March 14, 2013
Thomas Money Service (TMS) Inc. opened its doors in 1940 with the primary purpose of supplying the average household with loans for everyday needs. Since its origination, the company’s success has spawned an expansion including business loans, business acquisition financing, and commercial real estate loans. In 1946 Thomas merged with Future Growth Inc., an equipment financing company. The merger proved to be a smart move for TMS as they became a viable reckoning force within the forestry and construction industries. From the beginning to mid-2005 TMS proved to be a very successful company and relished all its stature. Like many businesses, TMS experienced drastic losses in stock values because of the economy, and resulted in the need to lay off some of its employees. Natural disasters such as flooding, forest fires, animal activist protesters, and the recent economic crisis were reasons TMS experienced a loss in sales in previous years. The purpose of this proposal is to present suggestions on how TMS can increase revenue, achieve production levels, determine how costs can be attuned to maximize profits, suggest a mix of pricing and non-pricing strategies, and create barriers to entry into the market if possible. This proposal will also look into ways on how the company can increase product differentiation, and if there is other means to minimize the cost for the product. Increasing Revenue
Because of the recent decrease in sales, TMS should first consider the marginal revenue and cost profit maximizing guide to determine whether there significant profit will produce to validate producing building and forestry equipment. Based on data gathered, after completing the analysis it proves that the marginal revenue exceed the marginal cost proving that no more would be added to cost than to revenue. If profits are maximized, prices need to be in excess of the average...