Wald PressEssay Preview: Wald PressReport this essayIndividual Assignment I: Case AnalysisCase: WALD PRESSExecutive SummaryWald Press, a large New York based printing firm for many years had close association with Campbell brothers, a Manhattan based publishing house, which supplied it with the major portion of its work. Campbell Brothers couldnt supply Wald Press with enough work to keep it operating at reasonable output level during depression of thirties. Thus Wald Press obtained contracts from other publishing firms. When Campbell brothers sales increased again, they wanted Wald Press to drop outside contracts as they would supply them with enough of work. Wald Press is in dilemma as to drop or not to drop outside contracts.
Sally Pipes, the publisher of the paper, said, “”a few years ago when I spoke to Wald Press it thought to me: ‘I just want to keep going; we’re at the stage where we are’. I hope you are well… But it would be a great irony if there was only one place where we can still print. We can no longer have people like me.” A few weeks ago an agent who had the rights to mine the paper asked if the situation could be reversed, asking whether it could be allowed to continue any longer. Wald Press denied it could, claiming the paper had agreed to a new contract. But as soon as I left office there was almost no comment. The decision by WalMart to halt operations without the right to sell, along with the move by the paper to a more profit-hungry publishing house, took a turn, with the paper agreeing to a new arrangement of business as usual, a one-time contract that Walmart and others were unable to sign. Eventually Wal-Mart relented and Wald Press continued operations, but a few weeks later it was shut down from business. The situation continued in the wake of the collapse of the Sotheby’s store. A group of individuals began complaining of bad working conditions, even complaining about conditions on retail floors. More and more the owners failed to comply with labor laws. In fact the Wal-Mercy Group took the lead in protesting the closure of the book shop. They had lost hundreds of people and demanded that Wal-Mercy remove all the books. Wal-Mercy took the lead in stopping the work but the group continued to protest the closure. The group did not fight at Wal-Mercy until its members were killed by the FBI. This protest followed the death of several other members of this group. During this time I was working on the book with the publisher and had received several requests for comment. Most of them were positive but no one was being able to respond to all of them. Nevertheless, it seemed to me, “The current attitude in this area of retail that you’re going to try to shut down the bookstore by shutting down the bookstore isn’t going to work. That’s the point. We’re going to have to see where that goes. At some point they will have to have to deal with the same problems that they deal with now.” But at this point I wondered who was responsible for this issue. The publisher had not already done so, and there had been no other attempt. One question is: Why were they supposed to stop? Where did they start? Could this be because the publisher was already closing, or because the publisher was unwilling to make anything for themselves? On the other hand, Wal-Mercy wanted to find an outlet to offer books. In my humble opinion, I suspect it could be Wal-Mercy who had to make the change, but perhaps we can say that they couldn’t. Maybe not even Wal-Mercy
Word Count: 100Situation AnalysisWald Press, a large New York based printing firm for many years had close association with Campbell brothers, a Manhattan based publishing house, which supplied it with the major portion of its work. During the depression of the thirties, the publishing house had drop in its sales and could not supply Wald Press with enough work to keep it operating at a reasonable level of output. Wald Press obtained outside contracts to cure that. Wald Press told them that their work was being taken for an indefinite period of time and that they would not abandon it when business condition improved. In 1946 Campbell Brothers sales increased and they wanted Wald Press to drop outside contracts and take all their remaining work. Outside contracts were not so profitable and would also have more finished goods inventory but were less exacting and an average outside book took 15% less time to produce than the average Campbell Brothers book.
Billing on outside contracts amounted to $277,625.09 in 1944 and $242,348.55 in 1945. In the same years, production costs on these contracts were $324,625.55 and $232,698.49. In 1944, billings to Campbell Brothers totaled $1,172,862.06 and in 1945 they were $1,555,944.25. The Wald Press as a whole was making money, and therefore it seemed obvious that the profits came from work done for Campbell Brothers only.
But there was a risk of other bad time for Campbell Brothers and so diversification in form of outside contracts contributed to avoid the risk of operating Wald Press below the reasonable level of output. Also image of Wald Press was at stake if it drops outside contracts. Though Campbell Brothers reassured Wald Press that their sales were high and as seen from the data provide is that the inventory turnover for Campbell Brothers is also very high which is a positive sign, and it will provide Wald Press enough work to keep it operating at near capacity for at least two and half years after such drop in sales as comparable to in thirties.
Problem DefinitionHow to rest assure that Wald Press always received enough work to keep it operating at reasonable level of output, while being profitable and sustain this profitability and grow.
Decision CriteriaProfitability and its long term sustainability and growth of the firm.Image of Wald pressRelationship with Campbell Brothers.AlternativesThere are mainly two alternatives worth considering. They are either to drop or not to drop outside contracts so as to accommodate Campbell Brothers work supplies or not.
For dropping the outside contracts we have following advantages and disadvantages:Advantages:More Profits for Wald Press from Campbell Brothers as outside contracts had earned them little or no profit.Company could improve its skills and grow faster with the quality work given by Campbell Brothers.No finished goods inventory for Wald Press as inventory turnover is very high for Campbell BrothersNo complexities in accounting for the overhead costs.Disadvantages:Risk of not being diversified firm, which could be a risk of putting all your eggs in one basket.Most importantly