Alpes Situation Analysis

Topics: North American Free Trade Agreement, Financial ratio, Ratio Pages: 2 (465 words) Published: September 6, 2008

Situation Analysis
Internal Analysis (Charles River Laboratories)
Strength: The Company has potential customers in more than 15 countries worldwide such as biotechnology firms, animal health, medical device, hospitals, academic institutions and government agencies. Then, CRL is market leader of industry about commercial production and supply of laboratory animal models.

Weakness: Cost per unit for produce SPF egg was more expensive than normal egg. So, selling price per unit was high and some of customer unaware about SPF egg.

Internal Analysis (ALPES S.A.)
Strengths: ALPES as a member of IDISA group which owned the large poultry operation that is physical resource of company. Next, ALPES has human resource who is Miguel; he had completed Ph.D. in chemistry at Harvard University and starts his job for U.S. Company in Mexico. So, he has more experience and generates new idea to reduce cost and increase reliability by vertically integrating. In addition, the company was readily to supply SPF egg and embryos because they own well-established production facilities. Moreover, a company has potential customers which are InterVet and Anchor. (InterVet is Netherland based company that it was one of the world’s largest poultry vaccine manufacturers and Anchor is Mexican subsidiary of German company)

Weakness: From financial ratio analysis, it shown that ALPES has problem about lack of financial resources which Debt to Asset is 19.95% and Debt to Equity is 24.91%. Both of ratios mean that company has problem to borrow fund form external and fund form shareholders (internal). In addition, there is negative real rate of return in last three years.

External Analysis (Mexico)
Opportunities: Because of North American Free Trade Agreement (NAFTA), it has effected to increase Vaccine production in Mexico and the company might easily to expand their product to Unites State and Canada. Next, change in European and...
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