Business Administration 1220E Lecture Notes - Lecture 15: Cost, North American Free Trade Agreement, Net Income

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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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