Research Proposal on "Lawrence Sports Problem Solution and Defense"

Research Proposal 13 pages (3550 words) Sources: 2 Style: APA

[EXCERPT] . . . .

Lawrence Sports is a company that deals with manufacturing and distributing sports equipment. The important thing about the company's situation consists in the financial problems that currently affect Lawrence Sports' activity. If not resolved, these problems will only intensify and may even lead to bankruptcy.

The most important issue for Lawrence Sports is the credit the company has borrowed from a local bank, credit that the company is unable to pay back. This is connected with another debt, a debt owed by the company's most important customer. This debt has created a hole in Lawrence Sports' financial resources. This means that the hole has to be covered with money allocated from other activities. Even if this solves the financial problem, it will lead to other dysfunctional processes in the company's activity, given the fact that certain areas will be deprived of their required resources.

Even so, this will only solve the problem for the moment. But this is not a real problem solution. The paper will provide an optimal solution that best suits Lawrence Sports' situation. The optimal solution presented in the following pages is designed to produce long-term effects, in order to stabilize the company's working capital.

Situation Analysis

Issue and Opportunity Identification

Lawrence Sports is traversing a turmoil period caused by internal and external factors. Each of these factors, which will be discussed in the following paragraphs, has its level of importance in creating the situation Lawrence Sports is in at the moment. Even if each of these issues does not represent an immense problem by itself, it seems that their combination led to the serious situation Lawrence Sports finds itself in.

The issues that created this situation are: use of cash, the balance between collecting and distributing the cash, incurring debt, and debt management.

Lawrence Sports use of cash - although the company's optimal use of cash is an internal matter, in Lawrence Sports' case it had external causes. The situation was created by the fact that Mayo Stores did not pay their debt to Lawrence Sports in due time, causing a lot of financial distress for the company. The situation was further emphasized by the fact that some of the goods that the company delivered seemed to be damaged. This was obviously not anticipated by the company, so this matter could not be counteracted in time. Much like the economic and financial crisis affecting the entire world currently, the detriment produced by Mayo had to be covered by cash initially allocated for other activities. The opportunity that arises here is represented by the fact that the company would be somewhat forced to reassess its cash flow, and, more importantly, its cash allocation.

The risk incurring debt - this issue is considered to have significant negative repercussions for Lawrence Sports. Even more, it is expected that such damages will not be solved by the company, having to deal with their effects for a long time. This could affect the company's activity on medium term or long-term. This means that the company will be forced to adapt to these changes and even to completely modify its strategy in fight for survival. However, opportunities still exist even in this situation. Opportunity here is derived from the fact that the company can implement risk management tools for diminishing the effects produced by this issue.

The balance between collecting and distributing cash - this is an internal factor with external repercussions. Although Mayo owes money to Lawrence Sports, our company also owes money to some if its vendors. These debts are correlated. Once Lawrence Sports receives its debt from Mayo, the company is able to honor its debt to its vendors. If Mayo continues to delay the payment, Lawrence Sports cannot respect its financial agreement with its vendors and pay them the debt. The opportunity here relies on the fact that Lawrence Sports is in the position of developing a negotiation strategy with both parties.

Debt management - this is an external factor. Lawrence Sports also owes money to the bank. The amount has reached a total of p $1.2 million. This is the maximum amount that the company can borrow. This is also the most important debt for the company, debt that must be paid as soon as possible. The opportunity consists in the fact that Lawrence Sports must diminish credit standing problems and increase its debt to income ration.

Stakeholder Perspectives/Ethical Dilemmas

The company's stakeholders include:

Employees

Managers

Owners

Suppliers

Customers

Shareholders

Society

Government

Creditors

The employees, managers and owners represent internal stakeholders, while the suppliers, customers, shareholders, society, government and creditors represent external stakeholders.

Employees are the most important resource that the company possesses. Their responsibility consists in performing the tasks they are assigned by their managers in order to ensure the well-functioning of the company. Their rights are negotiated before the work contracts are signed and cannot be modified by unilateral request of the company. Their interest is to keep their jobs and to receive their salaries in time.

Managers are responsible for running the company, for establishing the general strategy and its sub-strategies, and to ensure that this strategy is correctly implemented. Their interest is to make Lawrence Sports as successful as possible, so that their incomes and prestige will grow in accordance with the company's growth.

The company's owners or the shareholders have the responsibility of financing, financially investing in this company. Their interests consist in profit, performance, and the direction the company tends to follow.

The company's suppliers are an important part of its activity. Their responsibility is to ensure that the company receives the supplies they agreed upon. Their interest consists in building a long-term commercial relationship with the company that would be able to bring them long-term profits.

