business model

1

MGMT20143: Marking Rubric

Assessment 1: Business Model Deconstruction

Key Criteria

Excellent

Very good

Above average

Satisfactory

Unsatisfactory

Poor

Not shown

Context: 10%

Provide a succinct description of the business, the industry in which it operates, the market or markets it serves, and the products and services it provides.

Exemplary and succinct description of the operating context, marketplace, and products and services the selected business provides.
Very sound and succinct description of the operating context, marketplace, and products and services the selected business provides.
A credible description of the operating context, marketplace, and products and services the selected business provides.
A very general description lacking succinctness and/or specificity regarding operating context, marketplace, and products and services the selected business provides.
Poor or limited description lacking succinctness and/or specificity regarding operating context, marketplace, and products and services the selected business provides.
Extremely limited description lacking succinctness and/or specificity regarding operating context, marketplace, and products and services the selected business provides.
Description of the business, industry, the market, the products and services absent

Business Model Canvas:
15
%

Describe the business model canvas of the selected business using the nine building blocks in Osterwalder & Pigneur.

Exemplary description of the business model of the selected business using the nine building blocks in Osterwalder & Pigneur.
Very sound description of the business model of the selected business using the nine building blocks in Osterwalder & Pigneur
A credible description of the business model of the selected business using the nine building blocks in Osterwalder & Pigneur.
Rudimentary description of the business model of the selected business using the nine building blocks in Osterwalder & Pigneur.
Poor or limited description of the business model of the selected business using the nine building blocks in Osterwalder & Pigneur.
Extremely limited description of the business model of the selected business using the nine building blocks in Osterwalder & Pigneur.
Business model canvas absent

Key Relationships:
15
%

Explain the key relationships that exist across the nine building blocks detailed above.

Exemplary explanation of the key relationships that exist across the nine building blocks.
Very good explanation of the key relationships that exist across the nine building blocks.
A credible explanation of the key relationships that exist across the nine building blocks.
Rudimentary explanation of the key relationships that exist across the nine building blocks.
General failure to explain the key relationships that exist across the nine building blocks.
Almost complete failure to explain the key relationships that exist across the nine building blocks.
Key relationships in above not discussed at all

Critical Success Factors:
10
%

Identify and discuss the critical success factors the business has to get right to achieve sustainable success.

Exemplary identification and detailed discussion of the critical success factors for the business.
Very good identification and discussion of the critical success factors for the business.
A credible identification and discussion of the critical success factors for the business.
Rudimentary identification and discussion of the critical success factors for the business.
General failure to identify and discuss any of the critical success factors for the business.
Almost complete failure to identify and discuss any of the critical success factors for the business.
Critical success factors not touched on

Downside Risk: 10%

Evaluate what will contribute to downside risk.

Very candid and balanced examination of aspects that may increase the downside risk.
Reasonably candid and balanced examination of aspects that may increase the downside risk
Somewhat candid and reasonably balanced attempt to examine aspects that may increase the downside risk
Very basic analysis and no real attempt to examine aspects that may increase the downside risk
Very limited analysis to examine aspects that increased the downside risk
Nearly no analysis to examine aspects that increased the downside risk
Downside risk analysis absent

Recommended Changes:
10
%

Discuss the changes you would make to the business model if this was your business

Exemplary identification and examination of key changes you would make to improve the business.
Clear identification and examination of key changes you would make to improve the business.
Reasonable identification and examination of key changes you would make to improve the business.
Quite basic identification and limited examination of key changes you would make to improve the business.
Very limited identification and examination of key changes you would make to improve the business.
Nearly no identification and examination of key changes you would make to improve the business.
No mention of recommended change
Quality of critical thinking
:
15
%

A
bility to critically evaluate evidence, and demonstrate the ability to identify strengths and weaknesses logically

Very high levels of showing ability to weigh and evaluate, compare and contrast evidence.
Clear evidence of ability to weigh and evaluate, compare and contrast evidence.
Some evidence of ability to weigh and evaluate, compare and contrast evidence..
Limited demonstration of ability to weigh and evaluate, compare and contrast evidence.
Very limited demonstration of ability to weigh and evaluate, compare and contrast evidence.
Very limited demonstration of ability to weigh and evaluate, compare and contrast evidence.
No evidence of critical thinking
Quality of communications
:
15
%

