Not everyone participated well in our group. No one was really carefully thinking about the decisions and focusing on the actual work, otherwise the group would have been a success and also my group was very able to achieve a high profit at the end of the project. Other groups chatting to us distracted us, and it didn’t help us chatting back. No one was 100% focused on the task. Our group needed some kind of motivation or incentive to make them try hard. If the task had a reward then I think the group would have participated well but instead it was another ‘boring’ game for the members in my group. This really annoyed me and I knew that if I owned a business and my employees were being lazy/ignorant and not co-operative then I would immediately want replacement.
As a group we were only four members. In a real business situation, communication between small groups is unproblematic, excellent and ideal. However communication between group members in our group was very appalling.
The group was quite successful. We managed to get the second highest profit considering our efforts, which was excellent, although I think we could have done better though. The success of our business was due to my motivation to get 1st place overall however that does justify the other group members lack of concentration and care during the game. Our result could have been the best out of the groups easily but it was my groups’ lack of concentration that cost us first place.
If this exercise was done again I would have to probably change group unfortunately, but I would change it to a group where I know my skills could be used properly. I would probably work with someone like Martin or Garry, where I think we would do very well as we are all very able to do so but I must also work with people I don’t know well or people that want to take Gorgeous Gateaux seriously. I would also volunteer to take control and be a leader of the group and change it to a more effective group than the one I was chosen to be in. I would make sure that co-operation was a priority and also communication and concentration towards the actual task. I would also make the group elect a leader and if I get the group I want I will persuade them to make it a consultative group instead of an autocratic leadership where the leader is left to dictate everything.
If I were to do this again I would also change the group name and the group decisions that we made. The group decisions cost us a lot at the beginning as we had the least amount of profit at the beginning as we did not know what the rules were so we went over the top and that cost us dearly otherwise we could of won and become first in gaining the most profit.
I decided from the beginning that I was going to be the leader but I did this without actually telling the group but instead I dominated the group. Although I wanted to be a democratic leader I decided to be more of a persuasive and autocratic leader because I made all the decisions but I believe that all the other group members should be motivated first to accept them. I therefore explained my ideas and convinced the group which was quite easy
In my group I had to decide a lot of the things. My job was to decide the number of crates produced and the variable costs. In the first month I chose to produce 8 crates with a variable cost of £8000. This foolish decision cost our group dearly as no one wanted to buy 1 crate for £8000. I believe that was due to my lack of care of the whole topic. We managed to make only £2000 worth of sales, which was the least in the whole class. I noticed from the other group results, which the group with the cheapest variable cost ended up with the most sales. I decide to take all the decisions after the first month and I knew it was paramount for us to gain high profit in the second and third month in order to stay in the game. I did most of the decisions, although I did have some small input from Tom and Danny. Our tactic now was to have low variable costs and a lot of crates, Danny decided in month three to increase the variable cost, but this cost us dearly and we ended up as runners up.
In month 2 we decided to make the prices lower and provide a suitable no. of crates. This careful thinking was rewarded with an excellent profit of more than 5 times what we received in the first round. I decided that obviously buyers did not want to buy a lot of crates at a ridiculously high price so in the last and final round I decided to go with wits again.
In month 3 I decided to lower the price again but to increase the supply as I strongly believed that the lower the price then more customers will be attracted and this proved right as I got the most buyers out of the groups as the price was right and the number of crates was ideal so our business benefited from two thousand pound increase from the month before and gaining us second place overall but if it wasn’t for the irrational first round decision then we could have easily won. Again this disappointment of not winning was due to lack of teamwork and careful thinking and care towards the whole game.
In conclusion to the task we were set, I was disappointed that my groups success was not as good as I wanted it to be but I have learnt something from the Gorgeous Gateux assignment:
Capital Expenditure
Money spent on acquiring assets for a business which will normally last for more than a year.
Revenue Expenditure
Money paid out for the running of the business. The revenue expenditure is all the money that is paid out to run the business. This will include the cost of buying stock, expenses like rent and heating bills, and any loss a business has made during the year.
It is important to distinguish between capital and revenue expenditure, because only revenue expenditure affects profit. Sometimes the line between what is capital expenditure and what is revenue expenditure may vary a little, depending on the kind of business being carried on.
Fixed Costs
Expenditure which is not affected by the amount of trade done by a firm or by the number of goods produced. A business cost which must be paid whether the firm is making money or not. Some of the costs under revenue expenditure have to be paid for whether the firm is making a profit or not, and they are not affected by the amount of sales or production. These are called fixed costs. Examples of fixed costs are rent or mortgage.
Variable Costs
Any costs which change according to the amount of business done or the number of goods produced.
Other costs relate to how many goods are produced or how much is being sold. For example, to produce more goods, more materials will be needed and more electricity may be used. These costs are higher at some periods than at others, and are not known for certain in advance. Theses are called variable costs.
Team-work and importance of co-operation and communication
I have also learnt how teamwork is an important factor when running a business. Without teamwork, the business is unlikely to progress and communication will be bad. Therefore for a smooth running of a business all staff, entrepreneurs and workers must learn to co-operate with each other and there has to be a sense of teamwork where disputes are solved easy, otherwise it is very difficult to earn profit if it is a one-man team. I would not like to work in an environment where there is constant dispute and lack of care and consideration for people and for the business operation itself.
(The first 3 months of selling the crates to buyers)
(Only for the first month of the game)
Break-even point
This confirms that I need 2 crates to break-even.
The level of sales or output where total costs are exactly the same as total revenue is called the BREAK-EVEN POINT. Firms use break-even analysis to:
-calculate in advance the level of sales needed to break even
-see how changes in price affect break – even-see how chnages in cost affect the break - even point
Calculating the break-even point is simple:
Contribution = selling price – variable cost
fixed costs
There fore the break-even point =
Contribution
