SPACE AND LIGHT STUDIO Harvard Case Solution & Analysis

SPACE AND LIGHT STUDIO Case Study Solution 

Q1. What is the central tension of the case?

Every new business or venture, when acquired or developed, requires proper cost structures and its allocation, revenue generation techniques, competent line of staff and capacity of transformation in business rationales. In this case, the main duo Lynn and Sumeiare, who are yoga trainers, are inspired by ‘Ansura’ form of yoga. They were keen to provide efficient services to their customers and very much excited about that new took over, however besides that they were also considering the fact that they were not utilizing the maximum capacity and that they could do favorable changes to make this new venture grow by also improving their services and managing costs and cutting extra cost reasonably. Competition in providing Yoga services all over Singapore is a point of concern in this case, as the challenges faced by the duo after the take over and improvisation as well as the changes required minimizing costs and increasing revenues, hiring competent trainers and effective arrangements of classes are some of the points to ponder.

 

Q2. What quantitative techniques can be used in this case? How it can be useful.

Some of the quantitative techniques that are useful involves:

*CVP ANALYSIS:

CVP analysis refers to cost volume profit analysis. Through this we can easily identify the fixed and variable costs involved and that whether the contribution margin percentage company is being maintained. Diminishing unnecessary variable costs and the point at which the company achieves break even comes under this. Marginal revenues and costs and their analyses are given below:

*Marginal and Absorption costs:

This analysis is also helpful to assess the company’s costs. treatment of fixed costs and other useful cost parts can be assessed.

*Relevant costs:

Relevant costs are those costs that affect profitability. From this case we can identify relevant costs and treat them properly to arrive at accurate profit.

*Ratios:

Ratios can also be calculated from key figures to assess the performance over time.

 

RECOMMENDATIONS FOR SLS:

They can follow the following strategies to make their business more viable and fruitful:

Competitive cost structure and best quality services:

They should keep their cost and pricing competitive to other similar institutes and in uniformity with them but providing excellent and comfortable service and good standards of work simultaneously. There should be different training programs for yoga teachers and they should be provided with perks, and less temporary staff appointment.

Different services in multiple packages:

The company can design attractive packages to attract new customers. Moreover, it can offer multiple services or different kinds of yoga treatments to its existing customers through which it can increase its revenue reasonably.

Balancing of different kinds of classes:

The company should make flexible and reasonable scheduling for each kind of classes to make the effective use of their timing slots effectively. Moreover, the company should offer additional workshops and training sessions, which would cost less and would increase its revenue reasonably.

Efficient managerial tasks and promotions:

The company should promote its business and advertise its attractive packages to different websites and media channels. Managerial tasks should be managed and organized effectively keeping in view the ease of customers and advancement of the company’s business.

SUPPORTING DETAILS:

  • SLS is currently seems not very much viable because they are not operating at their maximum capacity. Many improvements are required to make it more viable and prosperous.
  • Their trainers are efficient but their management is weak, scheduling and other related concerns needs to be improvised and customer friendly.
  • General outlook is good and stable.
  • Negotiation policies, flexible rates and comfortable packages would make improvement to revenues. Additional added advantages like introduction of  gym equipped with advanced machines. Nutrition guides and specialists and more facilitative environment for customers would help to boost up the revenue.
  • Fixed costs should be reduced. For instance, acquisition of a place for yoga center would help to reduce rent expense (when company earns marginal revenues).

SPACE AND LIGHT STUDIO Harvard Case Solution & Analysis

 

SOME OTHER EXPLANAITIONS:

  • Cost allocation is necessary to get individual revenue assessment, it can be allocated on any reasonable basis. Such as on the basis of numberof classes held or the number of customers arrived for different categories of customers.
  • ‘Groups are apparently more profit capable area for this company. They should make attractive arrangements and cost effective changes to satisfy this lot of customers and to provide more attractive packages so as to generate more revenue..................

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