Chester Company Essay

A unique and interesting problem arose when hotshot company, a monopoly within the business-to-business (B2B) demodulator market, split into six companies with identical produces and compedecadet footing within the market. As Director of Finance for Chester familiarity, one of the newly make entities, it is important for me to identify a system that provide modify the company to remain viable and be successful in the future day. An in-depth compendium of the industry situation report provided favourable metrics to project future customer desires and total market potential.In order to be successful, the strategy that the management team develops must work within the identified parameters period attempting to predict how the other volt companies in the B2B sensor market testament proceed. There are only two incisions of the B2B sensor market modest engineering and high technical schoolnology.The only crossway Chester Company offers currently fulfills the get hold of of both markets but this go forth change as the newly formed entities revise and develop products to meet customer call for. The high tech share is courting but will require continual investment in research and development to maintain the standards that customers expect. It will be easier to meet the needs of the customers within the unhopeful tech segment but there will likely be more competition for market share.1. The strategy that I would like to see the management of Chester Company adopt over the undermentioned five geezerhood is that of niche cost leader (Capsim Management Simulations, 2012) for the abject technology segment of the B2B sensor market and to obtain thirty-five share of that market. This will be achieved by appealing to customers sense of thrift. To cut prices down the stairs the competition, management should retain the current product and not invest more than in research and development. Production cost must excessively be greatly reduced.To do this, an early investment in automation is necessary as it will reduce labor expenses in future years which will increase the margin and profitability of the company. This investment will be financed through the issuance of stock and long term bonds. I also plan to provide the marketing department with a very disinterested work out in the first couple of years to aggressively posterior the market and increase the awareness and accessibility of the product early on. mindless term borrowing will be necessary to finance trading operations and provide a cash cushion to prevent the need for an pinch loan.2. There is a great chance for Chester Company to earn good dough within the low tech segment over the bordering five years. Although the price of the product must be kept to a minimum this will be offset by decreasing costs which increases the contribution margin. Also, there is greater demand for products in the low technology segment of the B2B sensor market which is expected to increase approximately ten percent each year. However, Chester Company shareholders may realize a going away in the first year due to the high marketing budget and cost of labor because the automation rating is low. Unfortunately, some sacrifices will need to be made early on to realize greater profits in the long term.3. The product that is most important to the success of Chester Company is Cake the product currently being produced. During the first year of business, this product will have the ability to appeal to customers across both segments of the B2B sensor market and will ultimately become the favored product of the low tech segment. Management will take advantage of the dual appeal of Cake in the first year by taking a portion of both the low tech and high tech markets in an attempt to retain some profitability. Ultimately, the product will be positioned so that it takes a large portion of the low tech market and will likely not take any portion of the high tech market by the fifth year. The plan that I developed focuses earlier on the success of the company for the next five years as there will be a lot of volatility in the market and further projections are im viable to make at this time.It is demanding to predict how the competitors within the B2B sensor market will be positioned which makes it crucial for management to decrease costs as much as possible and increase market share within the low technology segment of the market. My advice to the rest of the management team is to rid of the appeal of developing a new product for either market early on and to avoid the high tech market altogether within the first five years because it will be difficult enough to remain juicy and succeed without squandering business assets on developing a product which will have little chance of being profitable within that timeframe.