VMM2: Business Performance Report

Champions Corner LLC

Business Performance Report Task 1
Student ID:

Date:

C1. Business Overview

Cycling is a sport that people can do for a living or as a pastime. Bicycle sales were so profitable

that a company was established. Bike sales are the focus of the well-known, international

company Champions Corner LLC. One Brazillian market that the company has chosen to enter is

Rio De Janeiro. Additionally, as part of its operations, the company chose to open a store in New

York. In order to maximize the market for Mountain Bikes, which the data indicated was the

next city after Rio de Janeiro, this was done.

The Brazillian bicycle business, especially in Rio, is increasing because people enjoy riding

bicycles. Opening a new bike shop in this location will require guidance and a well-thought-out

plan. It’s critical to design the best display possible for this kind of store to accommodate the

wide range of bicycle brands and sizes. Similarly, the business needs to make sure that it

evaluates the preferences of the target market. The company has already made more than

1,500,000 motorcycles, and they are available. Packing the outlet will still be pointless. To

enable each customer to receive personalized attention and select the bike that best meets their

demands, it is enough to offer a range of bicycle brands on display, including mountain,

recreational, and speed cycles.

Market survey

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These 3D-printed carbon fiber bicycles are totally new to the market. It is likely to appeal to the

city's already established, affluent, and well-known bike market due to its comfort. Compared to

the typical bike enthusiasts in the marketplaces, this market is wealthier and more informed

about the types of bicycles they already want. However, it's crucial to remember that most

cyclists may not be able to purchase pricey carbon fiber bikes. Nevertheless, they have always

wanted to add them to their lineup of motorcycles. Because this company was established in

New York City, the market may now get a high-quality bike at a very affordable price. It will be

far better than what they have been using for years, and they can get closer to it. As a result, the

market might simultaneously become more sophisticated and upscale.

Market segments

Carbon fiber bicycles are already seen by consumers as being a little expensive for each market.

Elite consumers have shifted to mountain bikes and high-performance bikes for the most part in

recent years. Despite their high cost, carbon bikes are frequently purchased by those who

recognize their benefits. However, the company wishes to change this deeply held viewpoint.

This will occur throughout the early phases of the product's launch. This will introduce 3D

printing to the entire industry. It will also ensure that it has some features that our target market

is used to seeing on mountain bikes.

C2. Financial Analysis

1. Store Expenses and Sales Force

The company's market share did not meet its target, therefore by the end of the second quarter,

its gross profit had to rise. Because many Americans like mountain hiking on bicycles, the

management decided to create a store in New York. The country's geology and terrain also make

mountain biking easier. This would increase the market base. In the third quarter of employment,

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it also added more employees in an effort to expand Salesforce and meet the demand in New

York.

2. Pricing

When this plan or strategy was put into practice, the company's gross profit rose dramatically

from the previous quarter. This was expecially after an introduction of a new brand Reduction in

price for the VelocityDyna3 changed from $1,400 to a steady $1100. This was in a bid to ensure

that we achieve the affordability of the carbon fibre bikes which are deemed to be for the elite.

All the bikes for this company were sold at a very affordable price thus increasing our sales. As

at quarter 7, VelocityDyna3, The Spokesmen, Head stopper2 and You want it4 were selling at

$1,100, $899, $999 and $799 respectively.

3. Utilization of Loans and Cash

The business did not ask for a traditional loan in any of the quarters despite the opportunity. The

avoidance of a loan was to prevent the dilution of the shares issued by the company. The

implementation of research and development, which needed a significant capital commitment,

was also facilitated by issuance of shares and utilization of the certificates of deposits. With the

use of shares, it contributes to a strategic business goal of increasing efficiency since

shareholders are focused on maximizing the shareholder’s wealth.

C3. Ethical Decision-Making

Throughout the simulation, Champions Corner received numerous alerts. These warnings

expressed that the company's ads did not meet the basic requirements of the target audience. It

was also suggested that the company make new ads that would better appeal to its target

audience. However, the company found it extremely challenging to handle these warnings. For

around half of the simulation process, the company disregarded these warnings and

experimented with various ads that only partially adhered to the rules. The commercials were

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altered in many ways. After several attempts, the company ceased following them. Among other

severe consequences, there would have been financial fines if this had occurred in the actual

commercial world (Mooij, 2019).

