Case Study-Payout: Gainesboro
Financial Management Case Study-Payout: Gainesboro
I. The goals of Gainesboro
i.
Corporate Goals
Management expected the firm to grow at an average annual compound rate of 15% and reach $2.0 billion in sales and $160 million in net income through 2011. ii. Recent strategy of Gainesboro
The company devoted a greater share of its research-and-development budget to CAD/CAM as to reestablish its leadership in the field. The company also underwent two massive restructurings, including selling two unprofitable lines of business, selling two plants, eliminating five leased facilities, and reducing personnel in 2002. Then, in 2004, the company implemented a second round of restructuring by altering its manufacturing strategy, refocusing its sales and marketing approach, and adopting administrative procedures for a further reduction in staff and facilities.
The Artificial Workforce was an array of advanced control hardware, software, and applications that could distribute information throughout a plant. Thus a product could be designed, manufactured, and packaged solely by computer no matter how intricate it was. Although the company had successfully patented several of the processes used by the Artificial
Workforce, there were two factors that could affect sales which should be concerned. First, two strong competitors were developing comparable products and would probably introduce them within the next 12 months.
Second, sales of molds, presses, and CAD/CAM equipment and software were highly cyclical, and predictions about the strength of the U.S. economy were not encouraging.
II. The inferential process
i.
2004 SALES
2011 SALES
15%
45%
25%
75%
40%
CAD
Machine Tools
Press,Die,Mold
CAD
Press,Mold
Cause the company goal is to change its revenue structure, which make CAD/CAM and peripheral cutting edge products generate 3/4 of the sales, and the traditional presses and mold would account for the remainder.
I. The goals of Gainesboro
i.
Corporate Goals
Management expected the firm to grow at an average annual compound rate of 15% and reach $2.0 billion in sales and $160 million in net income through 2011. ii. Recent strategy of Gainesboro
The company devoted a greater share of its research-and-development budget to CAD/CAM as to reestablish its leadership in the field. The company also underwent two massive restructurings, including selling two unprofitable lines of business, selling two plants, eliminating five leased facilities, and reducing personnel in 2002. Then, in 2004, the company implemented a second round of restructuring by altering its manufacturing strategy, refocusing its sales and marketing approach, and adopting administrative procedures for a further reduction in staff and facilities.
The Artificial Workforce was an array of advanced control hardware, software, and applications that could distribute information throughout a plant. Thus a product could be designed, manufactured, and packaged solely by computer no matter how intricate it was. Although the company had successfully patented several of the processes used by the Artificial
Workforce, there were two factors that could affect sales which should be concerned. First, two strong competitors were developing comparable products and would probably introduce them within the next 12 months.
Second, sales of molds, presses, and CAD/CAM equipment and software were highly cyclical, and predictions about the strength of the U.S. economy were not encouraging.
II. The inferential process
i.
2004 SALES
2011 SALES
15%
45%
25%
75%
40%
CAD
Machine Tools
Press,Die,Mold
CAD
Press,Mold
Cause the company goal is to change its revenue structure, which make CAD/CAM and peripheral cutting edge products generate 3/4 of the sales, and the traditional presses and mold would account for the remainder.