Applicable VLOs for This Weeks Case Study

11. Articulate various economic principles and their relationship to business.

Brief Introduction to This Weeks Case Study

The premium store, is owned by THE TENDER TOUCH company and it is specialized only in premium products. Linda the general manager of THE TENDER TOUCH company believes the business cycle phase is about to change and thus she is determined to act fast.

This Weeks Detailed Case Study Information

The TENDER TOUCH company operates various stores throughout Canada. The company also operates a premium store, which stocks top of the line products. The products at the premium store are high quality products selling at a premium price.

The premium store was created when Linda realized the need to have a premium brand in the TENDER TOUCH company brands portfolio. THE TENDER TOUCH company has a mix of different products, ranging from low quality cheap products to high quality premium products. Back in the days the company correctly forecasted the increase in demand for premium products. The company tried to dedicate a separate store for that, which was simply a typical THE TENDER TOUCH store, but with premium products only. The idea did not work well, the stores revenues, and profits declined substantially, so at that point the company started following a different approach, it fully redesigned one of its stores to become the premium store. A large amount of money was spent on interior dcor, and a PR campaign for this store.

Now the situation is changing, the economy is approaching the Peak in the business cycle, and its is expected that premium products demand will cool off. Some analysts expect the demand to decline in the coming years. Linda is concerned about this recent development, since she expects the premium store to experience declining profits and sales. She knows the TENDER TOUCH corporation wont be affected by this trend since it has all types of products, and some of these products will experience an increase in sales, when the business cycle phase changes.

Linda is willing to gradually change the product mix of the premium store. She is not sure what type of products does the store stock right now (Luxury, Inferior, or Normal)? And she is not sure what products to stock.

Deliverables, Format and Marking Scheme for This Weeks Case Study

Your task is:

1% explain what is meant by the business cycle. State the phases of the business cycle and describe what happens in each phase

1% explain what is meant by normal, inferior, and luxury goods. State why should business care about the type of products which they carry in their stores.

3% analyze the companys current situation and state the best course of action.

Note: you can assume any missing information, and you can use external resources. Clearly state your assumptions in your submissions. Your findings should be reported in a two-page word documen