Aviall Company Analysis - Case Study Example

Aviall Company Analysis Table of Content Table of Contents Table of Contents 2 Aviall Company Analysis 3 0.0.Introduction 3 11.0.0. References 15 Fred, K. M. (2012). SWOT Analysis of Availl Services Company. Retrieved on 1st December 2014 from: http://swot.advisorgate.com/swot-a/4154-swot-analysis-aviall.html 15 Michele, M. (2013). Competitors of Availl Services Company. Retrieved on 1st December 2014 from: http://www.hoovers.com/company-information/cs/competition.Aviall_Services_Inc.856e00475e83a2bc.html 15 Ryan, K. M. (2013). SWOT analysis of Availl Services Company. Retrieved on 1st December 2014 from: http://connection.ebscohost.com/c/company-reports/13410371/aviall-inc-swot-analysis 15 Aviall Company Analysis 1.0.0. Introduction Proficiency and competency in business organization is facilitated by different factors and aspects, but the management takes the core obligations of ensuring that all the targets of the firm are achieved. The external environment and internal environment also contribute to the performance of an organization either directly or indirectly. Some of these aspects are with inclusion of the financial status of the organizations, the level of competence of the workers, the nature of the business an organization operates and more importantly, the nature and attitude of the targeted customers. Some industries in the business world are favored by the internal and external environment, but it is of the essence to note that the management still determines the position of a firm in such competitive industries. This paper aims at critically evaluating Aviall Company’s performance and strategy in terms of financial performance, capital investment strategies, and business valuation. To achieve this, a critical evaluation of the investment strategy for growth for the organization with the inclusion of a strategy for asset ownership, sources of funds and implications for cost of capital. Additionally, a comprehensive analysis will be conducted on the state of the company as per the financials in terms of liquidity, assets utilization, leverage, profitability and the market-based ratios. Considering it is an international company, the paper will consider performance comparison between the company and some of its competitors such as First Aviation Services Inc, and GE ENGINE SERVICES, LLC,. It will also focus on Aviall’s industrial sector in which the challenges and opportunities of the company are evaluated, and this will be with inclusion of the opportunities and threats that hinder the company from achieving its goals and objectives. The factors affecting the industry such as the products distribution and technical innovation will also be analyzed, and to be able to make evidence-based conclusions about the company, the company’s current position within the industry context will be evaluated. 2.0.0. Availl Company Aviall Services Company is an international company that deals with aviation parts. It is observed that the company distributes aviation parts for approximately 235 manufacturers and provides associated aftermarket supply chain services to the aerospace and also the defense sectors. The technique of using the internet to promote and make sales to its products as enabled the company to grow and expand as a result of the large volume of sales that the company makes in a day. The companys supply chain and logistics services include various processes, which are with inclusion of the order processing and inventory management (Ryan, 2013). Additionally, the company offers certain services including repair and maintenance of components such as batteries. Additionally, the company repairs and maintains aviation parts such as the brakes and hose assemblies among others. 2.1.0. Strengths It provides high-quality products to the consumers in terms of value and style, and this makes it beat its competitors to great depth as it is able to attract, sustain and maintain its customers. Its customers have discovered an intersting shopping environment with some of the best  collections including private, national, and international exclusive brands and attractions. The company has a rich legacy that is honored by demonstration of its integrity and accordance with the ethical standards as well as all its practices and activities that not only aim at improving the performance of the company, but also aims at bettering the relationship between the consumers and the company (Michele, 2013). According to some customers who have tasted and embraced the products from the company, finding perfect gifts at a great price is easier than ever. Being the largest organization providing aviation parts, the company enjoys various competitive advantages, which are with inclusion of popularity and attainment of confidentiality from the clients due to high-quality products that the company provides. 2.2.0. Weaknesses There are very few weaknesses associated with the company, and these are with inclusion of having less presence worldly specially emerging economies. Additionally, the market share of the company is limited because the competitors are offering similar share to the consumers. 2.3.0. Opportunities There are some opportunities that can be utilized by the company as a means of enhancing services, including those are with inclusion of having disposable income that is increasing of the customers. The company has the opportunity of tapping the international market, especially the emerging economies. Additionally, the firm is able to make acquisition of smaller retail chains. The company can use advertising and customer focused services to improve its reaches to the consumer, hence increasing its sales. 2.4.0. Threats Financial control that is not included in the company’s operational cost is considered to be the core threat to the firm. Expansion from competitors is another threat to the organization, alongside playing on price point level. Controlling these threats can help the firm manage the competition from companies. 