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Start Young, Take the Lead - Business Case - April 2015
1. EY Future Leaders Program
Business Case
April 2015
Start Young, Take the Lead
Case Study
2. Abstract:
The case study is made out of 2 parts – you are presented with a situation of the
Navitas yoga studio (part I) and a Request for Proposal (RfP) for the services of
recreational activities for the employees of Company Cloud Ridge Ltd. (part II).
You are tasked to create a presentation in PowerPoint (limited to 15 slides) on behalf of
the yoga studio Navitas that contains and adequately meets with items and conditions
set out in the Request for Proposal of Cloud Ridge Ltd.
You are free to add additional information to your Proposal that you think is relevant
and can make you, as a bidder, advance to the next round where you will prepare your
Best and Final Offer (BAFO) to present in person to the Company.
3. PART I
“You are where you need to be
-Just breathe”
THE SITUATION
You are representing a yoga studio Navitas in the town of Brightwick, The studio has a
long history of Bikram yoga and has a prosperous client base. Over the 14 years of its
existence the studio grew to operate 4 locations in town with a servicing staff of 50
people. Navitas is one of the two only certified Bikram yoga studios in the region.
ROAD BEHIND NAVITAS OF TODAY
Frederick Rousseau, founder of yoga studio Navitas, started practicing yoga 27 years
ago. From his humble beginnings as a yoga instructor in Nice, France, he grew into an
esteemed member of the yoga community. His spiritual ascension reached its peak
during his pilgrimage through India, in the mid 90’s. He settled in Brightwick and after
connecting with other yoga enthusiasts founded Navitas.
The timing was fortunate as the western companies started migrating into Unaria’s
capitol. With economic prosperity and wealth – satisfied with fulfilment of their
materialistic needs people started on the road to metaphysical escalation. Navitas
positioned itself as a vessel to calm the body as well as mind and created a large
community of yoga devotees. Expansion of the community naturally led to the
expansion of Navitas physical premises, and it organically grew to the size and number
of studios it has today.
CITY OF BRIGHTWICK
Brightwick is the capital of Unaria. Being the meeting spot of different cultures, races
and religions for hundreds of years, Brightwick is as intoxicating in its diversity as it is
ageless. Rich with cultural traditions dating back to 1500s, this modern concrete jungle
now has a population of over six million. The small trade centre, which began as a
colonial municipality on the riverbank of Unarias biggest river 500 years ago, is now
one of the most prosperous service and trade hubs in the region.
Enviable infrastructure, easy accessibility, integrated services and state-of-the-art
facilities make it a perfect destination for tourism and for many of the global service
companies. The city is a haven for shoppers, a delight for foodies and a destination to
work at for corporate savants. As a meeting point of eastern and western cultures,
Brightwick serves as a perfect concoction of modern day life and ancient rich culture.
4. NAVITAS AND ITS STAFF
Staff consists of 26 yoga instructors, and administration, maintenance and
management staff. 9 of yoga instructors have attended the renowned Bikram Yoga
College of India, and have travelled holding a total of 112 yoga seminars and wrote 17
research papers on the subjects of benefits of yoga (effects on the body, and cognitive
abilities), the history of practice, and also explored new concepts – yoga as
psychotherapy.
Classes are limited to groups of 20 people; there are 7 yoga sessions per day in a
single studio (lasting the required hour and a half each). All studios are working seven
days a week, made possible by the significant number of instructors. The classes are
rarely overcrowded with average attendance in amount of 65% of maximum capacity.
Most recently a group of instructors started delving deeper into relaxation techniques
targeting stress relief. Currently there are two instructors specialized in corporate
yoga. They have written multiple articles and research papers on the subject (e.g.
“Yoga as a stress relief activity – measuring the effects on stress levels – nine month
study at Beak International”, “Testing effectiveness and efficiency of implementation
techniques of yoga concepts for yoga novices, pilot project of National Bank of
Unaria”, “Meditation and yoga in a corporate environment, case study of Bright-IT”).
This proved to be a strategically good choice, opening up a new client channel – the
corporate sector. However the studio has received some flak (from the community
and some prominent persons from the yoga society) for ‘abandoning’ its traditional
ways, hence the pressure is to show the potential and possible harmonization of this
new direction of Navitas.
REVENUE AND COST DRIVERS
The studios revenue stream is generated through fees for yoga sessions from
customers. Currently a customer can come in for a single session paying 19 Lunar
Coins (LC); or have 8 sessions a month for 110 LC; or have 24 sessions for three
months for 300 LC.
