The retailing recession was what the company believed caused this decline in sales. A company’s ability to pay off a short-term loan relies heavily on the company’s sales and profit. If these are declining then there is no way the company would be able to pay off the loan at the original forecasted time. Along with the downturn in sales SureCut Shears did not accurately forecast its financial needs. The company’s proforma statements did not take into account any external factors such as a retail recession taking place.
Lack of strategic planning within a business will bring failure to the business and will cause the business to lose a lot of profit or even have to shut down their doors. Thinking strategically is essential in the growth stage of the business life cycle, either thinking of strategies to sustain growth, to forecast future expenses associated with growth and preparing for future problems which the business’ may encounter. Coles-Myer merger is an example of failure of strategic planning and thinking, Coles and Myers merged in 1985 and
This is something they have done well. For example, the company knew that their operations and technology were great, but that they were lacking in the marketing area. After they identified this problem, they reached out to experienced marketing managers. Harrah’s had always focused on customer loyalty and, for a very long time, they thought this strategy was working in their favor. However, in 1998, they realized that Harrah’s customers were showing very little loyalty to the company.
The main problem in a declining industry is that falling demand for products lead to the emergence of excess capacity. In trying to use this capacity, GE began to cut prices, thus sparking a price war and diminishing the profit. GE was also suffering from low productivity growth (1%-2%) as well as a lack of new innovations. Another issue facing Welch as he took control was that the company was still organized as it had been when GE was founded near the turn of the century. GE was suffering from a lack of strong leadership and the existence of to much bureaucracy.
The decision of cutting price was considered by the main members of the company. But the price cut had led to declining company profit. In a strong effort to correct the situation Wilkerson Company was forced to analyse the situation as the overhead costs has become larger than the direct labour expenses. According to the Wilkerson case reading, the company had always used a simple cost accounting system or a traditional costing approach where each unit of product was charged for direct material and labour. Material cost was based on the prices paid and labour that was charged to the product standard run for each product..
Even though the leaders contended that conflicts between its auditing and consulting missions had no impact on the quality of its work but actually they do. The two roles rarely mix well--a fact Arthur Andersen himself warned about as far back as the Great Depression. The culture changed where the auditor was no longer the guy people respected in the '80s and '90s. Even as many of its partners and staff continued to uphold a high standard, others compromised in the interest of generating fees. Andersen's remaining leadership disputed that the firm emphasized the selling of services over audit quality, replacing partners who were strong auditors but didn't generate enough revenue.
In fact, those “growing” companies are not truly “growing” because that even if they are still making profit, they are losing consumers and market at the same time. Especially those companies who owns irreplaceable resource and products for now, they should have a clear cognition that no product is indispensable forever. In addition, companies always narrow themselves to a limited area so that it is hard to have extraordinary improvement in their products. In order to keep their competitiveness in this rapidly developing age, asking for trouble is necessary so that companies will be pushed to develop products to reach higher level of consumer satisfaction. It is important to focus on customers and customers’ needs instead of just persuading customers to make the exchange.
Executive Summary: This case is about the acquisition of Great Outdoors by Templeton Hardware. The management in Templeton Hardware changed the business strategy and the reward strategy that was initially enjoyed by the staff of Great Outdoors to match those which were in place in their company. This strategy however, did not work very well. Staff were demotivated and started to leave the organization. The sales suffered and customers were extremely dissatisfied with the service being offered.
Store managers have been deprived of the opportunity to advance due to the lack of training and the general development of managerial skills by their supervisors. The third area concerns cooperation and morale within stores, which is low. The friendly atmosphere originally created by Doug Campbell has disappeared and is a valuable asset to the company. The fourth area concerns the long-term growth and development of the store chain – a re-evaluation of long-term strategy is recommended to compete with the changing trends towards department stores in the industry. ISSUE 1: The Thunderbunnies Consulting Group recognizes the need to adapt to change in both their layout and structure.