Answer:

1.) The announced turnaround strategies for Circle K with its corresponding pros and cons includes the following;

a.) Location Analysis

Pros:

• It allows the company to know its customers well, which helps the business gain a competitive advantage.
• It gives the company access to a comprehensive trade network. This can reduce tariffs, making it cost-effective to enter new markets and make its products cost-efficient with similar products.
• It allows the company to have strategic market proximity to minimize travel time while maximizing the number of potential customers. 

Cons:

• A lot of stores were in oversaturated areas which increases market competition. Hence, the company's sales and profit will be compromised.
• The marketers of the company will be the ones to process the location-based data of the target market, which is quite expensive and complex.
• The rising costs and other expenditures put the company at risk for bankruptcy.

 

b.) Control Cost and Revenue

Pros:

• It eliminates wastes, losses, and inefficiencies of the company by fixing standards for everything.
• The company can decide whether to create or purchase a product in a highly competitive market. The management team can rightly pick the best alternative out of many alternatives. 
• Efficient and improved methods of production are followed by the company wherein it leads to cost reduction.

 

Cons:

• The company will have limited resources to utilize because everything is put on a budget. Unfortunately, this will cause the company to have a reduction in revenue and net profit index.
• The cost is ascertained based on the full utilization of capacity. If capacity is partly utilized, the cost may not be accurate.
• The cost of the previous year is not the same in the succeeding year. Hence, the cost data is not highly useful. 

 

c.) Differentiate (Revenue = average dollar transaction sale * number of customers)

Pros:

• The company will have a solid value proposition for its products. Product differentiation will give the company's prospective customers added value to make them feel valued and appreciated.
• It creates brand loyalty and credibility. Every time customers see the company's products on social media and advertisements, they will know exactly what the brand represents.
• With product differentiation, the company can compete in several areas other than price. The company can be innovative in style, quality, features, etc.

 

Cons:

• Product differentiation doesn't necessarily guarantee that consumers will find the value that separates the company's products from other brands.
• As technology progresses each year, the differentiation of the company's product might no longer provide value to customers.
• Pursuing a differentiation strategy entails a lot of time, energy, and resources. This can burden research and development teams, product manufacturers, and even the company's profit margins. 

d.) Marketing mix sensitivities and synergies need to be considered while estimating sales and profit consequences of marketing decisions (i.e., elasticity and cross elasticity)

Pros:

• It simplifies and brings together different concepts of marketing into one, making Marketing easier to do and manage
• Enables a company to vary its marketing activities according to its resources, market conditions, and customer needs
• Allows separation of marketing from other company activities and delegation of marketing tasks to specialists.

Cons:

• The marketing mix and synergies consider consumers passive. It will not allow interaction and can not capture relationships.
• It does not include the unique elements of service marketing.
• It does not consider consumers' behavior, but it is internally oriented.

 

2. What is the likely 1991 sales and profit impact of Circle K's announced turnaround strategy and your assessment of the strategy's potential success?

 

In the 1991 sales and profit impact of Circle K's, its reliance on fuel makes it sensitive to fuel costs that may fluctuate wildly. Whereas accounting for a few seventy-two of sales, fuel provides forty-sixth of lucre. Tobacco products account for nearly four-hundredth of the merchandise and repair revenue. Couche-Tard additionally sells brands of cigarettes created for the corporate that may expose it to proceedings.

The company launched its straightforward pay loyalty program in U.S markets, providing every day fuel discounts to its most loyal customers. Couche-Tard acknowledges sales of merchandise to bound freelance operators and franchisees. It is made of the company's distribution centers and sales of road transportation fuel.

The profit impact of Circle K's announce turnaround strategy is highly favorable because the corporate saw a two hundred percent increase in Circle K Southeast Facebook engagement and captured three hundred new Facebook fans. Campaign efforts attained 830,500 impressions among targeted Facebook users and 532,000 media impressions from coverage that ran up to and through the day of the event. Furthermore, this sales and profit impact has increase the international expansion of Circle K's, and significantly improve its revenue and net profit index across national borders.

 

My assessment of the strategy's potential success is that the level of quality customer service might change from customer orientation to a sales orientation as salespersons focus more on revenue-related objectives. This is highly favorable for the company because their business model will benefit not only customers but also the company itself. Their sales promotions campaigns that are designed to impact the company's market share are very commendable because Circle K was able to achieve the internal rate of return on the sales plan.