How Will the Loan Proceeds Be Used?
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How Will the Loan Proceeds Be Used?
One of the more important uses of the loan will be for increasing research and development. Economists agree that investing in research and development produces positive returns, especially in industry (Levy, 2007). The number of children with food allergies has increased 18% from 1997 to 2007 (Landau, 2010). Tootsie Roll is committed to consumer safety, and while adherence to the traditional recipe is always a goal, researching newer and safer ingredients to widen its markets to include these often neglected customers is of great importance to the company.
Tootsie Roll Industries would be remiss in opening factories and sales outlets without increasing its brand awareness in these new markets. Being over one-hundred, Tootsie Roll is excited about this new era in its already successful business life. Introducing Tootsie Roll Candy to new cultures across the globe should prove as successful as it is in the countries is has already been exposed. Tootsie plans to broaden its markets following the same successful formula as it always has; with equal parts reverence for its history and enthusiastic welcome for new techniques.
Finally, to maintain the companys competitive edge as Americas favorite candy company, Tootsie Roll is constantly striving to improve its productivity by investing in the most advanced and productive equipment and integrating operations whenever possible. Therefore, the firms standard is to deliver the highest quality product at the lowest price with efficient operations model. The firm has demonstrated its ability to take care of its debt obligation as well as remain profitable within the industry. By securing this loan, the company will be able to expand its operation around the world and remain solvent for years to come.
References
Landau, E. (2010, August 3). Why are Food Allergies on the Rise? Retrieved March 11, 2012, from CNN.com:
Levy, D. (2007, December). Research and Development. Retrieved March 11, 2012, from Library of Economics and Liberty: