The board agreed that a radical response to the current situation was required to reassure investors and the stock market by showing them that the SmartWear board remained in control of the business, and was willing to take essential action when necessary. The board decided that the company needed to rationalise its operations by closing the 20 worst performing retail outlets in Noria, and withdrawing entirely from the neighbouring country of Centrum, where SmartWear’s 15 retail outlets were all suffering heavy losses and showing absolutely no sign of recovery.

(b) Evaluate the strategic and ethical implications to SmartWear of the planned shop closures in Noria and the withdrawal from Centrum. (12 marks)

Professional skills marks are available for applying scepticism skills to the underlying issues and problems which may arise from this strategic decision. (2 marks)