Overstating projections A problem that can arise from starting the budget is when the person who created the budget gets an idea that the business will sell more items than the business is realistically able to do. If this happens the business will spend a lot of money on items that the budget believe the business will sell but in reality the business will not be able to sell this stock. IF the business is in the food industry and this problem happens it will end up going to waste as food goes off. This will result in the business losing a lot of money which they could spend elsewhere and if the business doesn’t have much money this money could have been used to pay off their expenses. If the business does lose this money they might
It appears that this very issue may be vexing Elite. The admission by one of Elite’s own employees, that Stampy offers a “similar, if not better” product at a lessor price is troubling. The entrance of Stampy may pose a long term problem. If Stampy is able to continuously drive down pricing, it may create a
Low customer satisfaction is another internal weakness that is crucial to the success of CanGo. Another internal weakness includes severe communication issues within CanGo’s management and employees. External threats such as competition, plays a big role in the future success of CanGo. Your organizations internal organizational strengths such as online growth, and cost advantage offers great potential if properly utilized. Another external threat includes economic slowdown.
Business Resources – D3 Possible causes of the cash flow problems Cash flow problems are a major cause of insolvency. Cash flow planning involves making sure that a business generates enough cash at the right time to meet pressing liabilities. A cash flow forecast is really useful for a business as it helps them to identify their inflows and outflows, however if it is not manages properly it may causes some problems which may affect the business and the way this is performing. Owner’s drawing Owner’s drawing is when the owner of the business takes money out of the business for its personal use. In our case study, the owner for Yo Retro has taken different amounts of money out of the business from January to June, however in the next six
Field Trial McDonalds may use this and bring out a new product for a limited amount of time or in limited stores to see how it does. * People may not like the product totally and it could be a waste of a try for McDonalds. * It is expensive to set up schemes like this and the product could be a total failure. * It takes time to get enough research to bring out the new product and the research costs a
If he relocates one of the stores he could also lose customers as well. The internal weakness include not wanting to hire outside of his family and the timing if he relocated one of his stores which he could lose current and potential customers due to the opening of West 9. He is not sure of his ability of running two stores either . External perspectives The characteristics of this industry are that with similar companies that are larger it greatly affects smaller companies with the cheaper prices that these companies can offer to customers. The firm’s strategy for differentiation is to be able to provide exceptional customer service by react quickly to competition
Perhaps they believe that the employees are contributing to the revenue losses and are stealing merchandise. These are all self destructive in nature and could impact their ability to remain in business and keep good employees. Making the decision to close two stores without adequate justification drastically reduces it footprint in the market place. It appears that either the store supervisor or manager is not engaged with the employees and consumers; do not have sufficient training on company ethics policies to enforce them; or they do not have a fully robust ethics program in place to address to ongoing issues. PART B Company Q can take some immediate steps which I believe would turn a downward trend in to positive results.
There are not always happy endings to fairy tales. The financial risk can either boost or hinder a company to succeed. No matter if the money is from one’s pocket, borrowed or funded; there is a huge risk in losing a lot of money. If the money is borrowed, one will end up having a lot of debts. To prevent this, one needs to create good budget plans for the company and manage his money wisely.
More debt will be created at first and possibly in the future depending on how good the new company takes off. Also, the working capital needs to decrease in the first organization that was opened in order for things to work out. If Hoffman decides to merge with another organization can set a company back with projects, revenue, and staffing. Having a new company can bring in new customers, but can also lose customers if they are unaware that a company has merged or if they do not like the company that they had merged with. Other things to think about are the companies’ lines of credit and financial lending.
However, there is a problem that Costco has to deal with is that their profits mostly from its membership fees instead its net income. They are sometimes keeping the prices too low to compete with their competitor but this strategy has a disadvantage. They couldn’t make a lot of profit from the merchandises. Therefore, a recommendation needs to be given. They should utilize their space in each store efficiently.