Through sampling several classes during the last year it was also deducted that on
average a single class comprises of 50% of yoga participants with a monthly
membership, 30% of them are there for a single session of yoga, while the rest are
participants with tri-monthly membership.
As far as monthly costs are concerned they are divided in to three categories:
Salary
Rent and heating
Other costs
5. Salary
Yoga instructors have small variations in salary depending on their position,
experience and credentials. On average an instructor has a monthly salary in amount of
2 000 LC.
Supporting staff comprised of administration, maintenance and managers have a
greater variation of salary on their pay checks but their salaries average at 1 600 LC a
month.
Rent and heating
Rent is starting to present a big problem for the company. The town of Brightwick is
reaching its expansion limits but the demand for residential and office space is still
high. This has caused an increase in real estate and rent prices of approximately 60%
over the last 5 years.
Currently each of the four studios is paying around 10 000 LC a month to their
respective landlords. This is one of the main drivers behind the decision to focus the
future strategic direction of Navitas to corporate yoga, as the company has the
necessary number of instructors but limited amount of space.
Practicing Bikram yoga requires high temperatures while in sessions, hence it also
presents one of the bigger expenses in the monthly budget amounting to 7 000 LC.
Other costs
These costs are related to required equipment, maintenance and marketing of the
studios, with total costs amounting to 1 000 LC, 2 000 LC and 7 400 LC respectively.
6. OUTLOOK
As previously stated the Navitas studios have started entering the market of corporate
yoga. Over 20 companies have signed contracts with Navitas to have their employees
join Bikram yoga classes in Navitas studios. In the past, Navitas also had contracts for
sending yoga instructors to 12 local SME’s and 5 major global companies in their
Brightwick offices:
FMCG giant – Beak International,
IT consulting company – Bright-IT,
Whole-sale and distribution of pharmaceuticals - UnariPharm
Waste and water management company – W&W Service Valley
National Bank of Unaria.
There are numerous other opportunities arising but the company has often fallen short
of receiving the contract due to its high price offering, despite being arguably the most
qualified in the region. The main issue behind this is that Navitas management is
expecting the corporate yoga segment to participate in coverage of the exact costs as
studio yoga.
With the most recent Request for Proposal from Cloud Ridge Ltd. the corporate yoga
team sat down with Navitas management and after much debate they have agreed that
for major clients such as this one they are ready to exclude rent and heating category
from the equation. In essence the price per session should be formed through
calculation taking into account gross margin and expenses for salary per session, and
the distribution of other expenses per one session. After calculating the expenses in
regard to the Proposal, the price should reflect the same gross margin ((Revenue –
Expenses)/ Revenue) as is on Navitas company level.
Also after feedback from management - another task regarding the proposal is to
format the resumes (CV’s) of the corporate team in a unified manner, with relevant
data and presentable to the company Cloud Ridge Ltd.
7. CORPORATE YOGA TEAM – RESUMES
Kumar Raj Ganesh
Kumar Raj Ganesh
Mail- yoganesh@email.com
Number : 099/940-940
DOB: 5.15.1983
Address- High Street no. 74
I'm Kumar Ganesh, PhD student of the University of Brightwick - Faculty of
Psychology. I have experience in many areas. I worked at a local HR office of Beak
International – Senior Associate for three (3) years until 2012; I’m a part time yoga
instructor for corporate yoga in Navitas yoga studio for 4 years. I also teach other
yoga instructors at Hatha Yoga School in Brightwick since 2008.
During the period 2008-2009 I worked at rehabilitation center as a Rehabilitation
Specialist and Counsellor.
During the summer season of 2007, from June till October, I worked in a textile
company.
During the summer season of 2006 I worked in small retail shop as casher. I love
working with people and I am hard working and very driven. My smile is my trademark. I
can feel a strong desire to teach and have combined that with my passion for yoga. I
have been practicing yoga since I was 21.
Education:
• University of Brightwick – Bachelor, Master’s degree in Psychology
• Certified Hatha Yoga School in Brightwick - Teacher Training Program – 2 year
course, graduated in 2008.
