財(cái)務(wù)案例大賽樣本案例分析課件

NorthlakeBookstore:

BenchmarkingforPerformanceEvaluation1NorthlakeBookstore:

BenchOutlines

BackgroundCurrentSituationLearningOperationCustomerBenchmarkingPrinciplesBenchmarkingAnalysisTacticsforGapsPerformanceMeasurement-BSC

Case

OverviewCaseAnalysisTacticsActionPlan2OutlinesBackgroundLearningBenSection1–CaseOverview

BackgroundCurrentSituationCase

Overview3Section1–CaseOverviewBackCaseOverview-

Background4MissionAcademicResourceServiceExcellenceNorthlakeCompanyLocation:MetropolitanProductLines:Textbooks,Sundries,Clothing,Software,ComputersCompetitorsOnlineTextbookVendorsOtherBooksellers:B&N,Wal-mart,etc.CustomersStudentsFacultyStaffAlumniGuestsAUniversityBookstoreCaseOverview-Background4MisTotalBooks67.8%NewTexts46.7%Sundries6.3%Clothing11.7%Computers7.8%Software6.5%Notes4.7%General3.0%Used13.4%FiveProducts-Textbooks-Clothing-Computers-Software-Sundries1.ProductStructure2.FinancialPerformance5CaseOverview–

CurrentSituationIncreasingTrendTotalBooks67.8%NewSundries6Why？3.TextbookSales6For

thefirsttimeinpastsevenyears,textbooksales

decrease.InFall2004,thesalesdecreasewas$180,000,

3%ofannualtextbooksales.(estimated)CaseOverview–

CurrentSituationWhy？3.TextbookSales6ForthefSection2–CaseAnalysisBenchmarkingPrinciplesBenchmarkingAnalysisCaseAnalysis7Section2–CaseAnalysisBenchCaseOverview–

BenchmarkingPrinciplesBenchmarkingasaToolComparewithSuperiorPerformanceIdentifyGapsImproveNecessaryAreasBuildingPrinciplesAlignwithOrganizationalStrategyProfitabilityServiceExcellence8CaseOverview–BenchmarkingPCaseOverview–

BenchmarkingGrandStrategyLevelFunctionLevelCompetitiveStrategyLevelProductLinesFocusStrategySupportiveDepartmentsOperationHumanResourceMarketingMarketPriceServiceTextbooksClothingComputersSoftwareSundries9CaseOverview–BenchmarkingGrGrandStrategyLevelFunctionLevelCompetitiveStrategyLevelProductLinesFocusStrategySupportiveDepartmentsOperationHumanResourceMarketingMarketPriceServiceTextbooksClothingComputersSoftwareSundries10CaseOverview–

BenchmarkingGrandStrategyLevelFunctionLeProducts%ofSalesGMRateSalesGrowthNewTexts47%23%26%UsedTexts13%36%18%ClassNotes5%23%4%GeneralBooks3%31%205%Sundries6%38%10%Clothing12%47%41%Computers8%5%-16%Software7%24%13%Benchmarking-GrandStrategyLevel47%38%13%12%47%36%205%41%26%3%5%-16%Top31.ProductStructure&ProfitabilityAnalysis11Last1Products%ofSalesGMRateSales%ofSales:AboveMedianNewTextsClothingComputersBelowMedianUsedTextsRatio=Northlake/NACSMedian2.NACSBenchmarks12GMRate:AboveMedianNewTextsUsedTextsClothingBelowMedianComputersBenchmarking-GrandStrategyLevel%ofSales:Ratio=2.NACSBenGrandStrategyLevelProductLinesFocusStrategySupportiveDepartmentsOperationHumanResourceMarketingMarketPriceServiceTextbooksClothingComputersSoftwareSundries13CompetitiveStrategyLevelFunctionLevelCaseOverview–

BenchmarkingGrandStrategyLevelProductLiBenchmarking-CompetitiveStrategyLevel

Average25thMedian75thNorthlakeTotalSpaceinSquareFeet$23,495$14,993$20,006$32,025$22,500SquareFeetperFTEStudent$2$1$2$2$3Average#ofFTEStudents19,78814,23718,20321,33612,708MarketCoverage59.37%N/A

