DULCE 2022

1(a) PLAN

Role: senior business manager

Audience: board of Dulce
Format: speakers notes to 4 slides
Skill: commercial acumen - organisational and wider external factors
Marks: 16 + 4 (5 marks per slide + 1 mark else)
Task: discuss how the sales development strategies proposed will assist Dulce in achieving
its strategic aim

1(a) ANSWER
NOTES TO SLIDE 1 - SALES DEVELOPMENT STRATEGIES

Dear Board,
let me introduce sales development strategies that I believe will contribute to the achievement of
Dulce’s strategic aim, which is to develop our product range and our markets.

NOTES TO SLIDE 2 - DULCE SHOPS

165 high streets shops

High street shops will continue to be our primary channel of sales (despite declining annual sales for
the last three years), as we will continue focusing on offering customers the products they demand in
the locations they are demanded. 1 mark

Being present at many high street locations contributes to our mission of bringing our customers
together to make every day special. 1 mark

Therefore market penetration with our existing products in these existing markets should be seen as
vital for our further growth. 1 mark

Improvement of customer experience

In order to combat the declining sales in this sales channel, we should focus our efforts on improving
customer experience. 1 mark

In recent years we have seen changes in our customer tastes and buying habits, increased
competition from online retailers, and the economic recession impacting on customers’ disposable
incomes. In order to address these challenges, we need to further focus on our brand and customer
appeal. 1 mark

Refurbishment of our stores to remain current and retraining our staff to respond to the changes in our
customer tastes and preferences will help us to achieve the target growth. 1 mark

Closure of 20 shops

Closure of 20 shops, which are not meeting our profit standards or not in the area with desirable
demand, could help us to achieve our strategic aim, by concentrating our resources and rechanneling
them to the already mentioned refurbishment and staff training in more attractive locations. max
DULCE 2022

Concentrating Dulce’s presence in the most prominent high street locations (and withdrawing from the
lesser ones) could also further foster our brand perception of being high-quality and premium,
ultimately helping us to achieve our strategic aim of developing our product range and our markets.
max

NOTES TO SLIDE 3 - DULCE WEBSITE

Wide range of customers

Web side is a unique sales channel as it is able to sell our entire product range to our both individual
as well as corporate clients and this way has market-wide access. 1 mark

Especially with increased competition from online retailers, in order to remain competitive and
promote our growth, we should also focus on our online presence. 1 mark

Product development - gift ideas

Through its web site, Dulce could offer other gift ideas such as flowers, greeting cards and hampers to
their existing clients as a way of further developing our product range, which is in line with our
strategic aim. 1 mark

We could enjoy desiderd sales growth by focusing on customers who order the higher-end chocolate
for special occasions and attract them by offering flowers and other gift ideas for their convenience
along, as a whole package. rep

International presence

Based on our recent study, there is growth forecast in the next 5 years on our international website.
As internet is independent of location, Dulce may be able to reach markets further than just its
neighboring countries. 1 mark

This is a perfect opportunity to exploit and achieve our desired market development.

NOTES TO SLIDE 4 - RETAIL PARTNERS

Strong growth in boxed chocolate ranges

Due to economic recession impacting on customers’ disposable incomes, Dulce succeeded in seeing
strong growth in its sales through retail partners over the last two years. 1 mark

Wider range of products

Further building up on this, we will attempt to extend our product range sold through our existing retail
partners. This product development should help us to further grow our retail sales in line with our
strategic aim to develop our product range. 1 mark

Wider range of retail partners

Also, we should attempt to grow our pool of retail partners to further increase our brand recognition,
market availability and presence.This will help us to achieve our strategic aim to develop our markets
further. 1 mark
DULCE 2022

13 tec + 2 profi = 15 marks / 20 marks

1(b) PLAN

Role: senior business manager

Audience: finance director
Format: report
Skill: communication skills in using compelling and logical arguments
Marks: 12 + 4 + 4
Task: financial and non-financial implications of Dulce prioritising one order over the other

financial implications

Box A B C total

Contribution per labour hour ($) 4 3 2

ranking - priority 1st 2nd 3rd

Labour hours per box (Hr) 2 3 3

If Excelsior order is
prioritised

Boxes per month 2000 2000 2000

Hours used 4000 6000 6000 16000

Hours left for BB order 14000

BB order to be supplied

Boxes per month 3000 2666

Hours used 6000 8000

Contribution earned in this alternative

Boxes per month 5000 4666 2000

Contribution per box ($) 8 9 6

40000 41994 12000 93994

DULCE 2022

Box A B C total

Contribution per labour hour ($) 4 3 2

ranking - priority 1st 2nd 3rd

Labour hours per box (Hr) 2 3 3

If BB order is prioritised

Boxes per month 3000 3000 3000

Hours used 6000 9000 9000 24000

Hours left for Excelsior order 6000

Excelsior order to be supplied

Boxes per month 2000 666

Hours used 4000 2000

Contribution earned in this alternative

Boxes per month 5000 3666 3000

Contribution per box ($) 8 9 6

40000 32994 18000 90994

non-financial implications

1 size of deal - extent of future demand - market presence and prospective demand - Excelsior is a
high-class department store, located in the capital city of Northland vs BB is Northland’s second
largest supermarket chain

