Essay about M1A3 LIVORIA SANDWICHES, INC.

963 Words Oct 1st, 2013 4 Pages
Date : October 11, 2013
To : Brothers Sam and Paul Livoria
From : Dev Das
Subject : Strategic Review and Recommendations
INTRODUCTION
This report examines strategic alternatives that would help owners of Livoria Sandwiches Inc. gain competitive advantage in a growing market, achieve its profitability target and maintain its strong reputation of having a high quality and unique product in the industry. This report provides an analysis of the company’s current situation, identify strategic issues and analyze strategic alternatives. These also provide recommendations as to courses of actions the brothers should adopt to reach their goal, and proposed implementation plan.
CURRENT SITUATION
Stakeholders Preferences: * Go
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Appendix 4 showing Statement of Cash Flow present a positive economic growth, from $423K cash inflow generated in 2013 155% increase in cash to $1.9M in 2015. Calculating IRR for the next 3 years showed 478% return.
II. OPEN FOR FRANCHISE AGREEMENT
PROS
CONS
1. opportunity to grow faster than would be the case of training employees create internal marketing strategy, sales and distribution
1. significant disadvantage is loss of control, though substantial restrictions may apply because of franchise agreement, franchise is still considered a 3 rd party who would seek to maximize return of investment at your expense
2. use of franchising fee/capital will expedite growth/network of the company than finding one for the business
2. part of your profit is use to utilized to promote your franchise/s
3. franchising motivates franchisee to excel and go beyond to succeed due to incentive scheme and growth is dependent upon the success of your business
3. substantial product knowledge and expertise has to be shared concerning your business although restrictions may apply but control over it is difficult to enforce and monitor
4. will increase purchasing power as franchising network grows and that eventually reduced cost to operate, gain profitability from small units
4. skills required to monitor, manage and support franchise/s are far different than handling your

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