N/A

N/A

59.02%SlightlyBelowtheAverageLevelPotentialforExpansionMarketCoverage14MarketCoverage=(TotalSpace/SquareFeetperStudent)/AverageStudentsBenchmarking-CompetitiveStrPotentialforExpansionMarketCoverageCampusContrib.HighCampusContribution15Benchmarking-

CompetitiveStrategyLevelPotentialforExpansionMarketPotentialforExpansionMarketCoverageCampusContrib.HighCampusContributionSalesperStudentStrongPurchasePower16Benchmarking-

CompetitiveStrategyLevelPotentialforExpansionMarketPriceChangeAmazonEcampusBarnes&NobleWalMartAverageNorthlakeFall,2003-Fall,2004-27.45%-22.61%-22.45%-28.02%-25.08%-22.03%-25.08%-22.03%LowDecreasingMagnitudePriceTrend17Benchmarking-

CompetitiveStrategyLevelPriceChangeAmazonEcampusBarnLowDecreasingMagnitudePriceTrendHighCurrentPrice

PriceAmazonEcampusBarnes&NobleWalMartAverageNorthlake2004Fall$58.82$57.78$61.36$57.08$58.76$60.83$58.76$60.8318Benchmarking-

CompetitiveStrategyLevelLowDecreasingMagnitudePrice19FacultyOverallSatisfactionCustomerQueuingTime%ofCoursepacksAvailableFirstDay%ofTextbooksAvailableFirstDayBenchmarking-

CompetitiveStrategyLevel19FacultyOverallSatisfactioHighServiceQualityImprovingService20FacultyOverallSatisfactionCustomerQueuingTime%ofCoursepacksAvailableFirstDay%ofTextbooksAvailableFirstDayBenchmarking-

CompetitiveStrategyLevelHighServiceQualityImprovingGrandStrategyLevelProductLinesFocusStrategySupportiveDepartmentsOperationHumanResourceMarketingMarketPriceServiceTextbooksClothingComputersSoftwareSundries21CompetitiveStrategyLevelFunctionLevelCaseOverview–

BenchmarkingGrandStrategyLevelProductLiOperationMarketingHumanResourceSpaceUtilizationCost&ExpenseInventoryManagementEmployeeStructureLaborEfficiencyLaborExpensePromotionChannel22Benchmarking–FunctionLevelOperationMarketingHumanSpace23OperationInventoryManagementGMROI

=InventoryTurnover*GMRateGoodBenchmarking–FunctionLevel23OperationInventoryManagemenOperationInventoryManagementGrossMarginRateInventoryTurnoverMedianMedian

0IncreasepriceGoodComputersNewTextsUsedTextsClassNotesClothingGeneralBooksSoftwareSundriesReduceprice24Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowRatio=Northlake/NACSMedianMedian25Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlCostControl26Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlExpenseControlGood27Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlGoodOperatingRisksCostStructureNorthlakeNACS(Average)2002200320042004FixedCost1,484,7811,642,3641,881,734$2,483,757VariableCost6,616,7516,760,7308,052,2609168894TotalCost8,101,5328,403,0949,933,99411,652,651FC/TC18.33%19.54%18.94%21.31%28Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlGoodOperatingRisksOperatingLeverageNorthlakeNACS(Average)2002200320042004GrossMargin2,148,4132,440,4033,058,347$3,188,106TotalOper.Expenses1,484,7811,642,3641,881,734$2,483,757OperatingLeverage3.243.062.604.53

2004(NACS,average)29Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlGoodOperatingRisksOperatingRisksNorthlakeNACS(Average)2002200320042004BreakEvenSales6,060,3316,197,6006,842,6699,626,965MarginofSafety2,704,8323,003,5324,267,9382,730,035MarginofSafetyRatio30.86%32.64%38.41%22.09%MarginofSafetyRatio=(TotalSales-BreakEvenSales)/TotalSales30

