Business Administration 1220E Lecture Notes - Lecture 15: Cost, North American Free Trade Agreement, Net Income
Role: John Powell, President and founder of Powell Logistics Inc.
Alternatives
Continue running current operations
1.
Expand business
2.
Pass company on to his children
3.
Sell the company to an outside party
4.
Want
Personal & Professional Wants
Personal
Generate sufficient income to support his family
•
Maintain Powell's positive reputation in the community
•
Retire
•
Honor his value of hard work/ commitment
•
Professional
Sales growth
•
Long-term, successful future
•
Need
Industry Analysis
Political
Highly regulated by government
•
Cross border issues
•
NAFTA
•
Economic
Cost of fuel increased (expected to continue)
•
Cad dollar increasing
•
Shortage of qualifies truckers
•
Technological
Advanced tech gives carriers advantage•
Consumer Analysis
Primary Market
Who are they? Small and medium-sized companies in Ontario
and upstate New York
•
What do they want? On-time delivery•
Reasonable prices•
Safety of goods •
When do they purchase? Year-round – no seasonality the business •
How are the influenced? Referrals•
• Direct sales •
Competitive Analysis
TTS1)
Strengths Weakness
Established•
Lower price•
LTL & TL•
Small orders expedited•
Same lane as PLI•
Yellow2)
Strengths Weakness
Established & large•
Global operations•
Large financial resources & access to capital•
Competitive prices•
Lack of personalized services•
Competitive Advantage
excellent reputation in the industry •
Is this sustainable?
KSF
Good logistical technology is critical •
Competitive pricing •
Strong sales force and good reputation to ensure strong relationships •
Internal efficiencies and expertise •
Great service •
Can
Internal Analysis
Finance
Fixed assets, capital intensive, barrier to entry•
Net income is low % of sales - not much room to lower price/absorb costs•
Marketing
Strong connections in the community and industry •
Operations
State of the art logistical technology•
Two separate facilities are causing operational issues •
Human Resources
Powell is clearly an asset to the company and a figurehead within the
community
•
Current "family business" atmosphere likely makes this a good place to work
and allows PLI to retain employees
•
Powell Logistics Inc.
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Business Administration 1220E Full Course Notes
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