Wrote and presented a two research papers on an International Yoga conference in
India:
1. “Yoga as a stress relief activity – measuring the effects on stress levels – nine
month study at Beak International”
2. “Meditation and yoga in a corporate environment, case study of Bright-IT”
8. Tanya Kapur
Tanya Kapur
Street Nectar Highlands, 24A, Brightwick, Unaria
099 / 694-281
kapur86@email.com
Education:
2007 School of economics, Brightwick, Unaria
High school diploma – Banking
2012 Certified Hatha Yoga School in Brightwick – Trainee program – 1 year course
Experience:
2013-2014 Yoga instructor at Navitas
2010-2013 Bank assistant at National Bank of Navitas
Published articles: “Testing effectiveness and efficiency of implementation techniques
of yoga concepts for yoga novices, pilot project of National Bank of Unaria”
Personal data:
Date of birth: 16.12.1986.
Place of residence: Brightwick, Unaria
I have practiced gymnastics for 5 years and yoga for 6 years. I am a person who is
considered to be ‘fun.’ I believe that we are way more productive when we are working
with people with which we enjoy spending time. When the situation gets tough with a
customer, a touch of humor can save the day.
9. PART II
“All problems are illusions
to the mind”
CLOUD RIDGE LTD. REQUEST FOR PROPOSAL #6841-03
PROCUREMENT OF RECREATIONAL SERVICES FOR EMPLOYEES
SECTION 1 INTRODUCTION
To whomever it may concern,
1. You are invited to submit a proposal for sports/physical activity services for the
needs of Cloud Ridge Ltd.
2. Your offer should include the items listed in the specification of requirements in
Sections 2 and 3 and be submitted via e-mail to the address listed below.
3. Bids will be evaluated on the basis of fulfilment of financial and technical criteria
and the contract will be awarded to the bidder who submits the best offer in
accordance with the applicable binding internal regulations and collective
procurement of Cloud Ridge Ltd.
4. In case of multiple satisfactory bids there will be another round where you will
be able to present in person your adjusted Best and Final Offer.
5. Your offer should be made in PowerPoint form (limited to 15 slides), in English
language, e-mailed to the address below clearly marked: For Cloud Ridge Ltd. –
sports/physical activity proposal, with the name and address of the bidder, and
submitted to the following address:
6. ey.case.study@rs.ey.com
7. The deadline for submission of bids to the specified address is March 3, 2015.
The bids received after this deadline will not be considered.
8. For additional information regarding the manner of submitting tenders and
criteria for evaluation of qualified bids, interested bidders should contact HR
Team (ey.case.study@rs.ey.com).
It isn’t necessary to confirm receipt of this call, regardless of whether you will submit a
bid or not.
Sincerely,
Cloud Ridge Ltd.
10. SECTION 2 REQUIREMENTS SPECIFICATION AND ADDITIONAL
INFORMATION
I Subject of procurement
Subject of procurement are services of holding and teaching sports/physical activity
classes to employees of Cloud Ridge Ltd. We are requiring a partner that can provide
recreational services 2 (two) times a week, for a period of 6 months.
II Confidentiality
The contracting parties are obliged to respect the confidentiality of trade secrets of
the other party.
III Criteria for Evaluation
The process of procurement and selection of bidders will be carried out according to
the Regulations of procurement of Cloud Ridge Ltd.
Bidder should define their offer in order to provide the best possible commercially-
economic conditions and to meet the specifications of the application. In the process of
selecting the best bid a combined criteria of economically most advantageous and
technically most superior will be applied to this tender with consideration of the
following elements:
1. The offered price (per one session and total for 6 months)
2. Benefits of your recreational activity in regard to our reasons for
procurement of services (see Appendices);
3. Previous experience and professionalism in the field concerned, references
and valid certificates (please also briefly present your recreational team and
their CV’s);
4. Credentials from similar projects for other companies.
IV Terms of deal
Only timely submitted bids and bids that meet the requirements of this call will be
taken into consideration. Cloud Ridge Ltd. reserves the right to refrain from
procurement, without compensation to bidders, until a contract is signed.
11. SECTION 3 TERMS AND CONDITIONS OF PROCUREMENT
Your offer should be submitted according to the following instructions and in
accordance with the conditions defined below:
1. The costs of bidding
Bidders cover all expenses related to the tender.
2. Offers
The offer submitted by the bidder should be complete and should at least include the
following sections:
1. Description and benefits of recreational activity you are proposing (why should
we choose your proposed activity?)
2. Summary of your company history, status and past experience in the field (why
should we choose your company?)
3. Credentials of your staff relevant to the engagement (include CV’s if possible)
4. Financial Proposal (offered price per one session and total for 6 months)
Optional:
5. If possible provide us with Key performance indicators (KPI’s) we can use to
measure the effects of your work that correlate to our reasons for procurement
of services; also provide us with KPI’s for measuring satisfaction of our
employees with your services.