3.0.0. Applicability of Decision-Making Techniques The companys service delivery increases gradually over the years making it one of the best performing organization in the United States due to the decision-making techniques that are used by the company. It has opened various stores in the major states and cities in the US, which is an indication that the financial position of the company is good. The management of the organization understands that for effectiveness and efficiency to be obtained in their company, they not only need to consider the operational strategies, but also need to stabilize the firm financially. It is with this understanding that the management, through integration of the financial support from investors and other core stakeholders of the firm has been able to improve the quality and quantity supplied by the company to the consumers. The current financial position of the company can be termed to be high, and this is with consideration of the position of its competing organizations. The techniques that the company uses in its management enable it to solve various challenges linked to operations and performance. The fact that the firm is among the top retailers and distributor of aviation products suffices to prove the argument that the financial sector of the company is positive and this allows it to remain in the competitive business world in the industry. Its decision and operational strategies have enabled the organization to meet its financial needs, and more importantly expand its reaches to various locations to meet the needs of the consumers who have positive attitude towards the products and services offered by the company due to their quality, durability, cost and more importantly, the timely delivery and accessibility that is made by the company. 4.0.0. Factors and Processes involved in Production/Operational System Design From the analysis and statistical data about the company that were done by 2013, Aviall Company is the one best world brand globally in terms of value, and this is to the observation that it is worth about millions of dollars. It is a leading company in terms of brands production and distribution. The standard of quality for the products offered by the firm has been high over several years, and this has positively improved the sales of the company, leading to growth and expansion of the company to different regions across the globe. Aviall Company has the strongest marketing and advertising strategies in the world with respect to the industry it is operating in. Most of its advertisements and communications intended to meet the consumers are done through its websites and social media, and this approach is favored by integration of modern technologies and digitalization. The promotion techniques and sponsorship that the company makes in different regions across the globe also play an immense role in attracting and sustaining consumers, and consequently, the sales of the company are elevated leading to growth and expansion of the company. Considering that the companyoffers services to more than 11 cities in USA is sufficient to prove the observation that more than 1.7 million servings are made in a day. The customer loyalty is one of the major strengths of the company, and this is facilitated by the nature of services and products that the company offers to the consumers, starting with distributors, wholesalers, retailers to the end users. This implies that the consumers highly depend on the company, and this brings a great challenge to the management as it tries to meet the needs of the consumers at timely manner and meeting the quality of products and services as required by the consumers or even better. Therefore, the company exerts significant power over its suppliers due to its size and popularity, and this convinces the suppliers to offer the lowest prices possible from them. The management and employees of Aviall Company entirely establishes substantive understanding pertaining to corporate social responsibility, and this is to the observation that the firm does not exclusively focus of profit maximization, but rather considers other aspects that will attract, retain and sustain consumers to their products and services. The management and executives in various departments understand the business laws and corporate laws, and this allows them to manage and meet all the necessities of the workers starting from the subordinate staff to the CEO, and all the consumers. Additionally, the bargaining power over suppliers exhibited from the company is very high, and this allows it to beat its competitor and meet the demands of the consumers among the general public who are directly or indirectly affected by the organization in ways like job opportunity creation among others. The firm has also a low debt level due to acquisitions, and this creates a significant benefit to the management as it has less strain in ensuring that the company is stable in terms of service and product production and distribution. In return, this has led to positive publicity and promoted, facilitating to high confidence of the company by both the consumers and traders who depend on the services and products from the company. Brand failures and distribution of several brands with an insignificant amount of revenue is another predicament that is directly affecting the company. Inability to account for some of the distributions and operational expenses has greatly influenced the performance of the company, and this is to the confirmation that the organization works with approximated production cost leading to inability to account for the losses and the profits that the organization undergoes through after every financial year. The major weakness linked to the company is their preceding surplus inventory. It has been observed that the overflow of products in the company is a major reason that leads to decline in sales as it leads to delay of receiving stock that addresses the fashion tendencies. 