HHG Consultants has been asked to analyze Carol & Carroll Co. (C&C), which has one retail division. C&C is concerned that it is not focused on its core mission of sales despite only having one division. Each store is divided into departments: casual clothing (CC), formal clothing (FC), outerwear (OW), shoes (S), and specialty items (SI). C&C’s initial impression is that all of the departments contribute equally to sales. However, examination of each department’s actual sales reveals that the breakdown is very different: $5.2 billion (CC), $2.7 billion (FC), $3.75 billion (OW), $4.5 billion (S), and $1.7 billion (SI). Compute a Herfindahl Index based on the departments having equal sales and based on the actual sales. Your conclusion concerning the firm’s becoming unfocused will be based on the actual HI being lower than the equivalent sales HI scenario. What does your analysis find with regard to the focus of C&C’s retailing division?

  • CreatedMarch 26, 2015
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