A Business Report On Akaroa Experience Partnership

Findings

The Assessment is based on Buisienss located in Akaora banks penisula  write a Business Report that preasents primary and secondary reseach on the Business Function.

John and Mary Wheeler are event management experts who run the company ‘Akaroa Experience Partnership’, which was a drama and musical production company, which was inspired from the drama company which was based on the history of Waitangi. They were concerned with creating drama and musical events for the cruise ship guests, who used to visit Akaroa. Songs were written and play was scripted and was consequently performed by the students of NASDA, who were hired during their summer holidays. Along with this, the company was also involved in various kinds of ancillary business, apart from the drama and singing business. They had entered into an arrangement with Iwi at Onuku Marae for providing bus rides to the visiting guests, which was an additional business arrangement apart from their main business.

The report has been requested by the owners of the company, namely John and Mary Wheeler. This report has been written with the purpose of evaluating the functioning of the company, with the aim of enquiring into its low profits and providing recommendations for improvement purposes. It mainly covers four aspects which are the financial, operational, sales and marketing along with the human resource. It has been prepared by the use of both primary as well as secondary source of data.

The drama business which was provided by John and Mary’s Akaroa Experience Partnership. The business had grown steadily with the active participation of the students as well as the owners. The collaborative arrangement with local Onku Marae, was also a welcoming affair for the business. Every kind of arrangement was present for the students from a good incentive system to the accommodation facilities at their holiday home. However, after achieving substantial success, John and Mary had decided to re-open their old event management business form the accumulated profits achieved from the Akaroa business. In the subsequent paragraphs all the different aspects of the business has been provided.

From the analysis of the income statement and the balance sheet of the company for the years 2016-17 and for the year 2017-18, many important aspects of the performance of the company has been observed. The four different efficiency ratios have been calculated for better analysis of the financial performances of the drama company for the two year period. The efficiency ratios and their analysis has been provided below:

Financial aspect

Assets turnover ratio: The asset turnover ratio is an efficiency ratio which measures the company’s ability to produce sales from its assets by comparing net sales with average total assets. This ratio shows how resourcefully a company uses its assets to generate sales (Aasb.gov.au. 2018). In the case of Akaroa, it has improved in the year 2017-18, but it is not reflected in the gross profit of the company, as it has decreased by $111,300 in 2017-18.

Working capital ratio: This ratio has been found out with the help of the primary sources of Akaroa, financial statements. It is mainly prepared to illustrate the ability of a business to pay for its current liabilities from its current assets. The working capital ratio of Akaroa has decreased in the year 2017-18, indicating the fact that the company has not been able to efficiently manage its current liabilities.

Operating expense ratio: It is used to measure the amount of costs which is incurred in producing certain commodity or a piece of property, in comparison to the amount of income that the property brings in. The operating ratio has decreased in 2017-8, showing signs of improvement, as the costs had decreased when the new manager had replace the students with   those marketing posters and banners.

Accounts receivable turnover ratio: It is used to measure how efficiently a company uses its assets. The higher the better, as a higher ratio represents that the company has a good credit policy and sound financial system, where the debtors timely pay their dues to the company. This has significantly decreased in the year 2017-18, signifying serious failure.

Since the time, the manager came on to handle the reigns of the business, he made some drastic changes, in the basic framework of the business, which has given so much success to it over the past couple of years (Unitec.ac.nz, 2018). Some of the major changes and their impacts have been given below:

• Usage of banners and posters around the town of Akaroa has proved detrimental to the business because of the loss of customers. It was a small business, which had grown on the basis of personal promotions by the students and their hard work, which could not be replaced by the banners and posters.
• Loss of efficient man power took place. The students of NASDA were the active participants of the play who used to promote the event too, with their innovative dancing and singing on the streets of Akaroa. The drama company had expanded because of their hard working performances and positive word of mouth publicity. They used to earn good amount of incentives in the form of extra $3 per customer, but with the installation of the banners, the motivation to perform was also gone. Such information was collected with the help of the interviews of the students (com. 2018).

