extending existing premises
Development
and constructing
From the above description, it is evident that, The Shop at Bluebird is facing three
different operational issues and for overcoming these, owner of venture need to adopt some
crucial strategies. These problems and necessary solutions for the same has been discussed down
under:
 Increasing customers:
Cited organization has a chain of large and loyal customer base. Customers start coming
from morning and the process goes on till 9-10 pm in the night. The owner has also recruited
some individuals who suggest customers regarding what to purchase and what will suit to them.
Their efficient staff is the key for success and owner also keep care of the same (Leonidou, L.C.,
Palihawadana and Theodosiou, 2011). However, sometimes these increasing customers becomes
a major problem for organization as with increase in customers, it is hectic for business to deal
all the same at the same time.
On the other hand, in the fast moving marketplace, individual do not like to wait and they
go out to the organization without making a purchase. In order to solve this cause, cited firm is
planning to launch a new venture at some other part of the city as it will be convenient for
customers as well as for venture. Apart from it, it will give more customer satisfaction and within
some time period, cited firm will be able to increase their revenue as well as productivity.
 Long ques for payment:
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Customers spent more of the time in order to make the best purchase. Also, they want
that they get best products and they get worth of the money so invested. Organization staff also
do their best in showing customers new designs and apparels. However, the major problem
which customers are facing is the long que for payment which makes them as they have to stand
in the long lines (Varadarajan, 2010). Further, this thing hesitate as they used to spend more time
in making payment as compared to making payment. They also used to get late towards reaching
to their destination. This is suddenly causing them a sense of dissatisfaction.
For solving this, organization can implement self check-out machine which will reduce
time for both organization and customers. Customer need to take the apparels which they have
selected to the self check out machine, need to scan the bar-code which are there on products and
can make cash or debit card payment on their purchase. Here, customers self acts as a cashier
and do transaction accordingly.
 High alteration or refund order:
Volume of alteration order has been increased because there do not exist trial room
within the establishment. This has resulted towards high alteration and refund order from the
venture and it has also leaded towards wastage of time which they have spent in showing
apparels to customers (Papadopoulos and Heslop, 2014). Mentioned firm has to reduced this in
order to save time and energy which is invested in the past orders.
However, cited venture can overcome this issue by constructing changing rooms as with
that customers can see the fitting of clothes by wearing at the same time only. This will save time
for both employees and customers. If clients do not like that product then they can alter it at the
same time only. Therefore, change room will be a major solution for the venture and with that
firm will be able to increase their revenue and productivity.
TASK 3
Investment appraisal method
Investment appraisal techniques are considered as a crucial tool which help organization
to decide that which project to choose from the identified. However, owner of cited venture
should not concentrate on one appraisal method but he also has to select different financial as
well as non-financial techniques as it will help venture to make change from different angels
(Cronin Jr and et.al., 2011). Moreover, to understand this topic deeply, different investment
appraisal methods has been discussed down under:
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 Net Present Value (NPV): According to Chabowski, Mena and Gonzalez-Padron (2011)
NPV is discounted cash flow approach which help venture in selecting suitable project
option available with them. NPV is present value of net cash -(minus) initial cash outflow
of project. This NPV method also assist enterprise in making easy comparison of the
returns which they can get from different projects and the changes which are made in
discount rates can be easily seen in the evaluation process. However, Hoerl and Snee
(2012) argued that NPV do not offer same base for comparison between two project. This
is because different projects have indifferent lives of the cash flow. Payback period: Mellat Parast, Adams and Jones (2011) stated that payback period is
generally the number of years taken by an option to payback the initial investment of
project by taking the help of the cash flows. Moreover, this is considered as one of the
simplest techniques as it require minimum efforts in analysing. However, Trkman and
et.al., (2010) argued that this payback period do not consider the time value of money and
apart from it no consideration of length of investment is also taken. Performance matrix: Ghattas, Soffer and Peleg (2014) explained that performance
matrix is generally used in determining the performance of particular project, firm
behaviour on that project and the performance. Moreover, this matrix also provides
assistance to various stakeholder needs. The major stakeholders for cited venture are
customers, shareholders and employees. Apart from it, various parameters are considered
for assessing the performance which consists of safety, time, cost, resources, scope,
actions and quality. But Zellner (2011) argued that when information is gathered with
different mathematical methods, it evaluated that performance matrix's experts chooses
some relative measures which has low value.
