(pasted from info on Blackboard)
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This semester, we have partnered with Snowcentral, a family run business that is struggling in the current COVID-19 world.
About the business
Snowcentral is a family run business, founded by the Bishop family in 1993. From its inception, the business has catered for budget minded skiers and snowboarders with second-hand clothing and hardware, and as the ski industry has grown in Australia, now provides a wide range of new and second hand snow clothing, hardware and accessories, catering for budget through to high performance customers. The store also provides an extensive range of rental clothing, skis, snowboards, boots and snow-chains. Snowcentral also boasts one of the most advanced alpine sports workshops in the country with its Wintersteiger Tunejet machine, for the most precise edging and stone-grinding available for skis and snowboards. The business has a great reputation in the boot fitting side of the industry, with Masterfit certified boot fitters who can customise ski and snowboard boots to practically any foot shape with a high level of reliability.
Snowcentral was an early mover in the digital shopping space, having a dedicated website for two decades that remains fresh and easy to navigate. With a focus on domestic sales (international sales are restricted due to supplier limitations), the website continues to enable the business to extend its reach beyond Southeast Queensland to all of Australia.
Issues facing the business
Discussions with the manager identified the following issues facing the business:
· Just like every other small business in the country, Snowcentral has been impacted by market changes brought on by COVID-19. A store focusing solely on the alpine travel industry is already an oddity in Brisbane, as there is a long flight and/or drive associated with anyone from Southeast Queensland travelling to the snow. This means that any of the store’s customers needs to travel interstate or internationally for their intended holiday. With domestic and international border lockdowns, Snowcentral’s customer base is essentially in hibernation until such time as the borders reopen.
· At its peak, the business employed 28 people during peak selling seasons. As we come into the latter stages of the current Australian ski season, there are only 7 people employed currently to run the store (1 full-time manager, 3 part-time assistants, and 3 casual assistants) required to meet current demand. In the early weeks of the 2021 ski season, the business had to (re-)hire staff to meet an influx of demand from domestic/state borders re-opening coupled with above average snowfall reported in the media in May and June. However, as border restrictions were re-introduced shortly after this, the demand for snow gear, and hence the number of customers to the store, dropped to an almost stand-still.
· Many customers who had purchased snow gear early in the season were left without a place to travel. While larger retail chains may be able to afford a no questions asked returns policy, this family run business has always maintained that refunds would only be provided if goods are faulty (i.e. no refunds for those who no longer want or need the goods purchased). While many customers understand this, some customers have been vocal in their displeasure at this policy.
· Much of the stock on the shelves and in storage are considered “last season”, with only some new season stock available. COVID-19 effectively cancelled the 2020 ski season, and new season stock typically arrives to Australia in late April each year, but was delayed due to impacts of global supply chains. This means that the vast majority of stock at Snowcentral is considered to be 2019 and 2020 stock. As snow gear retailers in New South Wales have enjoyed most customers through the 2021 ski season being able to access the Australian Alps, there is a growing concern that Snowcentral is holding around $1million of stock that other snow gear retailers in the country will consider “old” in 2022.
· While travel to the snow has essentially stopped for Queenslanders, the store has continued to bring in some revenue. Ski and snowboard owners bringing their equipment in for servicing that had been overdue from previous years, and some incidental sales to tradespeople seeking hard wearing socks and warm gloves. Many items sold in the store could be considered as useful for purposes other than holidays to the snow. For example, shell jackets (jackets without insulation) could be useful for hiking, and some cold weather travel destinations remain open (i.e. cruises to Antarctica), so there is potential for the business to find new ways to connect people to the goods currently on stock.
What is Snowcentral’s management looking for?
The General Manager of the store, Ali, noted:
“We need to attract revenue to survive as a business. We’ve tried a few things to identify non-essential expenses and cut these from our operating budget, but there are still some aspects of the business that we could potentially improve. For example, our shipping of internet sales goes through a freight management company [ShipIt], which takes a small percentage cut of the internet sales revenue. Brand awareness might be part of the solution – a decade ago people would find the store through word of mouth, but we seem to get more and more customers saying they didn’t know there was a snow gear shop in Brisbane. There is no appetite to add a different product line to our shelves as we already have so much stock to sell, so the key problem we need solutions for is to find new or different ways for us to bring customers in and get stock out. I’m really interested to see what ideas [the BSB399] teams can come up with.”
What your team needs to do now
Apply the Structured Problem Solving process to identify a key issue that your team can apply its strengths to answering, and develop a robust solution that can be pitched to the client organisation.
The lecture and tutorial content covered each week in the unit will help your team to respond to this challenge. Please liaise with your coach/tutor to help you develop and vet your initial ideas.
Please note that there will be an opportunity in Week 7 of semester to ask questions to your client organisation. For this reason it is essential that your team discusses this issue brief, work on identifying a core issue from the Week 6 tutorial activities, and have questions ready to ask the client at the beginning of Week 7 so that you can receive feedback on your thinking as you formulate your ideas. This will ensure that your ideas/solutions more accurately meet the real world needs of the client.