Research Paper on The International Moving Company

Introduction

The International Moving Company (the Company), is currently performing poorly. Though its monthly sales are impressive, its expenses are also quite high. As a result, the Company has been operating at a loss for the majority of the year. The Company made a profit in March, April, and September only. The negative balance of - $546,639.00 at the end of the year indicates the business has exhausted its capital and has incurred considerable debts. Therefore, the Company is technically liquidated.

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How the Company Could Obtain a Positive Result

Other than cutting labor costs and increasing sales, International Moving company can take several steps to improve its performance. From the present data, it seems the Company operating profits and gross profit margins are low (Finkel, 2015). As such, the Company should focus on strategies that will increase these two ratios. These include:

Improving the Turnaround Time

The Company should endeavor to reduce the time between orders and deliveries (Finkel, 2015). It can do this by streamlining its operational systems and eliminating delays, maintaining an optimal inventory, and timely following up sales leads. By doing so, the Company will increase the rate it moves its products, which reduces overhead costs and thus improve its profit margins (Finkel, 2015).

Increasing the Average Sale Unit Size

The Company needs to improve the size of its sale units to specific customers at a given time (Finkel, 2015). Also, the Company should introduce complementary products to cross-sell with the ones it currently offers (Finkel, 2015). Such a move would allow the business to increase its average unit of sale, which in turn enhances the purchase velocity (Finkel, 2015). This strategy reduces costs of sale per unit by lowering the overhead burden (Finkel, 2015). It also permits the business to amortize marketing expense over a larger unit of sale, which reduces marketing expenses for each sale and grows profit margins (Finkel, 2015).

Focusing on High-Margin Clients, Goods, or Services

The management the Company should assess the type of customers they are serving. As such, they will establish those who allow it to move its products in, say, large volume at once. These clients contribute to higher profit margins due to reduced costs for handling, packaging, and delivering (Finkel, 2015). Similarly, the Company should cut from its portfolios products or services that have small margins (Finkel, 2015). The business can, thus, use the time saved from dealing with less profitable clients, products, or services to improve its handling of the profitable ventures (Finkel, 2015).

Monitoring for Scrap, Spoilage, and Wastage

The management of the Company should ensure it does proper forecasting and market research to avoid unwanted outcomes such as holding excessive supplies, inventory and making poor marketing decisions (Finkel, 2015). The impacts of these complications include higher overhead costs, loss of stock due to obsolescence, and investing in a non-profitable market (Finkel, 2015).

Focusing on Customer Retention

The Company should ensure it motivates its clients to active continue buying its products (Finkel, 2015). The firm should study its clients' purchase history and seek an understanding of clients' "drop points" (Finkel, 2015, para. 24). The management should then take steps to tactically reinforce its operating system to reduce the current customers' attrition (Finkel, 2015). Some of the measures to avoid losing clients include offering timely discounts or improving communication (Finkel, 2015). By wooing the current customers base, the business will eradicate or significantly decreases the acquisition or marketing cost on subsequent and all future deals (Finkel, 2015).

References

Finkel, D. (2015, November 25). 5 simple ways to improve your profit margins. Retrieved from https://www.inc.com/david-finkel/5-simple-ways-to-improve-your-profit-margins.html