 SAFe criteria: The last very common and important technique of project appraisal is
SAFe criteria. This technique states that it is a method which is used for assessing
performance of particular project. Further, it is also helpful for measuring the
performance of workers who are giving their productive service within the venture. This
criteria is eventually followed when cited venture has to identify the risk of different
investment options which is available in relation to their suitability, feasibility and
acceptability.
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Implicating project appraisal techniques for The Shop at Bluebird
The different changes which has been discussed above can be successfully evaluated with
the help of different project appraisal techniques. These techniques will help the owner to
evaluate that which techniques is most necessary to adopt which do not impact their financial
stability the most (Eckerson, 2010). Further, by implementing different techniques, venture will
look at investment from all the angels which are available to them. Cited firm will also look at
most valuable strategy so that the risk will be minimum and The Shop at Bluebird gets maximum
outcome.
The Shop at Bluebird Projects Appraisal Summary table
The Shop at
Bluebird
Payback period Performance
matrix
SAFe criteria Final outcome
PROJECT 1
Establishment of
new store
✘ ✘ ✘ NO
PROJECT 2
Development of
Self Checkout
machines
✓ ✓ ✓ YES
PROJECT 3
Installation of
changing room
and extending
existing premises
✓ ✘ ✘ NO
Implementing the best result and analysis of the same
From the above table, it clearly evaluates that PROJECT 2 Development of Self
Checkout machines shows the best results when different techniques applied on situations. Thus,
it is most acceptable. When payback period calculations is checked then both PROJECT 2 & 3
are able to recover the cost which is invested in the operation. But PROJECT 2 gets the majority
because it will take the shortest time duration.
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Apart from it, Development for self checkout machines will give more convenience to the
customers and business owner. Therefore, it is evaluated that this plan is best both in terms of
investment and efforts.
PROJECT A: Establishment of new store
Year Inflow PV Factor
Inflow by considering PV
factor
1 £900,000 0.909 £818,100
2 £800,000 0.826 £660,800
3 £600,000 0.751 £450,600
4 £50,000 0.683 £34,150
5 £50,000 0.604 £30,200
Total inflow £2,400,000.00 £1,993,850
Less: Initial investment £2,000,000
Net present value -£6,150
PROJECT B: Development of Self Checkout machines
Year Inflow PV Factor
Inflow by considering pv
factor
1 £6,000 0.909 £5,454
2 £5,500 0.826 £4,543
3 £6,700 0.751 £5,032
4 £7,200 0.683 £4,918
5 £3,000 0.604 £1,812
Total inflow £21,758
Less: Initial investment £19,000
Net present value £2,758.30
PROJECT C: Installation of changing room and extending existing premises
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Year Inflow PV Factor
Inflow by considering pv
factor
1 £1,600 0.909 £1,454
2 £2,100 0.826 £1,735
3 £4,200 0.751 £3,154
4 £4,700 0.683 £3,210
5 £5,300 0.604 £3,201
Total inflow £17,900.00 £12,755
Less: Initial investment £10,000
Net present value £2,754.50
PROJECT A (Payback period)
Year Inflow
Cumulative
inflow
0
-
£2,000,000.00 -£2,000,000
1 £900,000 -£1,100,000
2 £800,000 -£300,000
3 £600,000 £300,000
4 £50,000 £350,000
5 £50,000 £400,000
Payback period
2.5 yea
rs
PROJECT B (Pay back period)
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Year Inflow
Cumulative
inflow
0 -£19,000 -£19,000
1 £6,000 -£13,000
2 £5,500 -£7,500
3 £6,700 -£800
4 £7,200 £6,400
5 £3,000 £3,000
Payback period 3.1 years
PROJECT C (Pay back period)
Year Inflow
Cumulative
inflow
0 -£10,000.00 -£10,000
1 £1,600 -£8,400
2 £2,100 -£6,300
3 £4,200 -£2,100
4 £4,700 £2,600
5 £5,300 £7,900
Payback period 5 years
PROJECT A: Average Accounting Rate
Year Inflow
1 £900,000
2 £800,000
3 £600,000
4 £50,000
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5 £50,000
Total inflow £2,400,000
Average
inflow £480,000
Average
investment £2,000,000
ARR 24.00%
PROJECT B: Average Accounting Rate
Year Inflow
1 £6,000
2 £5,500
3 £6,700
4 £7,200
£3,000
Total inflow £25,400
Average
inflow £5,080
Average
investment £19,000
ARR 26.74%
PROJECT C: Average Accounting Rate
Year Inflow
1 £1,600
2 £2,100
3 £4,200
4 £4,700
5 £5,300
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