OK, this block is, as ABBA would have put it, all about Money, Money, Money!  [Or Pink Floyd: ‘Money’!]

And why this image – anybody know?  It is from one of the (many) Treasuries at Delphi.  the great kings and warlords of the age used to make massive financial gifts for the privilege of having a positive prophecy from the gods!  Not unlike shareholders today maybe!!!

The point is that as you progress in your careers you will inevitably progress in responsibility too – and that often involves managing financial resources:

• bidding for budgets
• managing the budgets
• directing the use of the  financial resources secured
• justifying future budget bids based upon measurement of the Es [Economy, Efficiency, Effectiveness and Equity] relating to the returns to the expenditure of last year’s budget.

I am therefore going to give you details of a hypothetical company called ‘ColmarCo [which is based upon an agglomeration of other real companies which you might recognise] and I am going to set you up as teams of divisional managers and ask you to give me [in role as CEO/PDG] an honest, critical analysis of your Division’s recent performance and suggest how you could make your division ‘leaner’ and better performing.

You will need THREE teams – one for each major division (we will consider SustainoPak separately, together as one whole group). No duplication.  So here’s the Company and its divisions:-

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ColmarCo is a (hypothetical) company that is engaged in many elements of the Tourism Industry.  Although hypothetical, each division contains similarities with a number of real-life products, services and brands – try to spot them.  I have also added into the mix products/services/experiences which I think may well emerge in the future.

ColmarCo has three key divisions as outlined hereunder. YOU are the Divisional and Brand Directors.  I am your boss.  Hereunder you will find details of the basic brand products and services and an independent consultant’s analysis of brand and divisional performance. Y0 = the performance figures from 2 years ago.  Y1 = performance in the latest full year of trading (last year for which figures are available).

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• FlyCol: A budget airline with 100 planes operating in Western Europe and seeking to expand in Eastern Europe, the Far East and China. (Think a sort of  EasyJet or Ryanair)
• CoachCol:  A Europe-wide coach network operating in the countries to which FlyCol flies
• AutoCol: A Western Europe-wide hire car company with centres in most major cities and airports. (Think Europcar)
• Airside Services: a range of airport services from check-in, car valet service, cleaning etc.

Critical Divisional Analysis by TJ Business Analysis Ltd:  Transcol has performed well in the past, with FlyCol, in particular, posting spectacular growth.  This growth has slowed in Western Europe in the face of the twin pressures of new budget airline entrants to the market coupled with the major airlines finally beginning to compete at budget prices. Although TransCol has hopes that market and service extension in Eastern Europe will maintain such growth, this would seem unlikely.  AutoCol and CoachCol are beginning to perform better in the light of the rising cost of private car ownership and the development and positioning of their up-market coaching brand: ‘Elite’ which seems to be dispelling the old reality of coach trips and holidays being of poor quality and low price.  ‘Airside’ is a comparative newcomer with truly impressive performance to date and strong growth possibilities, but starting from a modest base.

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• HoteloCol: A range of 120 hotels with sub-brands at 5* to 3* level situated in most western European Cities and towns, particularly, France, UK and Germany. (Think Accor)
• AppartoCol: 50 x Suite-style accommodation units, usually co-located with appropriate HoteloCo sites.
• ResortoCol: 15 x All-Inclusive Leisure Resorts, located principally in the Caribbean, and Far East.(Think Sandals)
• RoadoCol: 200 x Budget Hotels throughout Western Europe and rapidly developing in the new accession countries of the EU. Most have been developed courtesy of an alliance with petrol companies like Shell, BP, Total and Agip where land has been made available at motorway and major road service stations. (Think Campanile, F1)  [PS… why DOES the Agip animal logo have one more leg than it strictly needs?]

Critical Divisional Analysis by TJ Business Analysis Ltd: The HoteloCol operations have been having a tough time of late and it seems likely to continue when set against the continued success of the budget hotel, the constraints upon corporate Business Travel expenditure accounts and the increasing use of video-conferencing, internet, email and other means of communication.  AppartoCol and ResortoCol seem to have just about held their own in competitive markets (but their continued performance should be closely monitored), whereas RoadoCol would appear to be the only success story.  In the light of the above, if the performance of certain sub-divisions does not improve, the Division should perhaps consider the re-distribution of its assets and holdings.

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Division 3.  CaterCol

La Bouffe:  the umbrella brand for all CaterCol’s operations which comprise:

• Auto-Bouffe. A chain of 180 roadside restaurants on most auto-routes and highways in France, Germany, Italy and Spain: often co-located with Roado-Col accommodation units.
•  A La Bouffe: A franchise operation of 62 restaurants at the upper end of the market throughout France.
•  Techno-Bouffe: A new and fast-growing wholly-owned chain aimed at the 12-20 age range, combining the very best in online gaming and communications technologies with low-priced fast-food and drink.   90 sites in France and the UK usually located close to universities, secondary schools and colleges.
•  Bio-Bouffe:  Launched last year, (currently with only 5 wholly-owned units, but hoping for rapid franchise-based expansion) this chain hopes to capture the ‘first-mover advantage’ by colonising very early the fast-growing market for fast, healthy, seasonal organic food which is locally sourced from small producers.  The brand embodies common, omni-present values but non-identical menus as they are based upon local produce, ‘terroir’ cooking styles etc.

Critical Divisional Analysis by TJ Business Analysis Ltd:  An interesting ‘family’ with both ‘general’ and ‘niche’ markets, traditional and avant-garde. Auto-B and A La B are reliable and predictable performers in today’s markets whereas the company has ‘taken a flyer’ with Techno-B and Bio-B in attempting to break new ground in catering by appealing to highly specific markets.  Bio-B is clearly high-risk in that to take the first-mover leadership advantage ‘early’ can sometimes prove to be ‘too early’, nevertheless, first turnover postings appear encouraging.  If it works, the ‘trick’ will be to rapidly expand the operation to avoid the competition carving a share.

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SustainoPak is a ‘ground-floor’ investment in a revolutionary new form of packaging for almost all consumer products.  This was based upon a business idea coming out a University of Haute Alsace ‘Incubator’ company which combined the vision and technical expertise of four individuals from a number of critical fields in which the university is engaged.

ColmarCo owns 30% of the equity in the company [the remaining shares being held by the four key players cited above and UHA 10%].  The initial investment by ColmarCo was just 1M Euros to register the patent and set up the company: a high-risk / high-return investment.

The Unique Selling Proposition of the company is that it offers a 100% bio-degradable and sustainable solution for almost ANY packaging requirement.  Independent research has shown that as the packaging agent is based upon the use of a natural starch or Mycelium and can be ‘cultured’ / grown naturally at minimal cost, it will be possible to match and possibly undercut the price of any plastic competitor products. Offering a product (at no greater cost than the presently unsustainable alternative) which is guaranteed to decompose into the earth without any pollution effect whatever within in six months and at a price to undercut existing supply appears to be a world-beating opportunity and ColmarCo is particularly anxious to grow this business urgently by making major investments while the patent offers a potentially sustainable business advantage.  In its first year of trading (Y-5), the company produced a turnover of 250,000 Euros and broke even.  Forecasts for future years suggest a meteoric growth is possible, although it is a little too early to be assuming such figures will occur.   Subject to appropriate capital investment, and assuming it has proven possible to break into the supermarket and industrial packaging market, projections suggest:

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ColmarCo is considering purchasing the remaining equity in the company with a view to:

• using the ‘Sustaino’ name as a brand overlay for other elements in its existing product range
• diversification into non-leisure production / services in the light of the increasing role of Sustainability in all our lives.

 TJFB prot