Feasibility Study - College Courier Inc.
Essay by 24 • June 18, 2011 • 2,942 Words (12 Pages) • 2,061 Views
Table of Contents
Executive Summary.................................................................................1
Introduction...........................................................................................2
Industry Analysis.....................................................................................2
Competition Analysis................................................................................3
Internal Analysis......................................................................................4
Marketing Analysis...................................................................................5
Financial Ratio Analysis.............................................................................6
Alternatives............................................................................................7
Decision & Action Plan..............................................................................8
Contingency Plan......................................................................................9
Exhibits.......................................................................................... 10-24
EXECUTIVE SUMMARY
Introduction:
 Role: Dwayne Leslie
 Decision: Whether to purchase College Courier Inc., and what to change to improve its performance
Industry Analysis:
 Both Legal and General Market are highly Competitive, fragmented markets. (43 direct competitors)
 The legal market is seasonal and price insensitive. The KSF is the full range of services, flexibility and personable integrity.
 The general market experienced little seasonality, is more price sensitive, and required farther apart operations
 We should basically focus on the legal market
Competition Analysis:
 Walton Legal Service is successful but has a high employee turnover rate. Walton's hard working, but wants to have more time in social life and his family.
 Michael Collingwood is small, trusted, and the owner is experienced, but is losing his business because of his reputation of being less personable, less flexibility. We could seize this opportunity. The lower price we offered would be an asset for us.
 Three general delivery competitors are huge. Since we do not focus on this market, we will not compete with them directly.
Internal Analysis
 Ryan Thomas and Bob Zurawski. developed a reputation for being a reliable, friendly and fast courier with reasonable price offered
 CCI keeps approximately 30 clients as its major income revenue source, and its service revenues increase rapidly.
Marketing Analysis
 Apply the yellow page ad. ($500)
 Additional cardboard signs and vehicle stenciling to let our logo recognized
 Premium discount plan for royal clients who bring more business to the company
 Introduce the Thank you cards
 Customer refunds upon lateness
Financial Analysis
 Vertical analysis looks healthy over the year
 High current ratio indicates that we are capable of paying off current liabilities.
 The high debt to assets seems risky, but it is expected to reduce while we begin to have excess cash
Alternatives
 According to all the analysis and comparisons among 40% drop, regular and 5% increase, we choose the regular revenue as our strategy.
Decision & Action Plan
 Purchase the company
 Raise the price by 15%
 Try the best to keep Zurawski as the full time driver
 Try to get a $4,000 short term bank loan to finance the April 2004 cash deficit
 We may not need a long term bank loan as shown in balance sheet (exhibit 14) if we have excess cash as projected.
INTRODUCTION
As Dwayne Leslie, we have to decide whether or not to purchase College Courier, Inc. by the end of December 2003. Our decision all depends on the qualitative and the quantitative analysis of the business in order to make an appropriate plan for the first fiscal year.
INDUSTRY ANALSIS
Most couriers targeted clients based on their service needs and specialized in one or two specific services. Basically, specific services are needed by two different kinds of industries: the legal industry, and the general delivery industry. The courier market is highly competitive.
The legal market targets lawyers, accountants, and other professionals who require a full range of services. Flexibility is highly valued, since they expect couriers to accept rush and/or special orders instead of normal requests. Speed and personal integrity are the basic necessities. Price is insensitive in this market. Therefore, the key successful factors of this legal market are variety services, flexibility, speed, personal integrity, and last but not least - price.
Some areas have to be concerned in this legal market. First of all, the insensitive price provides us opportunity to raise the price and generate more income revenue. Since the professionals are price inelastic, courier companies can avoid the
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