Ability
to clearly and professional deliver information both from the scholarly and non-scholarly sources and maintain a clear line of argument

Perfect or near perfect quality in terms of clarity of expression, clear layout, accurate referencing.
Excellent quality in terms of clarity of expression, clear layout, accurate referencing.
Reasonable quality in terms of clarity of expression, clear layout, accurate referencing.
Mixed quality in terms of clarity of expression, layout, clear layout, accurate referencing.
Low quality and effort in terms of clarity of expression, clear layout, accurate referencing.
Very low effort in terms of clarity of expression, clear layout, accurate referencing.
Extremely poor quality, with absence of any care taken

LATE ASSESSMENT PENALTY

For each day, or part thereof, a penalty of 5% out of 100% will be deducted from the work submitted. Submitting an incorrect file is not excused from the penalty.

Charles tyrwhitt shirts

Assignment 1

MGMT

2

01

4

3

Think BiG

Lecturer

Student

12

34

5

6

7

8

30 march 2018

Charles Tyrwhitt Shirts Student

12345678

Page 14 of 14

Executive summary

This report explores the Charles Tyrwhitt business model using the nine component Business Model Canvas approach to identify the features that had such an immediate impact on Australian fashion retailing. The analysis relies on publically available information.

Charles Tyrwhitt’s online model draws on core elements of a direct mail order business relying heavily on renting mailing lists of potential

customers

with the propensity to buy using the internet capture orders.

Growth in inventory holdings a

nd

a slowing of the inventory cycle have been compounded by opening new stores in low

growth

markets and largescale owner capital drawings.

Charles Tyrwhitt can reshape its business model and avoid being disrupted by potential new entrants. The following are recommended to achieve future growth:

· Move from a propensity driven to a job to be done customer segmentation model

· Better understand whether the disruptive innovation concept of zero consumption competition applies to CT

· Halt UK store growth and focus on applying the lessons learned in Germany and Australia to Scandinavia and other English speaking markets respectively.

Charles Tyrwhitt Shirts Student 12345678 Page 3 of 14

Table of Contents

Executive summary

2

Table of Contents

3

List of Tables

3

I.

Introduction

4

II.

Business model

4

A.

Building blocks

4

1.

Customer segments

4

2.

Key partners

4

3.

Value proposition

5

4.

Key activities

5

5.

Channels

5

6.

Revenue streams

5

7.

Cost structure

6

8.

Key resources

6

9

.

Customer relationships

6

B.

Interrelationships

6

C.

Critical success factors

6

D.

Downside risks

7

E.

Business model changes

7

III.

Conclusion

7

IV.

Recommendations

8

Appendix 1 – Charles Tyrwhitt Business Model Canvas

9

Appendix 2 – Charles Tyrwhitt performance benchmarks & comparators

10

References

12

List of Tables

Table 1 Charles Tyrwhitt UK & US mailing list profiles

4

Table 2: Charles Tyrwhitt web referral commissions Australia

5

Table 3: Charles Tyrwhitt sales supported per store by major market

5

Table 4: Charles Tyrwhitt Australian sales (2013-2016)

6

Table 5: Charles Tyrwhitt Business Model Canvas

9

Table 6: Charles Tyrwhitt Australian fashion industry comparison

10

Table 7: Charles Tyrwhitt LLP & Shirts Ltd financial performance (20

11

–

2017

)

11

I. Introduction

In 2012 Charles Tyrwhitt (CT) launched an Australian website selling men’s English-style cotton business shirts (Loadman, 2013) with the promise to ‘make it easy for men to dress well’ (Charles Tyrwhitt Shirts Ltd., 2017) and save money buying proper quality shirts in multiples of four. The launch followed the Australian arrival of two fellow tennants from London’s Jermyn Street, the famed home of English shirtmakers for 200 years. Thomas Pink and TW Lewin both opened Australian stores in 2012 (Loadman, 2013). CT offered a web-based shopping experience tailored to men’s apparent dislike of shopping drawing on the infrastructure of a traditional mail-order business. Since 1986 CT has sold over 34 million made-to-measure shirts off the shelf (Confessions of a shirtmaker, 2017) in its principal markets in the UK, USA, Germany and now Australia.

