Essay on Chuck’s Wagon Inc
Today, Chuck’s Wagon Inc. faces considerable problems that threaten to the survival of the company in the market. In such a situation, the company has to take decision that can improve its position in the market fast. Otherwise, Chuck’s Wagon Inc. can fail to maintain its competitive position in the market to the extent that the company may run bankrupt being unable to resist to the pressure of rivals. In such a context, eliminating the slowest-moving products is the best solution for Chuck’s Wagon Inc. because this decision will preserve facilities of the company and its potential and optimize the current marketing performance of the company.
In fact, Chuck’s Wagon Inc. faces considerable financial problems and the deterioration of its competitive position because of the growing pressure from the part of rivals. In addition, the company has substantial difficulties with overcoming negative effects of the economic recession and the decrease of the buying power of customers. As a result, the company faces a considerable downturn in its business development. The company cannot ignore current problems and the company should take a decision fast because postponing the decision or changes in the company may lead to disastrous effects for Chuck’s Wagon Inc. This is why the leader of the company considers the option to wait for a while but this option is absolutely inapplicable and ineffective at the moment because the company has to start acting right now.
In such a situation, eliminating the slowest-moving products is the best solution for the company. First, this decision will help the company to get rid of products that do not match the demand of customers. To put it more precisely, the demand on these products is low and the company has to spend a lot of time after production of these products to sell them. Therefore, these products are ineffective from the point of view of marketing. In fact, the company can use funds it spends on the production and distribution of the slowest-moving products on the production of other products, which the company can sell fast and increase its revenues fast.
For instance, the company can invest $1,000 in the production of 1,000 fast-moving items and earn 10% of revenues, i.e. $100. The company can produce and sell these items ten times per year that will make net profit of $1,000 per year. In contrast, the company can invest $1,000 in the production of 1,000 slowest-moving items, which it will sale and earn 20% of revenues, but the company may produce sell these items twice per year because of their slow movement. As a result, the company will earn $200 of net profit on the slowest-moving products only. This example reveals the full extent to which slowest-moving products are ineffective. They become unbearable burden for the company because the company needs to invest money fast and earn profits fast too.
Thus, the elimination of the slowest-moving products will optimize its performance and allow the company to preserve its facilities and the second plant, which the company can use to accelerate its business.
