Cyclermate Private Limited Business - Case Study Example

?The Cyclermate Project –Referral Introduction This is a business report about Cyclermate Private Limited. This report has been developed to assess some of the critical organizational issues that the company has been facing. This report includes financial, marketing and human relation analysis of the company. PEST analysis and SWOT analysis of the company has been done to clearly identify the current issues. In financial planning, short term strategies are recommended to face capital structure and liquidity issues. Production planning has been developed to increase efficiency and cost reduction. In human relation planning, few changes are recommended in hr structure of the company. Short term marketing planning has also been made. Last requirement of investigation will be stated followed by recommendation for the overall growth of the company. Finally, a brief conclusion of this report will be provided. PEST Analysis PEST analysis has been done to assess the impact of environmental factors on the company’s business operations. Political factor has a substantial impact on labor law, income tax, trade barriers etc. Current number of worker is less than the output of the company. So, they recruit very less people and the workers have to work overtime for achieving company’s production target. But, the workers are not getting paid at normal wage rate for overtime work. This situation results frequent strike by them which affect the flow of productivity. Continuous overtime work is also the reason for lower productivity rate of individual workers. Economical factor has a major impact on financial health of a company. Though there is not any substantial impact of external environmental factors on the business but few internal issues are there which affect the economical stability of the company. Major issues is company’s purchase of bigger assets like it has purchased a huge warehouse which actually not needed according the demand and production capacity of the company. if they would have bought a smaller warehouse based their production capacity and inventories capacity then they would have invest the rest amount for new product development which would have more essential for the company’s product portfolio. This badly affected company’s economical stability. Social factor has strong impact on organizational culture and human factor of the company. Organizational work culture is of lower standard than what it should be as the workers have to overtime work each h and every day and also they do not get leaves by their won demand. This is because the company has lesser number of employees than its production target. Technological factor has major impact on production division of a firm. Cyclermate has been using manual methods for production of cy-cycles. They do not adopt technology advancement for production process like use of hi-tech machines for faster production. Using technology would enhance its productivity and the worker also would not have do overtime work. A single employee is responsible whole administrative work without help of any technology. SWOT Analysis SWOT analysis has been developed to assess internal and external factors like strength, weakness, opportunity and threat of the company. Strengths Employees of Cyclermate are the main strengths of the business as they are expert of making good designed and quality cycles. The company has huge warehouse for higher level production and stock management. The company was one of the leading bicycle companies in the market. Owner of the company has a potential investor to raise fund for the company’s new project. Weakness Cyclermate do not provide initial training to the new workers and thus it has maximum number of untrained workers which is a major weakness of the company with respect to productivity of the company. Employees do not have any specific job roles. They do not display the variety of products in the company showroom in Wales. The company has done ineffective investment by purchasing a huge warehouse which was more than required for its level of production capacity. The company has received many complaints from their customers regarding the product quality. Opportunity Cyclermate had opportunity to recruit more workforces in the company and they can increase the individual productivity of the employees by providing adequate training to them. The company has another opportunity to increase the production level by introducing some of the modern machineries. Administrative and operational efficiency can be enhanced by installing few computer systems. The company also has opportunity to promote their products range through internet and by making a company website. Threats Cyclermate has a major threat in terms of threat of new entrants in the market as there is a good demand of good quality cycles. Customer complaints regarding product quality are major threats of the company as it affects the reputation of the brand in the market. Short term options to alleviate difficulties Planning for financial improvements Balance sheet of Cyclermate shows that the company has ?210800 worth of noncurrent assets. It has applied loan from bank for getting funds for managing working capital of the company but its proposal was refused by the bank the company has only ?675 in its cash fund in the bank account. It can only borrow loan from bank on the basis of sufficient noncurrent assets of the company. Therefore the company needs to sell its freehold land, worth of ?160,000 and invest that money into business or they have to borrow bank loan on the basis of noncurrent asset of the company. Required funds for managing working capital of the company can be raised from the trade debtors of the company. For this, the company y needs to force them to clear their receivables. Cyclermate can recover a total sum of ?2000571 as receivables from the trade debtors which can be funded to its business. The company needs to stop debt selling to control the production continuity. The company has some finished machines which they can sell at lower prices. Cyclermate sells its products through direct selling in higher price than it sells in company showroom. It needs to reduce direct selling price to generate volume based revenue in lower number of transaction than the current scenario. It will also increase revenue of the company and also faster liquidation of stocks. Planning for production methods The company needs to buy stock of raw materials only when they required i.e. when liquidation of company’s inventories will be higher. Buying huge raw materials and warehousing those