Step 4. Prepare a report on the case. Use the instructions in Unit 1.

Role Play

Some Points to Keep in Mind

You should keep in mind that business strategies, by their very nature, are permanently subject to change. Regardless of a company’s previous performance, innovative ideas are absolutely essential if the company is eager to increase or just maintain its market share. As business isn’t a science, it’s impossible to determine exactly how long a particular strategy should be employed before it’s changed. Premature shifts in marketing strategy often have negative results. At the same time, in order to minimize losses, it’s vital to recognize when a strategy isn’t a success so that it may be altered.

Situation

In case of Microcomtec, the problem is precisely that described above. Microcomtec’s strategy initially was to produce microcomputers for general industrial use. When it wasn’t successful, Microcomtec targeted two specific areas: material-testing automation and chromatography automation. But that strategy seems to be failing. Is it the case, as Mr. Dixon believes, that simply more time is needed to penetrate these special targets, both domestically and overseas? Or is an absolutely new direction needed? Finally, is the sweeping reform proposed by Ms. Stanley the right direction if Microcomtec make a decision to alter its strategy?

Cast

Mr. David Robinson, President, Microcomtec Corporation

Mr. Henry Dixon, Vice-President, Microcomtec Corporation

Ms. Pauline Stanley, Computer Industry Consultant

The three are discussing Ms. Stanley’s report in Mr. Robinson’s office at Microcomtec.

(Make use of the information given in Case Study, Some Points to Keep in Mind, Situation).

P. Stanley realizes that her recommendations may seem very bold, but given the present financial situation at Microcomtec she thinks bold measures are needed. She tells Mr. Dixon she understands their position, but she doesn’t feel that they’ve received enough inquiries to warrant optimism. She considers that an order isn’t an order until they get a P.O. (purchase order) number. As for the European sales office Ms. Stanley can’t see that it’s worth keeping. She reminds that it doesn’t even pay for itself. Ms. Stanley finalizes the matter: she was hired by them to do a study and make some recommendations. She did that. It’s their choice whether to accept the recommendations or not. She happens to think her recommendations are sound, but it’s up to them to decide. She says that the reasons she thinks they are sound are detailed in the report. She mentions some facts in her speech. First, in three months of active effort the company have only six orders. Second, the competition, particularly in chromatography, is keen. Third, the European sales office is costing more than it’s producing. Fourth, their microcomputer is too expensive, given the fact that an IBM PC costs one-fourth as much as the Microcomtec and is an industry standard. Granted, it may not do as much, but it is basically all most researches need, given the right software. She supposes if they convert their software so that it will run on the IBM PC, they’ll be in a position to do just that. She also tries to assure Mr. Robinson and Mr. Dixon that if they are more horizontal than vertical in their approach to the market, they’ll have a larger target. Fifth, she is sure that their advertising and sales promotion measures are not getting to the right people. She recommends them to buy some lists and then do a direct mail shot. She advises to go to every trade show they can and demonstrate their product. She explains that the audience they are trying to reach doesn’t take journal advertising seriously. The audience wants more information than it can get in an ad. She is sure that direct mail can give that to the interested party. In Ms. Stanley’s opinion a demo can do even more.

Make use of the helpful phrases:

§ Let me just say at the beginning …

§ In the circumstances …

§ I want to press the point …

§ As far as I can gather …

§ What with one thing and another …

§ Gentlemen, let me make a couple of things clear …

§ But let me just reiterate a few facts here …

§ In the first place …

§ If you ask me …

§ I suppose …

§ I take it for granted that …

§ What do you think of … ?

§ I’ll tell you what.

§ Make the best of it.

§ The long and the short of it is …

H. Dixon agrees and wants to know whether these are the right measures. He says that his feeling is simply that they haven’t been aggressive enough in their marketing. Also, he considers that the new targeted fields - materials-testing automation and chromatography automation - are not quick sells. It takes some time to build up orders. He adds they launched their new campaign in the early fall. It’s just January now. He thinks that Ms. Stanley is premature in her assessment that this is not the right market. He has to admit that orders aren’t coming in in the necessary quantity, but they are getting more and more inquiries, and with proper action they should be able to turn them into orders. He isn’t that optimistic at all about it. But he feels they have to give this market, this product, some chance. Their sales manager in Rotterdam, Nick Govern, is right now working on an order for ten Microcomtecs, plus software. That amounts to $200,000. Henry tries to assure Ms. Stanley that Nick feels confident he’ll get an order for ten Microcomtecs. At the same time he accepts Ms. Stanley’s arguments concerning the European sales office. He reminds that it hasn’t paid for itself in four months. But he still doesn’t feel that means they should shut it down. He believes the potential is there. Nick is a good sales rep, and things are beginning to turn.