II. Business model

CT runs a traditional high/low retail strategy (Kaufmann, Smith, & Ortmeyer, 1994) also drescribed as ‘was/now’ (ACCC 2016) where new season stock is quickly discounted and sold cheaply driving sales and moving stock. Their Australian arrival was accompanied by a huge direct marketing and newspaper insert brochure campaign that also sold Jermyn Street in seeming equal measure to CT itself.

A. Building blocks

Osterwalder & Pigneur’s (2010) nine building blocks approach details CT’s business model (see Appendix 1 – Charles Tyrwhitt Business Model Canvas).

1. Customer segments

The defining feature CT’s direct mail advertising is precisely targeting people with a propensity to buy by renting lists. CT now rents its own lists out. Table 1 below describes affluent professional males.

Table 1 Charles Tyrwhitt UK & US mailing list profiles

Note: nd not disclosed

Source: (NextMark Inc, 2018), (NextMark Inc, 2018a)

2. Key partners

Access to mailing lists, newspapers and third party referral websites (see Table 2) are essential for CT to develop brand awareness and generate sales traffic.

Table 2: Charles Tyrwhitt web referral commissions Australia

Source: (Charles Tyrwhitt Shirts Ltd., 2017)

Australia Post and couriers to deliver brochures, catalogues, customers orders and product returns.

Manufacturers in Vietnam, Sri Lanka and India ensure consistent product quality and supply at lowest cost.

3. Value proposition

i. Make it easy for men to dress well,

ii. Make Jermyn Street quality and style affordable for everybody by cutting out the middle man and selling direct. (Confessions of a shirtmaker, 2017)

4. Key activities

Reliable brochure mailing and courier delivery of finished orders accepted over the internet.

A direct mail advertising ‘match back’ process links individual purchases with the particular offer presented to the customer and the rented mailing list by a code (Data Services Inc,

2015

).

5. Channels

Table 3 details CT sales supported per store in each major market assuming Jermyn Street store supports all sales globally. Australia, Germany and the Rest of the World have no in country stores and buy exclusively online but support 26 percent of 2015 sales at £44.16 millon.

Table 3: Charles Tyrwhitt sales supported per store by major market

Source: (Charles Tyrwhitt LLP, 2016)

6. Revenue streams

In 2012 CT recognised approximately £1 million of Australian turnover driven by former

expats

that had jumped to £10 million by 2014 (see Table 4). Long term operating profit averages 10 percent (see Table 7)

Table 4: Charles Tyrwhitt Australian sales (2013-2016)

Source: (Data Services Inc, 2015), (Charles Tyrwhitt LLP, 2016), (Speed, 2014)

7. Cost structure

Stock costs are 40 percent of the sale price (see Table 7). Distribution and selling costs are about 30 percent of revenue while administration costs account for approximately 20 percent.

8. Key resources

Mailing lists and match-back capabilities/infrastructure are indispensible for direct mail advertisers, along with a website to accept orders.

9. Customer relationships

Regular direct mail and email of current offers, promotions and catalogues to past customers and potential future prospects supported by an internet order platform.

B. Interrelationships

CT prints and mails 35 million brochures annually with 15 million sent to prospective buyers identified from rented lists (Data Services Inc, 2015) that generates 75 percent of sales turnover (Elejalde-Ruiz, 2014). The linkage between mailing houses, key partners, that rent lists to CT of potential buyers, customer segments, is foundational.

The CT value proposition ‘make it easy’ links the customer to the cost advatages of a direct channel online/mail order distribution and the revenue strategy of multibuy bundles of four shirts ‘affordable’. ‘Quality and style’ also links offshore suppliers with cost and revenue through profit margins.

CT’s 130,000 square foot warehouse in the UK fitted with 30,000 square feet of racking ensures customer segment demand is met by sufficient stock to avoid missed revenue opportunities due to stock run outs (Roberts, 2017). It also allows for apparent mass customisation by holding stock in multiple sleeve lengths and fits thereby linking customer demand for well fitting shirts and revenue opportunity.

Linking the cost and revenue is inventory mangement and the ‘was/now’ pricing tactic (ACCC, 2016) that ensures old stock doesn’t become dead stock by continuous rolling discounting of slow moving stock. It delivers savings to customers and clears stock, albeit at a reduced margin.

