Essay about Cape Chemical Case Written Report Finished

Words: 1093
Pages: 5
Open Document
Cape Chemical Case: Cash and Profits

Throughout history, the business community doesn’t necessarily think of a chemical, wholesale distributor, as having the ability to reach double-digit growth rates, all while revolutionizing the distribution process. But that is exactly what Cape Chemical has done. By offering “next day delivery,” the company was able to differentiate itself from its competitors and gain a significantly larger market share than those same adversaries. But with the new increase in demand, a lack of borrowing power, a very “loose” accounts payable collection system and a growing inventory pool, Cape Chemical ran into cash flow issues. Since they are running into cash flow issues now, even with double-digit growth …show more content…
As the company continues to grow, and if they continue to have a payment system that is basically dictated by its customers and inventory that grows at a rate of 50 percent per year, they will be forced to begin cutting costs elsewhere. This cost cutting can start with their cost of goods sold and selling expenses, which in their case, are variable costs. Cape Chemical would have to begin cutting wages; find cheaper materials to use or even lower the marketing budgets of its products. Most importantly and an area that would be most detrimental, would be that the company stop promising next day delivery to its customers. With no cash to buy products or pay its employees, Cape Chemical would have no choice but to eliminate the one thing that allows them to grow at unheard of rates. Since this is a last resort measure, the company will already have seen growth slow, and customers will have already started looking at competitors. By looking at Figure 3, you can see that cash flow will increase rather significantly almost instantly. But you will also notice that because they have begun cutting costs, the growth rate has slowed accordingly. I recommend that Cape Chemical organizes and executes a plan based around a combination of scenarios one and two, to fix its’ cash flow deficits. Scenario one being, that the company begins the process of meeting with its’ customers and arranging for a new payment system in
Show More

Related Documents: Essay about Cape Chemical Case Written Report Finished

Managing Information Technology (7th Edition) Essay

CONTENTS: CASE STUDIES CASE STUDY 1 Midsouth Chamber of Commerce (A): The Role of the Operating Manager in Information Systems CASE STUDY I-1 IMT Custom Machine Company, Inc.: Selection of an Information Technology Platform CASE STUDY I-2 VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier CASE STUDY I-3 The VoIP Adoption at Butler University CASE STUDY I-4 Supporting Mobile Health Clinics: The Children’s Health Fund of New York City CASE STUDY I-5…

Words 239873 - Pages 960

United Arab of Emirates Country Notebook Essay

making the UAE a leader in women‘s rights in the Arab World. The UAE Constitution guarantees equality between men and women in areas including legal status , claiming of titles and access to education. In 2007/2008 United Nations Development program report the UAE ranked 29th among 177 countries in the Gender Empowerment Measures to promote gender equality and women empowerment, the best rating received in the Arab world. Despite this advancement in the female role, still the Emirates society is Patriarchy…

Words 18853 - Pages 76