Fatima Enterprise Strategy Stage One Report – Context and Understanding


Buy and Amalgamate Special Care into the Company


4.27 At first glance it appears to be a good deal at a cost of €70,000 with two guaranteed jobs, receiving in return the goodwill contract to the value of €227,000 from Special Care. However, the bottom line is cushioned by FCL rent payment, and bank loans add to the risks.


4.28 Table 4.6 reproduces the SWOT analysis from Terry Buttner’s report. Table 4.6 – SWOT Analysis of Amalgamation Option


Strengths


Special Care has strong management and a committed team


It is regarded as a quality supplier with good customer care


It has contract negotiation skills and hands on production expertise


Opportunities


The team at Special Care is led by a skilled and experienced manager.


Special Care will grow the sales income of FCL six fold from €40,000 to €230,000


FCL will gain access through Special Care to a much larger range of customer business types, e.g. hotels and schools


4.29 This is a difficult business arena and there are gaps in the market to exploit, and Special Care could provide valuable skills, drive and commitment. However, FCL could be better served in negotiating not to buy the company but to buy only the goodwill and equipment, meeting the two jobs guarantee. JP Hallahan Management Limited (owners of Special Care) would be responsible for the company’s loans from the principle sum received from FCL and would be libel to sell on the lease of the premises and, in time, let the company expire.


3-5 Year Development Plan 4.30 The advice provided in Terry Buttner’s report for this option is quite limited, consisting of:


‘FCL should develop a mission statement listing who they are and who they aim to serve and support’.


4.31 Furthermore, it is noted that FCL should produce: - - -


a strategy plan; a tactical plan; and business plans, targets and measures.


4.32 Terry Buttner further notes that: FRB needs to decide whether to take FCL to a new level in the business of supplying quality service and value and allowing re-investment opportunities to expand and to increase the ability to aid more people in gaining employment or whether to remain in their current stand alone and heavily grant assisted position.


Launderette - Conclusions and Recommendations: 4.33 Terry Buttner’s report highlighed two possible ways forward:


‘Option one - that you take the big leap forward and therefore expanding your risks with more responsibility for more people, six additional in the first instant by taking on the good will and the


506 0149 31 Weaknesses


Special Care has a high dependency on the owner manager/low pay level


Their current premises is restrictive for a growing business


Inadequate documentation trail Threats Investment cost of €70,000


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