Ncb Office Summary

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NCB Office Products Inc. was a nationally suppliers of office products, which manufactured about 65 percent of what it sold. NCB had explored its business globally to Canada, where it granted Harrison as an exclusive distributor in the four Atlantic provinces. Although NCB dealt with several major regional distributors, Harrison was one of the main distributors, which 95 percent of NCB’s sales in Atlantic provinces were through Harrison. Before the new acquisition of Harrison by new president in 2003, these two companies had close relationship and both of them benefited from their businesses. But from 2003, Harrison’s financial performance turned to negative side, which affected NCB’s performance as well. NCB had to face the problems of losing market share, decreasing its earnings, and declining its sales. NCB had to find the right option to change this situation with the minimum risk as possible. There are four options that NCB had to choose from to take the action. The first option is to push Harrison’s receivable account down to some reason level. This option is very risky because the failure could proceed to bankruptcy, which leads to losing market share and facing the difficulty to finding other qualified distributors. The next option is NCB will start its own distribution centre in Atlantic Canada. But this option requires large amount of capital investment such as hiring more sale persons and setting up distribution points in several locations. The third option is trying to work with Harrison and helping them solve the problem. NCB will use separate bonded warehouse facility and remit collections from customers directly to reduce Harrison’s account. NCB also suggests the way to reduce inventory and helping Harrison to get the computer system that works efficiently. The last option is doing nothing, which create problem to NCB’s credit department, which

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