Riding a Fine Line

Riding a Fine Line - CASE Riding a Fine Line Just keep...

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Unformatted text preview: CASE: Riding a Fine Line Just keep doing business the same way you’ve been doing it. Don’t tell them anything has changed. ― ‖ Such were your direct instructions from the new CEO of your company concerning how you should conduct business with a longtime supplier which your company plans to quit using in a few months. You are the manager for a bicycle manufacturing business that has annual revenues of $4 million. Your business is one strategic business unit within a diversified company with revenues of $100 million. Your new CEO has decided he wants to liquidate your unit and use the cash from that liquidation for other more profitable business opportunities. You currently have approximately $2 million in inventory. If ― ‖ anyone learns that your company will be discontinuing the bicycle line, that inventory will immediately lose half of its value. Retailers would have to discount the bicycles significantly if the line were discontinued. half of its value....
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This note was uploaded on 11/27/2011 for the course BUS M 390 taught by Professor Loriwadsworth during the Fall '10 term at BYU.

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