Baby Bloomers
Summary
A family enterprise known as the Baby Bloomers specializing in floral arrangement was founded in 1977. It was inspired by the Three Flowers Florists which is considered as the leading supplier of flower arrangements during the previous years. It became widely known floral trade to the market because of the imported materials they use. Also, their standardized outlet, with luxuriant interior and overall air of quality, has a great impact to the customer. This led to a large amount of cash inflows incurred by the company, mainly because of its high price being charged in their high-quality products and services. With this tremendous success, owners take into consideration business expansion.
They started establishing restaurants, automobile dealership, wine importation business, cocktail lounge, jewelry shop, European sporting goods dealership, and store specializing in remote-controlled toys. However, not all of the newly established businesses were doing too well, except the restaurant which was moderately successful. Large amount of investments was incurred and much of the funds available were being use as working capital instead of servicing of the loans. During 1983, a consequential challenge was faced by the enterprise, when devaluation of the dollar exchange rate set in. Unfortunately, expenses increase because some of their businesses were import-oriented.
It became a greater liability for the Baby Bloomers flower boutiques for it is the only enterprise generating high income. Many of its loans were defaulted, and since personal funds were not sufficient to meet the payment, troubled businesses were eventually sold to settle the problem, leaving only the flower boutiques and the restaurant.
Mission Statement
To provide a high-quality floral products offering imported materials, and a standardized outlets for the convenience and satisfaction of our customers. To pursue business expansion of many unrelated ventures under the Baby Bloomers Commercial Corporation.
Vision Statement
To preserve the status of the company as the leading supplier of flower arrangements in the floral industry by providing good quality products and services. The primary objective of the study is to assist Baby Bloomers regain its success by devoting more time and effort in managing the money-generating flower boutiques, in order to recover the financial losses the company suffers.
Specific Objectives:
- To understand the background of the company.
- To know the causes of troubled businesses.
- To suggest means of settling pending loan obligations.
- To identify businesses need to continue and discontinue operation.
Advantages
- Lesser expenses may incur because the company do not need to hire new employees.
- Mrs. Picache may have an idle time to train her daughters in order to continue the family business traditions. Improvement
Disadvantages
- Letting go of the chance of successful business expansion where it can put the firm in a positive place when it comes to acquiring necessary financing.
- It cannot place the company in the forefront of many customers’ mind.
- Sacrificing the income coming from expansion of other boutiques.
Strategy Formulation/Recommendation
We therefore conclude that the best solution to the problem is alternative course of action no. 2, “Foreclosed the restaurant with moderate earnings and continue to expand immensely profitable flower boutiques.” Generally, expansion of unrelated ventures like the Baby Bloomers Restaurant is advantageous because of the additional income it may provide, but Picache’s family area of expertise does not lie in managing that kind of business, they are specializing in floral arrangements. Foreclosure of restaurant may result to more time and effort to be spent on the preservation and improvement of the high-class quality products and services of flower boutiques which will ensure a much higher profit, thus easily regaining its success.
It is also advisable that as early as possible, daughters of Mrs. Picache must be trained to continue the family business since she almost reached the age of seniority. As the company recovers, and plans to do expansion of unrelated ventures, by this time they need to be wiser, taking into consideration the past causes of their fall down, also the future problems they may encounter. Expansion must not be in a rapid sequence because expansion does not always connote additional profit because of the presence of economic and political risks. Additionally, there should be a defined reason for the expansion – entering into new, potentially profitable market segments, for example.
Plan of Action
- Focus on incurring cash inflows to settle part of loan obligations still unpaid.
- Devoting more time and effort in managing Baby Bloomers floral boutiques to recover from financial difficulties, thus maximizing profit.
- Expand the number of money-generating floral boutiques and sell the restaurant.
- Aid in first the assistance of business consultant when making expansion of unrelated ventures.
Potential Problems
- What if Mrs. Picache has no longer personal funds to cover the unpaid loan obligation?
- What if Mrs. Picache can no longer devote much of her time to manage the flower boutiques because of her age?
- What if prices of imported materials become doubled and Mrs. Picache could not offer its products in a much higher price than the usual because customers are also suffering financial difficulties?
- What if the trend for floral arrangements enterprise decreases due to innovative culture?
