Enager
agerGroup # 7: Enager Industries Inc.
FBTNW LLP – Management Consultants
FATHIMA BILAL TARIQ NAVEED WAHEED
FOLLOW BUSINESS TEACHER NELSON WAWERU
Enager Industries Inc
By:
Tariq Mehmood Waheed Faizi Naveed Khalid Bilal Khanani Fathima Mohamed
Background
• •
3 Divisions: Consumer products (primarily for kitchen), industrial products (one of a kind tools to customer specification, professional services (consulting services) consumer products - oldest
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professional services - newest
Each division was independent
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Differentiation strategy
Treated as an investment center (ROI measure) 12% RRR and a 15% ROI for approval of new projects
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Problems:
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Ineffective performance evaluation method o ROI set by the company is not taking into consideration the needs and the differing nature of each of its divisions. o The ineffective rate of return for each division and the desired required rate of return for the acceptance of new projects are not appropriate in accepting new projects that will increase the value of the firm.
• •
Tension among managers President's lack of knowledge about the effects of the performance measure and its implications to each division.
PORTERS 5 FORCES - CONSUMER
• • • •
High threat of substitutes as there are several substitutes available such as other stores that offer such products. Other wholesale stores and retail stores offer kitchen products so there are several substitutes. The threat of supplier power is moderate as there is intense competition. The threat of buyer power is high as there are other suppliers of the same product so they have the ability to switch suppliers easily. Intensity of competition is high and is another reason why the supplier power is low.
•
Given the amount of capital investment needed to enter certain segments in household consumer products, threat of new entrants is medium. Loyalty from customers is important in such an industry as there is intense
FBTNW LLP – Management Consultants
FATHIMA BILAL TARIQ NAVEED WAHEED
FOLLOW BUSINESS TEACHER NELSON WAWERU
Enager Industries Inc
By:
Tariq Mehmood Waheed Faizi Naveed Khalid Bilal Khanani Fathima Mohamed
Background
• •
3 Divisions: Consumer products (primarily for kitchen), industrial products (one of a kind tools to customer specification, professional services (consulting services) consumer products - oldest
•
•
professional services - newest
Each division was independent
•
•
Differentiation strategy
Treated as an investment center (ROI measure) 12% RRR and a 15% ROI for approval of new projects
•
Problems:
•
Ineffective performance evaluation method o ROI set by the company is not taking into consideration the needs and the differing nature of each of its divisions. o The ineffective rate of return for each division and the desired required rate of return for the acceptance of new projects are not appropriate in accepting new projects that will increase the value of the firm.
• •
Tension among managers President's lack of knowledge about the effects of the performance measure and its implications to each division.
PORTERS 5 FORCES - CONSUMER
• • • •
High threat of substitutes as there are several substitutes available such as other stores that offer such products. Other wholesale stores and retail stores offer kitchen products so there are several substitutes. The threat of supplier power is moderate as there is intense competition. The threat of buyer power is high as there are other suppliers of the same product so they have the ability to switch suppliers easily. Intensity of competition is high and is another reason why the supplier power is low.
•
Given the amount of capital investment needed to enter certain segments in household consumer products, threat of new entrants is medium. Loyalty from customers is important in such an industry as there is intense