Halifax Port Authority and Seaport Farmers Market Harvard Case Solution & Analysis

Halifax Port Authority and Seaport Farmers Market Case Study Solution

In The Half Year Of Its Operation, HSFM Was Visibly In Financial Distress. In 2011, The Company  Generated The Income Of $1,169,365, And Net Income Of $372,901, Excluding The Expenses.The Net Income Was Computed Before Liabilities And Payment Of Debt Was Very High. By April 13, 2012, The Liabilities Were $732,456. The Sum comprised due Rent Of $57,500, To The Company, And The Taxes That Were Due To The Company Amounted To $182,161, And manufacture Bills In Excess Of $200,000. This Shows That The Company Had The Financial Threat From The Creditors.Regardless Of All The Targets, HPA’s Had Faced Numerous Challenges Related To Its Operations, Administration, And Financial Performance. The Company Had The Substantial Debt Burden. The Revenues Earned By The Company Were Less Than The Debt Ratio Of The Company. The Issue Had Created The Liquidity Problem For The Company. Moreover, The Market Had 3 Executives, And None Of Them Had The Expertise And Proficiency To Work Productively, Due To Which “HSFM” Suffered From The Great Financial Distress.

The Market Had suffered With Huge Operating Expenditures, Which Created The Liability For The Company. The Expenses Included The Due Rent And Construction Duties. These Expenses Had The Undesirable Impact On HPA’s Financial Performance, Because It Was The Part Of “HSFM”. The Higher Debt And Lower Liquidity Had Created The Adverse Effect On The Performance Of The Company. Moreover, The Marketing Operations Were Not Performing Well, And Lacked The Proficiency To Work Efficiently In The Organization.

Additionally, The Market Had Regulatory And Monitoring Issues. The Financial Reporting Standard Followed By The Company Was Not Up To The Standard And Inefficient, Which In Turn Affected The Operations Of the Organization. (THE BELLE JAR , 2015)

Hpa’s Decisions

To Overcome The Challenges Faced By The Organization, PPS (Project Of Public Space Inc.) Made A Repositioning Plan For The Company. This Plan Had Certain Objectives Which Included The Development Of The Management And Other Regulatory Frame Work, And To Improve Leasing And Managerial Procedures, Along With The Employment Of A New Executive Manager. Furthermore, To Construct A Specialized Organization Structure For The Expansion Of Market, And To Deliver A Robust And Stable Economic Policy That The Company Could Use To Expand The Market In The Future, Included An Estimation Of An Accurate Operational Budget In Order To Analyze The Amount Of Net Income That Would Be Offered For Debt Payment. Besides This, PPS Also Aimed To Create A Concrete Presenter For The Future Growth And Investment In The “Seaport District” And To Take The Benefits Of Commercial Opportunities For The Market To Construct The Successful “Saturday Market”.

To Overcome The Financial Distress; The Major Goal Of The Company Was To Increase And Promote The  Trade On Non-Saturdays,To Increase The Sales For Companies That Work On A Daily Basis, And To Recover The Working Of The Facility And Its Plan To Better Assist The Marketplace And Retailer Operations.

The OPTIONS, ITS PRONS AND CONS

To Resolve The Issues Of The Organization; The Management Has 3 Options. The First Option Is To Give The Right To The Landlords To Confiscate The Lands If The Tenants Fail To Pay Their Rents, But It Would Result In The Negative Image Of “HPA”.

The Second Option Is To Increase The Credit Line For The Debtors With The Smooth Repayment Policy So That They Can Invest Funds In Other Business Avenues. The Benefit Of This Option Is That It Would Create Good Image Of The Organization, But The Prominent Con Of This Option Is That It Would Create The Larger Number Of Defaulters If The Debtors Are Unable To Pay Their Debts, Which Would Affect The Financial Performance Of The Company.

The Third Option Is That “HPA” Itself Will Have To Manage The Whole Issue For A Time Being, Which Will Reduce The Chance Of The Failure Of The “City Market Of Halifax Cooperative”.

