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Unformatted text preview: made to work. Aggressive Marketing Campaign 50% success 50% failure Lifestyle 80% success 20% failure Financing Establish a new geographic location de novo Finding new customers 95% success tangibles such as inventory and real estate. Banks love to lend for the purchase of Description: It may be possible to increase sales by aggressively seeking out end users and standard distributors who don’t use edgebanding. This is beneficial because you could sell more edgebanding and could rapidly increase the sale edgebanding machines, which is one of FTI’s other, smaller product lines. A high level of uncertainty exists regarding whether or not this would be effective. The end users are small shops, and it would take a lot of time and energy to find sell them on FTI’s products. Ability to find enough new customers 50% success 50% failure Profitability 35% success cost of the sales material and staff would be 65% failure very difficult. Getting enough new customers to recover the Partnerships with other companies Description: FTI could avoid the complexity of an acquisition or the risk of independently introducing a new product line by instead finding a mutually beneficial partnership. For example, consider a company in a different geographic location that could benefit from FTI’s product line (edgebanding) and has a product line that would sell well in FTI’s region. Then a partnership could be set up whereby both companies achieve increased sales by selling each other’s products. Ability to find and negotiate a partnership Do nothing Become a private equity firm Description: This means abandoning the plan for stage 3 growth altogether. FTI is generating healthy profits each year, so keeping the status quo humming along for a number of years may allow the decision makers to achieve their goal of financial independence and actually increase their ability to lead a relaxed lifestyle. FTI has been in business since 1984 and has recently been growing dramatically, so it is Keep company 97% success unlikely that company sales will suddenly running healthily 3% failure decline, but new competitors could always enter and steal away market share. Description: A radical approach that seeks to leverage the skill the decision makers have in business operations. They could try to repeat the success they had in finding, acquiring and adding value to FTI with other small businesses. This radical approach could have a potentially huge payoff. Originally the decision makers spent over a year locating and performing due diligence on Finding a business 70% success over 100 companies. Finding another to take over 30% failure company would take a similar effort, but is not assured to yield results. Adding value to the purchased company is a Success in 60% success difficult and uncertain task. Not all takeovers improving the 30% failure will be as successful as FTI. business There are not a lot of companies in the 25% success industry, and finding a suitable partner and 75% failure making the deal work would be difficult. Values, Preferences and Trade‐Offs The following important...
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- Winter '14