Brett Toys (Essay Sample)

Brett Toys
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Introduction
The business environment is dynamic due to the ever changing customer demands on product specification. Technological advancement is another factor that makes business vibrant and these calls for innovation to enhance novelty in goods and services offered by a company CITATION Bur13 \l 1033 (Burke, 2013). To curb this situation businesses and firms are adopting strategic management techniques that come up with policies and procedures which align production of goods and services to meet customer expectations. Andrew inherits a family business from his grandfather that has been in operation for many years with minimal changes to conform to the changing customer needs. The business produces high quality metal toy products that last long. However, there is drastic change in consumer toy preference of plastic made toys over the metal ones. According to the current situation of the company, it has enough financial savings for investment. The consumer toy preference has changed from long lasting metal toys to short lived plastic toys that allow the producer to be more innovative. This company is made of experienced employees in toys who have worked for a considerate time at the Brett Toy Company. Andrew’s firm has a capability to remain in operation because of its ability in terms assets, finances, and personnel and therefore the business should not close down.
Brett Toy Company should take a strategic management approach for it to identify strategies that will help the business attain better performance and a competitive edge against other players in the market CITATION Goo10 \l 1033 (Goodman, 2010). Option two offers Andrew an ideal chance to reinvest in the business and make it relevant to the current demand by toy clients. As technology advances, children who are the main consumers of toy products are now shifting from metal toys to plastic toys and electronic games such as video games and play stations. Electronic games do not appeal to children only, but also adults play them at their free time. This is due to the introduction of computers, mobile phones, and other electronic devices that support computer games. As a result of these new developments, investing in electronic games will give Andrew a wider market as opposed to the metal toys and this translates to higher profits, therefore he should consider taking project 2. Project two proposes that the company invest a considerable £750,000 with 80-100 employees producing up to 75000 games per annum at 40% profit per unit.
According to the analysis of the current market situation, it is discovered that enormous change has taken place over the years. Demand for electronic games is high compared to the traditional toys such as the metal toys made at Brett Company. There is also a large drop of 50% from metal toy production to plastic toys due to cheap production costs while using plastic compared to metal. This analogy is supported by the Brett’s head foreman who states that current consumers are interested in novelty and not toys that last over three generations. The market situation dictates to a large extent the success of a business CITATION Mar11 \l 1033 (Margretta, 2011). The market poses both the threats and opportunities that determine the development of the company. If Andrew’s Brett Company is sensitive to the current market situation, it has to take drastic change in operation and its products for the company to remain relevant in the industry.
Financially, Brett Company has £800,000 for investment which is sufficient to undertake the proposed project 2. This will allow the company to diversify its operations due to the ready available capital and avoidance of debt. According to Warner (2013), one of the impediments to business diversification and advancements is the lack of finances and capital and this does not affect Andrew and hence giving his company a good chance to adapt to the change in the market situation. Availability of ready capital will enable Brett Company to invest in modern machinery and reengineer the present machines to conform to the current production requirement. Project two has a larger breakeven point of 75000 games per annum as opposed to proposed project 1 of 30000. Despite project 2 having a lower profit approximation per unit than project 1, it will be able to provide maximum income due to the high breakeven point.
The structure of employees in the company needs to be improved and updated for the firm to avoid closing down the business. Project 2 proposes that the number of employees to be increased to between 80 and 100. The company already has highly skilled employees and addition of semi-skilled workers will be complimentary to the workforce for better performance. Producing electronic games require both high skilled and semi skilled labor that will coordinate production of electronic games that will meet the market expectations. Electronics games demand is wide because the consumers are not comprised of only children but adults too CITATION Goo10 \l 1033 (Goodman, 2010). Due to the expanded demand created in the market, project 2 offers more number of employees to keep with the pace of how the games will be demanded. Management of any business is an important aspect that determines the success of the firm. Andrew’s management team is not diversified in terms of managerial skills because it is mainly comprised of engineers with fewer skills in sales and accountancy. Brett should diversify the management to be inclusive of managers with technical knowhow and managers with other managerial skills such as accounting, marketing, procurement, and human resource management skills.
Brett assets include a factory that is strategically located near Blackburn in Lancashire, United Kingdom. Business location is a key factor that gives the ...