Essay About Cervus Equipment Case Study04-75 And Cash Flow

Cervus Equipment Case Study
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Cervus Equipment Case Study04-75-498-01Dr. Hongwei XuAhmed Zaqout (104 085 021)Andrew Varosky-Allsop (104 253 476)Dillon O’Neil (104 216 598)Ibrahim Chaudhry (104 007 855)Jamie Burns (102 984 600)Due: Tuesday, November 21st, 2017Table of ContentsProblem Identification ………………………………………………………………………………2Internal AnalysisSWOT ……………………………………………………………………………………………….2VRIO…………………………………………………………………………………………………. 3Financial Analysis…………………………………………………………………………………. 4External AnalysisPorter’s Five Forces…………………………………………………………………………………..4Cage analysis………….……………………………………………………………………………….5PESTEL……………………………………………………………………………………………….6Alternative Options.……………………..…………………………………………………….………7Actionable Recommendation…………………………………………………..…..…………………7Implementation……………………………………………………………………………………….8Contingency Plan ……………………………………………….……………………………………8Appendix 1……………………………………………………………………………………………9Appendix 2………………………………………………………………….…………………….…………………10 Problem IdentificationCervus’ business is faced with several challenges as a result of the innovative industry it operates within, as well as the strain that the new CEO has placed on the company. By 2020 the company wants to achieve $2.5 billion in revenue. The industry is becoming increasingly technical and competitive; the current challenge of choosing the appropriate growth strategy is crucial for the company moving forward. Cervus can either grow product and service capabilities and optimize operational requirements to satisfy clients or fund and integrate new acquisitions.1. Implementing a growth strategy2. Integrating and funding new acquisitions3. Increasing products and service capabilities to employees/ customersIssue Analysis: InternalSWOTStrengths:High Profitability & Revenue – Cervus Equipment is a company known for its ability to turn dealerships, that were not performing to their current market potential and turn them around in order to see results. It has done so with great success in the past and continues to do so.Barriers of Market Entry: Due to the strength of positioning that Cervus Equipment was able to establish in their previous years it has become more difficult for any sort of new comer to entry the market. Cervus is already partnered with many of the largest dealerships, like “John-Deere”.Existing Distribution and Sales Networks: The existing distribution and sales networks that Cervus Equipment has in place are far superior than of their competitors due to the partners that Cervus has. Having access to dealerships in different regions gives the company more mobility and flexibility. Weaknesses:Small Business Units: SBU’s are known to have certain downfalls that cannot truly be overcome. The defence against nature and God’s will cannot be overcome. In the case of a tornado or some sort of horrific natural disaster Cervus has to prepare for these issues. As well as keeping the inventory safe from theft in their SBU’s can be an issue. However, because of their ability to achieve economies of scale Cervus should not have as much of an issue with this than it’s competitors. Opportunities: New Products and Services: The market in which Cervus Equipment operates in is a unique market that is always open to innovative ideas that can get certain jobs done faster or more efficiently. Farmers are willing to pay for the machinery needed for their crops/farms. New Acquisitions: Acquiring new companies and aligning their strategies with that of Cervus Equipment has been a task that Cervus has done successfully Threats:Increasing Costs: As the costs of fuel steadily rise year by year the costs of producing, transporting, maintaining their facilities and processes become more costly. Cash Flow: Cash is an important part of keeping the business healthy, being able to ensure that the company has enough cash on hand to pay its obligations is a vital part of the business. Cervus should try doing a better job of managing the company’s cash flow to meet obligations, in case of an illness outbreak or some sort of disease that could halt their typical volume of sales. VRIO AnalysisResource/ CapabilityValuable?Rare?Inimitable?Exploitable?Management & EmployeesYYYYInformation System (IS)YNNYGoodwillYYYYHigh End Brand OfferingYYYYManagement / Employees:                Cervius has successfully employed management and employees with previous experience in acquisitions, mergers and large-scale growth that has and will continue to be vital in the successful expansion of Cervus in the years to come. Because Cervus is able to utilize the same core employees and management, these key employees can continue to use their past experience and utilize the systems of integration in place and outlined, they can create a sustained competitive advantage for Cercus as the company continues to grow and expand. Additionally, experienced employees who understand the business are increasingly difficult to find. This is an challenge that Cervus faces for the future.