The centrality of the Jermyn Street brand to CT’s marketing success is interesting. Cooperating with Thomas Pink and TW Lewin by promoting Jermyn Street quality separately CT itself, makes an interesting link between lost revenue through competition and key partners that support sales. This was first described by Nash (1950) and extended (1953).

C. Critical success factors

“I used to run a dodgy old catalog business and suddenly I was running a very sexy Internet business, almost overnight”

Nick Wheeler, founder Charles Tyrwhitt (Elejalde-Ruiz, 2014)

The match-back process is fundamental by linking the customer characteristics that decribe a propensity to buy on the rented mailing list, with the offer presented and the composition of purchase outcome. Feedback refines insights into future list selection and offer creation (Data Services Inc, 2015).

Continuous process improvement and the application of capital investments allows CT to improve speed of fulfilment at lower cost and with fewer errors. Recent commissioning of a conveyor system in the warehouse facility enables 7500 orders to be processed each day by two people rather than seven or eight staff previously. (Roberts, 2017)

In 2016 CT stores supported on average £6,778,000 in sales for each store against between $500,000 and $776,000 on average in Australian stores. Table 3 above breaks this down by CT primary market to the point where a single store in London’s Jermyn Street supports £44,160,000 in sales in Australia, Germany and the Rest of the World.

D. Downside risks

In the five years between 2011 and 2015 CT owners withdrew and distributed £44,971,000 (Table 7) potentially impeding CT’s ability to grow and invest.

CT holds stock for on average from 75 days in 2011 to 131 days in 2016 (see Table 7). Australian fashion retailers hold between 90 and 100 days (Table 6). Old stock is harder to move and is often written off at great financial cost.

The ‘was/now’ tactic resulted in the ACCC fining CT $10,800 for essentially fabricating the ‘was’ price; no customers had purchased at the high price. If trust in the credibilty of the retailer diminishes the business model is at risk of failing.

Movements in foreign exchange (FX) markets can add costs to global businesses. CBA (2015)

reported

70 percent of retailers had FX induced cost increases but only 43 percent had raised prices. Further the UK’s exit from the European Union is predicted to add a further 10 percent to costs (Bridge, 2017).

E. Business model changes

I would move toward better understanding buyer behaviour moving away from propensity to causality (Christensen et al, 2016). I would seek to observe buyers and precisely understand what job needs to be completed that gives rise to a purchase.

CT’s success may in part be attributable to Christensen’s (2016) disruptive innovation concept of competing against zero consumption. Perhaps men didn’t buy shirts at all and their partners, parents and children were in fact purchasing shirts in department stores for them. Web based purcahsing by men themselves possibly was an ideal market entry point that needs to be understood.

Expansion in high growth, low cost markets such as Germany and Australia is potentially undermined by the expansion of stores in low growth markets such as the UK and France (BCG, 1970). I would halt UK store growth. Expand online offerings in Scandinavia following the learnings from the Germany and similarly expand into Ireland, Canada and

New

Zealand applying Australian lessons.

III. Conclusion

The preceding analysis is based on public information. CT has been wonderfully successful in the application of old school direct marketing practices to the cost and distributional efficiencies of the internet. The future is not without risk. Perhaps the greatest risk is that without next level insights, CT may be open to disruption itself.

IV. Recommendations

· Move from a propensity driven to a job to be done customer segmentation model
· Better understand whether the disruptive innovation concept of zero consumption competition applies to CT
· Halt UK store growth and focus on applying the lessons learned in Germany and Australia to Scandinavia and other English speaking markets respectively.

Appendix 1 – Charles Tyrwhitt Business Model Canvas

Table 5: Charles Tyrwhitt Business Model Canvas

Source: (Osterwalder & Pigneur, 2010, p. 44)

Appendix 2 – Charles Tyrwhitt performance benchmarks & comparators

Table 6: Charles Tyrwhitt Australian fashion industry comparison

Source: (Charles Tyrwhitt Shirts Ltd, 2016)

Table 7: Charles Tyrwhitt LLP & Shirts Ltd financial performance (2011-2017)

Source: (Charles Tyrwhitt LLP, 2011-16), (Charles Tyrwhitt Shirts Ltd, 2016), (Bectin Ltd, 2018)

