Mock D task 1 by Josie Kelly

Average exchange rate

2025-07-22 08:48:43 UTC

Is it going up or down consistently, can we rely on the average rate

Definition of expected values/annual volume/revenue

2025-07-22 08:49:23 UTC

Can we be certain the input creating these values are trustworthy? i.e. average rate for 2024 may no longer be relevant with changes in market demand/pricing

Pricing from small colleges

2025-07-22 08:49:32 UTC

We are a national chain with a large college, we may have better resources over a small college

Expected annual revenue

2025-07-22 08:49:39 UTC

It would be useful to see how they reached this expected annual revenue. This would be achievable by having the probabilities of each course volume so we can trust this information.

Expected values - estimates are used (probabilities)

2025-07-22 08:49:45 UTC

Research data

2025-07-22 08:50:05 UTC

We are using external data from Patland National Hairdressers association so cannot verify the accuracy of this data. how was this data collected and analysed?

Expected values

2025-07-22 08:50:13 UTC

Using expected values, which are the weighted average of all the possible outcomes weighted by their probability can be risk as it may not be a possible outcome and is more of a long-run average, making it less useful for one-off or short term decisions. Additionally it assumes we are taking a risk-neutral approach, which perhaps may not be the case, particularly given we have never operated any salons or franchises or Academies outside of Dazzland, so Trimayr may be more risk averse. Therefore, it may not be appropriate to use expected values in the investment appraisal calculation.

Survey conducted - sample used

2025-07-22 08:50:41 UTC

2025-07-22 08:51:00 UTC

Expected values need big volume of data, and apply to repeating events, it hard to use them for one-off events

Attitude to risk

2025-07-22 08:51:06 UTC

EV assumes risk neutral attitude

How reliable/realistic are estimated probabilities?

2025-07-22 08:51:13 UTC

Expected values

2025-07-22 08:51:25 UTC

Estimates used (probabilities) outcomes may not occur

use of Expected values

2025-07-22 08:51:26 UTC

Whilst EV takes into account risks, challenge with EVs is that probabilities are subjective, what's the rationale behind these probabilities? do we have any underpinning data to support our estimates? EV's also are a long run weighted average if the event of us launching the training course was to take place thousands of times over. However, as this is a one off project, EVs may not be the best to use.

How big was the sample size and demographic represented in the samples?

2025-07-22 08:51:27 UTC

External Research

2025-07-22 08:51:39 UTC

Second-hand research (veracity of the data in the report could be challenged)

Scale of surveying

2025-07-22 08:51:45 UTC

There are no large hairdresser training facilities in Patland - the pricing information we have is based of small hairdressing colleges which are likely to demand a smaller/larger fee?

Smaller? Less reputation, can not demand larger fees

Larger? Smaller business, requirement of more revenue to drive business compared to Trimary academy which may run off economies of scale, higher uptake etc.

Perfect information

2025-07-22 08:51:49 UTC

Has the research report explored any potential perfect/non perfect information that we could buy to impact our expected values

Course take up assumptions

2025-07-22 08:52:06 UTC

These are price dependent so for higher priced course could be lower take up and lower priced courses could be higher. This impacts on revenue forecasts

No analysis on demand or current appetite for hairdressing roles in Patland

2025-07-22 08:52:47 UTC

Actual values in report does not make up part of the expected value table

2025-07-22 08:53:12 UTC

Due to the ambiguos nature of EV calculation, our actual outcomes could be completely different to that of the table which therefore diminishes how well we can rely on it

Training needs analysis

2025-07-22 08:53:13 UTC

No research on training needs of Patland salons - how these compare with Academy/Trimayr standards. Affect offer and cost

Concerns with research report

2025-07-22 08:53:14 UTC

External data (Hairdressers Assoc & National Stats) - possibly out of date as it takes time to produce national level statistics
Average XR for 2024 used for currency conversions - has there been any drastic changes to XR since then
Probabilities - how accurate are our related probabilities for each demand level
Do we want to take into account risk attitude - EV good if risk neutral but what if we want to be risk seeking

Demand

2025-07-22 08:53:20 UTC

Question about demand being unaffected by the change in price, suggesting this product is totally in-elastic which I think is unrealistic as a product like this is definitely likely to see a change in demand with a change in price, especially when the change in price is 25%

Research Report

2025-07-22 08:53:28 UTC

The research uses expected value calculations and outdated exchange rate information, both of which gives concern to the accuracy of the figures provided. Expected value calculations in particular are difficult to back in a real life scenario - they have used arbitrary probabilities with predicted uptake volumes. The concern is that there is a huge margin for error in prediction, so to rely on these figures for a decision would be a huge gamble

Probabilities of achieving Small/Medium/Strong would be useful to know

2025-07-22 08:53:41 UTC

Sample data

2025-07-22 08:53:44 UTC

what sort of businesses where included in the sample survey? Where are these located? Do these results give a true representation of the hairdressing industry in Patland.

