Thomas Money Service Business Analysis

Topics: Economics, Microeconomics, Marginal cost Pages: 5 (1315 words) Published: April 8, 2011
Thomas Money Service Incorporated Business Analysis
Leslie (Scott) McCrory
ECO/561 Economics
March 14, 2011
Facilitator David Francom
Thomas Money Service Incorporated Business Analysis
Executive Summary

Thomas Money Service Incorporated is a consumer finance company, and conducted business successfully for 71 years. The organizations primary financing services pertained to commercial real estate and business loans. In 1946, the company decided to incorporate a subsidiary business to manufacture forestry and construction equipment. The new company, Future Growth Incorporated, became the Thomas Money Service’s sole brand of merchandise. In 1951, the newfound company purchased a suitable manufacturing facility to produce its products. The timing in which the company diversified its financial services by integrating its own brand of products proved lucrative.

Differentiating economic conditions over time, the implementation of technology to create a global marketplace, and naturalist have affected the organizations “bottom-line.” The organization’s business plan has served them well, but has become antiquated in today’s economic times. Economic indicators display needed change in organizational spending to improve the company’s market share position while increasing consumer interest. The organization’s management must consider new methods to increase revenue, reallocate expenses, and improve production for profit maximization. Although the company has proven steady growth throughout its business life, a recent 30% decline in profits reduced the company’s workforce by one-third. Many non-price barriers such as economic downturn in the construction industry, environmental awareness, and environmental conditions prove formidable adversaries to industry growth. Thomas Money Service’s fiduciary responsibility to redefine business operations is essential for survival. Increasing Revenue

Thomas Money Service successfully implemented a new brand of equipment and construction products into a pure competitive market. The organization’s product demand has peaked market demand, and sales revenue is declining. According to Economic Principles (2011, ) “In open and competitive markets, supply & demand tend to fluctuate and get out of balance for short periods, but they do tend to be in balance over long periods. This concept is particularly true in real estate markets where supply generally takes a long time to create; also factors that affect demand are also often broad-based and extend over long periods” (p. 42). Therefore, future business applications must maximize revenue in correlation with all economic business cycles, and generate a balance of supply costs with the industries aggregate demand. “A demand unit is simply the combination of desirability and effective purchasing power, that is, a member of a population of data (person, family, household, business, etc.) that desires a product and can afford it” (Economic Demand, p. 51). To maximize net income and increase revenue, strategic managerial planning must focus on product differentiation to encourage • Brand switching – Increased advertising for product differentiation and brand awareness • Competitive pricing – Increase product and services quality and price to entice greater demand • Decreased operational costs – Manufacturing upgrades and determination of an appropriate mix

When aggregate demand exceeds supply, opportunities arise to maximize net income because of increased demand. Thomas Money Service should restructure its product and services mix, and increase advertising expenditures in an effort to create increased revenue. Achieve Ideal Production Levels

This study’s scenario does not offer production costs or levels. Additionally, costs associated with inventory levels and turns are absent from this study. Therefore, exact production analysis is difficult to obtain. Thomas Money Services can improve production levels by...
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