Suprema Car Case Study

Topics: Risk, Finance, Security Pages: 4 (1229 words) Published: April 4, 2013
1Executive summary
Suprema Cars has been caused to a financial crisis. 7 options of recommendation have been suggested to Suprema Cars to get out of financial crisis. 3 outstanding options have been chosen in step 1 report to further analyze here. Setting up joint venture is recommended to Suprema Cars.  2Introduction

Suprema Cars, a manufacturer of a classic English sports car, began to lose sales and market share, and it made a loss in last two years. At the same time Suprema Cars is facing problem with labor force due to the dissatisfaction of wages, working conditions and manager’s insistence of increasing production. As a result, bad effect of the quality of the cars caused. Increase number of Suprema Cars that have broken down. 7 options of recommendation have been suggested to Suprema Cars to get out of financial crisis. That are price reduction, modernizing factory, subcontract with low cost foreign manufacturer, get outside additional finance, setting up joint venture, launching new product and getting help in sales boosting.  

3.1Price Reduction
This Option is to cut down price of the cars. This option is high risk in financial aspect, in terms of risk level. This movement will reduce profit made by each sale of Suprema Cars, which is limited now. But it could also stimulate sales growth by attracting new customers, due to the deduced price. Some reputational risk may also cause by this option. Due to the price reduction, some old customers may feel like Suprema Cars is cutting cost for sales instead of keeping the hand-made high quality, thus some loyal customers may lost. 3.2Getting Outside Additional Finance

This Option is to get additional finance from outside source than have major launch in the USA. Aspect of morale of workforce is the high risk and reputational risk is medium risk in terms of risk level. Suprema Cars was founded in England for over 50 years, it may break down the self-esteem of the workforce, that causing a...

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