First Mates Wholesale Boating Supply Company: Do Or Don’t? Harvard Case Solution & Analysis

Introduction

            The First Mates Whole Sale Boating Supply Company was founded in the year 1970 in United States in the region of Gulf Coast. The initial business of the company related to the supply and sales of the deep sea fishing equipment. These sales were made to the leading charter companies of the region. The prices of the company were affordable and gears of high quality were also sold by the company at these prices.

            Apart from this, the return policy of the company, repair services and the prompt delivery had made the company a leading in its line of business. The company has been serving around the states at their coastal areas. Further, the product line of First Mates Whole Sale Boating Supply Company had expanded rapidly over the years and it has been serving the fishing and the lake recreational market. The lake business unit and the deep sea fishing business unit remained the two major business units of the company.

            The specialization of the lake business unit was in products such as ski boat products, sport fishing equipment, bass, dock related products, mooring, wake boards, swim related attire, tow able tubes and water skis. On the other hand, the main functions of the deep sea fishing business unit was to maintain its image of a relationship oriented business and generating sales for First Mates Whole Sale Boating Supply Company through follow-up contacts and personals ales calls. The products that were sold by this business unit of the company included the scuba related gear, outfitting, big boat maintenance and heavy duty deep sea sport fishing.

Problem Diagnosis

            Over the years First Mates Whole Sale Boating Supply Company has been enjoying strong financial growth and showed great performance to its board, shareholders and potential investors of the company. Nick Pittman who is the president of the company became tensed and more concerned that the company was not going to meet its financial objectives for the coming year which was just 2 months away. One of the most significant strengths of the company was its growth in the earnings per share.

            Over the past 30 years, the management of the company had been enjoying considerable growth in the business and in its earnings on a per share basis. Last year’s earnings per share stood at about $3.6 per share, however, it was expected that the project earnings per share for First Mates Whole Sale Boating Supply Company was going to be $0.3 per share less than last year which is $3.3 per share. This was for the first time that the company was going to experience a decline in its strong earnings growth over the years.

            Along with this the management of the company had also expected that the sales volume, operating earnings and the total revenues of the company were to decline also. This was not good at all. However, this was the problem being faced by the company currently. Many times before the company had also faced problems financially but it had succeeded to overcome that and this time also Pittman expects that the financial results are going to be more than expected if the right actions are taken immediately so that its earnings per share grows at a compounded growth rate of 3% rather than dropping to 2%.

Analysis of Alternatives

            The president of First Mates Whole Sale Boating Supply Company had emailed all the department heads and the senior managers to look into the matter and come up with their suggestions and alternatives to overcome the problem that was about to come over the coming year. He expected all the reports to be received by no more than a week longer. As it has been previously mentioned that First Mates Whole Sale Boating Supply Company had two core significant business units, therefore, the heads and the department managers have suggested specific alternatives for their concerned business units. All of the alternatives have been analyzed below.

First Mates Wholesale Boating Supply Company Do Or Don t Case Solution

Lake Products Business Unit

Alternative 1

            The first suggestion came from Jeremy To lmit who was the promotions and marketing head. He suggested stopping the ad campaign that had been launched by the company and he also suggested that the next quarter’s marina replenishment orders would be shipped in the current order. Stopping the ad campaign would decrease the promotional expenditures currently being incurred by the company. Along with this, the early shipments of the marina replenishment orders would also increase the revenues for the current year thus boosting the earnings..............

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