Armour Garments Company (AGC)

I. Central Problem
AGC should find methods on the way to revitalize the corporate from its steady slope into worse conditions. The circumstances of AGC tumbling downhill were already stacked towards them; they just weren’t conscious that their technique throughout good market economic system wouldn’t work well in opposition to harsh conditions, such as the competition increase and the autumn of the undergarment market in the course of the Seventies, which occurred simultaneously. Their condition grew to become so bad their equity shriveled up to half of what it used to be.

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II. Statement of Objectives
To earn back their prospects from the competitors attraction as nicely as earn new ones To design methods to improve the earnings of the company
To broaden the goal market
To use state-of-the-art equipment

III. Areas of Consideration
Competition is stiff
Selling only to one merchandiser (Divisoria)
Limited goal audience
Was not ready for market instability
Dependent on firm goodwill
Production was not versatile sufficient to successfully craft high quality items Products have been limited (white undershirts)
Prices were not favorable to the company

IV. Alternative Courses of Action (ACA’s)
1.) Sell some old tools of the company and buy helpful trendy equipment.

A. Advantages
Greater possibility that the company can invest more flexible tools for enchancment of manufacturing in firm.

B. Disadvantages
They will find a onerous time disposing the old tools due to its restricted capabilities and the fact that it’s already old.

2.) The promoting of products shouldn’t be restricted only to at least one place.

A. Advantages
Reach out to potential clients who do not frequent to Divisoria.

Expand your goal market.

B. Disadvantages
Will prices extra bills in direction of shipping, delivery and marketing.

3.) Advertise products in media and print.

A. Advantages
Create demand for his or her merchandise.
Procure product and model awareness to the basic public.
Name or model recall.

B. Disadvantages
Incur expenses in advertising and advertising.

4.) Introduce products designed for ladies.

A. Advantages
Wider audience
More customers
Greater chance for profit

B. Disadvantages
Additional expenditures for analysis and design

5.) Give advantages to middlemen (merchandisers).

A. Advantages
Increase loyalty from merchandiser.
Create a rapport between companies.

B. Disadvantages
Additional costs

6.) Create products that are trending out there.

A. Advantages
More sales
Larger target market
Variety of merchandise to determine on from

B. Disadvantages
Higher price in manufacturing.
Higher threat of putting capital to waste.

7.) Retain “Blossom” in manufacturing.

A. Advantages
Helps the company to gain again revenue.
Provide lower class citizens with a selection of merchandise.

B. Disadvantages
Brands Armour & Marca Troca might be additional overshadowed.
Less revenue (same quality but at a lower price).

V. Final Decision

The ultimate choice is to exchange the old notions and infuse the brand new, whereas still retaining the standard of the product. Despite the immense exhausting work put into the corporate, adjustments will proceed to occur, so a new life for the corporate can be better suited than if it were to proceed its sluggish downward pace.

VI. Detailed Action Plans

The first thing that the enterprise must do is replace the machines that manufacture their product. The machines are not only inflexible for making clothes other than undershirts, but assuming from context; they’re old, contemplating the corporate up to the liquidation proposition was twenty years old. Although it will need much capital to buy these machines, in the long haul, it is an funding and it’ll help them broaden their product lines.

A massive chunk within the revision of plans situates in the products. In the previous AGC, they only produced white undershirts for males. The subsequent step is the development of their product lines. It may begin with research on their current and their aspirant prospects and merchandise. Expanding the brands embrace introducing clothing for ladies, designing top quality and fashionable clothes, and making them in colour. The gamble is excessive because the corporate has solely ever excelled in manufacturing one constant product, and increasing the product traces want a lot capital. Another good call for the corporate is to revive Blossom.

That model, with its good high quality but low-cost prices caters to these of lower revenue ranges, which is a potential market to promote to despite quite a few competitors within the price warfare. And though brands Armour and Marca Troca would be overlapped by the potential success of Blossom, by way of increasing the brands would they have the ability cater to a different taste and subsequently cater to a different viewers. This means, the brands under AGC is not going to be immediately competing for customers to purchase them. Through good marketing and properly maintained production, AGC can obtain excessive profits from expanding their line.

Further action to broaden their target audience could be to advertise AGC. Its namesake and goodwill may undoubtedly draw in crowds, but commercializing it in media and in prints will reach those that haven’t heard about the firm and its manufacturers. This creates demand for the product, and in flip, excessive gross sales.

An influx of the model new isn’t all the time a nasty factor; it’s the way you respond to
change that counts. AGC nonetheless has some struggle left and with the proper strategy and taking the best alternatives, AGC can still be capable of bounce again and regain what was lost.

Case Analysis 3-2: Armour Garments Company (AGC)
The Armour Garments Corp. (AGC) was established in 1954 in the Philippines as a producer of high of the range undershirts. It had two popular manufacturers, namely: “Armour” and “Marca Troca”. The firm started out by copying well-liked types and designs from Hongkong. The first ten years was fairly profitable. The firm grew from 25 employees in 1954 to about 250 staff in 1967. The firm sells all of its products to wholesalers in Divisoria who distribute the product all over the country. The products are manufactured in white colour only and are typically of superior high quality being twice more durable than other brands in the market. Undershirts are worn as a matter of habit to keep away from the direct contact of customers polo shirts with the body. Product sales are seasonal. Business normally peaks twice a year: in June, with the opening of classes and in December, with the Christmas rush.

In the mid 60’s increasingly more undershirt factories opened. The company faced severe threats in its operation since the Divisoria middlemen were not loyal to brands. All alongside, AGC was banking on its institutional delight and goodwill being the pioneer in the trade. While gross sales of the corporate didn’t lower, it also didn’t considerably improve with the growth of the population. However, this did not hassle management for the reason that cash flow was good. No major investments have been made in the course of the period. It was enterprise as traditional so to talk. In 1971, the market for the undershirt abruptly took a downturn. It was not fashionable to put on undershirts. Moreover, more and more marginal factories sprouted up and have been willing to compromise on price and payment phrases with the middlemen.

For the primary time in its historical past, the company was astounded. It launched a model new model “Blossom” which was of precisely the same product quality however priced decrease to match competing merchandise. It didn’t take lengthy earlier than “Blossom” was withdrawn from the market as a result of AGC offered extra of “Blossom” and less of “Armour” and “Marca Troca”. Having failed to improve the marketability of its traditional product strains, the corporate finally decided to diversify and venture into ready-to-wear business. It launched a polo shirt line. The market response was not favorable. In 1973, the company added a couple of traces like jeans and printed shirts, these two lines also failed.

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