Suprema Cars, a classic sports car manufacturer in Northern England, has had to face a lot of problems over the last few years: * Firstly, the company began to lose sales and market share, and in the last two years, it has made a loss. * Secondly, the factory workers are dissatisfied with the present situation: They demand higher wages and better working conditions. * And thirdly, the cars have suffered from a loss of quality due to an increased production. Therefore, Suprema Cars has to react quickly because otherwise they will go out of business.
This report will look at two possible options for the company on how to solve these problems and increase its profitability. Moreover, it will give some recommendations on how to be able to stay competitive in the car industry.
First of all, the company is forced to raise additional finance from an outside source in order to put into practice the following projects: * Suprema Cars should launch its classic sports cars in the United States. Thus, the company could increase its sales due to a larger target group (5.1 million inhabitants in Great Britain in contrast to 310 million inhabitants in the United States). In view of the financial situation of Suprema Cars, this would be a very economical option. * In addition to the classic sport car, Suprema Cars should launch an environmentally friendly, small car that uses the company’s brand name and design. With a small, dual fuel car, the company could attract new customers – people who live in big cities but who also set a high value on environmental protection. Moreover, rising energy costs and increased emissions regulations will certainly increase the demand for hybrid electric cars, as hybrid engines are more fuel efficient and less polluting than conventional gasoline and diesel engines. Worldwide demand for hybrid cars is estimated to reach four million units by 2015. * Suprema Cars has to...