References

Asher, N. (2013, Sep 2). Charles Tyrwhitt. Facebook. Retrieved 03 20, 2018, from https://en-gb.facebook.com/CharlesTyrwhitt/posts/555871587799306
Australian Competition and Consumer Commission. (2016, Sep 16). Charles Tyrwhitt pays penalty for an alleged false or misleading ‘was/now’ pricing representation. Media Release. Retrieved 03 13, 2018, from https://www.accc.gov.au/media-release/charles-tyrwhitt-pays-penalty-for-an-alleged-false-or-misleading-%E2%80%98was-now%E2%80%99-pricing-representation
Bain & Company. (2014, July). Nick Wheeler. Alumni Newsletter. Retrieved 03 16, 2018, from http://www.bain.com/careers/why-bain/future-career-potential/nick-wheeler.aspx
Bectin Ltd. (2018, Jan 26). Filing History 09630291 2017 Annual Accounts. Retrieved 03 18, 2018, from Companies House UK: https://beta.companieshouse.gov.uk/company/09630291/filing-history
Bridge, S. (2017, May 14). ‘I backed Brexit but it’s cost me my shirt deal’: Four for £100? Not any more, says Charles Tyrwhitt founder… it will be £110. Financial Mail on Sunday. Retrieved from http://www.thisismoney.co.uk/money/news/article-4502836/I-backed-Brexit-s-cost-shirt-price.html
Business Wire. (2017, Oct 19). Charles Tyrwhitt Selects Tinyclues Platform for AI-Driven Customer Marketing Campaigns. Retrieved 03 23, 2018, from Venture Beat: https://venturebeat.com/2017/10/19/charles-tyrwhitt-selects-tinyclues-platform-for-ai-driven-customer-marketing-campaigns/
Cameron, A. C., & Trivedi, P. K. (1990). Regression-based tests for overdispersion in the Poisson model. Journal of Econometrics, 46(3), 347-364.
Charles Tyrwhitt LLP. (2011-16). Filing History OC305896 Annual Reports. Retrieved 03 18, 2018, from Companies House UK: https://beta.companieshouse.gov.uk/company/OC305896/filing-history
Charles Tyrwhitt Shirts Ltd. (2016, Nov 24). Filing History 02914928 2016 Annual Accounts. Retrieved 03 18, 2018, from Companies House UK: https://beta.companieshouse.gov.uk/company/02914928/filing-history
Charles Tyrwhitt Shirts Ltd. (2017). Retrieved 03 13, 2018, from Charles Tyrwhitt: https://www.ctshirts.com/au/home
Christensen, C., Hall, T., Dillon, K., & Duncan, D. (2016). Know your customers’ “jobs to be done” . Harvard Business Review, 54-62.
Citrina, A. V., Stem, D. E., Spangenberg, E. R., & Clark, M. J. (2003). Consumer need for tactile input An internet retailing challenge. Journal of Business Research, 56, 915 – 922.
Commonwealth Bank of Australia. (2015). Retail Insights. Retrieved 03 15, 2018, from CommBank.
Confessions of a shirtmaker (2017). [Motion Picture]. Vimeo. Retrieved 03 15, 2018, from https://vimeo.com/198329586
Cormack, L. (2016, Sep 17). Charles Tyrwhitt pays $10,800 ACCC fine for misleading pricing on shirts. The Sydeny Morning Herald. Retrieved 03 13, 2018, from https://www.smh.com.au/business/consumer-affairs/charles-tyrwhitt-pays-10800-accc-fine-for-misleading-pricing-on-shirts-20160917-grihuk.html
crdb. (2017, Sep 27). Australian Members – Part II – if you read the first post, you’ll get what this is all about. Retrieved 03 13, 2018, from https://www.styleforum.net/threads/australian-members-part-ii-if-you-read-the-first-post-youll-get-what-this-is-all-about.518027/page-382#post-9019897
Data Services Inc. (2015, Aug 19). How Charles Tyrwhitt Does It With Mail. Retrieved 03 22, 2018, from http://www.dataservicesinc.com/newsletter/how-charles-tyrwhitt-does-it-with-mail/
Elejalde-Ruiz, A. (2014, Oct 22). Charles Tyrwhitt founder offers business lessons. Retrieved 03 23, 2018, from Chicago Tribune: http://www.chicagotribune.com/business/ct-retail-noteook-1022-biz-20141021-story.html
Fenech, C., & Perkins, B. (2015). Made to order: The rise of mass personalisation. Deloitte LLP, The Deloitte Consumer Review. Retrieved 03 12, 2018, from https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/consumer-business/ch-en-consumer-business-made-to-order-consumer-review
Graham, N. (2017, Feb 7). My First Million: Nick Wheeler, Charles Tyrwhitt founder. Financial Times. Retrieved 03 16, 2018, from https://www.ft.com/content/a421b5b4-bc85-11e6-8b45-b8b81dd5d080
Jim. (2012, Sep 21). Online comment following ‘Democratising tax evasion’. The Drum . Retrieved 03 20, 2018, from http://www.abc.net.au/news/2012-09-21/janda-democratising-tax-evasion/4272502
Kaufmann, P., Smith, N., & Ortmeyer, G. (1994). Deception in retailer high-low pricing: a ‘rule of reason’ approach. Journal of Retailing, 70(2), 115-138.
Loadman, J. (2013, Apr 18). Best of British for web-savvy shirt shoppers. The Age. Retrieved 03 12, 2018, from https://www.theage.com.au/lifestyle/best-of-british-for-websavvy-shirt-shoppers-20130418-2i1bs.html
Mayer, E. (1951). Direct Mail Advertising. Harvard Business Review, 37-51.
Nash, J. (1950, Jul). The bargaining problem. Econometrica, 18(2), 155-162.
Nash, J. (1953). Two-person cooperative games. Econometrica, 21(1), 128-140.
NextMark Inc. (2018, Jan 10). Charles Tyrwhitt – UK Buyers (Masterfile) Mailing List. Retrieved 03 28, 2018, from Nextmark Mailing List Finder: https://lists.nextmark.com/market?page=order/online/datacard&id=262864
NextMark Inc. (2018a, Jan 31). CHARLES TYRWHITT CATALOG BUYERS Mailing List. Retrieved 03 28, 2018, from Nextmark Mailing List Finder: https://lists.nextmark.com/market?page=order/online/datacard&id=345239
Octavius Lucien. (2017, Sep 27). Australian Members – Part II – if you read the first post, you’ll get what this is all about. styleforum.net. Retrieved 03 13, 2018, from https://www.styleforum.net/threads/australian-members-part-ii-if-you-read-the-first-post-youll-get-what-this-is-all-about.518027/page-382#post-9019843
Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation. Hoboken, New Jersey: John Wiley & Sons Inc.
Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2014). Value Proposition. Hoboken, New Jersey: John Wiley & Sons Inc.
Roberts, F. (2017, Oct 30). UK’s largest fine shirt retailer Charles Tyrwhitt is dressed for success. Supply Chain Digital. Retrieved 03 12, 2018, from http://www.supplychaindigital.com/company/uks-largest-fine-shirt-retailer-charles-tyrwhitt-dressed-success#
Speed, A. (2014, Mar 15). Shirt front:

