I. Central Problem
AGC should happen ways on how to regenerate the company from its steady incline into worse conditions. The fortunes of AGC toppling downhill were already stacked against them ; they merely weren’t cognizant that their scheme during good market economic system would non work good against rough conditions. such as the competition roar and the autumn of the undergarment market during the Seventies. which occurred at the same time. Their status became so bad their equity shriveled up to half of what it used to be.
II. Statement of Aims
To gain back their clients from the rivals appeal every bit good as earn new 1s To plan ways to better the net incomes of the company
To broaden the mark market
To utilize state-of-the-art equipment
III. Areas of Consideration
Competition is stiff
Selling merely to one merchant ( Divisoria )
Limited mark audience
Was non ready for market instability
Dependant on company good will
Production was non flexible plenty to efficaciously craft high quality points Products were limited ( white singlets )
Monetary values were non favourable to the company
IV. Alternative Courses of Action ( ACA’s )
1. ) Sell some old equipment of the company and purchase utile modern equipment.
A. Advantages
Greater possibility that the company can put more flexible equipment for betterment of production in company.
B. Disadvantages
They will happen a difficult clip disposing the old equipment due to its limited maps and the fact that it’s already old.
2. ) The merchandising of goods should non be limited merely to one topographic point.
A. Advantages
Reach out to possible clients who do non patronize to Divisoria. Expand your mark market.
B. Disadvantages
Will costs more disbursals towards transporting. bringing and selling.
3. ) Advertise merchandises in media and print.
A. Advantages
Create demand for their merchandises.
Procure merchandise and trade name consciousness to the populace.
Name or trade name callback.
B. Disadvantages
Incur disbursals in selling and advertisement.
4. ) Introduce merchandises designed for adult females.
A. Advantages
Wider audience
More clients
Greater opportunity for net income
B. Disadvantages
Extra outgos for research and design
5. ) Give benefits to jobbers ( merchants ) .
A. Advantages
Increase trueness from merchant.
Make a resonance between companies.
B. Disadvantages
Extra costs
6. ) Create merchandises that are swerving in the market.
A. Advantages
More gross revenues
Larger mark market
Assortment of merchandises to take from
B. Disadvantages
Higher cost in production.
Higher hazard of seting capital to waste.
7. ) Retain “Blossom” in production.
A. Advantages
Helps the company to derive back net income.
Supply lower category citizens with a choice of merchandises.
B. Disadvantages
Trade names Armour & A ; Marca Troca will be farther overshadowed.
Less net income ( same quality but at a lower monetary value ) .
V. Final Decision
The concluding determination is to replace the old impressions and inculcate the new. while still retaining the quality of the merchandise. Despite the huge difficult work put into the company. alterations will go on to happen. so a new life for the company would be better suited than if it were to go on its slow downward gait.
VI. Detailed Action Plans
The first thing that the concern demands to make is replace the machines that manufacture their merchandise. The machines are non merely inflexible for doing garments other than singlets. but presuming from context ; they are old. sing the company up to the settlement proposition was twenty old ages old. Although it will necessitate much capital to buy these machines. in the long draw. it is an investing and it will assist them broaden their merchandise lines.
A big ball in the alteration of programs situates in the merchandises. In the past AGC. they merely produced white singlets for work forces. The following measure is the development of their merchandise lines. It may get down with research on their current and their aspirer clients and merchandises. Expanding the trade names include presenting vesture for adult females. planing high quality and stylish vesture. and doing them in colour. The gamble is high because the company has merely of all time excelled in fabricating one consistent merchandise. and spread outing the merchandise lines need much capital. Another good call for the company is to resuscitate Blossom.
That trade name. with its good quality yet inexpensive monetary values caters to those of lower income degrees. which is a possible market to sell to despite legion rivals in the monetary value war. And although trade names Armour and Marca Troca would be overlapped by the possible success of Blossom. through spread outing the trade names would they be able cater to a different gustatory sensation and hence cater to a different audience. This manner. the trade names under AGC will non be straight viing for clients to purchase them. Through good selling and good maintained production. AGC can accomplish high net incomes from spread outing their line.
Further action to broaden their mark audience would be to publicize AGC. Its namesake and good will may decidedly pull in crowds. but commercializing it in media and in prints will make those who have non heard about the company and its trade names. This creates demand for the merchandise. and in bend. high gross revenues.
An inflow of the new is non ever a bad thing ; it’s how you respond to
alteration that counts. AGC still has some battle left and with the proper scheme and taking the right chances. AGC can still be able to resile back and recover what was lost.
Case Analysis 3-2: Armour Garments Company ( AGC )
The Armour Garments Corp. ( AGC ) was established in 1954 in the Philippines as a maker of high quality singlets. It had two popular trade names. viz. : “Armour” and “Marca Troca” . The company started out by copying popular manners and designs from Hongkong. The first 10 old ages was rather profitable. The company grew from 25 workers in 1954 to about 250 workers in 1967. The company sells all of its merchandises to jobbers in Divisoria who distribute the merchandise all over the state. The merchandises are manufactured in white colour merely and are by and large of superior quality being twice more lasting than other trade names in the market. Singlets are worn as a affair of wont to avoid the direct contact of users polo shirts with the organic structure. Merchandise gross revenues are seasonal. Business normally peaks twice a twelvemonth: in June. with the gap of categories and in December. with the Christmas haste.
In the mid 60’s more and more undershirt mills opened. The company faced serious menaces in its operation since the Divisoria jobbers were non loyal to trade names. All along. AGC was banking on its institutional pride and good will being the innovator in the industry. While gross revenues of the company did non diminish. it besides did non well increase with the growing of the population. However. this did non trouble oneself direction since the hard currency flow was good. No major investings were made during the period. It was concern as usual so to talk. In 1971. the market for the singlet all of a sudden took a downswing. It was no longer stylish to have on singlets. Furthermore. more and more fringy mills sprouted up and were willing to compromise on monetary value and payment footings with the jobbers.
For the first clip in its history. the company was astounded. It introduced a new trade name “Blossom” which was of precisely the same merchandise quality but priced lower to fit viing merchandises. It did non take long earlier “Blossom” was withdrawn from the market because AGC sold more of “Blossom” and less of “Armour” and “Marca Troca” . Having failed to better the marketability of its traditional merchandise lines. the company eventually decided to diversify and venture into off-the-rack concern. It introduced a polo shirt line. The market response was non favourable. In 1973. the company added a twosome of lines like denims and printed shirts. these two lines besides failed.