BreakEvenSales=TotalOper.Expenses/GMRateBenchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlGoodOperatingRisksOperatingRisksNorthlakeNACS(Average)2002200320042004BreakEvenSales6,060,3316,197,6006,842,6699,626,965MarginofSafety2,704,8323,003,5324,267,9382,730,035MarginofSafetyRatio30.86%32.64%38.41%22.09%2004(NACSAverage)LowMarginofSafetyRatio31Benchmarking–FunctionLevelOperationInventoryManagementGHumanResource

EmployeeStructureFewerPart-timeEmployeesvs32Benchmarking–FunctionLevelHumanResourceEmployeeStructHumanResource

EmployeeStructureFewerPart-timeEmployees

LaborEfficiencyLowLaborEfficiency

LaborExpenseLowLaborExpenseLaborEfficiencyAverage25thMedian75thNorthlakeSalesperEmployee$444,665$350,385$440,618$536,855$383,124SalesperEmployeeHour$8,085

N/AN/A

N/A

$7,368LaborExpense

Average25thMedian75thNorthlakeLaborExpenses12.90%10.30%12.40%15.00%12.60%LaborExpensesperEmployee$57,362N/A

N/A

N/A

$48,27433Benchmarking–FunctionLevelHumanResourceEmployeeStruct

ChannelWeakOnlineSales,SeasonalDemandMarketing34Benchmarking–FunctionLevelChannelWeakOnlineSales,Se

ChannelWeakOnlineSales,SeasonalDemand

Marketing

PromotionFewPromotionsGrossMarginAverage25thMedian75thNorthlake%ofSales25.80%24.30%2.80%28.80%27.50%%ofNetSales26.20%23.40%26.70%29.60%27.50%TotalNetSales=TotalSales-SalesDiscount35Benchmarking–FunctionLevelChannelWeakOnlineSales,SeCaseAnalysis-

SummaryGrandStrategyLevelFunctionLevelCompetitiveStrategyLevelOperationHumanResourceMarketingMarketPriceServiceNewbooks,Usedbooks,ClothingComputersSundries,Software,OtherBooksAppealingNotAppealingAverageLevelLowHighHighGoodInventoryManagementLowSpaceUtilizationProblematicStructureLowLaborEfficiencyWeakOnlineSalesFewPromotions36CaseAnalysis-SummaryGrandSReasonAnalysis-FishboneDiagramSalesDecreaseHighPriceEmergingTechnologyFewPromotionsSingleChannelAlmostNoPromotionsIgnoreSeasonalPromotionOnlinePublishersOnlineShoppingOnlineVendersFrequentUpdatesHighCostLowNegotiationPowerWeakOnlineSalesDependonCampusContrib.37ReasonAnalysis-FishboneDiagSection3-TacticsTacticsforGaps-GrandStrategyLevel-CompetitiveStrategyLevel-FunctionLevelPerformanceMeasurement-BSCTactics38Section3-TacticsTacticsforTactics-GrandStrategyLevelCompetitivePosition(%Sales)HighStrong

LowWeakAverage

Med-iumNewTextsComputersUsedTextsGeneralBooksClothingSundriesClassNotesSoftwareGEMatrixofBookstoreMarketAppeal(GMRate)

ExpandSelectiveDevelopHarvestorShrinkStrengthen-NewTextsDevelop-UsedTextsCultivate-ClothingMaintain&Improve-Computers39Tactics-GrandStrategyLevelTactics-

CompetitiveStrategyLevelNewTextsIncreaseonlinesalesDoseasonalpromotionsMaintainarelativelyhighpriceClothingExtendseriesof“clothingandgifts”CorporatewithAlumniFundingOfficeHighGrossMarginLowSalesProportionUsedTextsIncreasesalesproportionFindmoresourcesofsupplyImposemorecontrolonsuppliersHighGrossMargin&StrongDemandLowSalesProportion&UnstableSupplyCurrentSituationSolutionProductLinesComputers

IncreasepriceofcomputersPromotethesaleofaccessoriesHighInventoryTurnoverLowGrossMarginHighPriceOnlineShoppingImpact40Tactics-CompetitiveStrategyTactics-FunctionLevelFunctionlevelOperation