2 previous experience - Dulce has not worked with Excelsior before vs Dulce has been supplying BB
with its normal range of Dulce branded chocolates for over five years

3 branding of the new luxury hand-made chocolate products - Excelsior’s ‘own label’ chocolates vs in
BB Dulce’s manufacturing brand label
DULCE 2022

4 prospects - Excelsior three-month period only plus considering purchasing other luxury hand-made
products from Dulce vs three months in 10% of BB supermarkets, however, BB is confident that sales
would be rolled out to the remaining of its supermarkets across Northland after the three-month trial
period

Recommends, with justification, which order should be prioritised (4 marks)

1
2

1(b) ANSWER
Report
From: senior business manager
To: finance director
Date: xx xx 20xx
Subject: Evaluation of the two mutually exclusive orders

Introduction

Dulce is currently considering manufacturing a range of three new luxury hand-made chocolate
products (A, B and C) for two retail partners, Excelsior department
store and BB supermarkets.

Due to a current shortage of skilled labour in hand-made production techniques,

Dulce would currently be unable to supply both of the retail partners’ orders in full.

This report has been prepared to evaluate the financial and non-financial implications, and provide a
recommendation on which order should be prioritised and be completed in full and which could be
partially completed, in order to optimise the use of the skilled labour available.

Financial implications

As Dulce is currently facing a shortage of skilled labour in hand-made production techniques such that
both orders cannot be completed in full, the key decision-making financial factor is which production
alternative would provide Dulce with greater total contribution.

In determining this, the production of the individual products in the order that would be only partially
completed should be prioritised based on their contribution per the limiting factor, i.e. the labour hour -
making it product A first, product B second and product C as last.
DULCE 2022

Alternative 1 - prioritise Excelsior order

Product A B C TOTAL
Hrs required per box 2 3 3
Contribution per box 8 9 6

Excelsior - in full
Product A B C TOTAL
Boxes / month 2,000 2,000 2,000
Hrs used 4,000 6,000 6,000 16,000
Contribution / month 16,000 18,000 12,000 46,000

BB - partially
Hrs used 6,000 8,000 14,000
Boxes / month 3,000 2,666 - 1 mark
Contribution / month 24,000 23,994 47,994

Total contribution / month 93,994

Alternative 2 - prioritise BB supermarket order

Product A B C TOTAL
Hrs required per box 2 3 3
Contribution per box 8 9 6

BB - in full
Product A B C TOTAL
Boxes / month 3,000 3,000 3,000
Hrs used 6,000 9,000 9,000 24,000
Contribution / month 24,000 27,000018,000 69,000

Excelsior - partially
Hrs used 4,000 2,000 6,000
Boxes / month 2,000 666 - max
Contribution / month 16,000 5,994 21,994

Total contribution / month 90,994

Based on the analysis of the financial impact, the total contribution to be earned per month is greater
if Excelsior order is to be prioritised and BB order completed just partially.

Non-Financial implications

Dulce should also take into account non-financial implications such as:

Branding
In Excelsior, Dulce’s new products would be sold as Excelsior’s ‘own label’ chocolates, whereas in BB
under Dulce’s manufacturing brand label.
Developing these 3 new products is in line with Dulce’s trategic aim of developing its product range
and therefore BB order is more supportive of this aim.
DULCE 2022

Customer demand
Excelsior is a high-class department store located just in the capital city of Northland, whereas BB is
Northland’s second largest supermarket chain. Through BB, Dulce has prospectively much further
customer reach than just through one store in the capital.

Business relationship
Dulce has been supplying BB with its normal range of Dulce branded chocolates for over five years
and if Excelsior order is priorities, this may impact their future business relationship.

Prospectus
Both orders are initially for a three-month period only.
Excelsior might be considering purchasing other luxury hand-made products from Dulce if these
pioneer products are successful, whereas BB is confident that sales would be rolled out to the
remaining of its supermarkets across Northland after the three-month trial period.
This makes supplying BB in priority more sensible.

Recommendation
Based on the above analysis, BB order should be prioritised and completed in full.

