Cyclermate Report Essay

I. An executive abridgmentDai Armstrong and Lewis Llewellyn argon the two men who plan to open their own federation subsequently being superfluous im throw away adequate to the shutting charge of the steel plants in their town of S discoverh Wales were Dai Armstrong and Lewis Llewellyn. They became bully friends because of taking part in the local club of cycle touring unitedly and decided to start Cyclermate, which was a bicycle manufacturing ac keep comp all that was laid down in the year 1988. In the beginning of snip, Cyclermate gained a huge mildew over the voice of the merchandise. The political party appe atomic number 18d well with no problems and difficulties up to 2010, the clipping when the course is in trouble, it confronted lots of consequences with respect to operation human election and finance.Therefore, the demand by purchasers fell continue sadly even though the determines were cut down by the company the distinguishing attri justes of the unassai lables were non up to the gauge as they were earlier. The rising complaints from the customers regarding degrading bore and faults in the product and the irritation by the bank manager regarding the overdraft could cause trouble if the problems are non solved as curtly as possible. Because of that, the company requires a efficient way to deal with this issue and save it from the edge of sledding bankrupt.II. displayBased on case study research in Cyclermate Ltd. and a series of case in community, this report will work out the financial problems and various other problems confronted by Cyclermate. It has been designed to analysis the vocation environment and forethought, measured by SWOT and PET models that are all important(p) to be looked upon. The report to a fault draws on a brief summary for the financial side of the tune. In addition, this report takes into account an examination of difficulties confronted by Cyclermate and possible dissolvent for the problems, included short and long term solutions. some other function of this report is to examine how the company could buzz off out of the crisis and thread seat to the current market share. Finally, the report brings us some recommendations and finishing of the whole Cyclermate case study.III. abridgment of Business Environment1. cuss AnalysisPEST analysis is involved in the chief outer environmental that effect or control containably a business st vagabondgy. As we cigaret see, PEST is aimed for policy-making, Economic, Social and Technological matters that potentiometer affect the business. PEST is recognized to persuade it in a utile manner of summarizing the external environment. However, it may be adopted the ability of how an establishment should react to these constituents.Political FactorA political factor has a powerful feign on income tax, tire out law, concern restriction and many to a greater extent than than. Company did not recruit enough workers to meet the draw a bead ons and worker had to work overtime to get the work put one and workers are getting paid at design rate. Using a traditional method may harm workers health and decreased their productivity as well. These mistakes made Cyclermate become a target of health and safety agencies. They choose to improve the quality or else they green goddess be stuck in authorized issues. On theother hand, they also penury to attain high standard in manufacturing to meet requirements of the market, especially outside(prenominal) markets.Economic FactorCyclermate had purchased a larger storehouse for easilys, which indeed was essential to them but did not suffice their requirements. Purchasing a warehouse, which fulfilled the necessitate of the company, could be in possession of saved a lot of with child(p) and that same notes could collapse used in saucily or currently in existence projects. Another factor in economics that affects to the development of Cyclermate Ltd is labor. The unemployment rate is increasing, therefore, this is a good chance for this company to choose worker more easily, and employ them easily with affordable price.Social FactorSocial factor has a powerful impact on human behavior, Cyclermate had many ramble but they did not have enough manpower to complete these targets. They have to work long hours in frame to achieve their goals. One more important thing is that high-speed innovation as well as the increasing demands of consumers requires Cyclermate to change and improve e rattling day. But there is a rightfully infact that living standard of clients could effect to their choices. The high income distribution they get, the higher demands they reTechnological FactorCyclermate Ltd is using the oldest way to labor their products by posting advertisement in traditional tonicspapers. It has limited their goods to the customers. Instead, this company can set up its own website. In addition, Cyclermate Ltd is using the olde st way to advertise their products by posting advertisement in traditional newspapers. It has limited their goods to the customers. Instead, this company can set up its own website.2. SWOT AnalysisIt is a methodical technique that is utilized to categorize and identify substantial external (Opportunities and Threats) and internal (Strengths and Weaknesses) factors confronted with a specific area. (Johnson, 1993) Itrenders data which are useful in corresponding the capabilities and resources to the spiritual atmosphere in which it functions and hence is a portentous addition to the planning and marketing procedure. (Pearce, 2005) Let have look at the SWOT of cyclermate to understand more about the current issue that company has to face with.StrengthsDirect channels of changeCyclermate has civilize channels of bargains with the direct sales and direct shops hence intermediarys apostrophize is largely eliminated. Reducing the bell of manufacturing could unquestionably assistant Cyclermate achieve a huge share of the market. As direct channels are in direct contact with the providers, thus, it could help in increasing in measure or value of the sales and it provides a good opportunity to the providers to commiserate the clients and could birth required changes are per the requirement of the customers.Motivated workforceThe employees at the Cyclermate are extremely pioneering and are can fully utilize and achieve any given(p) objective or alterations in the company but they are inhibited by the administration as a leave they are unable to express their views set downly. The employees could have a crucial function in the company for its overall growth and development.Possession of buildings and groundsUnlike Cyclermate close of the companies