Maintainhighinventoryturnover,whileensurefullrange,timelydeliveryEnhancespaceutilizationReduceexpenseofoperatingutilitiesHumanResourceHiremorestudentemployeesIncreasewagesProvidemoretrainingMarketing

SolvetheunstableorderproblemDomorepromotionsIncreaseproportionofonlinesales41Tactics-FunctionLevelFunctiMeasureLevelKSFIndicatorsActualPositioninIndustryOptimalVarianceFinanceGrossMarginRateNewBooks23.4%50th-75th30.17%6.77%UUsedBooks36.3%50th-75th44.18%7.88%UClothing47.0%>75th55.95%8.95%USalesGrowthSalesChangefromPriorYear20.8%>75th19.56%1.24%FCustomerConvenienceOnlineSales1.9%50th-75th6.51%4.61%USatisfactionSatisfactionSurvey4.05N/A5.000.95UOperationInventoryManagementInventoryTurnover9.1>75th7.881.22FStoreUtilizationSalesperSquareFeet$74125th-50th$1,458$717UExpenseControlUtilities0.5%75th0.10%0.4%ULearning&DevelopmentEmployeeStructurePart-time/Full-time30%<50th77%43%U42Tactics-

BalancedScorecardMeasureLevelKSFIndicatorsActMeasureLevelKSFIndicatorsActualPositioninIndustryOptimalVarianceFinanceGrossMarginRateNewBooks23.4%50th-75th30.17%6.77%UUsedBooks36.3%50th-75th44.18%7.88%UClothing47.0%>75th55.95%8.95%USalesGrowthSalesChangefromPriorYear20.8%>75th19.56%1.24%FCustomerConvenienceOnlineSales1.9%50th-75th6.51%4.61%USatisfactionSatisfactionSurvey4.05N/A5.000.95UOperationInventoryManagementInventoryTurnover9.1>75th7.881.22FStoreUtilizationSalesperSquareFeet$74125th-50th$1,458$717UExpenseControlUtilities0.5%75th0.10%0.4%ULearning&DevelopmentEmployeeStructurePart-time/Full-time30%<50th77%43%U43Assumption：TheNACSbenchmarkshaveanormaldistribution.The5thand95thpercentilesareestimatedaccordingly.ThreeCriteria：Importance,BigGap,DataAvailableTactics-

BalancedScorecardMeasureLevelKSFIndicatorsActMeasureLevelKSFIndicatorsActualShort-termandLong-termGoalsFirstyearSecondyearThirdyearFinanceGrossMarginRateNewBooks23.4%25.66%27.91%30.17%UsedBooks36.3%38.93%41.55%44.18%Clothing47.0%49.98%52.97%55.95%SalesGrowthSalesChangefromPriorYear20.8%20.8%20.8%20.8%CustomerConvenienceOnlineSales1.9%3.44%4.97%6.51%SatisfactionSatisfactionSurvey4.054.374.685.00OperationInventoryManagementInventoryTurnover9.1StoreUtilizationSalesperSquareFeet$741$980$1,219$1,458ExpenseControlUtilities0.5%0.37%0.23%0.10%Learning&DevelopmentEmployeeStructurePart-time/Full-time30%45.67%61.33%77.00%44Tactics-

BalancedScorecardMeasureLevelKSFIndicatorsActSection4-ActionPlanLearningOperationCustomerActionPlan45Section4-ActionPlanLearninActionPlanLearning&DevelopmentOperationCustomer46ActionPlanLearning&DevelopmActionPlanLearning&Development47Learning&Development