5.0.0. Nature and Techniques of Aggregate Planning Aggregate planning incorporates projecting market demand and also evaluating production capacity to facilitate to effectively meeting the demands of the targeted consumers and goals of the organization. From the information in the Website of Aviall Company, it is easy to deduce that the financial performance of the company has been rising over the past years, unlike in other financial years that were analyzed previously where there was a decline in almost every sector of the company in terms of income generation and increased expenses. However, the management under the current CEO integrated new operational strategies of the company and the approaches that have been currently implemented has positively impacted to the general performance of the company includes increased profitability generation. For instance, the number of employees has been raised and their wages upgraded depending on the job position, and the proficiency and competence of the workers worked upon through training and educational programs aimed at improving their skills. This is an indication that the current management has excellent managerial skills and expertise on matters related to financial management and resource distribution in an organization. The companys position still remains among the top irrespective of the predicaments and failures that are associated with operational strategies of the company. 6.0.0. Competitive Advantage and Comparison of the Company with its Competitors According to the financial findings from the company’s profile and the business evaluation conducted for the last five years, there is a clear argument that can be constructed that the performance and operational strategies used by Aviall Company are effective and appropriate with respect to the nature of products and services it offers to the end consumers. This implies that the company’s operational strategies are better than those of First Aviation Services Inc, AAR CORP and GE ENGINE SERVICES, LLC. The management is made up of skilled and experienced manpower, with sufficient knowledge and abilities to run a multi-billion organization with tight competitors. The decision strategies and operational strategies integrated in the organization are effective in meeting the competition in the industry regardless of the drawbacks that are evident in the firm, and this is with consideration of the performances and operational decisions from other organizations in the same industry. The company is one the leading business organization globally,considered to be a competitive advantage that Availl Company has over its competitors, which are with inclusion of First Aviation Services Inc, AAR CORP and GE ENGINE SERVICES, LLC. This is facilitated more greatly by a strong marketing, advertising and promotion techniques integrated by the sales departments of the firm. It is also considered to be one of the best companies with most loyal consumer groups globally, and this is mostly facilitated by the quality of the products and services that the company offers to its consumers and other parties concerned by the operations and activities of the organization. The ability of the company to convince and persuade the suppliers to lower their prices to raw materials, distribution and supply cost is high due to its position in the world market, and this advantage enables it to lower its distribution cost and consequently increase its supply and sales. Focusing on corporate social responsibility programs (CSR) is another operating strategy that the company is using to attract, sustain and retain the highest groups of customers possible (Fred, 2012). Engaging in community developing programs positively helps Availl Company in boosting the organization’s social image, and consequently this leads to the establishment of competitive advantage which helps the company to manage its competitors. 7.0.0. Importance of Quality and Quality Assurance to the Company and Methods of Controlling Quality Considering an interview with a Head of Human Resource Department of Availl Company, which is one of the recognized organizations in the aviation parts supply industry, there are several supportive measures that the company integrates in its operations to improve the performance of its employees. According to the HOD, the company offers clear and coherent guidelines and procedures on how activities and practices within the organization need to be conducted. This acquaints the employees with both technical skills and productivity knowledge in the aviation industry, and this acts as it competitive advantage that enables the company to beat its competitors in the industry. The firm integrates new and unique operational procedures interchangeably, from hiring new employees, training them, subjecting them to practice and also in sacking of workers. According to the argument of the personnel, these procedures entail clear regulations, stages and methods of operation within the organization. Additionally, the consequences of failing to adhere to the outlined rules and regulations within the organization are stated to allow the employees make right choices and encourage them to incorporate valuable job protection measures for effective and efficient working in the firm (Luft, 2011). Considering the issue of the national security, the there are various legal procedures and requirements that are not fully met by the company, principally in the human resource department. For instance, the employee Act that requires the employer to sign a working contract with employees is ignored by the company because it offers the employees a probation period of three months before signing the agreement. This limits the employees’ job security and consequently affects their general performance in production in terms of quality and quantity deliverance. Through training and educational programs that the company offers to the employees, they are able to manage such and related operational challenges in the company (Church, 2012). Training and education subjected to the employees enables them to have wide reasoning skills and advance the ability of the employees to make constructive decisions to the organization. 