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Butler Company Business Analysis Marketing Analysis: Butler Lumber Company (BLC) is a retail distributor of lumber; nonetheless, its operations are limited to lumber
in the decision making process at Global Communications (GC). Increased competition from multiple sources as well as a decreased stock price has put great pressure
isolated from her town. She has grown up her whole life in the same house, with the same butler, and primarily the company of only her father. In the eyes of the
cigarettes), SuperKings and John Player Specials (mid-priced), and Lambert & Butler (more cheaply priced).However the group's business does not focus solely on cigarettes.
Before starting your project, your business should answer these two basic questions: 3.0 COMPANY 'S PEST ANALYSIS In order to keep their business at their highest
Submitted by bama14 on July 23, 2008
Category: Business
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Marketing Analysis:
Butler Lumber Company (BLC) is a retail distributor of lumber; nonetheless, its operations are limited to lumber products in its local area. BLC is located in a growing suburb of a large city in the Pacific Northwest. The company owns land with access to a railroad siding, and two large buildings that were built on this land. The company is looking for more cash due to such a fast-paced lumber market and a shortage of funding. BLC’s current bank, Suburban National Bank, is not willing to expand Butler’s existing loan to an amount greater than $250,000; moreover, Suburban National is demanding the loan be secured with real property. Northrop National Bank, however, is offering BLC a line of credit of up to $465,000 with the exception that all ties with Suburban National Bank be severed. The interest on the new loan would be prime + 2%.
Customers are offered quantity discounts and credit terms of net 30 days on open accounts. Sales growth has largely developed on the basis of successful price competition which was achieved by careful control of operating expenses and by quantity purchases of material at substantial discounts. This business relies more heavily on the repair industry rather than on new construction making it somewhat protected against market fluctuations on new construction. Assuming purchase discounts were not taken on all purchases in 1991, the net income would be projected at $56,000 based on projected sales of $3.6 million; however, if purchase discounts would have been taken into consideration, net income would be projected at $76,000.
Butler’s short-term loan options are entirely maxed out; therefore, the company has no cash flexibility. Inventory levels indicate Butler is ramping up in expectations of the substantial influx of sales in the warmer months (second and third quarters) when its repairs are easier to make. Butler should select the line of credit for up to $465,000 because...
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