Reports from the Sales Manager indicated that contracts have been lost because

Reports from the sales manager indicated that

This preview shows page 4 - 8 out of 13 pages.

Reports from the Sales Manager indicated that contracts havebeen lost because some clients want to engage a courier whocan deliver to their regional offices, in particular Newcastle,Wollongong and the Central West. Fast Track is currently unableto meet this demand and therefore, some potential clients havebeen lost. This became a motive to expand operations for bothfinancial and customer service reasons. 3
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Company StructureThe company is family owned, with 3 family members acting asa Management Board and responsible for approving all businessdecisionsManaging Director – responsible for daily operationalmanagement decisionsLogistics Manager – responsible for the scheduling of thetrucks and drivers20 truck drivers5 office support employees – responsible foradministration, accounts, human resources and salesFacilities and EquipmentsComputersManualsGPSPDATrucksMarketing ActivityDirect sales TelephoneInternet listingsMail-outsBusiness OperationsThe company communicates with employees via email for headoffice employees, and a printed monthly newsletter for drivers.Policies and procedures are provided through employeemanuals that are kept in each truck.Trucks are fitted with a GPS system to assist drivers innavigating to each pick-up and drop-off location. They are alsoassigned a PDA that provides drivers with details of eachdelivery and records when a job starts and finishes. The data4
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from this device is sent back to head office to competeproductivity reporting.Strategy to Expand BusinessFast Track Couriers currently allocates 2 drivers per truck toensure that drivers are able to load and unload heavypackages. The strategy going forward is to remove the need for2 drivers per truck by installing an automatic lift gate on theback of each truck, at a cost of $10,000 per truck. Thisindicates that only 1 driver is needed per truck, as no heavylifting is required. Hence, it will allow Fast Track to purchase 10new trucks and use the existing drivers for regional routes. Each new truck will cost $60,000, including installation of anautomatic lift gate. The money to purchase the trucks will beborrowed from the bank on a business plan. Financial Information and ForecastsAnnual salesCurrent sales Estimated sales (Year1)$17 million$22 millionAnnual net profitCurrent net profitEstimated net profit$1.9 million$3.2 million5
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Increased costsLoan repaymentsOperating costs (fuelservicing, etc.)+$200,000 per annum+$2.2 millionAdministrative costsLabour Costs+$100,000NilRisk AnalysisSince drivers are typically negative about change, there is arisk that the turnover of drivers may increase. Hence, proposingthe sudden change could be done in a positive note by offeringhigher salary and rewards if sales manage to increasesignificantly. By doing so, this could motivate the drivers toengage in the sudden change and as well as getting involved inorganisation activities. If all else fails, Fast Track Couriers couldretain the accepting drivers and recruit new drivers.
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