- Recommend whether SP should close The Lido. Justify your answer. ( Shows understanding of factors affecting business performance of The Lido or the impact of closing/ staying open in context; A justified recommend- ation based on a developed two sided argument)

1 Swimming Pools (SP) SP is a public sector organisation. SP operates many swimming pools across country X. The main objective for SP is to provide a quality service to the local community. Each swimming pool is used by consumers from different market segments (see Table 1). Table 1: SP's market segments 5 Time when pool is used by this segment Daytime Market segment Schools which rent the pool for swimming lessons Children for fun swimming Adults for fitness swimming Weekends Evenings 10 SP currently uses price discrimination. Most of the swimming pools have a steady demand throughout each week. One of SP's swimming pools, The Lido, is currently making a loss. Table 2 shows the income statement for The Lido for the last 12 months. Table 2: Extract from The Lido's income statement ($000s) Revenue 280 15 Cost of sales 210 Gross Profit 70 SP Head Office allocated costs* 40 Overhead expenses 60 Profit/(loss) for the year (30) 20 *Each of SP's swimming pools must pay for some of the Head Office costs The Lido is based in an area with many schools that are under the control of the government. Unemployment in the area is high. The manager has reduced the price for customers who are under 18 years old or do not have a job. 1 Swimming Pools (SP) SP is a public sector organisation. SP operates many swimming pools across country X. The main objective for SP is to provide a quality service to the local community. Each swimming pool is used by consumers from different market segments (see Table 1). Table 1: SP's market segments 5 Time when pool is used by this segment Daytime Market segment Schools which rent the pool for swimming lessons Children for fun swimming Adults for fitness swimming Weekends Evenings 10 SP currently uses price discrimination. Most of the swimming pools have a steady demand throughout each week. One of SP's swimming pools, The Lido, is currently making a loss. Table 2 shows the income statement for The Lido for the last 12 months. Table 2: Extract from The Lido's income statement ($000s) Revenue 280 15 Cost of sales 210 Gross Profit 70 SP Head Office allocated costs* 40 Overhead expenses 60 Profit/(loss) for the year (30) 20 *Each of SP's swimming pools must pay for some of the Head Office costs The Lido is based in an area with many schools that are under the control of the government. Unemployment in the area is high. The manager has reduced the price for customers who are under 18 years old or do not have a job