BB order brings Dulce further reaching non-financial benefits then just the total contribution earned,
such as further brand recognition for high quality chocolate, tried-out business parternship, longer
term prospectus of future cooperation and possibly greater sales volumes.

These future benefits seem to outweigh the possible greater contribution of $9 thousand (3 months of
$3 thousand each) that could be earned were the Excelsior order be prioritized.

2(a) PLAN

Role: senior business manager

Audience: chairman of the audit and risk committee
Format: table
Skill: analysis skills
Marks: 16 + 4
Task: how the risks identified in the current risk register could impact the achievement of
Dulce’s strategic aims; and recommend mitigating activities for each

2(a) ANSWER

Table
From: senior business manager
To: chairman of the audit and risk committee
DULCE 2022

Date xx xx xxxx

Risk Impact on the achievement Mitigating activities

of Dulce’s strategic aims
- develop our product range
and our markets
- performance excellence

Competitive marketplace Failing to react on customer 1. Engage with customers and

(HIGH) The global
confectionery market has many
strong players.
Our competitive position
depends on our continued
ability to offer products which
strongly appeal to consumers
and which are readily available
in the places they are
demanded.
trends could result in reduced
demand for our products and
as such decrease profitability
which will further impact our
ability to invest in new products
portfolio.
Failure to have products readily
available in the places they are
demanded will seriously limit
our customer reach, leading to
lower sales and thus
profitability.
conduct surveys, to understand
changes in attitudes..
2. Develop new product ranges
to satisfy changing customers’
needs.
3. Develop multi-channel sales
network including focus on
online sales.

Key input prices are driven
by commodity markets
(MEDIUM)
Adverse changes in certain
commodity prices (particularly
cocoa supplies) could affect
our liquidity and profitability.
Prices of production inputs are > utilize hedging instruments
crucial for future success. As (reduce the risks)
the most significant input is
cocoa, it can be impacted by > long term contracts with fix
environmental changes, prices
climate catastrophes or pests.
Lack of commodity on the > diversification of supplier
market would lead to higher base
prices finally reflected in
increased selling price of our
product, chocolate.

This could result in Dulce not

being able to sell their
chocolate at affordable prices
to its customers and/or drop in
Dulce’s profitability.

Furthermore, it could impact

Dulce’s ability to grow its range
of products further.

Our products must have the

highest integrity (HIGH)
- Product contamination (for
example, uncleanliness or
impurities in the materials or
production process) could
be harmful to customers.
– Unethical sourcing of
materials could severely
damage our reputation.
Reputation risk and even legal
risk - if product contamination
occurs Dulce might be facing
significant both reputational
and legal risk causing financial
losses as well as deteriorating
perception on the market place
for losing the excellence glare.
Product contamination -
Run strict quality controls with
suppliers, within production and
storage. Randomly perform lab
checks on a daily basis.
Insurance for product
contamination

Customers are becoming more

DULCE 2022
We depend on the
skills, enthusiasm
and wellbeing of
our staff (MEDIUM)
– Poor staff management or
lack of skills in our whole team
could result in the loss of the
competitive advantage
derived from our highly skilled
staff or the loss of staff to
competitors.
– We rely heavily on the loyalty
and commitment of our
staff.
and more concerned whether
the business they buy their
product from is acting ethically.
Unethical sourcing of materials
might drive customers away
from us.
As a result, both of these could
significantly impact our
strategic aim of developing
products and our markets.
Lack of skilled labor or poor
staff management could result
in a loss of qualified employees
and our competitive advantage
if the staff goes to competitors.
Any such loss will cause the
lack of knowledge in our
business which will have a
significant impact to achieve
our aim to develop new product
ranges and to achieve
performance excellence.
Unethical sourcing - introduce
random control visits to farms
to inspect and prove our
sourcing is ethical.
Include in contracts with
suppliers strict penalties for any
violation of ethical sourcing.
Have a regular trainings to
share and transfer skills and
knowledge.
Run adequate appraisal,
remuneration and promotion
system to retain and motivate
you key talents.
Reward loyalty and tenure
Succession planning
We have to keep the staff
informed about any
developments and changes
within the company on a
regular basis to keep them
engaged and feel valued.
DULCE 2022

2(b) PLAN

Role: senior business manager

Audience: board
Format: slides and notes – 3 slides
Skill: scepticism skills in challenging the opinions of the board
Marks: 4+6+6+4
Task: Identify how each risk response suggested by the three directors would be
categorised using an appropriate risk management framework

2(b) ANSWER

SLIDE 1
TARA Framework
Operation’s director response – ACCEPT approach
HR director response - AVOID approach
Financial director response - REDUCE approach

NOTES TO SLIDE 1
The TARA Framework is a tool that helps to define strategy to manage risks. It classifies risks
according to 2 variables - the probability of these risks occurring and the impact these risks would
have. This model then defines 4 scenarios - transfer, avoid, reduce, accept - depending on whether
these variables have high or low values.

