Miss Case

This single product (a mixed case of wine) provides an ideal framework for an in depth investigation of costs, volume and profitability of WineBox Ltd (WB) a division of The Wine Club plc (WC) a well respected company established in 1975.The company has sales of around £20,000,000 representing around 5,000,000 bottles of the wine of which the six varieties offered by in the advertisement are an example.

The division (WB) was set up with aim of exploiting the club's mail-order customer base of 200,000 subscribers (and to expand the base through advertising) in the ' season of goodwill.' WB will operate from the offices of WC and use its warehousing and distribution facilities. WC is located near Bluewater and has good access to the M2/M20/ M25. WC has well established links with the major wine growers in Europe, South America and Australia.

You are required to analyse the costs associated with the business (WB) and develop a plan for the business. The WB will continue ad infinitum but you are required to produce a plan for the first year of operation assuming that the Division(WB) will commence operations in January 2010.

Task

You are to work in groups, the seminar leader will divide you into 4 groups (around 5/6 students per group). You will need to meet to identify the type of information you will need and to discuss how to obtain the data and allocate tasks to individuals in the group. You will need to identify target completion dates and schedule meetings for further discussion.

You should consider undertaking the analysis of the C-V-P relationship using an excel spreadsheet and should (after undertaking suitable reading) consider the application of probability and sensitivity analysis to the outcomes. You will need to produce budgets (including cash budgets) as part of the process of assessing the profitability and cash-flow implications of the plan.

The tasks you may wish to undertake include the following:

1. Gather data on the market and competitors. You may wish to refer to the annual reports of relevant companies as one source of information.

2. Determine a marketing strategy

3. Identify the capital required and its costs

4. Produce budgets, to