Wheeler

knows his game. The Australian. Retrieved 03 12, 2018, from https://www.theaustralian.com.au/life/shirt-front-wheeler-knows-his-game/news-story/b034b17bb2766c4c24f1ab0d67c391cb?sv=13ea2c601407686ae9519677f973a74f
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Wright, J. (2016, June 17). Charles Tyrwhitt: selling shirts to one customer at a time. internetretailing.net. Retrieved 03 20, 2018, from http://internetretailing.net/2016/06/charles-tyrwhitt-selling-shirts-one-customer-time/
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UKUSA

Sex76% male90% male

Income

67% greater than

£30,000

Average

$100,000

Consumer classificationABC1nd

Age30 – 54nd

Average transaction spendnd$165

Other characteristics

Home owners,

Credit card users,

Frequent travellers,

Majority married

nd

Number of list names109,562562,094

Website type

New
customers

Extisting

customers

General websites12%6%

Voucher/code websites6%3%

Loyalty & cash back websites10%10%

UKUSAFrance

Australia +

Germany +

RoW

Sales £ 80,900 £ 47,574 £ 1,300 £ 44,160

Stores16510

Jermyn Street Store1111

Sales supported per store (£’000) £ 4,759 £ 7,929 £ 650 £ 44,160

2015

2016201520142013

Australian turnover £ 15,861 £ 12,843 £ 10,000 £ 1,000

NoteData Services

2015 N

Wheeler

projected 9%

of turnover

CTLLP 2016Data Services

2015 N
Wheeler
reported

single year

growth

Speed 2015

reported N

Wheeler sales

to former

expats

Reporting year2016

Company nameCharles Tyrwhitt Shirts LtdNoni B LtdSpecialty Fashion Group LtdPAS RetailGazal Ltd

