Suprema Cars – report on option to increase the company’s profit
1. Executive summary
On our last meeting a management consultant has advised us seven options to increase the company’s profit. Two of them were ruled out (a joint venture with an overseas manufacturer, accept the approach of a major European manufacturer), because of there are not acceptable for our company. The management team has been discussing the other five options during last week.
This report will look at:
• Pros and cons of the options
• Recommendations to increase sales and market shares.
1. By cutting the prices of the cars we will gain new customers, but, on the other hand, there will be no financial opportunities to raise a worker’s salary and repair the roof of the factory.
2. By installing automated machinery we will be able to cut productions costs and modernize the factory, but to do this we need to raise prices by 20%. Furthermore, it can expose the company to loss of reputation and loyal customers interested in buying a hand-made car.
3. If we increase production, we will have the problems with the morale of workforce. Workers think this will have a bad effect on the quality of the cars. Dealing with the subcontractors will bring down company’s reputation and client’s loyalty.
4. The American market is the biggest one in the world. A major launch of the cars in the US opens big opportunities for our company. Selling in the US could transform our fortunes in the long term.
5. The market of the sporty, environmentally friendly, dual fuel, small cars is very competitive and supposes a use of high-technologies and considerable financial resources.
Try to get additional finance from an outside source then have a major launch of the cars in the US.
1. For the avoidance of troubles with the Unions we need to repair the roof of the factory as soon as possible. 2. Raise prices by 5-10%...
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