Case 2 – Royal Printing and Packaging Company
Fundamentals of Management Case 5-1
I. Executive Summary
In May of 1989, the Royal Printing and Packaging Company, which was put up in 1962, was turned over by Ricardo Baltazar to his son Jose. The printing company’s primary supplies were high quality, good condition German brands of machines bought at low prices, including a Heidelberg Offset Kord, originally acquired at 380 000 pesos, now valued at 1.2 million pesos. Upon reviewing the company’s income statements and balance sheets, Jose noticed that company sales did not reach 1 million pesos despite being in the business for 25 years. In addition, he computed a 6% increase in net margin should assets be sold and treasury bills invested in.
Jose presented the information to his father; however, the latter only gave him freedom in setting targets, not in making the decision as to whether or not the assets should be sold. Jose went back to researching and planning for his first year managing the printing company.
II. Problem Statements
What factors or variables should Jose take into account as a means for increasing the net income of the Royal Printing and Packaging Company? Long Term
What measures must Jose take in order to improve market standing, innovate operations, upgrade physical and financial resources and increase profitability in order to sustain consumer interest, confidence and loyalty? III. Areas of Consideration/Key Success Factors
[in table form]
Established customer base (S)
Investments made in good condition machinery (S)
Only 1 million pesos generated in company sales despite being in the business for 25 years (W) Expected boost in printing industry (O)
International market ())
6% increase in interest rate should assets be sold and treasury bills invested in ()) Estimated 3 700 printing establishments in the country, 2 700 of which...
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