ActivityRetailerRetailerRetailerRetailerWholesaler

Clothing market

Men’s & women’sWomen’s

Women’s & men’sWomen’s & men’sWomen’s & men’s

Sales revenue (£/000) £ 176,233311,483$ 808,914$ 140,890$ 62,112$

Revenue growth (%)2%190%-2%4%4%

Store count26 614 1,043 258

Store growth (%)18%169%-4%7%

Sales supported per store (£/000) £ 6,778507$ 776$ 546$

Online sales (%)65%4%10%12%

Online sales growth (%)57%18%48%

Gross margin (%)58%63%44%69%37%

Operating income before tax (£/000) £ 12,3235,910$ 6,474-$ 13,138$ 11,919$

Operating margin (%)7.0%1.9%-0.8%9.3%19.2%

Net cash earnings margin (%)4.9%-0.2%-1.1%-16.0%

Stock turnover (times pa)2.783.923.993.652.33

Average stock held (days pa)1319391100157

Intangible Goodwill (£/000) £ 51,15238,625$ 10,095$ $57,0423,323$
Intangible Brand (£/000) £ 79,20336,300$ 8,505$ $25,502-$
Intangible Customer relationships (£/000) £ 3,018-$ -$ $0-$

Amortisation expense £ 7,916-$ -$ $0-$

NotesCTSL reports 2017 results in April

2018. CTSL did not report a cash

flow statement for the 2016

financial year or reveal turnover

by

channel

(retail, mail order,

internet). CTSL year runs 1

August – 31 July. FT reported 65%

online sales in Feb 2017

interview with Nick Wheeler.

Operating income adjusted by

amortisation expense for

comparability. CTSL amortises

intangibles on a 5% straight line

method over 20 years.

Purchased new businesses with

368 stores. Goodwill & Brand are

not

amortised but rather

subject to

annual

impairment testing as

Brand

& Goodwill have

indefinite life.

Goodwill & Brand are not

amortised but rather subject to
annual impairment testing as Brand
& Goodwill have indefinite life.

Balance sheet and cash

flows not separately

reported for retail.

Figures reported for

wholesale & retail.

Goodwill & Brand are not
amortised but rather

subject to annual

impairment testing as

Brand & Goodwill have

indefinite life.

Recently sold all retail

operations and no longer

operates retail stores.

Gazal owns 50% of the

wholesale distributor (PV

Brands Aust) for Van

Heusen & Pierre Cardin

shirts and suits. Goodwill is

not amortised but rather

subject to annual
impairment testing as

Goodwill has indefinite life.

2017

Reporting year2017201620152014201320122011

Company nameCharles Tyrwhitt Shirts LtdCharles Tyrwhitt Shirts LtdCharles Tyrwhitt LLPCharles Tyrwhitt LLPCharles Tyrwhitt LLPCharles Tyrwhitt LLPCharles Tyrwhitt LLP

ActivityRetailerRetailerRetailerRetailerRetailerRetailerRetailer

Clothing market

Men’s & women’sMen’s & women’sMen’s & women’sMen’s & women’sMen’s & women’sMen’s & women’sMen’s & women’s

Sales revenue (£’000) £ 194,400 £ 176,233 £ 172,634 £ 145,213 £ 120,857 £ 98,361 £ 78,629

Revenue growth (%)10%2%19%20%23%25%39%

Store count29262221201817

Store growth (%)12%18%5%5%11%8%30%

Sales supported per store (£’000) £ 6,703 £ 6,778 £ 7,847 £ 6,915 £ 6,043 £ 5,465 £ 4,625

Staff count821803690578480400

Sales per staff member (£’000) £ 215 £ 215 £ 210 £ 209 £ 205 £ 197

Operating profit per staff member (£’000) £ 5 £ 23 £ 25 £ 25 £ 16 £ 18

Gross margin (%)58%59%61%60%59%60%

Operating income before tax (£’000) £ 4,407 £ 18,612 £ 17,523 £ 14,454 £ 7,636 £ 7,187