EmployeeStructureHiremorestudentsaspart-timeemployeesTrainingProvideextensivetrainingand

career-enhancingpackagesCompensationOfferindustry-leadingcompensationandexcellentbenefitsPerformanceEvaluationEstablishanewperformanceevaluationsystembasedonBenchmarkingindicatorsActionPlanLearning&47LearninLearning&DevelopmentOperationActionPlan48ProcurementUsedBooksEstablishtakeoverpointsofusedbooksoncampususingsomeslogans,e.g.environmentalfriendly.NewBooksBuildalong-termrelationshipwithsuppliers.LogisticsInventoryEstablishan

electronicinterface,streamlineprocedurestoimproveinventorycontrol.MarketingOrdersProvideaccuratesalesandcustomerprofileinformation;Utilizeadistributedstoresystemsoftwaretomeetthedemandsofchangingtechnologyinretailchannels.OnlineSalesOfferseamlessonlineorderingandanonlineportaltobenefitbookstore’ssuccess,especiallyinpeakseasons.Learning&OperationActionPlanLearning&DevelopmentOperationCustomerActionPlan49StoreDesignSpaceUtilizationAddvisualmerchandisetoenhancespaceefficiencyConsistent&UniqueServiceConsiderallaspectswhenstartingarenovationorbuildinganewstore.FlexibilityProvideversatilesignatureseriesfixtures,allowingtorespondtochangesincustomerdemand.Learning&OperationCustomerActLearning&DevelopmentOperationCustomerActionPlan50PromotionsAuditoryPromotionsOrchestrate

todrawcustomersintothestoreandbringthembackagain.SpecialPromotionsPresentpromotionstiedtoseasonalevents,suchasthestartofclasses,homecoming,theholidayseasons,bookbuybackandgraduationValue-addedPromotionsRangefrom"TheReader’sChoiceBookClub"toa"SeniorSalutesSale"aswellasstudentandfacultyappreciationsalesLearning&OperationCustomerActLearning&DevelopmentOperationCustomerActionPlan51CommunityProjectsDonationDonatetextbooktodevelopingcountries.ScholarshipProgramsFundscholarshipprogramsforthestudentswithexcellentrecords.Membership

Establishmembershipsystem,providemembershipcardforstudents;Maintainmembershipswithhighereducationassociations,suchasAmericanAssociationofCommunityColleges.Learning&OperationCustomerActSummary52CaseOverviewCaseAnalysisTacticsActionPlanBackgroundCurrentSituationBenchmarkingPrinciplesBenchmarkingAnalysisTacticsforGapsPerformanceMeasurement–BalancedScorecardLearning&DevelopmentOperationCustomerGrandStrategyLevelCompetitiveStrategyLevelFunctionLevelTacticsforGrandStrategyLevelTacticsforCompetitiveStrategyLevelTacticsforFunctionLevelSummary52CaseOverviewCaseAnaThankyou!53Thankyou!53NorthlakeBookstore:

BenchmarkingforPerformanceEvaluation54NorthlakeBookstore:

BenchOutlines

BackgroundCurrentSituationLearningOperationCustomerBenchmarkingPrinciplesBenchmarkingAnalysisTacticsforGapsPerformanceMeasurement-BSC

Case

OverviewCaseAnalysisTacticsActionPlan55OutlinesBackgroundLearningBenSection1–CaseOverview

BackgroundCurrentSituationCase

Overview56Section1–CaseOverviewBackCaseOverview-

Background57MissionAcademicResourceServiceExcellenceNorthlakeCompanyLocation:MetropolitanProductLines:Textbooks,Sundries,Clothing,Software,ComputersCompetitorsOnlineTextbookVendorsOtherBooksellers:B&N,Wal-mart,etc.CustomersStudentsFacultyStaffAlumniGuestsAUniversityBookstoreCaseOverview-Background4MisTotalBooks67.8%NewTexts46.7%Sundries6.3%Clothing11.7%Computers7.8%Software6.5%Notes4.7%General3.0%Used13.4%FiveProducts-Textbooks-Clothing-Computers-Software-Sundries1.ProductStructure2.FinancialPerformance58CaseOverview–

CurrentSituationIncreasingTrendTotalBooks67.8%NewSundries6Why？3.TextbookSales59For

thefirsttimeinpastsevenyears,textbooksales

decrease.InFall2004,thesalesdecreasewas$180,000,

3%ofannualtextbooksales.(estimated)CaseOverview–

CurrentSituationWhy？3.TextbookSales6ForthefSection2–CaseAnalysisBenchmarkingPrinciplesBenchmarkingAnalysisCaseAnalysis60Section2–CaseAnalysisBenchCaseOverview–