dont possess either building or land and hence have to pay the heavy rents which adds to the financial value but cyclermate can make any changes in the buildings and could capitalize in whichever way they aspir ation to as they own it, which reduces the overall cost.WeaknessesInexperience and unmotivated mental facultys of the companyThe company has made use of untrained workers. These untrained workers are not given the proper breeding after their employment. It is the fact that the employees and the staff are neer al baseborned to put forward their creative and self-ideas due to the policies of the way, as a declaration of thismotivation in the staff is lost. Sales are decreasing in amount or degree and there is piling up of broths in the warehouses which generates a feeling among the staff that they are not under a good management and as this feeling flourishes they lose hopes from the company and it has a very bad impact on their morale. The investors do not truly interested in the businessDue to the menial returns on the capital invested by the investors, they are unhappy with the performance of the company and are losing corporate trust in it. In addition, the very fact that the shareholders were not paid any interest last year, it may result in the withdrawal of their money from the company. The quality concernsBecause lack of the power to be effective of the staffs to keep up the measures of the goods and the quality of raw material utilized is leading to degraded quality of the goods eventually. Old machinery such(prenominal) as traditional spaying technique, painting and low-quality line of descent control technology needs updating as soon as possible if the business hopes to improve the doing and sales in the approach time.OpportunitiesTake the advantages of social mediaCyclermate should introduction its website, which provides complete detail and range of the products functional with them. Company can employ a new computer dodge for keeping a good database of the company. They can introduce online exchange and adjustment according to the wish of customers. Introduction of new machinesThey should introduce some of the ripe machinery in ord er to achieve higher- direct productivity. Cyclermate could bring in new robotic machinery in the production process that will lead to speedy output and a superior quality of goods.Employ trained workersThey have the opportunity to make use of the trained workforce, which has been recently laid off from the nearby production site. More workforce meat opportunity to gain more productivity.Threats foreign competitorsAs a result of the growth to a global or worldwide scale, many companies from across the globe have entered the market with products of low price and high quality, which certainly is a threat for Cyclermate as it supplies good with high cost and of lower quality. Due to recession, which is prevailing in europium the purchasing power of people is going down. Thus, company can have reduced sales or can face financial crises. studyDue to poor-quality product for a period of Cyclermates reputation is going down and therefore people do not like to go for their products. Huge retailMerchantsRetail Merchants like Argos and Halfords are captivating the market eventually and it might happen that Cyclermate may lose the market share completely. Customer threatens them to sue their company after their product was fail in delivering the good performance.IV. Analysis of Business Management1. Financial ProblemsProb. 1.1 Uncontrolled costThe main problem that company is in this situation is because of the uncontrolled cost and mismanaged budget. The costs are increasing yearly with the sales and snitching price of the products going down. Let have look at the financial tilt that company has 210,800 worth of non-current assets. Loan pass will be refused as company only holds cash fund of 675 into their bank account. Costs are increasing at a rapid rate year after year. Asset turnover ratio is 2.061. This indicates that the profit margins for the company are very low thats why the ratio is so high. We can also conclude from this that the companys pricing strateg y is not effective leading to lower profits.Prob. 1.2 Dealing with a big loanCreditor eld 24 old age leads to the company has to pay back it its debtors in 24 days and it is just left with 675 of cash. The Company is liable to pay 87,500 to the creditors and if they dont so a legal action may be taken on them, which are not good for companys reputation. They may talk to the creditors and ask for an extension in time for payments as they are going by means of financial crisis and dont have money right now to pay back.Prob. 1.3 Lots of inventoriesBesides, it shows that the majority of inventories are stored and not effectively managed, that is why current ratio is at such high level, which also means low sales and low revenue gained. Moreover, the company relies on the bank loan as the main monetary support.2. Operation ProblemsProb. 2.1 Stock control systemDisturbingly, materials are always in the shortage which results in the disruption of the production process recently. Altho ugh the demand is higher and higher, company cannot meet their requirement because of lacking necessary components.Prob. 2.2 Inappropriate function of dutiesThe inappropriate division of duties obviously had made such a consequence on many workers. In particular, Dai Armstrong has to deal with many tasks such as making all the frames, factory manager and business director at the same time. He himself also finds it hard to keep up the level of production (approximately 8 frames/day) because it requires the harsh physical demands.Prob. 2.3 Assembly is a manifold processMoreover, assembly is a complex process, which takes 2 or 3 hours for one individual. Janice Jones and Ffred Gregory often have to work overtime to catch up with the progress. As a result, their health and time issue could be severely damaged.3. HR Management problemsProb. 