Swisher Mower Case

Swisher Mower Case - needed to go after this opportunity...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Decision Faced with the decision of whether or not to pursue a private brand opportunity, I have decided that it is not in the best interest of Swisher Mower to pursue this opportunity. The goal of the company is to NOT hurt financial performance. If you look at the financials at the end of the report, the net profits turn into net losses when you figure in the amount of financing needed to fund this opportunity. Increases in inventory costs and accounts receivables alone, are higher than the gross profits. Currently, the company is making an annual profit of $400,000, and if they were to pursue this opportunity, they would be operating in the red. Even if the company was to pursue this opportunity, and it was profitable, there is no guarantee that the branding company would continue the contract with Swisher Mower. The start-up costs that are
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: needed to go after this opportunity are not worth the risk of the branding company cancelling the contract. Once Swisher commits to the opportunity, the branding company could cancel the contract at any time with a six month notice. It makes no sense on any level for Swisher Mower to pursue this opportunity. With this opportunity, the company will begin losing money. The company’s goal is to at least maintain their financial performance, and by agreeing to private branding, they will begin losing money. This opportunity also leaves the company with no other options of pursuing other product lines and growing the company in any other way. The cash needed to fund this operation doesn’t leave any more to fund the product extension they were planning. The company should not pursue this opportunity....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online