Singapore Vivo Private Limited was established in 1980 and is engaged in manufacturing and retailing designer sunglasses. It has a reputation for quality products. The company has several retail shops located in different parts of Singapore. In recent years, due to the intense competition in this industry, the company has suffered a reduction in their customer base. In view of this, the Board of Directors has appointed a new chief executive officer, Ms Jacqueline Chan, to bring the company to a new level of development. Jacqueline Chan has brought with her 25 years of track record in a related industry from U.S. and Europe. One of its main competitors is ION Private Limited and it has been growing at an exponential rate over the last few years. In addition to this, ION’s expansion strategy through joint venture with other companies has been to have outlets in different locations in order to increase its market share. They have invested substantially in new technology that could produce sunglasses within two hours. The customers can collect the tailor-made sunglasses on the same day as the prescription. Singapore Vivo operates within an old school thought concept. All the sunglasses are handmade and do not depend on any new computer-aided production method. Delivery of the sunglasses to the customers requires a weeks grace period. In this respect, the production costs are relatively high compared to the competitors. The company is financially sound and has healthy cash reserves built up over the years of profitability. In 2015, the company sponsored the 28th South East Asia (SEA) Games and as a result have increased sales since then. One of the main priorities for Jacqueline Chan is to improve the financial performance of the company. She has discovered the following issues during her monthly meeting with the managers. • The profitability of each retail shop varies significantly and the shops report the monthly income to management. • The rental costs and other fixed costs are significantly higher in many of the shopping malls such as Far East Plaza. • Targets are set by the management. 2 • The company uses a top down approach to decision making. All the shops do not have any right or exercised control over the job scopes and roles, working conditions and salary scale. • The staff remuneration such as annual increments and bonus is pre-determined across the board regardless of the performance. The remuneration is not dependent on the company’s financial performance. The market analysis has forecasted that there will be a slowdown in the Singapore economy in 2016. In addition to this, Singapore is experiencing the impact of a rapidly ageing population. If the trend persists, by 2050, the population pyramid will be inverted. The Singapore population will be growing older faster than any other society in the world. Required: As a newly appointed management accountant, you are given the following task: a) Critically discuss and produce a corporate appraisal of Singapore Vivo Private Limited, taking into account both internal and external factors for the company. b) Critically discuss the key strategic challenges facing Singapore Vivo Private Limited. c) Provide recommendations and strategies from your appraisal that would enable Singapore Vivo Private Limited to build on its past success