6. If needed provide us with your recommendation for number of weekly sessions
needed, and overall duration of the service period (now at 2 sessions per week,
for a period of 6 months). Provide us with an adjusted financial proposal for your
recommendation.
7. If possible provide us with a brief description of a company event/team building
that integrates your activity.
3. Opening Offer
The bids will be opened in the presence of members of the Commission for
procurement. The presence of the bidders' representatives is not envisaged.
12. 4. Evaluation Offer
The Cloud Ridge Ltd. shall assign the contract to the bidder whose bid fulfils the
necessary criteria and is deemed to be best suited for Cloud Ridge Ltd., in accordance
with the binding internal regulations of procurement for Cloud Ridge Ltd..
When making the final assessment of bids, all the criteria listed are taken into account.
5. The right of the Purchaser to accept any bid or reject any or all bids
The Purchaser reserves the right to accept or reject any bid, to annul the whole
process and reject all bids at any time prior to contract award, without incurring any
liability to Bidders and without obligation to notify the Bidders or provide reasons for
this decision.
6. Price
Bids that meet the technical specifications and required performance will be evaluated
by comparing the offered price for the service.
The offered price must be expressed in Lunar Coins (LC)
7. Awarding Contract
The contract will be awarded to the bidder who submits the best offer on the condition
that he fulfilled all the requirements listed.
In case of multiple satisfactory bids there will be another round where you will be able
to present in person your adjusted Best and Final Offer.
Successful bidder will sign a contract with the Contractor for the services specified.
8. Payment
Unless otherwise agreed in writing, payment is made by bank transfer to the account
which will be submitted in writing within 30 days of receipt of the invoice. Payment will
be made through an account in favor of the selected bidder.
13. APPENDICES
ABOUT CLOUD RIDGE LTD.
Cloud Ridge Ltd. is a global innovation company that never stops inventing. Over the
years, our innovations have improved daily life for people all over the world. Every day
at Cloud Ridge Ltd, one idea always leads to the next, igniting momentum to make
progress possible around the world.
Five industrious and tenacious businessmen with diverse occupations founded Cloud
Ridge Ltd.. They financed the company to mine precious metals and so Cloud Ridge
Ltd. was founded in 1902. Five businessmen set out to mine a prospective gold
deposit, but the deposits proved to be of little value, and the new company quickly
moved to nearby Derby to focus on other products. Like many others in the early
1900s, Cloud Ridge Ltd. founders incorporated first and investigated later. In the face
of failure, they persevered and turned their investment into a lucrative venture.
Years of struggle ensued until the company could master quality production and a
supply chain. New investors were attracted to Cloud Ridge Ltd. and the company
moved to Ratchet in 1910. Early technical and marketing innovations began to produce
successes and, in 1916, the company paid its first dividend. Ever since, the company’s
story has been a story of success.
Cloud Ridge Ltd. serves customers through four business groups, which increase speed
and efficiency by sharing technological, manufacturing, marketing and other resources.
The company currently employs 430 people in Brightwick across these four groups.
Consumer
Supplying an array of innovative products that keep homes cleaner, offices organized
and buildings well-maintained.
Electronics and Energy
We turn technology into solutions for customers in electronics and energy markets
around the world. We contribute to reliable sources of power, high-performance
electronic devices. We're also leading the way in renewable energy to improve quality
while reducing costs.
Industrial
We provide thousands of innovative products including tapes, abrasives, adhesives,
specialty materials and filtration systems to dozens of diverse markets – from
purification to aerospace.
14. Safety
Our products—personal protective equipment, safety and security products, track and
trace solutions and more — increase the safety, security and productivity of people,
facilities and systems around the world.
Reasons for procurement of services
Recently, the company management noticed that employees are starting to suffer from
various small illnesses caused by the lack of physical activity. Monthly performance
indicators are still looking good, but company’s health insurance has provided
information that employees are seeking medical help more often. Furthermore, during
time periods when the amount of work increases, and with it the time employees spend
in the offices, stress level increases accordingly and tensions rise in the company.
Also, employees who could normally find time for some physical activities are being
deprived of that time. Because of all this, HR proposed to include physical activity in
everyday routine in the company. It should ideally improve employee’s health, increase
their productivity and reduce the stress. Below are the results of the most recent
survey:
15%
17%
38%
16%
14%
Definitely yes Probably yes, it depends Maybe Probably not Definitely not