Business Operation Decision



Business Operation Decision

Business Overview

Roberto Shirts is private limited company, which was founded in the year 2000. The owner of the company is Roberto Carlos. The company produces shirts which are meant for all seasons that is it remains warm in winter and cool in summer. The shirt has it special feature that it does not get wet once a person goes into water. Roberto shirt presently employees around 100 workers. They produce around 6000 units per month. Their working time per month is 20 day. The daily wage earned by them is $70 per worker, and the firm output price is $32. The variable cost is around $2000 per day. The marginal cost of the firm is $30.

The company's main strength is its Quality and durability .The shirt is very popular amongst the youth of the country. Regular sales are held by the company, in which the customers purchase on average about three shirts. Not only they wear it, many a times they present it to their love ones. Since the shirt is for all season, so people wear and purchase new one every quarter. The shirt is very durable with the added feature of temperature control in it. The youth customer loves the attractive design and consistent quality of the product, by using these shirt they remain updated with the latest fashion trends. The company is producing these shirt at the lowest possible cost, thus the entrance of the competitors are limited. The suppliers of the company have limited power due to excess availability of the suppliers in the market. The bargaining power of the customers is low, but any change in fashion can trigger the opposite of it. As far as the new entrants are concerned, the threat of it is very high. Thus, the company needs to be very careful while designing its finical policy.

Determination of factors that will have the greatest impact on the plant operations and the management decision to continue with the operation or not

As stated by Augilar 1967 that environmental scan factors refer to the macro environment. It deals and interprets the PEST analysis that is political, economic, social and technological (PEST) analysis. It deals with the activity of acquiring information relating to the events and relationship of the external environment of the company. This information is useful for the top management in designing the companies long term polices ...