Business Report

Topics: Risk, Marketing, Derivative Pages: 2 (463 words) Published: December 13, 2012
Full name: Ngo Thi Diem
Class: QH10.E18
Task: As members of the Suprema Cars management team, write a report for Jack Dexter analyzing the options you considered. Make recommendations on what Suprema Cars should do.

A Time for Taking Risks
Options for increasing profitability report
Executive summary
After evaluating the advantages and disadvantages of seven options which proposed by the management consultant, we considered the three following options. The first one is cut costs, modernize the factory and raise prices; the second is raise finance to break into the US market and the last one is launch a new design aiming at green consumers. Although each solution has its own pros and cons, we recommended that the second choice would be the most feasible one. Introduction

This report will look at:
* The advantages of each option
* The levels of risk - disadvantages of each option
* Recommendations on what our company should do
1. The 1st option:
* Cut production costs by installing automated machinery will obviously boost the productivity and be labor-saving. However, our company has big reputation for craftsmanship, so if we do this, it is certainly that we will lose a large number of customer bases. Moreover, the presence of automated equipment would somehow have a negative effect on the morale of workforce. * Raise prices by 20% on the one hand would provide us with an available amount of cash in a short term to upgrade the factory. On the other hand, we may have to face a risk of losing more customers. 2. The 2nd option:

* Try to get additional finance from an outside source can take time and effort. * Have a major launch of the cars in the US will involve in a huge cost for researching the US market, marketing the products, etc. If the launch succeeds, we will gain a tremendous profit, but if it fails, our company will go out of business. 3. The 3rd option:

* Putting our brand name on a...
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