National statistics

2025-07-22 08:53:48 UTC

related to a number of hairdressing salons, this is for a bespoke training course so would likely only be relevant to more upmarket salons therefore this data may not be suitable

Legislation/agreement on opening salons once trained

2025-07-22 08:53:48 UTC

Demand

2025-07-22 08:53:58 UTC

Patland doesn’t currently have any large hairdressing training facilities – although this may lend itself to assuming there would be high uptake in hairdressing training, it may be that there isn’t a market for hairdressing Academies there. As such, the ‘possible annual course volumes’ used to calculate the expected annual revenue may not be accurate enough to reliably use in our investment appraisal calculations.

Additionally, these figures have been sourced from a survey conducted by the Patland National Hairdressers’ Association, and we are not told how many people have contributed to this survey. As such, we do not know whether these survey results accurately represent the demand in Patland.

Sources of data

2025-07-22 08:54:08 UTC

Whilst it's good we're using external sources, how can we be sure it's reliable? there may be biases in the survey population sample size, maybe Patland national hairdressers association has used more responses from an upmarket area vs a range of areas?

To address demand and small sample size risk - social media campaign to ascertain appetite for hairdressers

2025-07-22 08:54:57 UTC

Bonus for franchisee hairdressers training Patland hairdressers / % of class size % of additional profit

2025-07-22 08:55:07 UTC

Reliability of Report Findings

2025-07-22 08:55:25 UTC

External research conducted, how reliable is the information provided?

Survey; what was the sample size? Is it reflective of the range and number of Patland hairdressers that we have based our volumes from?
Pricing; based on small colleges, are there larger colleges offering cheaper training prices that have been ignored?

uncertainty on the receiving the expected annual revenue.

2025-07-22 08:55:27 UTC

Quality of training compromised

2025-07-22 08:55:28 UTC

Provide reassurance by ringfencing sufficient courses for Dazzland owned salons and franchisee staff. Need to do this otherwise our staff may not be able to access training and poor quality hairdressing skills in salons, customer dissatisfaction will be the result.

To address revenue risk - obtain information about cultural attitudes towards hairdressing profession and disposal income to assess how successful the academy could be in Patland

2025-07-22 08:56:11 UTC

Quality of Training

2025-07-22 08:57:02 UTC

Spreading teaching resource across both our existing students and those from Patland could arguably bring quality of training into concern; teachers might have less time with the higher workload, so less focus on each individual student and their development. It may also affect the quality of feedback/grading for the same reason i.e. time constraints.

Smaller class sizes to keep quality standards

2025-07-22 08:57:03 UTC

Data sources

2025-07-22 08:57:16 UTC

Survey

There is no detail regarding what questions were included in the survey or the size of the pool of respondents
surveys are based on the respondents opinions rather than fact and can fluctuate depending on who is responding
the Hairdresser Association seems like a good pool of people to survey, however Patland doesnt have any large Hairdressing training facilities already so may not be able to respond with detailed knowledge of the industry

Pricing

average exchange rate from 2024 has been used which may / may not be consistent with exchange rates now
using an average exchange rate may not be the most accurate

National statistics

reflects their current industry which has no large hardressing training facilities
This may mean the probabilities used for the expected values arent reliable as it is hard to predict demand
use of expected values - not the most accurate way of calculating

Risk1

2025-07-22 08:57:41 UTC

Make sure franchisees/their hairdressers have priority to access this course

Make attendance for all franchisees a requirement as part of the T&Cs of the franchise agreement

Discount the course to franchisees

Part B

2025-07-22 08:57:56 UTC

1 - Complete analysis and respond accordingly. Quality of training is likely based on lack of staffing, therefore we may need to employ further staff to train in order to offset this risk. Secondary risk here would be ensuring the new members of training staff at at the Trimary level