Make use of the helpful phrases:

§ Right on both counts …

§ The question is …

§ I dare say …

§ I am inclined to think …

§ The way things are …

§ Looks like that …

§ I won’t deny …

§ In a way yes …

§ I don’t mind telling you … but …

§ Primarily …

§ As far as … is concerned …

§ On the surface (of it) …

§ What matters is …

D. Robinson thinks that Henry is right to some extent. But the orders just aren’t coming in fast enough. David understands that they can’t play a long-term waiting game. They don’t have the capital to last. D. Robinson wants to know what Henry is basing his sales projections on. Robinson supposes that they should consider the problem concerning the European sales office. D. Robinson expresses his disagreement with Ms. Stanley’s opinion that it isn’t worth keeping the European Sales office. But he has to agree that it barely pays for itself.

Make use of the helpful phrases:

§ I mean to say …

§ Actually …

§ But the truth is …

§ In the circumstances …

§ As far as I can see …

§ Could you possibly …, please?

§ That brings up the whole matter of …

§ I disagree with you (on that point) …

§ I differ from you …

§ There’s something in what you say, but …

§ I must admit …

Making a Decision

In coming to a decision about this case, consider the following points:

· Stanley’s recommendations

· Dixon’s original marketing strategy

· The significance of the European office

· The poor financial position of Microcomtec

· Dixon’s revised strategy

· The risks involved in radically changing the nature of the company

What other factors should be discussed?

Your decision.

GRAMMAR BACK UP

The Infinitive, Past Participle and the “-ing” form

(Revision)

PRACTICE

· Familiarize yourself with the text and comment upon the use of the Infinitive, Past Participle or the “-ing” form in bold type.

· Translate the text into Russian.

Every year the accounts of a limited company must be approved by auditors. They act on behalf of the shareholders. Their duty is to ensure that the directors are reporting correctly on the state of affairs of the company. They do not judge whether the directors are managing the company efficiently or not. That is something the shareholders must judge for themselves.

Until recently, the accounts of Harper & Grant have been audited by Hector Grant’s son-in-law, who is in private practice as an accountant. A new firm of auditors has now been appointed. A privately owned limited company is now no longer exempt from having to publish its accounts. It was therefore considered necessary to have the accounts audited by independent auditors in no way connected with Harper & Grant.

William Buckhurst, as Company Secretary, is responsible for seeingthat the books and records for the period in question are ready for checking. It could make a bad impression if the accounts department was not able to supply immediately any information wanted by the auditors.

What precisely do the auditors check? They have to be satisfied that everything which goes into making up the Profit Statement, the Balance Sheet and the Directors’ Report is correct. The Profit Statement (sometimes called a Trading and Profit and Loss Account) shows how the profit for the year is arrived at. It starts with net sales or income, and deducts surplus, from which charges, such as depreciation on plant and buildings, auditors’ fees, and administration and selling costs must be deducted to produce the net profit (or loss).

The Balance Sheet is a summarised statement showing the amount of funds envolved in the business and the sources from which these funds are derived. On one side is listed the capital employed, which usually consists of the issued share capital plus reserves and retained earnings. The share capital of Harper & Grant consisted of five thousand £1 shares. With a total market value of five hundred thousand pounds. In other words, there are four hundred and ninety-five thousand pounds in reserves and retained earnings. This starts with the total cost of its fixedassets (land, buildings and machinery) and any trade investments (interests in other companies), followed by a breakdown of net current assets (that is, cash and stocks, plus what the firm is owed by its customers, less its liabilities, or what it owes to others). The Wentworth Mattress Company owns shares in Harper & Grant, so this would be shown as a trade investment in Wentworth’s Balance Sheet. The totals on the two sides of the Balance Sheet must agree; that is, come to the same figure. The total dividend to be paid for the year is a current liability, and is therefore an item in the compilation of net current assets.

One of the most difficult jobs in preparing accounts is stock valuation: that is, putting a value on all goods in the hands of the company. It may seem easy, as goods could be counted, and then the price paid for them could be checked against the suppliers’ invoices. But the value of commodities often fluctuates. Furthermore, much of a company’s stock will consist of work in progress or finished stock, and the volume of all stock is changing daily, if not hourly. The rule for stock valuation is that it should be taken at cost price or market price, whichever is the lower.

Exercise 3.8.1

Date: 2016-03-03; view: 983