Starett Company Case Analysis Paper
Starrett companies is certainty not immune to risks. In this paper we will be looking at the risk poised to the Starrett company in the venture of opening a distribution warehouse in Toronto Canada.
1. Internal. What are the company’s most significant internal risks and opportunities related to the project?
Some internal risks to Starrett in regards to moving to Canada would be;
Increasing costs:
Most companies, and especially Starrett is not immune to the rising costs of doing business. In 2016 Starrett in North America saw administrative expenses increase over 1 Million or 3%. The Starrett websites also bring to light other increased costs of travel and entertainment at 2.3 Million.
Besides actual hard numbers that Starrett has experienced in 2016, the future of this project could make these numbers worse. Administrative costs will go up when we create the new warehouse. Opportunities:
The internal opportunities for a company like Starrett and opening a distribution warehouse is the opportunity to get their company products out to more customers. Currently, Starrett is not meeting the needs of their …show more content…
I would recommend the company still proceed forward because I do believe in time the company will benefit from such a close partnership with Canada.
Sales Higher 20%:
If the sales from the distribution warehouse increase by 20% this would be a great win for Starrett. They really need to have this boost in numbers. Looking at the increase we would then need to analyze where and how the profits were rising. Perhaps, looking at another distribution warehouse on the West of Canada towards California, as that is the next hot spot for Starrett. b. What do the net present value, internal rate of return, and payback values from your base scenario and the sales variation scenarios above imply for the proposed
1. Internal. What are the company’s most significant internal risks and opportunities related to the project?
Some internal risks to Starrett in regards to moving to Canada would be;
Increasing costs:
Most companies, and especially Starrett is not immune to the rising costs of doing business. In 2016 Starrett in North America saw administrative expenses increase over 1 Million or 3%. The Starrett websites also bring to light other increased costs of travel and entertainment at 2.3 Million.
Besides actual hard numbers that Starrett has experienced in 2016, the future of this project could make these numbers worse. Administrative costs will go up when we create the new warehouse. Opportunities:
The internal opportunities for a company like Starrett and opening a distribution warehouse is the opportunity to get their company products out to more customers. Currently, Starrett is not meeting the needs of their …show more content…
I would recommend the company still proceed forward because I do believe in time the company will benefit from such a close partnership with Canada.
Sales Higher 20%:
If the sales from the distribution warehouse increase by 20% this would be a great win for Starrett. They really need to have this boost in numbers. Looking at the increase we would then need to analyze where and how the profits were rising. Perhaps, looking at another distribution warehouse on the West of Canada towards California, as that is the next hot spot for Starrett. b. What do the net present value, internal rate of return, and payback values from your base scenario and the sales variation scenarios above imply for the proposed