EssaysForStudent.com - Free Essays, Term Papers & Book Notes
Search

Wirefab

By:   •  Essay  •  1,257 Words  •  February 13, 2010  •  1,167 Views

Page 1 of 6

Join now to read essay Wirefab

Opportunity:

For nearly 35 years Ozzie Zakarian had grown Wirefab to 70 employees while making a handsome profit along the way. He was now 65 and now realized that he had the opportunity to sell the company and secure his wealth for himself and his three nieces. At the same time he wanted to work for another five years while transferring the company to his management team. The biggest problem facing Zakarian is how to sell the company he had work so hard to build.

Customers:

Wirefab sells to over 100 different customers and no one customer accounts for more than 15% of the total sales. This diverse customer base consists of large industrial companies and smaller manufacturers. The large companies buy wire in bulk from the company and internally form it to their specifications; they also contract Wirefab to design individual wire products for them. The smaller companies use Wirefab and their machines to fabricate wire products for them. These customers buy from Wirefab because of their superior quality and fair pricing. They are able to give accurate and fair quotes due to their cost accounting system. Finally, most of the customer base is located in New England close to the factory in Massachusetts.

Competition:

The wire industry is highly competitive and fragmented. There were three main competitors to Wirefab located in New England. They were Eastern Wire, Acme Wire, and Titchener. All three of these competitors were privately owned, comparable in size, and operated in the same way as Wirefab. However, Wirefab had two distinct advantages over their competition. First, they delivered a consistent quality product to the customer. The competition did not always do this, in fact the customers who were scared away by the factory fire, all came back complaining of poor quality from the competition. Secondly, Wirefab was able to track every penny the company spent and made with their cost accounting system. This enabled the company to give precise and fair quotes to the customers in a timely fashion.

Context:

The customers for Wirefab had changed dramatically from the early 80’s when they were mainly computer companies, to a very diverse client base set up by Mr. Samsill. He is more in tune to the new customers and better understands what they really want. The markets and workplace have changed over the years and it is time for Mr. Zakarian to realize this and sell the company. The “old school” way of thinking is no longer the norm and he has to realize this. He cannot go around yelling at his employees when he feels like it.

Costs:

The firm was able to deliver a quality product while keeping costs as low as possible. This was due to Mr. Salem and his cost accounting system implemented in the 60’s. This system is one of the company’s Key Success Factors. Accounting is at the foundation of every business and a good system can give you an edge in the market. The company made a profit every year from 1979 to 1989, and was projecting their largest pre tax profit of all time in 1990 ($1,800,000). The costs for the firm are likely overwhelmingly fixed. They have to pay for the factory and 70 employees which make overhead expensive. Even though the company’s products are custom, the more they are able to sell the more money the company will make.

Cash Flows:

The cash flows for the firm are probably not very favorable. The company may require a small deposit for the job, but probably does not receive the bulk of the money until the job is complete. The company will have to pay for the raw materials and overhead before receiving the money.

People:

Ozzie Zakarian was the key to the operation as he had industry knowledge and a strong work ethic, working 50-80 hours a week. Even at 65 he is hands on and in charge, maybe to a fault. James Samsill, the executive vice president had no experience in manufacturing but was able to double the sales from 4 million to 9 million by finding new customers. Denis McCann is the plant manager and has run the factory smoothly for years now and is an incredibly

Continue for 5 more pages »  •  Join now to read essay Wirefab and other term papers or research documents
Download as (for upgraded members)
txt
pdf