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You will prepare and submit a term paper on Managerial Finance in a Health Spa Resort. Your paper should be a minimum of 2250 words in length.
You will prepare and submit a term paper on Managerial Finance in a Health Spa Resort. Your paper should be a minimum of 2250 words in length. In the face of looming competition, the company has decided to revamp its operations and in this respect formulate a suitable strategy, taking into account the escalating demand for the services provided by the Health and Beauty sector in the leisure industry, with the aim of sustaining growth and strengthening its market share. “The method a company uses to expand its business is largely contingent upon its financial situation, the competition and even government regulation. Some common growth strategies in business include market penetration, market expansion, product expansion, diversification and acquisition”. (Suttle, R., 2012) The following important issues have been identified, in connection with the strategies to be evolved, during the discussions at board level.
Better marketing and cost reduction exercises could not improve profitability dramatically as the company in these cases cannot push beyond certain limits. The idea of bringing down the debt level, so that the company can plow back the profits generated for investment, is not consistent with the objectives of growth and increasing market share, which calls for new investment.
The company needs to think about new strategies to improve profitability and market share. It is in this backdrop, the following strategies have been put forward for consideration after discussion between the board and the management team.
This paper seeks to analyze the above strategies and advise the company with regard to the advantages and critical issues related to the strategies put forward and the strategy best suited for the company for achieving its objectives of growth and increase in market share in the long run.
It is proposed to acquire the assets of the company New You. Smith, H.T.J. & Moraitis, T. (2009, p.86) state “The traditional logic of an acquisition is based on inter-assets synergies that are expected to arise when the merged organizations can support activities more profitably in combination than they could separately.” New You is a major player in .the industry with a market share of 28% as given in Exhibit 1. .
