The familial relationships amongst the family members tasked with running the entity compounded the problems experienced by the organizations. There was a need to identify and select a board of governors and appoint new management to operate the entity. Furthermore, the problems are associated with lack of communication channels between Alfie and Cindy whereas Ben was inattentive in regards to concerns raised by Dorothy over the condition and status of their business. Mr. Zhang’s incapacitated nature due to ill health contributed to disharmony amongst the family members. The selection of new managers to operate the entity could have enabled them to give attention to their various family problems such as taking care of their ailing father. It is noted that the managerial team is comprised of family members namely two brothers and their wives.
The entity is faced by a variety of issues, which have resulted in inefficiencies, and ineffectiveness of the entity in reaction to the needs of the clients in a rapidly evolving consumer market. The entity is unable to accommodate changes currently noted in the fashion market because of market trends, high costs of raw materials, labor costs, appreciation of the currency in china, outdated machinery, and an ineffective business model. It is also noted that the entity is facing decline in profitability due to low capacity production because of in appropriate strategies brought about by internal conflicts associated with passive and reactive approaches towards management of the entity.
The recession is seen to have a significant effect on the competitiveness of the entity because of appreciation of the Chinese currency. The entity has a heavy reliance on a single supplier, which impedes its ability to source competitively from other entities that could have provided cheap and quality products. This also played a role in lead-time in terms of delivery of products for production with delays by the producers having significant negative consequences. Moreover, it is evident that the entity has an outdated stock management system that results in raw material requisition and inventory management. This is reflected in low production levels and failure to achieve bottom lines and desired profitability levels.
Adoption of new technology would eliminate the labor-intensive process and improve efficiency, and effectiveness in delivery of products. This would have a significant effect on costs and enable achievement of set out goals on profitability. Automation is critical towards enabling achievement of set out strategies.
The company can turn around its fortunes by overhauling its management, business models, and automation of critical business processes. In addition, it can improve its managerial function if all the family members resign and appoint a qualified management team to move the entity towards growth base don market trends for quality, cost friendly and fashionable products that are in line with market trends. Adoption of new technology is critical towards the lifeline of the entity. This can enhance critical functions such as operations, management of inventory, and engagements with players in its supply chain and more so with its customers. Improving competitiveness would also hinge on exploring new supply options for its raw materials upon streamlining of its supply chain from its suppliers to distributors to ensure reduction of lead-time in delivery of raw materials and movement of finished products to the consumers. This is critical towards its cost bottom-line and strategic goals of profitability, competitivness, and growth in volatile market.
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