Introduction
In this paper, the case of the Sportswear Company and the possibility to be bought by the representative of the Foxtrot Company will be analyzed and evaluated. Mr. Leslie Olivera who is the manager at Foxtrot is going to accept the offer of Charles Richards who is the current president of Sportswear to buy his business. Leslie has to evaluate the past, the present, and the future of the company in order to make the necessary decision and define the prices.
What is the capacity of the process as it is at the start of the case?
At the beginning of the case, the situation and the capacity of the process is the following: Leslie has always one particular dream that is to be the owner of the business and Mr. Richards has already created a good company, Sportswear, that takes leading positions in the market and propose its workers worthwhile salary. The evaluation of the apparel industry helps to comprehend how effective and promising Sportswear can be in comparison to other organizations of the same field.
Though the late 1980s were characterized by unpleasant conditions for the development of the apparel industry, the representatives of Sportswear found out a good way to overcome the challenges: even if their annual rate was decreased, this company continued existing and introducing appropriate clothes. Sportswear was recognized as the company with a perfect ability to respond errors; and Leslie demonstrated a burning desire to own her business and make use of her skills in sourcing management. Due to the friendship with Charles Richards, Leslie got to know about the possibility to buy this company and get a good opportunity to grow all those affairs inherent to Sportswear.
Describe what the process will need to be in order to handle a possible doubling of orders from Foxtrot
Being a sourcing manager at Foxtrot, Leslie is aware of how to perform the work on the highest level and to double the order from this company. Sportswear has already established a reputation of an outstanding company: in-time deliveries of goods, proper quality of services and production, and desire to be improved day by day. Foxtrot demonstrates its abilities to double orders that are allocated to Sportswear, and the three-year contract signed may serve as the best and the most powerful evidence of how more work may be performed. This activity helps to double the order in case Sportswear meet all the conditions set in the contract and Foxtrot makes use of growth.
If such conditions are met by both parties of the contract, it will turn out to be possible to double orders, improve the transportation of production, and take higher positions in the world market. The development of the relations that may be between Foxtrot and Sportswear has a number of positive consequences; and if Leslie taking the position of the source manager at Foxtrot is able to become the owner of Sportswear, this opportunity has to be used.
What are the financial ramifications of doing business at the higher level of orders?
The already mentioned contract between Foxtrot and Sportswear aims at meeting high levels of necessary delivery and those quality standards that are required by the organizations. Leslie has already evaluated the possibility to improve the situation and get better incomes from their activities. This is why the ideas to achieve the desirable financial success mostly depend on growth demonstrated by the two companies. She takes into consideration all financial returns that may be possible and the volume of the payment required by Mr. Charles. Leslie’s experience in Foxtrot helps her evaluate what kinds of costs are possible to overcome or decrease and which ones are obligatory for this affair.
In case the organization is going to do the business at the higher level of orders, some financial ramifications are possible:
- the production process at Sportswear has to be changes and its managements requires some money;
- sales revenues may be doubles;
- staff at Sportswear has to be increased due to the burning necessity of having more hands to complete the duties in time.
However, in general, the idea to increase the levels of orders seems to be rational and may lead to positive outcomes for both Sportswear and Foxtrot.
Should Leslie buy the company, and what should Leslie be willing to pay for it?
There are several reasons of why Leslie has to but the Sportswear Company, and what is more important these reasons are of two types, personal and professional. First, Leslie has a dream to be an owner of her business. Her practice at Foxtrot and developed skills as a source manager should be rather helpful. This is why she has, at least, to evaluate the offer by Charles in order to realize what kind of affairs she may get involved into. Second, the chosen organization has rather successful indications in the apparel industry and strong grounds.
Finally, her friendship with the President of Sportswear should provide her with a good chance to learn more about the peculiarities of the organization, its strengths, and weakness in regards to other representatives in the same field. As for the financial side of this deal, Charles’s offer seems to be justified. The only point that has to be discussed once again is Leslie’s duties and rights after she buys the company. In general, Leslie has to agree to buy the company for $250,00o taking into consideration all future incomes and experience.