7) RECOMMENDATION
8) PLAN OF ACTION
EXECUTIVE SUMMARY
The Miller Tool Company started acquiring small companies that are of different streams to increase its business volume. Although some of them are contributing good cash to the company but still there is no integration among all of them and as a business there is no common objective among all of them. Many companies are running in losses and the other which are giving profit don’t have any future scope. The report consist of the analysis on hiring the management & structuring it so that it can manage the company effectively by implementing new policies.
No. of words: 95
SITUATION ANALYSIS
The company has eighteen small businesses, five are electronic companies, six are in service businesses like building maintenance business, a construction company etc. and seven are small businesses. The purpose was to increase the business volume. Hence the company has acquired a reputation as an aggressive growth and has become a favorite investment.Presently the company is running in losses due to various reason. Here is the present situation of the company the profits and the various contribution made my different companies.
- The old Miller Tool Company contributed about a quarter of the company’s sales.
( I ) Contribution of $70 million sales.
( II) Considered as a larger share of the company’s profits.
- The Baking company’s contribution is of $15 million sale
- The small businesses contribution of $2 million only.
Mr. McFettridge had anticipated the future of his Miller Tool company and started diversifying since 1960. He wanted to bring in some technological changes in the Tool company but he couldn’t do that on time.
It is seen that the diverse businesses didn’t contribute much and were not integrated with each other even none of the electronics businesses contributed anything, they were developing their own lines. The overall generated revenue was low. This shows that things are not in good shape which should be there. And any change in the business would create a huge problem with the product line.
Hence the company should come out of some of its businesses but which are they? It has to be decided and those which are unable to contribute to the parent company, Miller Tool Company should be in the list and the company should continue with those which are contributing for the growth and increase profit or it could generate a good revenue. For this restructuring of organization is required, it should be under top or proper management.
PROBLEM STATEMENT
Bringing in the technological changes in the Tool company at the same time managing the man power and the businesses
STATEMENT OF OPTIONS
The following are the statement options:
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Restructuring of Organization and Proper management : At present the company is lacking skilled manpower to handle the different small companies. The company can give the small business to the Bright young boys which Mcfettridge had hired and give them all the powers to handle it and take the decision so that it makes profit. Doing so their morale will be boosted and they will work very effectively and give a good revenue which can definitely help us in hiring new mangers which can be utilized for the bigger firms. For the bigger firms more experienced persons can be hired.
- Selling out the tool company and fully concentrating on electronics could be another options but it is at high risk cause Tool company is the one which is giving in the highest profit at the moment.
- Selling out all the other business except for the Tool company could help. The money generated will the used in expansion of the Technology in tool company.
CRITERIA FOR EVALUATION
The Criteria which I have selected for evaluation are:
- Loss Minimization
- Creating a way to generate consistent revenue
EVALUATION OF OPTIONS
- Restructuring of organization and proper management:
Structured organization will help us in Loss minimization because once the smaller companies are handed to Managers they can create revenue out of it which will help us to keep running our business. If later on the companies are still not doing fine they can be sold out. This will ensure us consistent revenue.
- Selling out tool company:
As I have earlier mention selling out the tool company and fully concentrating on electronics could be another options but it is at high risk cause Tool company is the one which is giving in the highest profit at the moment. Since technology is booming in this decade we can start out with new company in some recent technology.
- Selling the smaller business:
Selling all the small business and bringing in new technology would definitely help tool company. Once the company starts making profit in the Tool & technology. We can again think if diversifying in different field.
RECOMMENDATIONS
By restructuring the organization and proper management everything would be managed and analyzed properly through which it would be easy to take decisions regarding revenue generation and the proper differentiation between the acquisitions should be done by which company would be able to divest small businesses to generate revenue which could be invested for others.
PLAN OF ACTION
First proper analysis of all the revenue generated should be done by which the company would come to know from where it should be generating more and less. Then the manpower area needs to be handled. With proper interviewing new people can be hired. The management should be at top level by which everything would be categorized properly and managed properly.
No. of words 921
