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Lending Decision - Case Study Example
Pages 2 (502 words)
Coles performance during FY 2007 is quite dismal at a decrease of 9.5 percent in profits from its return on Food and Liquor business. This is difficult to understand in a booming economy where everyone in the competition is doing well.
For Wesfarmers, who are on the verge of taking over Coles, it is bad news…
It has tremendous staying power. But it is time to change. It has to take a good look at how others in the same field are doing business and catch up with them.
There is nothing wrong in the figures. The figures are only representative of the facts. Past performance of Coles is not going to help its future prospects unless the causes of the dismal figures are rectified. The company's accounts department is doing its job well. Problem is somewhere in the communications system and customer relations policies. Not enough seems to be happening to attract better customer base. Painting rosy pictures year after year cannot be a solution.
The company must look lean and handsome in the sight of its patrons. Good advertisements, sponsorship of popular events, forays into new areas of business or expansion of good, existing ones must seen to be happening every now and then to build customers and investors confidence.
Make a list of large potential customers like hotels, restaurants and other eating joints. Marketing strategies must go hand in hand with understanding and catering to the needs of individual as well as corporate clients.
Concentrate on products that yield better profit margin location-wise. Product A may rake in higher profit margin in one location, whereas Product B may show similar margin in another location. ...
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