In Lawrence sports' case the customers are represented by Mayo Stores. Their responsibility consists in ensuring that the company receives their owed amounts of money. Their interest consists in negotiating a price that is as small as possible for Mayo. They are also interested in value and customer care.

The society is represented by the local community in which the company activates. Its interests refer to the jobs created in the respective community, the company's involvement in community problems and other related issues.

The government as a stakeholder is basically interested in the money that the company can contribute with to the budget, consisting in taxation, VAT. The government is also interested in the unemployment rate that can be directly affected by the company.

The company's creditors are very important for Lawrence Sports. In this case, the main creditor is represented by the bank the company has reached to an agreement. Their interest consists in credit scores, agreement upon new contracts, and liquidity.

In this case, conflicting interests may interfere between employees and owners, between the company and the local community, or between the company and its creditors.

Problem Statement

Lawrence Sports' objective consists in establishing itself on the market as one of the leading competitors, maintaining this position, and after an established period of time becoming the leader of the sports equipment market. This will be achieved by implementing an optimal working capital procedure, and by developing a suitable cash budget. The company also aims at increasing profits, creating better relationships between the company's stakeholders, and improving the general financial strategy.

End-State Vision

The outcome for Lawrence Sports after the implementation of all the solutions that will be detailed further in the paper is for the company to become more profitable on the short-term, to resolve its problems with Mayo Stores, on the one hand, and with the bank, on the other hand. Also after the implementation of these solutions, the company should be able to benefit from a more efficient strategy regarding the management of financial resource that the company can exploit, compared to the previous strategy that has proven to be at least inefficient.

Also, a medium term and long terms vision of Lawrence Sports presents the company as a leader in the sports equipment industry. This means that the company needs to increase its production, to diversify the range of products, and to expand its customer base. Currently, Mayo Stores are the most important customer for Lawrence Sports, but this does not suffice for establishing a strong position on the market. Even more, given the debt Mayo owes to Lawrence Sports, the company cannot sustain and develop its activity in such circumstances.

The company's future also includes optimizing the flow of resources of all types, and diminishing or eliminating risks that may affect the company's activity in a significant manner. Lawrence Sports also expects to improve its relationships with its stakeholders and to reassess their interests and responsibilities.

Alternative Solutions

The alternative solutions that are most suitable for these circumstances are:

Using short-term loans

Implementing an electronic payment system

Developing an effective cash budget

Implementing company factoring

By borrowing through short-term loans, Lawrence Sports gets the money the company requires that is paid back to the bank in… READ MORE

How to Reference "Lawrence Sports Problem Solution and Defense" Research Proposal in a Bibliography

Related Research Proposals:

Ethics of Headhunting Structure Business Ethics Corporate Term Paper

Ethics of Headhunting

Structure

Business Ethics

Corporate Social Responsibility

Social responsibility frameworks

Personal recruitment

External recruitment

Executive search

What are the choices facing organizations? What are the consequences?

Inductive and… read more

Term Paper 33 pages (9767 words) Sources: 50 Style: Harvard Topic: Business / Corporations / E-commerce

---

Social Welfare State and Juvenile Research Proposal

Yet as a nation, we tolerate the highest child poverty rate of any nation in the developed world" (p. 28).

Likewise, these topsy-turvy priorities extend to how educators are paid… read more

Research Proposal 16 pages (4940 words) Sources: 16 Style: APA Topic: Child Development / Youth / Teens

---

Cloud Computing and Data Security Term Paper

Cloud Computing and Data Security

Cloud computing service providers have made their systems so inexpensive to use and easy to access, that there is little reason that companies should not… read more

Term Paper 18 pages (5196 words) Sources: 15 Topic: Computers / IT / Internet

---

We Should Increasing Gun Control to Increase Safety Term Paper

Gun Control to Increase Safety

We Should Increase Gun Control to Increase Safety

The aim of this paper is to tackle the sensible topic of gun control and the individual… read more

Term Paper 5 pages (1750 words) Sources: 6 Style: MLA Topic: Gun Control / Rights / 2nd Amendment

---

Child Soldiers Burundi and Sudan 1992-2002 Research Proposal

Child Soldiers in Burundi and Sudan: 1992-2002

The convention on the Rights of the Child of 1989 is one of the most prominent international humanitarian treaties in world history. It… read more

Research Proposal 20 pages (7303 words) Sources: 3 Style: MLA Topic: Military / Army / Navy / Marines

---

View 100+ more related papers  >>