Armour Garments Company Case Analysis

Armour Garments Company Case Analysis

I. Perspective held by the Student

- As the Company Owner

II. Case facts

Armour Garments Company has been in business for 21 years being the pioneer of high quality undershirts. It has two popular brands, namely: Armour and Marca Troca.

The company started out copying popular styles and designs from Hong Kong. The company sells all of its products to wholesalers in Divisoria who distribute the product to the whole country. Their products are of superior quality being twice more durable than other brands in the Market. Business usually peaks twice a year: in June and December.

In 1972, the company started to feel the pinch of profit deterioration due to stiff competition arising from competitors showing a product of high quality undershirts with lower prices and longer credit terms in the market place. Armour Garments Company introduced the "Blossom" - a new brand with the same product quality but of a lower price to match with the same product quality but of a lower price to match the competitors' products to the middlemen in Divisoria as a solution for the threat.

Blossom is introduced to save the other two brands of the company from the price war in the market palace. Yet, not long enough; it was withdrawn from the market because it was selling less than the other brands.

III. Statement of the Problem

In 1972, the company started to feel the pinch of profit deterioration due to stiff competition arising from competitors showing a product of high quality undershirts with lower prices and longer credit terms in the market place.

Main Problem

How could the company compete Globally?

Sub Problem

Would it be proper to the owners of AGC to infuse additional funds to the company?

I. Objectives

The objective of this study is to be able to give a clear picture of the problem of the company and a clearer overview of all possible outcomes in every probable solution of the problem. Also, it gives the pros and cons of every action that could be done to solve the problem facing by the Armour Garments Company.

1. To entice middlemen to patronize AGC's product

2. To be able to compete with its competitors to earn profit

3. To improve their fashion line and machinery

4. To handle their pride

II. Analysis of Relevant Case Facts and Situation Analysis

Liquidate the Business. This may sound very dastard but it's the safest way to stop incurring losses and perhaps avoid bankruptcy of the business. In a way, all the efforts sacrificed for the company would be put to waste and its institutional pride and goodwill would be trashed out.

Buy Flexible Sewing Machines. Perhaps the reason why the company is having a hard time coping up with the prices set by its competitiors is because it is not flexible and it couldn't be utilized in the manufacture of other types of garments like the jeans and polo shirts. If the sewing machines are changed then perhaps it would lessen the cost of the garment manufactured and then it could compete with its competitiors.

Low Quality - Low Priced Garments. This is a very effective way in competing with the fierce price war in the market area. But still ,the institutional pride and the goodwill of the company that it has long been taken care of as the pioneer of such business would be put to waste. It would not also be a business with integrity and honor anymore.

Don't Limit Selling the Goods in One Place. The company was selling all of their manufactured goods in Divisoria only. In additon to that, the middlemen there are not even loyal to their suppliers. So we suggests to why not sell some of their products to direct consumers if there are. And also, there are a lot of area or selling place wherein there are middlemen who are willing to buy the product and sell it again having their desired profit. In this case, the incurring of losses would be minimised or perhaps be totally washed out in the financial status of the company.

Commercialize. Since the wearing of undershirts are not on fashion anymore, it would be good if we'd coercialize the products. Though, another expense would rise up, it's worth the risk. As we can see nowadays, the mob are easily attracted by the products seen on television. A new cimmercializing strategy should be made in order for the product to click to the consumers.

Increase Marginal Profit. Another way to increase sales is to increase the marginal profit but still this strategy is very unlikely to increase the goodssold for more people are likely to buy the cheap ones.

Owners Shuld Infuse Additional Funds to the Company. This is very risky, the ownersmight just put their money to waste i the company can't revive its status. But every idea derserves a try. The company must also meet the changing demands of the customers and one way of doing so is to cope upwith their changing standards. Since the world we live in right now is modernized so shall the comapny and its factory.

III. Decision Analysis

Alternative