Human resource is one of the most aspects and units of any business organisation. They are one of the most important parts of any business entity, as they are the ones who plan, create and carry out the different activities performed by the organisation. They execute all the other functions of the business entity right from creation of the products and services, marketing of those products and service and their final distribution, every function is performed by them (Alfes et al., 2013). In this case of Akaroa this is no exception. A detailed look into the human resource activities of Akaroa Experience Partnership has been provided below:

• In the beginning of the business, John and Mary used their connections and experience in the event management to secure the services of the NASDA staff and students, in return for a small amount of money and real working experience in the arts industry, which was an important stepping stone for those students.
• Relying on students was a great idea because of three main reasons, the costs was low; availability was not an issue, cheap labour was easily available. In exchange all this, John and Mary were providing invaluable real time working experience to the students before their formal entry into the arts industry. They understood its importance as a result of which, their unswerving faith could be achieved.
• One of the most important aspects of the recruitment of the students was the indirect persuasive selling and promotion, which was provided by these students, in order to bring in extra customers. In return, they earned incentives which were used by them as their pocket money, college fees and other activities.
• The gravest mistake done by the new manager in the pursuit of cutting costs and earning the goodwill of the owners was the wrong marketing move by the installation of the banners and posters in strategic places by removing the students, who earlier used to perform on the streets to bring in customers. Although the banner installation was a welcome one, but stopping the students from their usual dancing and singing activities was a wrong move, which badly backfired. One important aspect, which the new manager had failed to realise, was the fact that the company was operating in the small area of Akaroa, where direct and persuasive marketing promotion with the various clients and cruise ship guests was the key (The Hindu, 2018).
• In the pursuit of personal interest, the manager failed to recognise the fact that the street performances was a small way for the students for earning extra incentives apart from their usual pay, which had pulled them into the business apart from the gathering experience factor. The business had thrived for so long, only because of the persuasive marketing step adopted by the students under the veil of those street performances (Billetto UK, 2018). This had played a huge part in the dismal and declining performances after the appointment of the new manager. This in fact proves the fact that the treatment of one of the most important resources of the business entity was not done in a proper manner. It had a severe impact on the financial results of the drama company.

Operational aspect

The heart of any business success lies in its marketing activities. Most of the aspects of any business heavily depend upon successful marketing of its products and services (Armstrong et al., 2018). By and large the marketing umbrella encompasses advertising, public relations, promotions and sales. Marketing is a process which helps in the formal introduction of a particular product or service for the purpose of promoting it to potential and prospective customers (Business.gov.au, 2018). There are many ways which are adopted by business entities market and promote their products and services; most common of them of in today’s world is the usage of the social media. However, direct and personal selling and persuasion is one of the most successful methods of marketing (Arnett & Wittmann, 2014).

In the case of Akaroa, some important steps were originally taken by John and Mary, which had sown the seeds of marketing success of the company. Some of these steps included the recruitment of the students for promoting the drama performances through their incessant street performances, the arrangement with Iwi at the local Onuku Marae for providing sightseeing to the cruise guests along with the extra facility of morning or afternoon tea. The company had also introduced by a great marketing tactic of rewarding the students with extra $3 for any new customers, which are roped in by them. This was a moral boost for them, which enabled them to go the extra mile for arranging extra customers for ensuring no vacant seats in the hall. The new manger had also come up with a novel and efficient marketing idea of installing new posters and signs in strategic parts of the town for attracting crowds (Arnett & Wittmann, 2014). This had led to the long run success of the business, only to be disrupted by the appointment of the new manager.

Conclusion:

After the collection of all the necessary information about the different aspects of the business from the different kinds of primary as well as secondary sources, some important observations were made and subsequently presented in the earlier paragraphs. The company had suffered financially, the assets turnover ratio had been abysmal, and the working capital ratio had not improved, which suggests the company has not been able to properly manage its current assets. The overall gross p[profits have also decreased. In terms of the human resource, the company had lost one of its pioneering partners in the venture-‘the students’, by adopting other marketing procedures. This has also led to a significant drop in the company’s operations and its sales and marketing had also taken a turn for the worse. Thus it could be concluded, that if the current scenario persists, the business could be in great danger and could lead to the bankruptcy of its owners. Thus proper steps must be taken to address the issues.

A lot of things had happened since the new manger took over the reins of the company. He brought some additional changes, which had backfired and the financial soundness of the company was at risk. At this juncture, it becomes imperative for the company to take some concrete steps in order to look after the issue. The following recommendations could be implemented:

• The company must address the website problem and should get it resolved by taking the help of any website professional; otherwise, the company would lose on some of the most lucrative business, the families.
• In order to ensure the welfare of the families, the company management can create some plays on family issues and some which are centred around the children, in order to grab their attention.
• The manager must immediately revert back to the old way of promotion through the street performances of the students. On the other hand, the manager must cut down on its banner expense and install them only in some few selected places, after holding consultations with the students.
• In order to bring back the camaraderie among the students and staffs, the manager must encourage them in order to perform more street shows, this would improve relationships, reduce turnover, along with this, and the company would be able to take advantage of the growth of the local customers. This step is highly advisable as the cruise ship guests have stopped coming, if the company is not adequately prepared on the basis of its trial and tested formulae, the company would lose the local customers

References:

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