Operating margin (%)3%11%12%12%8%9%

Net cash earnings margin (%) 9%3%8%11%9%

Stock turnover (times pa)2.783.113.464.384.494.86

Average stock held (days pa)131117105838175

Member income OR dividends (£’000) £ 0 £ 1,518 £ 720 £ 1,410 £ 0 £ 0

Net member OR shareholder drawings (£’000) £ 0 £ 8,837 £ 11,364 £ 7,506 £ 7,627 £ 5,989

Net Goodwill (£’000) £ 51,152 £ 0 £ 346 £ 384 £ 422 £ 461

Net Brand (£’000) £ 79,203 £ 0 £ 0 £ 0 £ 0 £ 0

Net Customer relationships (£’000) £ 3,018 £ 0 £ 0 £ 0 £ 0 £ 0

NotesFigures quoted by CTSL parent

Bectin Ltd for 1 April – 31 March

financial year. CTSL reports from

1 August – 31 July financial year.

Direct comparisions are not

possible until CTSL next reports

in April 2018. Bectin Ltd did not

report

turnover by channel

(retail, mail order, internet) for

CTSL.

New corporate structure

implemented 2 August 2015. CTLLP

purchased by CTSL, 95% owned by

Bection Ltd. Beneficial owners of

CTLLP and Bectin are essentially

the same. Balance sheet inflated

by value of goodwill, brand &

customer relationship value as well

as offsetting debts owed by Bectin

Ltd to CTSL that in turn owes a

similar amount to CTLLP. CTSL did

not report a cash flow statement

for the 2016 financial year or

reveal

turnover by channel (retail,

mail order, internet). 2016 CTLLP

annual report identified 2015

turnover by region.

CTLLP did not report

turnover by

channel (retail, mail order,

internet) or total number of stores.

Store

counts are sourced from

media

reports.

First year Australia

is identified as a key market by

directors.

CTLLP did not report
turnover by channel
(retail, mail order,

internet), geography (UK,

USA, Germany) or total

number of stores. Store

counts are sourced from
media reports.
CTLLP did not report
turnover by channel (retail,

mail order, internet),

geography (UK, USA,

Germany) or total number

of stores. Store counts are

sourced from media

reports.

CTLLP did not report turnover by

channel (retail, mail order,

internet), geography (UK, USA,

Germany) or total number of

stores. Store counts are sourced

from media reports.

Assignment 1: Business Model Deconstruction

Assessment:  1

Assessment type:  Practical Assessment

Weighting:  30%

Group or individual:  Individual.

Due date and time:  Week 4 Friday (3 Aug 2018) 12:00 pm AEST

Task Description
To be completed individually, you are required to prepare a business report that deconstructs an organisation’s business model and identifies the critical success factors that make the business sustainable. To undertake this analysis you will need to explore different business models, including those that are frequently seen to achieve sustainable success and high levels of profitability. Your analysis will demonstrate your critical thinking skills and your ability to professionally articulate your findings. Before commencing, you must seek your lecturer’s approval to undertake an analysis of the business you have chosen.

The type of organisation that should be identified for study is one that is relatively new, innovative in how they operate, and have most likely been established in the last five years. No students will be allowed to examine the same business. While the assignment is an individual one, you are encouraged to discuss with your colleagues the variety of business models that have become popular and why you think they have been successful. To achieve a result that meets your study objectives, please ensure the business report addresses each of the assessment criteria detailed below and which is elaborated in the marking rubric.

Length: 1500 words, maximum including references.
Format: Business Report
Reference Format: APA

Assessment Criteria/rubric overview

This assignment will be marked along the following criteria:
1. Provides a succinct description of the business, the industry in which it operates, the market(s) it serves, and the products and services it provides (10%)
2. Describes the business model canvas of the selected business using the nine building blocks (15%)
3. Explains the key relationships that exist across the nine building blocks (15%)
4. Identifies and discusses the critical success factors the business has to get right to achieve sustainable success (10%).
5. Evaluates what will contribute to downside risk (10%)
6. Discusses the changes you would make to the business model if this was your business (10%)
7. Quality of critical thinking (ability to critically evaluate evidence, and demonstrate the ability to identify strengths and weaknesses logically) (15%)
8. Quality of communications (ability to clearly and professional deliver information both from the scholarly and non-scholarly sources and maintain a clear line of argument) (15%