Implementation

According To The “PPS Repositioning Plan”, To Overcome The Debt Issues The Company Has Made Debt Restructuring Plan And Has Communicated The Same Plan With The Creditors. Moreover, The Company Has Decided To Adopt Various Promotional And Marketing Strategy To Attract The Customers Of The New Market In Order To Expand The Business. Furthermore, The Company Has Also Planned To Conduct Surveys From The Retailers And Customers Regarding The Design, Markets And Area Of Improvement. In This Way The Company Would Be Able To Get The Knowledge About The Needs Of Customers And Could Detect The Area Of Improvement.

Another Criteria That Management Can Adopt To Resolve These Issues Include The Strict Credit Policy For The Borrowers. Moreover, The Management Can Provide Secured Loan, Which Is The Loan Associated With The Collateral. The Management Should Impose The Strict Regulatory Policies, Especially For The Financial Reporting And Bookkeeping. Moreover, The Company Should Make Investment In Other Avenues, So That The Earnings From That Investment Can Be Used To Overcome The Problems Of Liquidity. Besides Which, The Company Should Have Aggressive Policy Of Implementing The New Management And Administrative Procedure In Order To Overcome The Administrative Issues And To Work Efficiently. (project for public space, 2012)

Impact

The Repositioning Plan Has created a Positive Impact On The Company. The Plan Has Offered An Opportunity To Both The Government And the Private Entities To invest In The Development Of The Port, And Has Provided An Opportunity To The Clients And Dealers to Support The Market. In The Survey, The Company Got To Know That Although There Were Debt Issues, But The Investments Had Supported The Growth Of The Market By Offering 3 Major Benefits Which Included, The Economic Benefit To The Country And Agricultural Suppliers From The Wider District And Region.

It Had Found That Approximately 10,000 Customer Come To Market On Saturdays, Which Doubled The Sales Of The Producers And Had Improved The Financial Position Of The Market. The Second Benefit Was That, People Had An Easy Access To The Domestic Food Products, And They Enjoyed The Variety Of The Foods. Moreover, It Provided Supports To The Domestic Agricultural Suppliers, Farmers And Also Contributed To The Economic Development Of The Country, And Had Reduced The Imports. The Third Advantage Was That “HSFM” Brought The Diversity And Was The Place Where All The People Met Together. The Public Places And Centers Helped The People To Meet And Interact With Each Other Thus, Created The Diversity Among The Community And Increased The Trade In The Country. (Halifax seaport, 2016)

Recommendations

After Analyzing The Case, I Would Recommend That The Organization Should Go For Option 2,Which Is To Increase The Credit Line Of The Borrowers With Smooth Repayment Of Debt. Because, Investment Is A Very Significant And Prominent Part For The Development Of The Port. If The Organization Provides Smooth Repayment Structures; It Will Lead To The Higher Investment That Indirectly Contributes To The Economy Of The Country Positively. Moreover, It Would Expand The “HSFM” For The Country. Although, The Company Had To Face The Default Issues,But The Benefit Is More Than The Default Problem,So I Would Recommend The Company To Go For Option Two.

The Other Options That The Organization Can Adopt Is To Provide Secured Debt. The Secured Debt Means That The Company Provides Debt Against Some Assets For Instance, Shares And Bonds Or Any Other Financial Asset. This Will Help The Company To Reduce The Problem Of Default And Will Create Good Relations With The Investors. By Adopting Such Method, The Company Can Create Good Relations And Could Have A Tremendous Expansion In The Near Future.

Conclusion

To Conclude, It Can Be Stated Thathpa’s Strategy Had Worked And Created The Positive Impact On The Organization. The Company Was Able To Remove All The Liabilities And Financial Obligations. Moreover, Almost All The Estimated Objective Were Achieved, And Are Still In The Process Of Being Implemented By The Company, Which Includes The Expansion Of The Seaport Markets, Effective Financial Policies, And Meeting The Customers’ Needs. Overall The Company Had Increased Its Sales And Has Attracted The Customers. The Company Should Target The Urban Centers To Expand The Agricultural Product That Help To Secure The Position Of The Company In Future.

APPENDIX

Component Of Strategies

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