Case-task 1
Short squeeze: there is no crime that capital would not risk for the sake of 300 percent profit.
The saying is by Thomas Joseph Dunning (1799-1873), quoted by Karl Marx in Capital.
Let´s move to our time.
Company A, operating in the field of wholesale and retail food products, is in first place with a 25% market share in terms of annual turnover. The second place is occupied by company B with a share of 20%, followed by companies with shares of less than 10% each.
Company A operates on the verge of profitability, within 1%, saves on everything. Wages are 2-3 times lower than the market. Bottled water is bought every 3 weeks, while it is enough for 1 week. Delivery drivers are given money for fuel for 70% of the daily route, because they know exactly where to cut off the route and there will be no fuel left for theft. The fuel bill for large refrigerated trucks has been slashed to a level that means turning off refrigerators en route to save fuel and money, which is not healthy for groceries. Such "optimization" allows the company to be called the market leader, provide "jobs", pay "taxes", the owner´s wife wear jewelry from famous French jewelry houses and have a $4 million penthouse in the metropolis.
1. Does Thomas Joseph Dunning´s statement correlate with this case, or do we not understand that either?
2. In your opinion, is it different or is it a necessary measure?
3. How would you personally run your business?
Case-task 2
A federal company with a branch structure: 500 employees, 25 branches across the country to set itself the task of increasing efficiency by changing the existing structure.
The company operates in the field of automotive dealership selling cars, spare parts and services through a branch network.
In addition to passenger cars, the company sells commercial vehicles and motorcycles. It turns out 3 directions: auto, moto, commercial vehicles.
idea: to increase efficiency by increasing the powers of branch managers = branches = getting closer to customers, but at the same time maintaining the overall number of staff and the independence of the main areas from each other.
All 3 directions today have their own leaders and their own management structure, sales, service, etc.
All 3 directions fulfill the plans for profitability.
Previously, the company did not have such a position as a branch manager/director, it is planned to nominate one of the existing experienced and loyal employees currently involved in sales of one of 3 areas (cars, motorcycles, commercial vehicles) to these positions. As a result of the changes, it is necessary to increase sales from 200 million US dollars by 15% during the first 2 years from the date of implementation of the planned changes.
At the same time, the state cannot be increased.
1. How should the structure of the company look like, provided that the main areas remain independent and have their own leaders in the parent company, their own goals and objectives, and specifically to whom and how should branch directors report?
2. What are the main KPIs that the director of the branch and the head of the direction should have?
3. What should be the optimal management structure within a separate branch?
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