Flip Factory Incorporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

RECOMMNEDATION:

The option which is most suitable for the Flip Factory Incorporation in the current phase of the company is to retain the current location which is an option 3. By applying this option company could further work on its weaknesses and opportunities by achieving maximum capacity. Although company could increase its product offering to some extent by retaining the current location which would help the company to gain their maximum customer base capacity. After that company could implement the other 2 options of expanding globally and diversifying their portfolio of product.

Within 1 month

Decision on task allocation must be decided between the minor partner and Travis and implementation plan framework should be structured.
Both partner should allocate a distribution of work in a way that revenue increasing activities can be focused.

Within 2 months

Marketing and promotional strategies should be defined completely.
Diversified and product categories should be defined.

Within 6 months

Promotional and marketing strategies should be implemented.
Market survey should be conducted by Darlene Travis to gauge company performance.

Within 12 months

The company should start looking for spaces suitable according to their requirements.

Within 24 months

The company should finalize the location and equipment to be placed on that location with the consultation of skilled and experienced trainers.

Within 36 months

The company should focus to expand globally so that it could be globally recognized which will increase the brand reputation for the company.

CONTIGENCY PLAN:

If the implementation of option 3 does not get successful i.e. if the company does get successful in attaining the maximum customer base while operating in its current location then the company should focus on its marketing and promotional activities. The other option after applying marketing and promotional strategies is that the company should focus diversifying its offering by leasing another space with increased products offering as a new branch to expand its revenue and customer base.

EXHIBITS:

Exhibit 1- SWOT Analysis

Strengths

· Flip factory provided diversified range of products in the category of gymnastic and fitness

· As an enthusiast of fitness and interest, Darlene Traviss possessed vast experience in managing the gymnastic and fitness center.

· Newly built infrastructure which could attract more customer even if the fees remain high in comparison with competitors.

Weaknesses

· There is a room for improvement in the courses offered by the Flip factory incorporation in comparison with its competitors offering portfolio of courses in the market.

· Location acquired on lease which increased the expense for Flip factory incorporation and caused them to be less competitive in terms of customer fees.

Opportunities

· The population of the metropolitan society has increased by more than ten percent where Flip factory is located which provides an advantage to Darlene Travis in increasing its customer base.

· Due to advancement and development the income growth of the population is also on an increasing trend which could further increase the revenue base for flip factory through annual increment in customer fees.

SO- Leverage (CRITICAL OPPORTUNITY)

· Adopt different marketing and promotional activities to increase the revenue of business so that business could be expanded.

WO- Constraints

· Investment is required in business to for increased space and product diversification which could increase the risk for the company

Threats

· The portfolio of programmed offered by the competitors were in wide range and diversified in comparison with Flip factory

· Some competitors are internationally recognized which provide brand reputation to them and increased customer base due to globally recognized.

ST- Vulnerabilities

· The company is only exposed to specific investment risk

WT- Problems (CRITICAL ISSUES)

· To increase its customer base and achieving maximum capacity, Company should focus and plan its strategy to maximize its capacity for 2 years.

Conclusion: Company should focus on market capitalization strategies to gain market share and increase its revenues. This increment in revenues will help the company to open further branches within the country so that it can increase its product diversification.

Exhibit 2- Porter's 5 Forces

Threat of new entrants (Low)	Threats of new entrants in this industry is quite low. The reason that the threats of new entrant is low because the gymnastic a fitness centers required large space with advanced equipment maintained by current gymnastic and fitness centers which require heavy initial investment. This requirement of heavy investment decreased the threats of new entrants in the industry
Threat of substitutes (Moderate)	The services offered by the companies located in gymnastic and fitness industry are approximately same but are different in the form of diversified services which they offer. The other things which customers in this type of industry looks of focus on is the infrastructure or the advanced equipment used and maintained by the company. The other vital aspect in attaining the offerings which are offered by the gymnastic and fitness centers to customers is the trainer or staff, i.e. either these trainer possesses the required skills and experience to provide the appropriate training or not. Therefore threat of substitute in this type of industry is moderate.
Bargaining power of the buyers (High)	The bargaining power of the buyer in this type of industry is quite high. The reason for this high power is that costumer could easily shift toward other gymnastic and fitness centers based on the offering and fees offered by those centers. Due to availability of globally recognized and well-structured fitness and gymnastic centers provides an array of choice to the customer which increased the bargaining power of the buyer or customer.
Bargaining power of the suppliers (Moderate)	The bargaining power of the supplier in this industry is moderate. Due to heavy cost of equipment supplied by the suppliers requires one time investments for at least 3 to 5 years. Although things for regular use and other small things related to gymnastic and fitness activities could be easily available. The supplier power cannot significantly affect the decision of gymnastics and fitness centers due to less differentiated products offered by them which made them moderate in affecting bargaining power of suppliers.
Rivalry among the existing players(High)	The rivalry among existing player is quite high in this type of industry because of the availability of several gymnastic and fitness centers located across Canada and particularly in Calgary. This availability of gymnastic and fitness centers with advanced equipment, professional trainers and diversified portfolio of products offered enable the companies to regularly evolve themselves by looking at the industry trend in keeping themselves ahead of their competitors or rivals

Conclusion: The gymnastic and fitness industry is highly competitive with many established brand recognized globally that are prevailing in the market. This implied that company should focus on brand promotional and marketing strategies to establish its brand first and attaining maximum customer base

Exhibit 3- Financial Ratios Analysis.

	2011	2012	2013
Revenue	179660	562996	786503
	2011	2012	2013
Expenses	179751	532860	767953
	2011	2012	2013
Net income	-91	30136	18550

Conclusion: These financials show that the revenue of the company is increasing but the net income of the company is decreasing which indicates that the expense of the company are increasing. This could be summed up that Darlene Travis is not efficiently using its human resources i.e. its trainer and staff which could provide additional product offerings.

Exhibit 4- Decision Matrix

2- Does meet criteria 1- Close to criteria 0- Does not meet criteria

FACTORS	OPTION 1	OPTION 2	OPTION 3
REVENUE	2	2	2
COST	1	1	2
PRODUCT DIVERSIFICATION	2	2	2
TOTAL SCORE	5	5	6

Conclusion:According to decision criteria and analysis the company should implement option 3 with highest score because of its attractiveness in increasing revenues, managing costs and product diversification......

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