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30 Oct 2012 238 Respondents
57%
+25XPRespond to CaseBoard
By David Seedhouse
Genius (55568 XP)
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CHRISTMAS PRESENT??

CHRISTMAS PRESENT??

You have an opportunity.

The government is subsidising new retail outlets in Redtown, which is officially the most socially deprived area in Sydney. It has the highest unemployment, the highest sickness rates, the lowest life expectancy and the highest poverty and debt.

The government believes that injecting retail activity into Redtown will provide an economic boost to the area, will provide more jobs for locals and will draw in people from outside the Redtown area to shop, spending their money in the deprived area.

Government will pay retail companies up to 50% of relocation or set up costs and will also guarantee that infrastructure (transport, IT connections, utility supplies and so on) are first class.

You accept the opportunity and set up a new store. To your surprise you see that three competitors have set up in the same development, ensuring that competiton is intense.

You have to make sure you turn a profit. You see that all your competitors are offering between 18 months and 2 years 'interest free' deals on all items, if customers 'buy now'. You are considering whether it would be a good idea to offer an even better deal, with Xmas coming up.

You are aware that many people in Redtown are unemployed and yet covet TVs, games, whiteware, computers and other gadgets as much as all other Sydney residents. You know that an attractive deal will bring in many sales. You also know that it is likely that such a deal will increase debt in the area, will add stress to household budgets, and will create a climate where people want to keep up with each other with the latest gadgets. It is even possible that people in Redtown will go short of food if they rack up too many debts: 2 or 3 years seems a long way away to repay a debt but it comes round soon enough and then they have to pay back money for 3 year old goods, almost certainly more expensive than new, updated models in 3 years time.

How do you look at this? What is your priority? Are you simply in business and therefore focused only on beating the competition, or do you have a social responsibility not to encourage people to borrow more than they can pay back?

Your sales manager is very clear - she is in business, and that's that. She has a great idea for Xmas - a 36 month interest free deal with no deposit required (at a price per product 5% higher than a standard cash sale negotiated discount) for 'buy now' between December 1st and midnight December 24th.

Do you agree with your sales manager?
It is proposed that you should offer the Xmas special deal - 36 months interest free for products bought in December

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