BenchmarkingPrinciplesBenchmarkingasaToolComparewithSuperiorPerformanceIdentifyGapsImproveNecessaryAreasBuildingPrinciplesAlignwithOrganizationalStrategyProfitabilityServiceExcellence61CaseOverview–BenchmarkingPCaseOverview–

BenchmarkingGrandStrategyLevelFunctionLevelCompetitiveStrategyLevelProductLinesFocusStrategySupportiveDepartmentsOperationHumanResourceMarketingMarketPriceServiceTextbooksClothingComputersSoftwareSundries62CaseOverview–BenchmarkingGrGrandStrategyLevelFunctionLevelCompetitiveStrategyLevelProductLinesFocusStrategySupportiveDepartmentsOperationHumanResourceMarketingMarketPriceServiceTextbooksClothingComputersSoftwareSundries63CaseOverview–

BenchmarkingGrandStrategyLevelFunctionLeProducts%ofSalesGMRateSalesGrowthNewTexts47%23%26%UsedTexts13%36%18%ClassNotes5%23%4%GeneralBooks3%31%205%Sundries6%38%10%Clothing12%47%41%Computers8%5%-16%Software7%24%13%Benchmarking-GrandStrategyLevel47%38%13%12%47%36%205%41%26%3%5%-16%Top31.ProductStructure&ProfitabilityAnalysis64Last1Products%ofSalesGMRateSales%ofSales:AboveMedianNewTextsClothingComputersBelowMedianUsedTextsRatio=Northlake/NACSMedian2.NACSBenchmarks65GMRate:AboveMedianNewTextsUsedTextsClothingBelowMedianComputersBenchmarking-GrandStrategyLevel%ofSales:Ratio=2.NACSBenGrandStrategyLevelProductLinesFocusStrategySupportiveDepartmentsOperationHumanResourceMarketingMarketPriceServiceTextbooksClothingComputersSoftwareSundries66CompetitiveStrategyLevelFunctionLevelCaseOverview–

BenchmarkingGrandStrategyLevelProductLiBenchmarking-CompetitiveStrategyLevel

Average25thMedian75thNorthlakeTotalSpaceinSquareFeet$23,495$14,993$20,006$32,025$22,500SquareFeetperFTEStudent$2$1$2$2$3Average#ofFTEStudents19,78814,23718,20321,33612,708MarketCoverage59.37%N/A

N/A

N/A

59.02%SlightlyBelowtheAverageLevelPotentialforExpansionMarketCoverage67MarketCoverage=(TotalSpace/SquareFeetperStudent)/AverageStudentsBenchmarking-CompetitiveStrPotentialforExpansionMarketCoverageCampusContrib.HighCampusContribution68Benchmarking-

CompetitiveStrategyLevelPotentialforExpansionMarketPotentialforExpansionMarketCoverageCampusContrib.HighCampusContributionSalesperStudentStrongPurchasePower69Benchmarking-

CompetitiveStrategyLevelPotentialforExpansionMarketPriceChangeAmazonEcampusBarnes&NobleWalMartAverageNorthlakeFall,2003-Fall,2004-27.45%-22.61%-22.45%-28.02%-25.08%-22.03%-25.08%-22.03%LowDecreasingMagnitudePriceTrend70Benchmarking-

CompetitiveStrategyLevelPriceChangeAmazonEcampusBarnLowDecreasingMagnitudePriceTrendHighCurrentPrice

PriceAmazonEcampusBarnes&NobleWalMartAverageNorthlake2004Fall$58.82$57.78$61.36$57.08$58.76$60.83$58.76$60.8371Benchmarking-

CompetitiveStrategyLevelLowDecreasingMagnitudePrice72FacultyOverallSatisfactionCustomerQueuingTime%ofCoursepacksAvailableFirstDay%ofTextbooksAvailableFirstDayBenchmarking-

CompetitiveStrategyLevel19FacultyOverallSatisfactioHighServiceQualityImprovingService73FacultyOverallSatisfactionCustomerQueuingTime%ofCoursepacksAvailableFirstDay%ofTextbooksAvailableFirstDayBenchmarking-

