Thursday, March 27, 2008
We're now through 12 "weeks" of the simulation. We all posted results and we're back on top. We were a little nervous, but it turns out we're currently showing about double the net income of our nearest competitor. Our strategy has been to run a high end chain supported by advertising and promotions. We don't have the sales numbers that some of the EDLP operators do, but we're making about twice the margin. We're also keeping tight control of labor, shrink and out-of-stocks to make sure we don't bleed out any income where we can avoid it.
For each decision we start with an analysis of our competition: what they're doing, what they've changed, what opportunities have opened up for us. We then go through detailed projections for each department and run different scenarios based on our options. Apparently it's working out pretty well for us.
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