One of the growing renowned names in appeal industry is R Jax’s Fashion Inc. in Canada with number one position in apparel market. We do business that provides the customer to have an experience of a fine-looking personality. We are working in Canada for more than ten years and have achieved 6th largest clothing apparel retail stores line with a number of successful acquisition. Since the last two years, we are facing gradual increase in the operating expenses along with an antagonistic growth rate. All these issues have made the company’s financial position worse by having a reduced profit margin and an increased cost of sales and overhead cost. We are aiming to increase our apparel clothing within Canada to increase our sales as well as to restructure our company. We have established an ERP system to escalate the business growth by streamlining the designs of apparels and organizational structure to increase financial stability.
The problems we have identified are playing vital role in declining our company’s growth. To solve these issues, we have suggested some alternatives for the refurbishment of the organizational configuration from open and scattered operations to the closed hierarchical structure. The second alternative according to our analysis is to reduce the operational cost by examining the existing system. The current operation is generating high selling and administrative cost that is lowering the company’s net profit. Thirdly, we are planning to expand our operations to present ourselves in the overall U.S market.
The main focus for growth and expansion to the US is to make sure there is an appropriate arrangement of operations and organizational structure. Hence, to prepare a strong market entrance strategy we need to pay a lot of concentration on the efficiency of our distribution system so that we can compete with the existing competitors present in the U.S market. We have estimated that by having a concrete base in the market would create a strong initial appearance. This solid appearance will give us the remarkable period of at least two years in which we will establish our company in other major cities of the U.S.
As we have identified our major problems and now we are assessing them to sort out the appropriate option that best fits our company. Alternative one would be a high-cost move for the company in which the company would revamp its hierarchy and ERP system. We will examine the reduction in the profit by linking up the return on assets and the return on earning so that the financial picture of the company would become clear to the organization.
The second alternative is to look over the operational system that has reduced profit. They are implementing enterprise resource planning system to run an efficient retailing service. The problem has started with the delay in the financial reporting system and a huge communication gap between different enterprise units. We have made the judgment that our company should go for this alternative. The last option decided by us is to present the partnership in the U.S market so that the profits would increase as well as the market share of the company. However, this is a long-term plan, and it requires an efficient flow of communication within the organization so for now we cannot go for it.....................
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