Willy Candy Company
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WILLYS CANDY COMPANY
As the Strategic Consultant to the Executive board of Willys Candy Company, it is my job to evaluate the ideas as presented by the Executive Committee and determine which of those ideas would be the best direction for the company to achieve growth, both immediate and long term. While listening to each of the Executive Committee members present their ideas, I have included a recap of each strategic idea as well as my recommendation as to which idea would be the best option for Willys Candy Company.
First to speak to the committee was the CEO, Chester A. Wonka, III. Mr. Wonka identified that over the past few years and that while two of the products the company markets, The Willys Yummy Chews and the Willys Sour Straws are in fact some of the most popular products for the company and has been able to maintain sales, overall the sales and profits for the company has been flat. Mr. Wonka feels that the best option for the company is to sell the company to a larger Swiss company in hopes that this merger will provide resources and marketing capabilities as well as expand the Willy brand into international markets that they have not be able to achieve as an independent company. What I agree with here is that by allowing a larger company to purchase Willys Candy Company will in fact allow them to begin to have a presence globally, which could impact sales and profits, however where I would be cautious of when making the decision to merge is that does the larger Swiss company have the same overall objectives and views on how to operate Willys Candy Company so that it does not cause cultural differences. I would recommend to Mr. Wonka that before we make the decision to sell The Willy Candy Company to the larger Swiss Company that he thoroughly understand how they plan to operate the company and if there are any conflicting objectives that could hinder the growth of the company and its brand.
The next recommendation to the Executive Committee was made by Swifty Miller, the CFO of the company. Mr. Miller expressed to the committee that he was against the idea of merging with a larger Swiss company, however his thought was to work with investment banks where they would receive funding with the help of the bank to help fund the purchase of several smaller candy companies in hope to grow the overall portfolio of Willy Candy Company and streamline the overall efficiencies in production, sales and marketing. While I understand the reason why Mr. Miller suggested that rather than selling the company to a larger company and instead buying smaller companies, I would question if the timing and the overall consequences are worth the risk. While I completely agree that if you sell the company that the potential for employees to lose jobs is a definitely possibility under those circumstances, I would also like to point out that if the company doesnt become profitable that as expenses increase and profits decline, that the company could be forced to make workforce reductions, which would also lead to a loss of jobs. My second concern with this proposal is the option of having the investment bank to sell new debt debentures that would help support the purchase of the new companies. My question to the CFO is what solid data have they been able to provide to the CFO that will guarantee that they will be successful at selling at the low rate? How will potential investors feel that the company has taken such a risk where they are willing to risk their investment ranking just to expand their product line?