Princessa Case Analysis

In order for Princessa to maintain the profit margin of at least 7.5%^[1] while achieving revenues of at least $ 676,600^[2] by the year end of 2010^[3], XXX must address the following critical issues:

-How to leverage their good reputation and good relationship with customers to adopt customer demand to expand the market^[4] by the year end of 2010.

-How to address the promotion strategy to improve competitiveness, so that $51,000^[5] net profit is  gained by the year end of 2010.        

-How to address the product mix to reduce the impact of cost increases, to limit the budget to 15,000 for the next three years..                

Princesa is one of the oldest shops in the area and has a good relationship with its guests, which means it is more attractive than the new store for guests who have just moved into the area. Also, there is increasing population of  native French speakers, and there is an increasing demand for anti-aging products, which has led to changes in demand for products. Therefore, Princesa has the opportunity to leverage attractiveness and good relationship to adopt customer demand and expand market.

Princessa lacks experienced staff to provide services and promotions, which may cause customers to feel dissatisfied and leave. As well as the high competitiveness of the region has led to a decline in the store's sales and income. If the financial situation remains unchanged, sales will continue to decline and the store may not be able to maintain a profitable state.Therefore, princess needs to apply better promotion strategies to improve competitiveness.

50% of the store's sales come from hair products and their goods are only for blacks, which means that any changes in hair products and customer groups can have a big impact on store sales. Also, Princesa's main supplier claims that the price of hair products will rise by 15%, which may lead to lower profit margins of stores or loss of price-sensitive customers. Therefore, stores need a new product portfolio to reduce the impact increasing product price.

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