2 - Incentivise franchisees/reassure them that we can make this new ways of working a positive for them i.e. monetary incentives (reduced franchisee fees, bonuses)

3 - Gain some contractual reassurance by writing in exclusitivity clause into any Patland-based hairdressers i.e. they are not allowed to open a shop there within x number of years, for example. Need to ensure this is well-written and may come at a large cost in terms of legal fees

Reputational damage, if the other people conducting the training are not up to Trimayr standards

2025-07-22 08:58:01 UTC

Risk

2025-07-22 08:58:57 UTC

Training - we would hope that the training delivered by the Academy staff would not be affected by the fact that the trainees are from a different country, each student should be treated the same. However, if the Patland students do not have much training then this could mean our staff might need to take a little longer to train these students. This could mean the training staff's time could become a bottleneck

Patland Competition

2025-07-22 08:59:02 UTC

Opening the door to Patland hairdressers by training them to the level of Trimayr standards is opening the door to direct competition. Possibly be an idea to offer the Patland trainees positions in Trimayr salons to help exisitng franchisees and eliminate additional competition

TARA

2025-07-22 08:59:13 UTC

Use TARA structure to assess if all of these risks are impactful and what management strategy should be taken on each one

Managing the risks

2025-07-22 08:59:16 UTC

Quality -
- Ensure class sizes remain small so trainees still get the same one-on-one time. Academy resources under-utilised so have the capacity for this
Resentment -
- sent up networking and bonding sessions to build a good relationship.
- Highlight to franchisee's how this could be a great learning opportunity to develop leadership / teaching skills to help further their career. Also is a highly regarded position to teach at the academy so can be used for marketing purposes / justification for higher pricing
Opening businesses
- Offer attractive joining franchise fees to deter leaving and setting up externally.
- Ensure there is awareness of the additional training available with being a Trimayr franchisee.

Source unreliability

2025-07-22 08:59:40 UTC

The data is provided by Patland sources despite Patland having no large hairdressing training facilities. A mitigation for this may be to analyse how well large training facilities in countries that have similar economic states to Patland operate and perform.

Patland hairdressers entering Dazzland market

2025-07-22 08:59:51 UTC

Ensure training for Patland in terms of business opportunities are focussed on entry into Patland market. Support this by looking at supporting expansion into Patland market by extending franchises there. Could offer opportunities for Dazzland hairdressers to expand into Patland. Need to ensure we are clear on what we want to achieve by training Patland hairdressers or they could become our competition.

More risk on new entrants to the market if Patland hairdressers are allowed to operate in Dazzland.

2025-07-22 09:00:17 UTC

Managing Risks

2025-07-22 09:01:08 UTC

Quality of Training; increasing the number or trainees at the Academy would reduce the direct 1:1 interaction for Trimayr hairdressers, this could demotivate trainees if they feel they are competing for time and not making improvements in their own training

Franchisee resentment; losing their top stylists to train external hairdressers would increase the level of dissatisfaction particularly if these are top earning stylists for their salons- direct impact to their profitability

Dazzland Competition; Trimayr risk opening their market to a competitor

Part B

2025-07-22 09:01:16 UTC

3 - Could we look to build newly trained Patland hairdressers into our franchisee scheme as part of the training course itself? Through this, we may be able to not only protect our own domestic market but reach out into the Patland market

Who conducted the research, how reliable is it, is there potiential bias in the research. How certain are we about the demand numbers, this is a new market that we have not operated in before. What are the probabilities being uses. The exchange rate is an average, what is the current exchange rate and is there potiential for that to move widely. The deman is the same regardless of the price being charged which does not appear correct.

2025-07-22 09:01:50 UTC

The max price is 20% above the the average while the lower price is 15% below the average. Any sensitivity analyses been done on the expected values. Ensure that there are dedicated staff available to train the Patland customers without effecting current business, this will need to be well planned to ensure we are able to cope with the additional demand without effecting the quality we currently provide.

2025-07-22 09:03:16 UTC

We do not want to damage our brand by providing worse training to our customers in dazzland. We could offer compensation to the hairdressers that are being seconded to train those from patland. Explore options to open franchises in patland to counter the potential concern of opening in dazzland

2025-07-22 09:03:23 UTC