The Conroy Manufacturing Company decided to diversify in the field of consumer goods, with the recruitment of their new management team, it can face some hurdles. However, they have been somewhat successful in consumer goods products, but they are lacking in sales when compared to the established brands in this field.
I can be seen that the given data of the Company for consecutive years from the year 2012 to 2016, it is seen that though the sales for the consumer goods have increased but still it is relatively very small amount if it is compared with other products such as industrial machinery or paint. If is evaluated from the data, we can find the following calculations(Armstrong et al., 2015).
Therefore, it is concluded from this that though there is a stable growth in sales every year, but the percentage in consideration with the total sales is comparatively very low in consumer goods.
Currently the company is looking forward to develop gardening tools. They are planning to produce an electric lawnmower, about this they have carried out a market research, which suggested about the consumer buying behaviour. Keeping this research in mind, various forms of estimation is done. The company are trying to figure out the time that can be taken to manufacture the first prototype and the time taken to start the actual production (Bodie, Kane & Marcus, 2014).
To start the production work, they have chosen two sites, one is Campbell field another is Laverton. The site in Campbell field is an old textile mill, which has remained closed for the last two years. This site is relatively smaller and it is estimated that this site is capable of producing not more fifty thousand lawnmower a year. It can be considered that the site in Laverton then the company needs to invest twenty four million dollar to make new buildings to start production. As the investment is relatively higher so the company decided that they would go ahead with the site renovation once, a successful prototype of the lawnmower is ready. In this case it means that once the prototype of the product is ready, the company will go ahead to develop the site which will take another year. Therefore, in this case, the production will solely depend on the prototype getting ready. It has been trying to calculate all the pros and cons of the project and that would it be feasible to continue with the project or to abandon (Clarke, 2014).
The company wants to expand its business in consumer goods section, they are trying to come-up with a new advanced lawnmower than can compete and win over other products in the market. In this regard they are investing heavily in research and development to understand the need of the consumer and there buying behaviour. After doing a research, it is found that safety and convenience is a key point that the customer is looking for in a product. They also found that customer also wants some key features that makes their work easy and will give them an upper hand from other competitors. To support this they came up with features such as automatic adjustable supported by a processor for uneven land and an automatic voice announcer that will notify the user when the grass box is full (Giocoli, 2016).
Company’s main objective is to build-up a successful prototype lawnmower as soon as possible and start production right away. In this regard, they need to do a lot of investment and they are not fully sure about how the product will perform in comparison with other product in the market. They have set a target that they will try to build a successful prototype by the end of December 2017 with a cost of around eight million and if fails to do so they will review the project on January 2018. They will analyze the situation and then conclude whether to continue with the project or abandon. The marketing team has done an assessment and came up with a two situations. They say that the sales of the product will depend on the actual launch of the product in the market. They have mentioned that if the product can be launched by January 2019, with comparison with its competitors it would be in an advantageous position and it is estimated 70 percentage good and thirty percent bad. Whereas if they launch the product by January 2020, they will lack behind in sales and this situation will prevail throughout the life of the product (Grant, 2016).
Product and Market
It can be analyzed in detail and can be seen that the company is into manufacturing sector and they are currently manufacturing goods for four different sectors such as:
- Industrial Machinery
- Building material
- Consumer Goods
It is analyzed fromeach sector individually and can be seen that the company has increased their sales apart from the section of paint. This is the only section where the company is lacking behind.
It is looked from the sales between the years 2014-2015 in the figure 2 we can clearly see that there is a decrease in sales from the previous year and this decrease amounts to 3.2 million dollars, which is 8.7% decrease.
The year 2015-2016 shows that there is an increase in sales this is 0.8 million dollars that is an increase of 2.38% from the previous year.
Considering last five years, we can find that from the year 2012 to 2016 the company has increased their sales by 2 million dollars, which is an increase of 6.17%.
Looking at the paint section, it is seen in the figure 3 that the company has made a gradual decrease in sale every year and that is not a good sign for any organization.
Analyzing the particular graph, it is seen that between the year 2012 to 2013 there was a decrease of sales. The decrease was of 1.2 million dollars, which is around 8.33% decrease in sales.
Considering the year 2013-2014 it is seen that there is again a decrease in sales as it is shown in This decrease is of 0.8 million dollars, which is around an increase of around 6.06% from the sales of the previous year (Johnson,2014).
Looking at the sales between the year 2014-2015 in the figure 3 we can clearly see that there is a decrease in sales from the previous year and this decrease amounts to 0.8 million dollars which is 6.45% decrease.
