Increasing Profitability Of Suprema Cars - étude en englais

Increasing profitability of Suprema Cars

Executive summary

Suprema Cars is an English company which has been manufacturing handmade classic sports cars for over 50 years. Suprema Cars began facing many problems 5 years ago and is now in a difficult economic situation and must find financial solutions or go out of business.

Considering this, the members of the Suprema Cars management team have been asked to have a meeting to discuss the options proposed by a management consultant.

Introduction

This report will look at:

• A quick selection of the 2 most reasonable options

• An analysis of each remaining option

• Recommendations on what Suprema Cars should do

A quick selection of the most reasonable options

Option 1: If we cut the prices of the cars we automatically go bankrupt, we have no certitude that it will increase our market share.

Option 2: We can’t install automated machinery and raise price by 20%. Indeed, a lot of people buy our cars because they are handmade, so they will not buy a more expensive not-handmade car.

Option 3: We won’t be able to sell 4,000 cars a year by lowering our quality and our price. Our customers buy our cars because we have an image of quality.

Option 5: Setting up a joint venture with an overseas car manufacturer could work, but the benefit-risk balance is really too low.

Option 6: This option costs way too much money; we need to increase profitability at a really short term.

Analysis of the 2 remaining options

The two remaining options have something in common: financial help from an outside source. That is something we really need.

Option 4:

We already have contacted some investors who seem quite interested in our project. Some American people have always loved British car and that’s why we think it’s a good opportunity to have a launche in the United States as soon as possible.

Option 7:

We have been approached by a major European manufacturer. He is willing to help us financially and to help us with his expertise. We think that is also a really good option because this company has a really good image and has always made the right choices in the past. Furthermore, it is the only European car manufacturer who has not been affected by the financial crisis.

Recommendations:

We think that option 4 is the way to go. A lot of European car manufacturer have experienced a significant growth in the past 2 years in the American market. Furthermore, the last James Bond movie was a great success and we could use it as an advertisement strategy to launch our brand in the United States (Suprema cars = James Bond’s cars). The only drawback is that we did not already find an outside financial source.

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