D. References

De Mooij, M. (2019). Consumer behavior and culture: Consequences for global marketing and

advertising.

E. APPENDICES

Appendix I: Cumulative Balanced Scorecard

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Cumulative Results for Quarter 6

Indicator Minimum Maximum Average Champions Corner LLC
Cumulative Total Performance 0.185 18.034 6.179 0.185
Cumulative Financial Performance 4.891 33.360 17.130 4.891
Cumulative Market Performance 0.105 0.374 0.236 0.130
Cumulative Marketing Effectiveness 0.480 0.766 0.692 0.480
Cumulative Investment in Future 3.650 7.446 5.795 7.434
Cumulative Wealth 0.664 1.193 0.915 0.664
Cumulative Human Resource Management 0.658 0.778 0.746 0.658
Cumulative Asset Management 0.170 0.599 0.378 0.237
Cumulative Manufacturing Productivity 0.734 0.963 0.825 0.785
Cumulative Financial Risk 1.000 1.000 1.000 1.000

Appendix II: Balance Sheet

Balance Sheet
Report Item Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6
Current Assets
Cash 1,011,500 1,041,817 1,642,477 2,978,206 2,909,203 2,931,170
+ 3 Month Certificate of Deposit 100,000 0 0 0 0 0
Long Term Assets
+ Net Fixed Assets 240,000 470,000 450,000 430,000 410,000 390,000
= Total Assets 1,351,500 1,511,817 2,092,477 3,408,206 3,319,203 3,321,170
Debt
Conventional Bank Loan 0 0 0 0 0 0
+ Emergency Loan 0 0 0 0 0 0
Equity
+ Common Stock 1,500,000 2,000,000 2,500,000 5,000,000 5,000,000 5,000,000
+ Retained Earnings -148,500 -488,183 -407,523 -1,591,794 -1,680,797 -1,678,830
= Total Debt and Equity 1,351,500 1,511,817 2,092,477 3,408,206 3,319,203 3,321,170
End of Worksheet

Appendix III: Income Statement

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Income Statement
Report Item Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6
Gross Profit
Revenues 0 185,700 828,000 763,888 648,559 646,738
- Rebates 0 9,800 52,960 47,940 36,420 35,340
- Cost of Goods Sold 0 120,568 441,161 416,088 338,011 336,724
= Gross Profit 0 55,332 333,879 299,860 274,128 274,674
Expenses
Research and Development 60,000 0 30,000 1,239,797 120,000 30,000
+ Advertising 0 27,500 37,500 37,500 37,500 37,500
+ Internet Marketing Expenses 0 0 3,000 3,000 3,000 3,000
+ Sales Force Expense 0 10,205 30,065 30,065 30,065 30,065
+ Store Expense 90,000 217,000 79,000 79,000 79,000 79,000
+ Marketing Research 0 20,000 20,000 20,000 20,000 20,000
+ Shipping 0 3,351 11,990 11,641 10,404 10,443
+ Excess Capacity Cost 0 106,960 21,665 43,128 43,161 42,700
+ Depreciation 0 10,000 20,000 20,000 20,000 20,000
= Total Expenses 150,000 395,015 253,220 1,484,130 363,131 272,708
Operating Profit -150,000 -339,683 80,660 -1,184,270 -89,003 1,966
Miscellaneous Income and Expenses
+ Other Income 0 0 0 0 0 0
- Other Expenses 0 0 0 0 0 0
= Earnings Before Interest and Taxes -150,000 -339,683 80,660 -1,184,270 -89,003 1,966
+ Interest Income 1,500 0 0 0 0 0
- Interest Charges 0 0 0 0 0 0
= Income Before Taxes -148,500 -339,683 80,660 -1,184,270 -89,003 1,966
- Loss Carry Forward 0 0 80,660 0 0 1,966
= Taxable Income 0 0 0 0 0 0
- Income Taxes 0 0 0 0 0 0
= Net Income -148,500 -339,683 80,660 -1,184,270 -89,003 1,966
Earnings per Share -10 -17 3 -24 -2 0
End of Worksheet

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