Introduction of IFYBS004 Business Studies Coursework
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Analysis of The Financial Data Provided
Brimore Engineering’s financial statement shows various aspects of the company’s performance for the years 2020 and 2021. It shows that the Capital Employed by the company in the year 2020 was £1.6m and in the year 2021, it was £2.0m. That means Brimore Engineering has more capital employed in the year 2021 compared to the year 2020 by £0.4m. Capital employed is the amount in the form of capital that has been invested in the company for the future growth of the company and it will give long-term benefits to the company, in the case of Brimore Engineering it was increased in the year 2021 which is good for the company.
As per the financial data of Brimore Engineering, it shows revenue of £1.76m in the year 2020 and it was declined to £1.66m in the year 2021, it shows a decline of £0.10m in 2021. In the year 2021, the company has more capital employed compared to the previous year, and although the company’s revenue has declined in the same year. That means the sales of the company are declining.
In the case of Gross Profit of the Brimore Engineering, it shows Gross Profit of £1.39m in the year 2020 but in the year 2021, it was decreased to £1.28m. As their revenue decreased in the year 2021 as well as their gross profit also decreased in the same year. As their gross profit declined in the year 2021 and revenue also has been decreased in the same year. Though it shows a lesser performance in the year 2021 the company must take some steps to accelerate its growth in the upcoming year.
As per the data, the profit for the year 2020 shows £0.62m and in the year 2021, it was £0.51m. It was also decreased in the year 2021 which measures the lesser performance of the company in the year 2021. Though their capital employed in the year 2021 increased after all their financial performance is not well in the year 2021. To improve its financial performance the company must take some steps so that its profitability will be increased in the coming years.
The financial data shows a fall in the sales of Brimore Engineering company so that the revenue of the company has declined in 2021 as well as the gross profit and the net profit also decreased in the same year. To accelerate the growth of the company, Brimore Engineering has to improve its sales and that will give overall growth for the company. In order to improve sales of the company, Brimore Engineering has to develop its marketing strategies and advance its promotional activities, which can be effective to improve the growth of the company.
Analysis of Product Portfolio
The Product Portfolio is the bunch of the products that are offered by the company. A portfolio of Products is the stock that helps “in order to achieve the goal of the company”. “The product portfolio analysis” can be helpful to improve the company’s performance it gives a better view of the “type of stock, the growth prospects of the company, drivers of profit margin, contributions of income, market leadership, and the operational risk” of the company (Villamil and Hallstedt, 2018). It is essential for the investors and also for the companies to boost their performance.
Peter Drucker had introduced classifications to help the companies in order to analyze their product portfolio which is based on each product’s present and future profitability (Braslina et al., 2019). It helps to identify the current product lines and the projection of future ones. The classification method of the product portfolio is divided into seven categories. All of the categories are described below
- Today’s Breadwinners: It consists of all the top products of the company, the products that are highly demanded in the market, and these products contribute to most of the profits. It includes the products that are the major source of profit for the company and the stock of these products is also called a liquid asset for the company because it can be easily converted to cash because of high demand in the market.
- Tomorrow’s Breadwinners: It consists of the products which are projected to the profitable product for the company, as per the projections these products will contribute most to the profit of the company but in the future, in the current situation the products may not contribute to the profit of the company.
- Yesterday’s Breadwinners: It consists of the products that are once had highly demanded and in the previous time the products had contributed most to the company’s profit but in the present situation it is not contributing significantly to the company’s profit (Braslina et al., 2019). And in the present situation, the products are not so demanded this type of product company may provide minimum support in the current situation but the company may not be interested to make an investment in these products a lot.
- Developments: It consists of the products which are in a development phase, doing investment in these products by the company in order to make available the product in the market can be beneficial for the company. The organization needs to do a thorough analysis of the market potential for the products and the ROI of the products then the company can decide whether they make an investment in these products or not.
- Sleepers: It consists of the products that are once available in the market but the products could not establish, the companies need to analyze the loopholes of the products and they need to do proper research on why the product has failed, and then they need to decide the future of these products.
- Investments in Managerial Ego: These are the product that is backed by the influential managers of the company but there is slight demand in the market for the products. This type of product is one of the reasons for the wastage of the functional resources of the company. The company should evaluate the customer’s demand for the products otherwise the investment for these products may be wasted.
- Failures: It consists of the products that are chosen to discontinue product by the company, there can be many reasons like the product may not have the potential value in the market and the products may not contribute profit to the company in the past days.
After classifying these category products, the company will be in a position where they can find out the products which are profitable and which are not, as well as the company, can find out the potential value of the products in the market. They can easily find out the products which are contributing to the growth of the company Brimore Engineering and also can analyze the product portfolio of their company. By using this classification Brimore Engineering also can identify the reasons for their fall in sales. This classification can be an effective way to find out the loopholes in the products of the company. It can help to measure the contribution of the products to the company’s profit. It can be used to boost the performance of the company in the future days.
The Methods of Promotion
There are several methods of Promotion that may help Brimore Engineering in order to increase its sales. The methods of promotion can improve the profitability of the organization and it also helps to generate more profit for Brimore Engineering.
The Methods of Promotion that Brimore’s senior Manager could use to increase sales
- Advertising: It is one of the key essential for promotion, Brimore Engineering should do unique advertising to reach their potential customers as well as to create brand awareness. Effective advertising can influence many customers for the company and its plays a crucial role to create a brand image in the market as well as it also gives an extra advantage to the company (Mikhail, 2018). Unique advertising can be a markable solution for companies in order to increase sales. Brimore Engineering should conduct an Advertisement Campaign that should be unique and as they are selling products for the car industry it has to contain the contents which reflects the products of Brimore Engineering, that should be attractive to the car industry. Though this can be an effective solution to improve sales of Brimore Engineering.
- Public Relations: It is another key aspect in order to increase sales of Brimore Engineering. Brimore Engineering should make focus on public relations as well as customer relations. Brimore Engineering should make trust between the customers and the company (Mikhail, 2018). That will create the brand loyalty of Brimore Engineering in the upcoming days. Brimore Engineering has to pay attention to this area so that it creates the brand image of the company in the market and it will also improve the market potential of the products of Brimore Engineering.
- Sales Promotion: Sales promotion is one of the major methods of promotion. Brimore Engineering should conduct an effective sales promotion team. The sales promotion team of Brimore Engineering should conduct effective sales promotion activities so that the company can increase its sales in the upcoming year (Kaveh et al., 2020). This method of promotion can be an advantage for the company in order to increase the sales of Brimore Engineering.
By implementing these methods of Promotion Brimore Technology can increase sales in the upcoming year. If their sales will improve in the coming years along with that the Gross and Net profit will also increase.
Braslina, L., Batraga, A., Skiltere, D., Legzdina, A., Braslins, G. and Cildermane, E., 2019. Improved innovative product strategy assessment model in market research context.
Kaveh, A., Nazari, M., van der Rest, J.P. and Mira, S.A., 2020. Customer engagement in sales promotion. Marketing Intelligence & Planning.
Mikhail, V., 2018. Development of goods and services promotional methods in the digital economy.
Villamil, C. and Hallstedt, S.I., 2018. Sustainability product portfolio: A review. European Journal of Sustainable Development, 7(4), pp.146-146.