Cyclermate Consultancy report Essay Example | Topics and Well Written Essays - 3000 words

Cyclermate Consultancy report - Essay Example This report will try to establish whether it is possible for Cyclermate Company to clear off its debts and attain financial stability in the near future with the increasingly loss of profitability. Background information Cyclermate Company has been enjoying unprecedented growth in the manufacture of cycles for quite some time. However, the last few years have seen the profits of this company sink sharply resulting from declined sales. The company was started in 1988 by two friends, Lewis Llewellyn and Dai Armstrong who had been in this business of making cycles for more than 20 years.The two friends brought their wealth of experience together and they decided to start a cycle manufacturing business going by the name Cyclermate. Within just a span of slightly more than two years, the firm had expanded to an extent that the two friends decided to acquire premises from where they were conducting their business. With increased demand for their product, the staff also increased considerab ly but they still insisted on keeping the staff at a skeletal minimum to cut costs. Everything was done manually or through the use of old or effective machinery. Automation was discouraged as they couldn’t justify buying the machines that were to be used in bending of the bars to manufacture these cycles. The issue of quality with these cycles arose when a cycle had an accident and blamed it on the fault of a braking system. Sales have declined and with a few creditors, Linda Llewellyn, who is Lewi’s wife and she demands that her share of the business be given to her and along term loaner, Geraint Williams, who relies on the payments from this loan to take care of his ailing wife. There is much financial pressure on the business and if measures are not taken into place, financial strain could cause the business to close down (Campello, Graham, & Harvey, 2010; Bancel, & Mittoo,2011). To this regard, the chairman Dai Armstrong and Gwyneth Morgan the secretary were taske d with the prerogative of arranging for a meeting with the bank to negotiate the possibility of an overdraft. The bank had already stipulated that this request would be highly unlikely to be considered unless the company provides proof that there would be increased trading to turn around the declining profits. To be able to know for sure whether the company can be capable of turning around and consolidate itself on the financial front in the short run, a full overview and assessment of the country will be done in this report. A SWOT analysis will be conducted to identify the areas of strengths, weaknesses, opportunities as well as threats that face this company. The issue of quality in production will also be illuminated upon. Measures that the company is undertaking to ensure it reverses these negative profits will also be looked into among other relevant issues pertaining to this case. Assumptions made To be able to provide a comprehensive and granular analysis of the company in f orm of its financial position and other aspects such as production techniques as well as marketing strategies and administration strategies, a number of assumptions will have to be made here. These assumptions are discussed in the following paragraphs. The main assumption is that both the company management and the bank acknowledge that the company had been performing well in the past but the