CompetitiveStrategyLevelHighServiceQualityImprovingGrandStrategyLevelProductLinesFocusStrategySupportiveDepartmentsOperationHumanResourceMarketingMarketPriceServiceTextbooksClothingComputersSoftwareSundries74CompetitiveStrategyLevelFunctionLevelCaseOverview–

BenchmarkingGrandStrategyLevelProductLiOperationMarketingHumanResourceSpaceUtilizationCost&ExpenseInventoryManagementEmployeeStructureLaborEfficiencyLaborExpensePromotionChannel75Benchmarking–FunctionLevelOperationMarketingHumanSpace76OperationInventoryManagementGMROI

=InventoryTurnover*GMRateGoodBenchmarking–FunctionLevel23OperationInventoryManagemenOperationInventoryManagementGrossMarginRateInventoryTurnoverMedianMedian

0IncreasepriceGoodComputersNewTextsUsedTextsClassNotesClothingGeneralBooksSoftwareSundriesReduceprice77Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowRatio=Northlake/NACSMedianMedian78Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlCostControl79Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlExpenseControlGood80Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlGoodOperatingRisksCostStructureNorthlakeNACS(Average)2002200320042004FixedCost1,484,7811,642,3641,881,734$2,483,757VariableCost6,616,7516,760,7308,052,2609168894TotalCost8,101,5328,403,0949,933,99411,652,651FC/TC18.33%19.54%18.94%21.31%81Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlGoodOperatingRisksOperatingLeverageNorthlakeNACS(Average)2002200320042004GrossMargin2,148,4132,440,4033,058,347$3,188,106TotalOper.Expenses1,484,7811,642,3641,881,734$2,483,757OperatingLeverage3.243.062.604.53

2004(NACS,average)82Benchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlGoodOperatingRisksOperatingRisksNorthlakeNACS(Average)2002200320042004BreakEvenSales6,060,3316,197,6006,842,6699,626,965MarginofSafety2,704,8323,003,5324,267,9382,730,035MarginofSafetyRatio30.86%32.64%38.41%22.09%MarginofSafetyRatio=(TotalSales-BreakEvenSales)/TotalSales83

BreakEvenSales=TotalOper.Expenses/GMRateBenchmarking–FunctionLevelOperationInventoryManagementGOperationInventoryManagementGoodSpaceUtilizationLowCostandExpenseControlGoodOperatingRisksOperatingRisksNorthlakeNACS(Average)2002200320042004BreakEvenSales6,060,3316,197,6006,842,6699,626,965MarginofSafety2,704,8323,003,5324,267,9382,730,035MarginofSafetyRatio30.86%32.64%38.41%22.09%2004(NACSAverage)LowMarginofSafetyRatio84Benchmarking–FunctionLevelOperationInventoryManagementGHumanResource

EmployeeStructureFewerPart-timeEmployeesvs85Benchmarking–FunctionLevelHumanResourceEmployeeStructHumanResource

EmployeeStructureFewerPart-timeEmployees

LaborEfficiencyLowLaborEfficiency

LaborExpenseLowLaborExpenseLaborEfficiencyAverage25thMedian75thNorthlakeSalesperEmployee$444,665$350,385$440,618$536,855$383,124SalesperEmployeeHour$8,085

N/AN/A

N/A

$7,368LaborExpense

Average25thMedian75thNorthlakeLaborExpenses12.90%10.30%12.40%15.00%12.60%LaborExpensesperEmployee$57,362N/A

N/A

N/A

$48,27486Benchmarking–FunctionLevelHumanResourceEmployeeStruct

ChannelWeakOnlineSales,SeasonalDemandMarketing87Benchmarking–FunctionLevelChannelWeakOnlineSales,Se

ChannelWeakOnlineSales,SeasonalDemand

Marketing

PromotionFewPromotionsGrossMarginAverage25thMedian75thNorthlake%ofSales25.80%24.30%2.80%28.80%27.50%%ofNetSales26.20%23.40%26.70%29.60%27.50%TotalNetSales=TotalSales-SalesDiscount88Benchmarking–F