Abc Company : An Aggressive Growth Approach

An industry product can be substituted by a substitute product which has the same or similar function by a different means. A substitute can limit industry profitability and growth. Porter (2008) gives several key elements on determining the threat.

Due to the nature of its business, the company looks for technological risks generated by one or more of the following factors:

Review of ABC Company and the directions it is targeting. The strategy of the company is to lift the expected sales in an aggressive fashion, with the expected end target being to triple the current levels. The plan is to push sales into the targeted range of $3 million within 3 years versus the current amount which sits at $1.2 million. We will identify the perceived risk factors that may impact this aggressive strategy and its successful execution. The following will be those risk factors:

The company believes that new initiatives are necessary to bolster unit volume and especially reorders. I believe Advanced Materials lacks coherent strategy for Nundies to effectively appraise the financial worth of product service offerings. The managers must reduce the spending on order getting costs because they cannot increase their output to the capped limit of 100,000 liners. Other issues are whether or not the distribution approach currently used by the company will help reach profitability, and whether or not the company effectively reaches the target market.

Lastly, the company suggest to expand their current inventory through increasing production and capacity. With the increase in production rate the company can gain more consumers as a whole through supply and demand. Doing this would give the company an opportunity for more exposure and perhaps better brand recognition.

The company’s resource strengths are advertising, celebrity appeal (2 contracts), competitive low pricing in several segments, rebate offer, and model availability. The company’s resources weaknesses are in SQ rating, free shipping, retailer support, and delivery time. The external market opportunities that will have the company growth and increase profitability; sustained low-cost strategy in the wholesale segment, compete in private label segment (no bids in Year 12) and expanding on manufacturing capacity. In Year 12, Company C was able to lower manufacturing cost by 10% and 7% in North America and Asia-Pacific respectively. External threats to Company C are companies like A, B, and E selling at a loss in the private-label segment. Company C will strive to compete with low-cost strategy but with a controlled loss (if any), unlike the current price wars in the private-label segment, which in Year 12 Company C did not compete. Company C is strong in the wholesale segment and in the industry as a whole. The company has some strong resources to continue its growth and probability. Company C’s

CR goes up: increase the size of the company → more internal control concern over new line of product’s inventories.

owners have found that demand for their product has outstripped their ability to supply it. They

The SGR in ABC Company is lower than SGR in industry average in years 2013, 2014, and 2015 mean that the management of ABC company should increase retention rate so it affected on remaining earnings amount was increase also, if we look at industry average retention rate, it’s between 72 in 2012 to 71 in 2013, 2014, and 2015, but in ABC Company it’s between 70 to

Analyzing the performance level of our company, ABC industries, Inc., it comes to an unfortunate conclusion that we are not able to maintain our company as a whole. With this being said, our largest competitor, XYZ industries, inc., has given us an opportunity to merge with their company in order for us to continue to facilitate. An agreement between both companies was made in which we were allowed to keep 80% of our workforce. As a result, 20% of our workforce will be terminated.

Another form of change comes from introducing a new product line. As a result of market demands or diversification measures, changing the product line increases profit as well as market

Next disadvantage is that market pioneers will face market and technology uncertainties, which is a primary reason of failure for startups. Lastly, a shift in customer’s needs is required in order to create demand for the market pioneer’s new product or

The threat of substitutes is the availability of a product that the consumer can purchase instead of the industry’s product (Free management books, n,d ). A substitute product is a product that produced by other industry and offer similar benefits to the customer as the product produced by the firms within the industry. The threat of substitutes can affect the competitive environment for the firm in that industry and also influence the profitability of the industry. This threat affects profitability of the industry because the consumers can choose to purchase similar product from other industry to instead of the company’s product. Besides that, the more the close substitute product can make the industry more competitive and decrease the profit potential of the firm in the industry whereas the less the close substitute product can make the industry less competitive and

One of their main strategy is to diversify their main business into many areas as possible as they can. Company is greatly looking the extent to which they are feasible with going to a new area and based on that they try to enter into different markets at a lower cost using their strong brand image in the global industries. This company is always looking for challenging venture in the market. While most of the organizations being risk averse, this organization act as a risk seeker in the market who will accept the challenge of going into new ventures very quickly. However, almost all the ventures they enter into has been a success as at now. This is because they always accept their

            Other environmental influences, such as competition, may fuel the company’s desire to create more and better products that could well determine their location and standing in the global market. Increase in the number of competitors for the same line of products may mean that there