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Financing Plan for Science Technology Company

Essay by   •  January 29, 2019  •  Case Study  •  515 Words (3 Pages)  •  112 Views

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*View Point of Mr. Bill Watson

*Time Context: October 11, 2018

  1. Statement of the Problem:

 How can Mr. Finson’s 5-year financing plan for Science Technology Company influence the firm?

  1. Objectives:
  1. To be recognized international  leader in providing integrated quality management systems to manufacturers of electronic devices and equipment.
  2. To be viable financially.
  3. To pursue aggressively most major segments of the semiconductor and electronics manufacturing industries throughout Europe, North America, and the Pacific basins.
  1. Areas of Consideration

        Strengths

  • Leading manufacturer of computer-controlled automated test equipment (ATE)
  • Its 2nd large business was its semiconductor test operation
  • Has a large consumer base
  • A fair position in VLSI testing
  • A dominant share of printed circuit board test market

Weaknesses

  • Poor forecasting track record
  • Inconsistent financial results year to year
  • Failing to keep pace with competition

Opportunities

  • Many new consumer products being developed, ranging from computers to calculators to electronic toys
  • Constant need for improvement, and innovation (smaller chips, more memory, lower power utilization, etc)
  • ATE firms were also helped by the steady increase in labor rates
  • Automated test equipment was also of increasing importance in the field

Threats

  • Falling prices
  • A large number competitors, including Teradyne, Zhentel, Taked Riken, Ando, Marconi, Fairchild, Hewlett-Packard, and LTX
  • Consumers demanded and could expect products of high quality at low prices

  1. Assumptions

None

  1. Alternative Courses of Action

ACA 1        STC must implement immediate cost-cutting measures to improve financial position.

ACA 2        Should introduce new ideas and services.

ACA 3                Proper cooperation and adaptation must be done in all its division.

  1. Analysis of Alternative Courses of Action

ACA 1

Advantages

  1. It can be a tool to evaluate outsourcing deals.
  2. Reflects the real cost of the purchasing rather than the pure acquisition.
  3. It helps the firm in reducing its costs and thus reduces its prices.
  4. Cost controls are the foundation for creating budgets.

                Disadvantages

  1. Lower quality.
  2. Customer dissatisfaction.

ACA 2

Advantages

...

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