The year 2015-2016 shows that there is a decrease in sales this is 1.2 million dollars that is an increase of 10.34% from the previous year.
Considering last five years, we can find that from the year 2012 to 2016 the sales has decreased by 4 million dollars, which is around 27.78%.
Looking at the graph, it can be clearly see that the company has made a gradual increase in sales in the section of building materials. In this section, the company has seen increase in sales each year.
Analyzing the particular graph, it is seen that between the years 2012 to 2013 there was an increase of sales. The increase was of 0.8 million dollars, which is around 3.17%, increase in sales (McVay, Flores-Villela & Carstens, 2015).
Considering the year 2013-2014 it can be seen that there is the also an increase in sales as it is shown in This increase is of 0.8 million dollars, which is around an increase of around 3.07% from the sales of the previous year (McVay, 2013).
Looking at the sales between the years 2014-2015 in the figure 4 it is seen that there is an increase in sales from the previous year and this increase amounts to 2 million dollars, which is 7.46% decrease.
The year 2015-2016 shows that there is an increase in sales this is 1.2 million dollars that is an increase of 4.16% from the previous year.
Considering last five years, we can find that from the year 2012 to 2016 the company has increased their sales by 4.8 million dollars, which is an increase of 19.04%.
Analyzing the consumer goods section it is seen in the figure 5 that the company has made a gradual increase in sale every year and that is a good sign for any organization.
Looking at the sales between the year 2014-2015 in the figure 5 it can be clearly seen that there is an increase in sales from the previous year and this increase amounts to 1.2 million dollars, which is 50% growth (Petkovi? et al.,2016).
The year 2015-2016 shows that there is an increase in sales this is 0.8 million dollars that is an increase of 22.22% from the previous year.
Considering last five years it is found that from the year 2012 to 2016 the sales has moved up to 4.4 million dollars which is around good for the company.
Considering the amount of the sales of the consumer goods in comparison to other goods, we can see:
Shows the sum of each year of sales from year 2012 to 2016. The total sales of the last five years of the consumer goods are 11.6 million dollars, which is 3.11% of the total sales (Ross et al., 2013).
In the past, the company has come-up with products, which they developed for the DIY enthusiast. The product included electric drill and car engine tuner. However, with successful with their product, but still the amount of sale generated in this field is relatively low in comparison with other established brands (Shroff, Verdi & Yu,2013).
The company wants to do extensive research on sales and customer need. In this regard, they have invested heavily on research and development of the product. In order to calculate the future sale they have made extensive use of industry data.
The site that has been chosen for production of these products in both nearby port of Melbourne. This is done to carry out easy transportation. This will also reduce the cost of transportation and will reduce the cost of the product. This strategy will help them to curtail the price of the product, which will give them an edge over there, competitor. Moreover, it will be easier for them to procure raw material and transport them through shipping. As we know water route is the cheapest possible means of transportation it helps in price reduction (Smit & Trigeorgis,2017).
The company wants to come out with a product, which meets the need of the customer, and have some unique and useful features that make their product unique and superior from their competitors.
In order to support their marketing of the product they have come up with the strategy to go-ahead with an extensive campaigning on major newspaper and local television.
With the help of the net present value, we can calculate whether a proposed project will be valuable for the company or not.
Expected Values and SMART Technique
This technique is being used to set goals. This technique is about;
S – Simple
This technique tells us that the goal that is being set should be specific and not random. This technique also help us to rate the attributes effectively. In addition to this, also helps to minimize the loopholes associated in the process (Truelove, Vasardani & Winter, 2015).
If we look in this case study we can see that how the whole process of production of lawnmowers are divided in short and specific goals. The goals that are being set are specific and relevant in nature. Once a goal is achieved then there is another goal each goal is measurable and time bound in nature.
In some cases it was also calculated what are the chances of achieving the goal at a specific time (Yemshanov et al, 2015).
Findings and Analysis Results
Conroy Manufacturing was trying to successfully build up a prototype of the lawnmowers as soon as possible to start production. The production and site development was all depended upon the completion of the prototype. They are trying to estimate there expenses and the sales so that they can conclude whether this project will be profitable for them. In the context they are trying to carry out different kinds of research and calculations so as get there assumptions right.
Time is short as getting late in starting production means that product will lack behind in sales and this will continue throughout the product life span. They want to come up with the product within least possible time and expenses so there product can compete with other products in the market. Failing to do so will give their competitors added advantage (Zimmermann &Jørgensen, 2015).
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