8.0.0. Operational Factors concerned with Maintenance and Reliability of Organizational Assets Privacy issues and confidentiality are other subjects that the personnel responded to, where he argued that the training offered to the employees by the company allows them to have a sense of trustworthiness and loyalty not only to the company’s privacy but also to workers discretion. Managing a group of workers is not easy, with the support of the character and behavior of the employees vary, with some workers behavior being hard to understand and sustain. Some employees have varied complications ranging from behavioral constraints to health complications, and it is the obligation of the HM to understand these issues to be able to keep the employees comfortable and satisfied. According to the HOD, it is as a result of the continuous training and educational sessions that the employees in various categories and levels are subjected to that they are able to address issues linked to privacy and confidentiality of employee information (Allaire & Firsirotu, 2010). Mulling over to the aspect of discrimination within and outside Availl Company, it was found that issues related to segregation in a firm are common, and it is the obligation of the management to understand the causes and effects to be able to devise appropriate solutions to such issues. Worker conflicts in an organization are flavors that enable the firm detect its weaknesses, strengths, threats and opportunities through the suggestions that are raised by the conflicting parties within the firm (Richard, 2009). The internal conflicts can be solved through integration of training as the employees are updated on the need to have coherency and dependability in the organization as togetherness and teamwork leads to attainment of the mutual goals of the firm. 9.0.0. Availl’s Industry Sector and Recommendations The company is in the retail industry where it deals with department stores, retails stores and clothing stores which integrate the home equipments and related furniture. There are various opportunities that the company has, and it is upon the realization of the management that the firm will be able to utilize these opportunities to meet the competition in the industry. Some of these opportunities are like integration of differentiation strategies which help in provision of unique products from its competitors. Other chances of improvements for the company in the industry are outlined in the recommendations below. Success in the organization can be attained if the management considers changing or modifying its operational strategies and decision strategies to focus on the needs and demands of the consumers in terms of quantity and quality production of goods and services. Some of the recommendations that the organization can integrate to improve its performance are with inclusion, but not limited to: Shifting its production strategies to supplying of products demanded highly as this will enable them compete in the emerging economies, Increasing the quality and quantity of the goods and services that they provide to the consumers in USA and other nations globally, Understanding the changes in manufacturers’ taste and acting towards satisfying their needs, Engaging in activities and operations that raise the gross profit and net profit margins, Increasing its competitive advantage to manage the strong competition from other companies in the industry. 10.0.0. Conclusion In the main, there are various issues that affect the performance of an organization regardless of its profit perspective. Management has always been considered to be the core determinant of the progress of a firm since it is the body that is responsible for resource allocation and distribution, employee recruitment, training and education of the employees and more importantly, management of the organization’s financial accounts. Availl Company is a for-profit firm whose major goals are meeting the corporate social responsibility and maximizing its sales, hence its profits. This is evident from the job creation opportunities in the firm and CSR programs that the company is engaged in, alongside increasing its supply to meet the demand of the consumers. The current business position of the company in aviation parts equipments distributing industry is high, but maintaining the top position is a challenge to the firm due to the emerging competitive firms in the industry. The major limiting factor as observed from the company’s SWOT analysis is changing in the consumer tastes due to the changing generations whose needs are different from the previous generations. It is, therefore, the obligation of the management to consider appropriate operational and decision strategies to meet such and other challenges to maintaining the company’s position in the business world. 11.0.0. References Allaire, Y. & Firsirotu, M. E. (2010). Theories of organizational culture. Organization Studies 5:193-226 Church, A. H. (2012). Managerial self-awareness in high performing individuals in organizations. Journal of Applied Psychology 82 (2): 281-292. Fred, K. M. (2012). SWOT Analysis of Availl Services Company. Retrieved on 1st December 2014 from: http://swot.advisorgate.com/swot-a/4154-swot-analysis-aviall.html Luft, J. (2011). Group Processes: An Introduction to Group Dynamics. 3rd ed. Palo Alto, CA: Mayfield. Michele, M. (2013). Competitors of Availl Services Company. Retrieved on 1st December 2014 from: http://www.hoovers.com/company-information/cs/competition.Aviall_Services_Inc.856e00475e83a2bc.html Richard, P. L. (2009). Top management team group factors, consensus, and firm performance. Strategic Management Journal 11: 471-476. Ryan, K. M. (2013). SWOT analysis of Availl Services Company. Retrieved on 1st December 2014 from: http://connection.ebscohost.com/c/company-reports/13410371/aviall-inc-swot-analysis Read More