Operation’s director response is ACCEPT approach as he believes that impact of the risk is low and
probability is potentially also low, arguing most customers are unaware of child-labour practices.

HR director response is an AVOID approach as he believes that impact of the risk is high and the
likelihood is high.

Financial director response is REDUCE approach as he believes impact of the risk is low but
likelihood is high, given Dulce uses cocoa farmers from Geeland and Rodia. So he suggests the risk
should be controlled / managed.

SLIDE 2
Operation’s director response – not ethical
HR director response - not feasible

NOTES TO SLIDE 2

Operation’s director response to ACCEPT the risk might be considered as unethical.

Arguments that most customers are unaware of child-labour practices can be clearly contradicted by
the facts presented in the press article.
Taking no action would violate Dulce’s stated beliefs evidenced in ethical sourcing statement
published in its annual report.
Moreover, it would also endanger accomplishment of strategic aim of performance excellence and
may endanger Dulce’s reputation as ethical business.

HR director response is an AVOID approach might not be feasible to put into practice.
DULCE 2022

Identifying cocoa farmers who do not use child-labour might be impractical if not impossible.
Ethical suppliers might not have quantities of cocoa that Dulce might need to sustain their production.
Such a course of action might be very expensive and although ethical, customers might not be able to
buy Dulce’s chocolate at such a high cost.

SLIDE 3
Financial director response - REDUCE approach - realistic
Control activities

NOTES TO SLIDE 3
Financial director's response to REDUCE the risk seems to be the most realistic.
Dulce should implement control activities to prove its concern for the ethical sourcing of its cocoa.
As such it would prove its commitment to high ethical standards as communicated to the public.
This way the impact of the risk occurring could be managed to an acceptable level as Dulce will be
seen as taking the necessary action feasible.

Control activities
As part of the control activities to be implemented, Dulce might introduce random control visits to
farms to inspect child labour is not used and that farmers are paid fair prices for their work.
Moreover, Dulce could include in their contracts with suppliers strict penalties for any violation of
ethical sourcing, in case revealed. Cease using suppliers for which unethical practices were identified.

3 PLAN

Role: senior business manager

Audience: fin director
Format: briefing notes
Skill: evaluation skill
Marks: 16 tech + 4 profi
Timing: 40 min (20 marks x 2 min)
Task: evaluate +/- the extent to which the criteria for achieving
performance excellence are being met by Dulce - aim to increase customer retention and loyalty

1 Leadership
+ strong leadership and management team taking action to promote Dulce’s growth through
developing its sales strategies and addressing risks as they arise - ew products and new
distribution channels - customers will be approached with right offer and right way -
excellence - retention and loyalty.
+ mission and aims are regularly reviewed to respond to changing market forces and external
environment which is important to address the issue of customer retention and loyalty -
adjusted for new developments in the public perception regarding ethical sourcing of cocoa
and react to be seen as ethical business and keep the customers
- engagement with stakeholders not covered
conclusion - seems leadership is meeting the criteria for performance excellence

2 Managing operations
+ investment into latest technology to deliver high quality product and take steps to prevent any
product contamination to maintain our reputation
+ regular product redesign to meet customer changing tastes and attitudes and remain
competitive
+ e-commerce to be competitive and reach market wide customer base
DULCE 2022

conclusion - seems managing of operations at Dulce is meeting the criteria for performance
excellence

3 Engagement with our customers:

+ Regular email and promotional offers along with customer surveys surely contribute to
Dulce’s performance excellence.
+ Regular communication with customers is likely to contribute to their feeling of involvement
and should foster their retention and loyalty.
conclusion - seems Engagement with our customers at Dulce is meeting the criteria for performance
excellence

4 Engagement and development of staff:

+ Regular staff training and skills updates that would contribute to improved customer service
and best quality products, positively impacting customer retention and loyalty.
+ Performance environment directed toward engaging staff such as annual performance
appraisals staff retention, talent management - new products, innovation - customer loyalty
encouraged.
+ Staff surveys - staff retention and motivation - risk identification - whistleblowing
conclusion - seems Engagementand development of staff at Dulce is meeting the criteria for
performance excellence

5 Measuring our operations:

+ Regular reporting of key performance measures such as profitability, shareholders returns
and customer,
- ….but consider how useful this information is/ to whom is it reported and how it is aligned with
attainment of excellence and customer loyalty.
- Big data analytics could be a great advantage but also a costly exercise. How is this to be
managed and cost-benefits of it assessed.
conclusion - more information is needed to assess if excellence is attained in this respect