Winston and Holmes Case Analysis

Determine the decision(s) that need to be made by Bob Landau and the criteria he should use.

In this case, the Founder and President of Winston & Holmes, Bob Landau must make a decision on whether to extend the space in their Yorkville location. Winston & Holmes offers fine tobacco and excellent men’s accessories. This year was a success for the company; with its Yorkville location accounting for 58% of the company’s overall sales, the management is contemplating the opportunity to expand its most successful location, the Yorkville location. The expansion comes with both pros and cons, thus Bob Landau needs to see an overall view with all the possibilities in regards to this investment. Therefore, the following are the decision criteria he should use in this situation:

Decision Criteria:

Benefits of expansion

* Qualitative:

* Pros:

* Added floor space

* Floor Additions for retail space - humidor

* Increased customer traffic – Increase revenue/profits

* Cons

* Financial cost

* Reduced prestige

Cost of expansion

* Variable Cost

* Operating costs – Supplies, Increased utilities and equipment maintenance

* Employee Wages – (Staff recruitment/training)

* Advertising – Marketing campaign

* Cost of Additional Inventory

Consequences of construction

* An estimated duration of the construction is 60 days – which is not always 100% accurate. Thus, Landau must make the decision quickly since, the construction is planned to commence in October and be completed by the end of November. As mentioned, construction time and costs are not precise, thus the construction may interfere with the upcoming holiday season.

Customer appreciation/Market reaction

* As the cigar phenomenon increased the customer traffic for Winston & Holmes, it is only fitting that the expansion would make its loyal customers truly appreciate it, making their shopping a much...