B 1 It would be advisable for Flacks to consult customers before developing a new product.

　　D 2 Producing goods for specialist markets might increase Flacks' profits.

　　C 3 Flacks may need to change the function of one of its facilities.

　　A 4 Flacks should utilise its current expertise to enter a different market.

　　B 5 Flacks may need to consider closing its current production facility.

　　C 6 Flacks should develop the connections it has established with leading retailers.

　　A 7 Expanding the product range would not be a problem for the workforce.

　　Flacks is a UK-based company that produces fashion accessories for women. How can it continue

　　to grow its business?

　　A Susan Falmer

　　Faced with a shrinking market, cheap imports and competitive pricing, Flacks will have to work

　　hard to increase its margins. They need to move into a more promising market, one where demand

　　is growing and where the company can exploit existing skills and contacts. They could think about

　　brand extension - this would not be a giant leap and the sales force would take it in its stride. Also,

　　they wouldn't need to re-equip their factory and could use non-UK sourcing if facilities here are in

　　short supply.

　　B Mesut Guzel

　　They have the fundamentals of a survival strategy in a market where outsourced manufacture and

　　brand differentiation hold the key to success. I think they should initially locate some of their

　　production in another country, where manufacturing quality tends to be better and it is easier to

　　meet changing customer demands. But they should also regularly monitor production in Britain

　　and think about outsourcing all this work abroad at some point if they need it done faster. The

　　company should continue to work on innovative products, and thorough market research will help

　　to ensure any new ideas are well received.

　　C Gary Wilmot

　　In order to beat their rivals in a highly competitive market, Flacks should ensure their products are

　　attractive and build on their relationships with the big stores rather than trying to go it alone and

　　market directly. They should also consider refocusing production by using their UK factory for

　　high-specification products. They could eventually build more production overseas in a cycle of

　　continuous development.

　　D Michal Kaminski

　　The demand for fashion accessories is relatively flat and the company should consider exploiting

　　niche markets to improve its margins. But even within these, Flacks must distinguish its goods

　　from those of its rivals in terms of quality, performance and design. Innovative sales, marketing

　　and PR are vital to exploit these niche products. One competitive advantage that Flacks does have

　　is production times. Many retail chains now have two-tier supply chains and Flacks could focus on

　　top-up orders. They might also investigate other sales channels such as mail order.