Royal Printing and Packaging company free essay sample

The new manager â€Å"Jose† being a fresh graduate knew new trends, ideas and tactics beneficial to the company. He has lots of ideas and plans for the future which makes the company adaptive and globally competitive to the business world. -The company has no substantial liabilities. Thus the company has enough financial capability to run business. Having no liabilities means that all sales they have generate goes directly to their net income. -Equipments being a high quality and first hand use, will last long. With its equipments being branded and first hand use, the life span of these will sure last long, which means that the company doesn’t need to purchase new machineries rather spend for maintenance that cost less rather than purchasing a new one. -The value of the machine increases as time passes by. As time goes by the equipments residual value increases, it doesn’t mean that there is a need to sell these to generate income rather, if time came that the machine was already obsolete, sales that would be coming from these will give a gain for the company’s future benefit. We will write a custom essay sample on Royal Printing and Packaging company or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page -The company is a sole proprietorship. Being with this type of business, the owner doesn’t need to consult with its other partners with regards to the decision-making for the company. Wherein there will only be a one- man decision for the entity. -Jose, being the son of the owner, knows the nature of their business. Who else can be suitable to manage the business? Having their business running for almost two decade, he already knew how he can manage it, nonetheless, can seek help and advices from his father. Weakness -Company depends solely with the drugs company. Generally, the company is only dependent from the income they generate from its clients which happens to be the Drug Company only. How can the new management reach its goal if they will only depend from their sales from these? -Too many expenses which lessen the net income. From the data cited on Exhibit B, it can be seen that almost half of their Income goes along with all their Operating Expense, especially from the Materials/Supplies Expense. If it can be lessen, it would be a good start for the company to generate a higher net income. -It has a bad net margin. For the past years, the net margin of the company doesn’t even reach 10% which measures the profitability of the entity. If this doesn’t increase, as time goes by may lead to bankruptcy. -The new manager lacks with experience being a fresh graduate. A fresh graduate lacks with experiences on how he would manage the company. A neophyte on the â€Å"real world† won’t survive if he would hold the company’s highest position, thus may lead to failure. -Machines were purchased long time ago which may lead to inadequacy and obsolescence. The machineries along was stated on the data given that to have a useful life at least 20 years. Almost all of its machineries used for operation were purchased long time ago, which may affect the productivity of the company’s output. Opportunities -There is an on-going structural reform. With the coming of the new management head, there would be reforms in the organization -Demand for basic school textbook increases. The population of pupils and students are increasing, thus, having more need for printed learning materials. -Restoration of democratic process. Restoration of democratic process will generate business from local companies as it achieves political stability. -The entity can accept prints for newspapers, journals, and periodic for them to advertise their company. During this time, a paid advertisement is a great help for the company to gain clients. Threat -More competitors rather than clients. -Economic change. -Technological advancement. During this time, technology ease the burden of most company’s thus inability to adapt with these changes, there would be a big gap between the entities with the other counterpart business establishments. -Natural calamities. Because Philippines a tropical country and a typhoon belt. It is also a part of the Pacific Ring of Fire; we cannot get rid of the possibility that this may affect the company’s operation. ALTERNATIVE COURSES OF ACTION (ACA) 1. Regain previous clients and give them discount or promo to gain their partnership again. Advantages: You would regain previous clients that would give and generate the entity a higher profit. Sales will increase. Many would acquire the discount/promo to have partnership with you. Disadvantages: Inability to meet deadlines. Higher demand for supplies needed for production. 2. Borrow money from creditors to finance larger scale operations. Advantages: There would be more capital for expanding the business Less taxes may be paid Disadvantages: There would be the presence of substantial liabilities. Inability to pay debt 3. Advertise Advantages: Attract buyers Informs potential buyers Disadvantages: Additional costs from advertisements 4. Do nothing. Advantages: No plan of action would be done Disadvantages: There would be no progress Recommendations Nos. 1 3