Birch Paper Company Group Assignment Final
Course : Strategic Finance and Control Growth
Group # 3
Student numbers:
SRFHR0912037;SRFHR1013006; SRFHR1013010;
SRFHR1013014; SRFHR1013023
Contents
Birch Paper Company 1
Background: 1
Problem Statement 2
Problem Analysis 3
Recommendations 6
Birch Paper Company
Background:
Birch Paper Company was a medium sized vertically integrated Paper Company that manufactures three products that were white and Kraft papers and paperboard. This company had four departments that produced the output and a Timberland department that delivers part of the pulp the company needed. BCP used a decentralization strategy and each divisions profit was judge and calculated individually. The Birch Paper Company departments were in charge of their own profits and they are responsible for their own Return on Invested Capital. The company faced some concerns and to clarify those, analyses have been made to reveal information to the Chief Executive Officer (CEO)
Problem Statement
BPC is divided into the Thompson department, the Northern department, the Southern department, the Timberland department and a fourth manufacturing department. Each being judged by the profit and ROI they generate. However, outside firms seems to tackle/squeeze them price-wise. Within the division there is a competitive strategy because they can buy boxes in or outside the company. Since these had to generate profit they had to look for other strategies to accomplish this but there were issues of transfer prices, out-of –pocket costs and the profit and ROI. The Thompson division worried about the transfer price it had to use in order to gain profit. Firms outside BPC offer a lower price than the price used within the company.
Northern department designed a special wholesale display box for one of its finished papers together with the Thompson department, which was appointed to make the boxes. Thompson as one of the four departments changed paperboards into new output that were
Group # 3
Student numbers:
SRFHR0912037;SRFHR1013006; SRFHR1013010;
SRFHR1013014; SRFHR1013023
Contents
Birch Paper Company 1
Background: 1
Problem Statement 2
Problem Analysis 3
Recommendations 6
Birch Paper Company
Background:
Birch Paper Company was a medium sized vertically integrated Paper Company that manufactures three products that were white and Kraft papers and paperboard. This company had four departments that produced the output and a Timberland department that delivers part of the pulp the company needed. BCP used a decentralization strategy and each divisions profit was judge and calculated individually. The Birch Paper Company departments were in charge of their own profits and they are responsible for their own Return on Invested Capital. The company faced some concerns and to clarify those, analyses have been made to reveal information to the Chief Executive Officer (CEO)
Problem Statement
BPC is divided into the Thompson department, the Northern department, the Southern department, the Timberland department and a fourth manufacturing department. Each being judged by the profit and ROI they generate. However, outside firms seems to tackle/squeeze them price-wise. Within the division there is a competitive strategy because they can buy boxes in or outside the company. Since these had to generate profit they had to look for other strategies to accomplish this but there were issues of transfer prices, out-of –pocket costs and the profit and ROI. The Thompson division worried about the transfer price it had to use in order to gain profit. Firms outside BPC offer a lower price than the price used within the company.
Northern department designed a special wholesale display box for one of its finished papers together with the Thompson department, which was appointed to make the boxes. Thompson as one of the four departments changed paperboards into new output that were