3.1 Improper workforce in manufacturingUnreasonable workforce division is one of the most serious problems of Cyclermate Ltd. Besides, lack of e xperienced employees and the aging workforce are worrying the production process and raising a big question for a more effective training system.Prob. 3.2 The training system createsThe training system creates such obstacles for the assembly process. Typically, Fred, who is 18 eld old, is a new and un-experienced person the training for him is necessary, however, not easy at all. It takes so much time to instruct Fred in traditional way, which is simply the cause of slow production recently.Prob. 3.3 Corporate cultureThe staff is exceedingly de-motivated due to decreasing sales and profits and also the behavior of the management as in the sinking company they are not take over to put up their ideas even if they do they are rejected because of the transcendency of the management.V. consequenceA. Short term and immediate planning1. Financial problems rootage 1.1 Cost in selling and distributionCost in selling and distribution could be possible declined to save more money for th e company such as cutting cost for postage and courier charges by substituting by cheaper service, as well as the travelling and hospitality. Those confirming costs contribute such high cost to the manufacturing of the cycles, restricting them would help boost the sales with cheaper price.Solution 1.2 Ask for trading debtors to repayThe solution to this issue is that they should strictly resolve and for thetrade debtors to repay the loans as soon as possible. The amount of $200,571 would help the financial situation better in the coming time. Once their assets are raised through and their limpidity are proved to be valuable enough to afford the loan, it will be beneficial for them to borrow money from the banks.Solution 1.3 Direct sale pricesCyclermates direct sale prices are higher than shop sale price. In order to generate healthy revenue, Cyclermate needs to reduce their direct sale price. By reducing the direct sale prices will increase their sale and it will be easy for them to generate healthy revenue.2. Operation ProblemsSolution 2.1 Buy stock when neededCompany should only buy stock when they needed. Buying stock earlier will harm companys financial positions, because raw material does not hold their value and it has got more chances of losing its market value.Solution 2.2 Require clear divisionA good answer for this problem is that the company should require clear division to who is able to undertake and separate arrangement of duties. Specifically, assigning other qualified person on frame-making position so that Mr. Dai could concentrate and dedicate himself to external traffic business only.Solution 2.3 hiring more experienced laborsThe company should consider hiring more experienced labors for assemble line and frame-making because Mr Dai can no longer put up with the physical requirement of the task. With those simple tasks like packaging, it is acceptable for free hand employees to help out, but only when they finished all their tasks.3. HR M anagement problemsSolution 3.1 Employ cheaper laborsIn this case, the company can consider employ cheaper labors that aresuggested by Maldwyn Jones Chinese or Taiwanese labor to make the machine for them- much better quality but half(prenominal) the price and move Idris Pugh to higher position as a supervisor for the whole wheel-making process.Solution 3.2 Improving the staffs skillsThis training course of study involves directly in the new changes with a purpose of improving the staffs skills, expertise and methods to complete an error-free task, exposing them to unfamiliar ideas and of course, giving them the chance to apply task under time/speed limit.Solution 3.3 Core business valueTrust in others and a firm belief in overcoming difficulties (set up new mission overcome difficulty, minimize waste and consequence)B. bulky term and efficiency improvementsPresent fiscal condition of Cyclermate (Accounting ratios).The acid / liquid ratio of Cyclermate is 0.761, which depicts Cy clermate is incapable to satisfy indebtednesses of shorter term, which mean that it would not be able to satisfy fiscal difficulty which may happen in the time to come. The Asset turnover ratio for Cyclermate is 2.061. As the ratio is excessively high, this means that profit margins are very low. The pricing strategy of Cyclermate is ineffective and because of that low profit. Return on capital employed Cyclermate has far too slight returns on the capital employed, just a mere 0.11 or 11%. Debtor days It would take Cyclermate 115 days to get back the money from debtors. Creditor days Cyclermate has to pay back in 24 days to its debtors with a cash balance of 675.The financial statement of Cyclermate shows that it has non-current assets which is of worth 210,800.Any request regarding a loan from the bank will be refused as it has a mere cash balance of 675. It may get a loan based on the position of its non-current assets. In place of the above-discussed alternative, it can sell i ts freehold land, which is worth 160,000, and use the proceeds from the sale in the business. Cyclermate could acquire notes if they pursue its trade debtors to pay off soon. Debtors worth 200,571 are to be recovered and the funds would be acquired soon if the debtors do notnonpayment and pay in full. Once it has sufficient fund, Cyclermate could apply for the bank loan.VI. conclusionOverall, Cyclermate will have a better future if they operate their business in slightly different ways. Cyclermate products were famous for its quality and price,if the company thus far provide what the consumer wants than it would be no harm to the company. But there hardly a(prenominal) changes needs to be changed and once the new rules and regulation apply into the business than it would be a great opportunity for Cyclermate to operate their services. Moreover, With the movement of new threats into the marketplace the present systematic plan of action of Cyclermate is continuously to a lower pl ace the acceptable level in its performance due to the fact that the new firms and the existing organizations are coming up with improved quality of products at a cheaper priceVII. RecommendationsThe company moldiness sign up countersink individual as per the requirement of the position. Currently the management is interfering in the process of production and is unable to focus of the activities they should be concerned. The financial hardships through which Cyclermate is going through at present could be resolved by selling the unused stock that is piled up in the warehouse. In order to generate revenues and funds to invest in other arena of the company, Cyclermate must sell its freehold land that would certainly generate high revenue.In order to achieve higher output and productivity, modern technology should be apply in the production process. Installing a computer database through which the management could look into all the important and relevant data as and when required. Cy clermate should launch its website, which provides complete detail and range of the products available with them. Reducing both direct sales prices so as to sell the current stock and trade debtors. Employing young and trained workforce that is fit for the position.