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3.0 Strengths and weaknesses of Bettina’s boutique

From the Exhibit 1, it can be seen that the amounts of sales are 21892 and the amounts of net profit are 373, so the sales net profit rate is 2.24%. The figure is too low which means that the profitability of Bettina’s boutique is not very good. And at the same time, it can be seen that the expenses of advertising are 4673 which accounts for 15.93% of sales. This figure is so high impacting the sales net profit rate. From this point it can be seen the marketing strategy of Bettina’s boutique is facing some problems. This is a weak point for Bettina’s boutique. If Bettina and Bill can reduce 10% of the expense of advertising, then its net profit can be reach 840.3 and the sales net profit rate can increase to 3.83%. These figures show that the net profit will increase by 71.12% and the sales net profit will increase by 71%. So in the future Bettina and Bill should think about to changing their marketing strategy and try their best to decrease the expense of advertising. In addition, according to the financial statement, the total costs (except cost of sales) of Bettina’s boutique are 2680 which is very close to gross profit, so it can be seen that their management is another weak point. In the near future, Bettina and Bill need to increase their management ability. Off course, in order to analyze the strengths and weaknesses of Bettina’s boutique, it should take on comparative study and analyze the business performance of other clothing stores similar to Bettina’s boutique. Exhibit 2 is a comparative ratios report. To Bettina’s boutique, it can be seen that the number in group about sales is No.2 and it locates in upper quartile. And at the same time, the number in group about the sales per FTE staff and cost of sales are No.1 and No.8 and one locates in upper quartile, the other locates in lower quartile. In addition, the number in group about the occupancy costs is No.7 and the number in group about the equipment expenses and other overheads is No.5 and they locate in lower quartile. These figures show that Bettina’s boutique has great strengths in these aspects. In the future, Bettina’s boutique should maintain its strengths which can increase its profitability and net profit.


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