Business Case Study - F. X. Pounds Inc Example | Topics and Well Written Essays - 1000 words

Business - F. X. Pounds Inc - Case Study Example secondly the initial and fixed toll to setup a distribution argument is lavishly. Fuel sector has long government intervention in its running too. Such conditions make it difficult for a new enemy to enter and survive in the market. (Hill & Jones.2010) Rivalry among established companies FXPs competitors are usually also oldish family own companies with fixed established loyal customers and championshipes. The crave in the sector is highschool and FXP must stir been facing high competition in order to capture market share and maintain profits. (Hill & Jones.2010) 1. force of customers In FXP, the fuel sector customers usually do not have very high force play to influence prices or cut be as the prices are influenced by governments intervention and are usually fixed. However in the land fuel products customer can bargain closely the prices being offered and FXP might have to cut its cost to retain its customers. (Hill & J ones.2010) 2. Bargaining power of suppliers The suppliers do form a significant position in every industry. FXP is mainly involved in distribution business where the suppliers have a significant power to effect companys cost and ultimately the price. (Hill & Jones.2010) 3. casualness of substitute for products The energy consumer sector supplies many products which can be used as each others alternatives. For e.g. woodwind can be used as a substitute of coal etc. It is extremely valuable for FXP to sell the best quality at competitive prices in order to stop its customers switch to substitutes. (Hill & Jones.2010) Cost-Leadership by and by the industrys analysis and the competition there in it could be suggested that FXP should adopt a cost leadership strategy out of Porters strategies, other being differentiation and focus because of high demand, high customer and supplier power and many replacements for companys products. There is increasing demand in the market and it is imp ortant for FXP to maintain and capture market share by decreasing costs and offering better prices than those offered by the competitor. As the environment in which FXP operates is extremely dynamic and the prices swing is frequent, it is necessary for FXP to lower down its cost and supply at the lowest price even when the prices are high in the market. Differentiation and focus are not suitable strategies as there isnt untold room for an innovative product or a product for which customer will be go down to pay a premium price. (Botten & Chartered Institute of Management Accountants.2009) Fragmented Shareholding Being a family owned and managed business since its inception FXP continues its shareholding in the family which caused fragmented shareholding. No one except Pam and the new CEO Bruce took parcel in managing the business. Additionally the death of the two shareholders and their shares being further transferred to their children were the main causes of fragmentation. Age ncy issues, transfer of shares and managing the business are the issues associated. In the current situation, Pam at the board meeting should raise the fragmentation issue for banter and should inquire how the other shareholders view the problem. A clear and proper policy