CvLTAELG1AAv7GMjp8RSaPGsvS8 MGT502 GDB 2 Idea Solution fall 2012 |
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MGT502 GDB 2 Idea Solution fall 2012

“Jet International Airlines (JIA) – a Republican Country based airliner is operating more than 1,400 flights annually with 23 planes of different ranges on domestic and international routes. With a stable stream of cash flows, the company has earned a pre tax profit of Rs. 3,450 million during the last year. Due to cost effective operations, JIA is enjoying competitive position in the industry.


The company’s Strategic Business Development Unit (SBDU) has recently discovered Green Valley – a jewel among the many beautiful valleys in the district of Northern City in the Northern area of Country and features pine forests, crystal clear lakes, cool mountain streams, Deep Cold River, and famous for its trout. SBDU has advised the top management to launch a regular daily flight from Central City to Northern City on day round trip basis. After going through some preliminary study, JIA has decided to operate this route as an independent tour operator. A new business segment in the company has been set up under the name of “Tour Entertainers” (TE).

JIA has inducted staff of 10 qualified persons and has planed to incur Rs. 0.5 million on their training. The company has signed a 3-years lease contract with Planes Lessor Incorporation (PLI) to acquire a new 100-seats “Smart Plane” to operate on this rout. PLI is also responsible for both the periodic and on-demand maintenance of this plane. The company’s SBDU head – Mr. Management Accountant has estimated the following cost figures:

 

Monthly Fixed Costs (FC):
Lease Rentals of the plane                  Rs. 14.28 million
Flight Crew expenses                                 2.25 million
Office Salaries etc.                                     1.78 million
Office expenses at Northern City                 0.89 million

After conducting meetings with various divisions, the SBDU has analyzed the following costs per person on a day round trip on this tour flight and the Management Accountant has verified these figures. They are:

Passenger boarding cost                                 Rs.   8,000
Fuels and ready-to-take-off expenses                     1,500
Meals and other services                                        350
Other value added (net, phone, movies etc)              150

 

While feeling calm upon the feedback of this new venture’s advertising campaign, the central management of JIA has approved to launch introductory price of Rs. 18,000 per day round trip ticket for each passenger.”

 

Required: 

Keeping in view the above situation answer the following questions:

1)      Determine the number of passengers that JIA must carry each month to break even.

2)      If at breakeven determined in (1) above, JIA operates any flight at full of passengers, determine the total net income of the flight per day round trip.

3)      JIA has a promotional plan to carry 10 newly wed couples to Northern City every month free of cost by balloting. In this case, how many additional passengers, JIA must carry to break even in each month?


4)      At present break even level, each flight is left unfilled with some passenger seats. To fill these seats, the TE manager is thinking to offer 5 members group, a complete 3-day trip armed with complete boarding and lodging, 3 group dinners, and daily sight seeing with the company maintained vehicle including driver and a guide on an additional cost of Rs. 25,000 per passenger. SBDU has approved per passenger charges at Rs. 27,000 in addition to a ticket at discount price of Rs. 8,000 per passenger. You are required determine the worth of this proposal.

Just provide your final answers in concise manner. Avoid for providing details of formulas and calculations

 

IDEA Solution

1)      Determine the number of passengers that JIA must carry each month to break even.

Total Monthly cost = 19.2

Passenger Boarding Cost = 8,000

SO,   the number of passengers that JIA must carry each month to break even = Total Monthly cost *  Passenger Boarding Cost = 8,000

= 19.2 * 8000 = 153600

 

2)      If at breakeven determined in (1) above, JIA operates any flight at full of passengers, determine the total net income of the flight per day round trip.

Fligh has full of 100 passenger and the total round trip Cost is 10,000 so the total net income of the flight per day round trip

total passenger in 1 flight * total round trip Cost

100 * 10,000 = 1,000,000

3)      JIA has a promotional plan to carry 10 newly wed couples to Northern City every month free of cost by balloting. In this case, how many additional passengers, JIA must carry to break even in each month?

Total Monthly cost = 19.2

Passenger Boarding Cost for this situation  =20 *  8,000

SO,   the number of passengers that JIA must carry each month to break even = Total Monthly cost *  Passenger Boarding Cost

= 19.2 * 16000 = 307200

4)      At present break even level, each flight is left unfilled with some passenger seats. To fill these seats, the TE manager is thinking to offer 5 members group, a complete 3-day trip armed with complete boarding and lodging, 3 group dinners, and daily sight seeing with the company maintained vehicle including driver and a guide on an additional cost of Rs. 25,000 per passenger. SBDU has approved per passenger charges at Rs. 27,000 in addition to a ticket at discount price of Rs. 8,000 per passenger. You are required determine the worth of this proposal.

 

 

(This is my idea concepts if you find any type of mistakes then you can share me)

3 comments

  1. For any two of the brands, you have to analyze the given data, and decide which brand falls in which category of BCG Matrix? Also suggest strategies for both selected brands as per BCG matrix.

  2. On any given day, two billion people use Unilever products to look good, feel good and get more out of life. With more than 400 brands focused on health and well being, no company touches so many people’s lives in so many different ways.
    The portfolio ranges from nutritionally balanced foods to indulgent ice creams, affordable soaps, luxurious shampoos and everyday household care products. The company produces world-leading brands including Lipton, Knorr, Dove, Lux, Lifebuoy, Axe, alongside trusted local names such as Blue Band, Pureit and Suave. (Courtesy Unilever)
    President, Soap Division of Unilever received the annual report of 2012, called his team and asks them to make goals and strategies for the year 2013. The team responds that there are many brands of soap of Unilever and each brand presents a unique offering to different customers; therefore to develop corporate strategy for each product they have to do portfolio analysis by using Boston Consulting Group (BCG) matrix. Now it comes down to you, as a team lead, that how you can segregate the soap brands according to BCG matrix.

    Soap Category
    Brand
    Market Share
    2012
    Market
    Share
    2011
    Market Growth
    2012
    Market Growth
    2011

    Beauty
    Lux
    60 %
    58%
    18 %
    22 %

    Germ
    Lifebuoy
    54%
    51 %
    29 %
    26 %

    Skin Care
    Dove
    4 %
    2.5 %
    11 %
    7 %

    Legend:
    Market share scale is 0 – 100
    Market growth scales is 0 – 50

    Question:
    For any two of the brands, you have to analyze the given data, and decide which brand falls in which category of BCG Matrix? Also suggest strategies for both selected brands as per BCG matrix.

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