is inefficient manufacturing process. Because, raw materials can’t hold or retain the value of it even sometimes market value of stocked raw materials decreases and the company needs to sell their final product in higher price. The company has unnecessary hold raw materials worth of ?102,300 which has lower market value at present than its purchased value. Thought selling excess stock is loss to the company but can generate required fund from this which most essential at the current financial condition of the company. The company currently needs to develop a packaging department for quality packaging of the finished products which will minimise the damage of products during transportation. All department needs to be separated and employees in each department needs to assign individual tasks to increase the productivity. Production of those designs and models needs to be focused which has higher demand in the market and production need to start only when orders are coming. This will reduce the space and also money. Modern technology should be implied in the production process as productivity of the firm will dramatically increase if modern machineries are used rather than manual production of cycles. It will help the company reducing its human labour. Cost of per unit production will be decreased through introduction of technology. Therefore the company will able sell at lower price especially for direct selling. Planning for human relation issues There are many critical issues that are affecting the company’s productivity. Cyclermate needs to recruit few new workers who are fully trained and also experienced for the job. They will also train the current untrained workers. They will also assign different categories of job for different people so that by doing repeated work, employees become expert on that. This is standard workforce practice. Incentives programs need to be introduced so that the worker are rewarded for their excess work more than the target they are assigned. This will act as motivational factor to the current workers. Discount should be available for the workers to purchase company’s own products for their personal usage. If these types of motivational stimulations are injected in the workforce then overall productivity of the company will increase. Work structure needs to be efficiently developed. People will have individual job role and they need to assigned task for daily basis or weekly basis. Job responsibility will divided equally within a same team members so that any kind of conflict not arises. Performance review of the workers needs to be done by the manager in every month so that issues and concerns are discussed with the workers. This type of hr policies will help the workers to confess their issues to the management and management. Company needs to pay extra money to the workers if they do overtime work. It should provide all possible resources to the workers to complete tasks efficiently and also faster. Implementation these human relation policies will increase the productivity and work culture will also be improved (Venkatachalam & Sellapan, p.222). Strategic marketing planning Efficient marketing is very essential for Cyclermate. The company do not practice any efficient marketing activities for better penetrating the brand in the market. It needs to publish innovative television advertisement making aware of the design and quality of the products they are producing. They can also publish advertisement in print media like newspaper and sports and gaming magazines which are very much popular to teenagers who are generally main target segment of Cyclermate as a bicycle company. Online promotion is very required in the current era of internet. Fort this it needs to develop a company websites where all the products will be displayed and also it can promote the products through others websites. People trust a company through accessing the company websites as they come to know details about the company. Through efficient manufacturing of products the company can decrease price based on competitive in the market. Finally, it needs to develop a marketing team who will be responsible for marketing planning and activities. Investigation for long term profitability Survey or investigation is very much important and essential for Cyclermate in regular interval of time. By this, the management can assess the internal and external issues that might affect the performance or growth of the company. Investigation provides both positive and negative results. So, the management needs to overcome the negative sites of the business by proper implementing its strength and opportunities. Current situation of the company requires frequent investigation to assess who much of these new strategies are getting implemented. Recommendation for over improvement For raising fund, the company needs to sell their freehold land and invents the money for new product development and other business activities like purchase of new machines, marketing activities e.g. advertisement and campaigns, purchase of new computer systems etc. To increase brand awareness, it must need to develop a brand new website through which it can promote its new arrival design in the internet. It needs to reduce direct selling price of its products to volume sell their current stocks. It also needs to collect the receivable and needs to minimize trade debtors for efficient cash flow into the business. Company needs to recruit trained people who will be responsible for providing training to the existing non trained workers. Conclusion After doing a thorough analysis of key areas of the business of Cyclermate, it can be concluding that the company has a good future if it efficiently operates its business in doing major changes in the kea areas of its business. For example, efficient asset management, effective production process, innovative marketing and frequent investigations of the business are very essential for the business grow sustainably. Therefore, Cyclermate needs to restructure the company policy and re-launch the brand in a new effective way in the market to get attention of the potential consumers. It can run efficiently after proper implementation of these new policies and strategies. Work Cited Venkatachalam, T.A. & Sellapan, C.M. Business Process. PHI Learning Pvt. Ltd. 2011. < http://books.google.co.in/books?id=5AQImKNMK8IC&pg=PA213&lpg=PA213&dq=analysis+of+critical+business+issues&source=bl&ots=r_ZptNs6nY&sig=zBkSP6H3IOPGEnbtm4Fmc6AWEgg&hl=en&sa=X&ei=RoYTUI_tIoXXrQf0koDYCg&ved=0CDgQ6AEwAQ#v=onepage&q=analysis%20of%20critical%20business%20issues&f=false>. Work Cited Read More