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| TMH Assignment | Spring 2010 | | Bella SongYi Wang | 3/2/2010 |
Background
This memorandum is presented in order to assess the risk Triangle Manufactured Homes (TMH) is engaged in. To assess the risk, we have thoroughly gone through the Company’s annual report and selected analyses of its financial condition and results of operations. These analyses have become the base of the level of risks that we determine TMH is exposed of.
Business Analysis
According to the Company’s annual report, TMH is a business that engages in the retailing of manufactured homes. It is one of the leading players in the manufactured homes industry, representing about 45 percent of the total U.S. market. Operating a total of 114 retail sales outlets, TMH generated sales of record high by the end of 2007 with the amount of $267 million.
Industry and Competition
The retailing of manufactured homes is a highly competitive industry, where new players can constantly enter due to the low barriers of entry and forced to leave due to the fierce competition. Therefore, the merger of small companies has become a new trend in the industry so as to expand companies’ size to compete with the larger competitors. Companies involved in this industry not only compete with each other, but also compete with businesses that deal with other forms of low-cost housing, such as rental housing and conventionally built homes. The competition between businesses is mostly based on price, product features, reputation for quality and service, depth of inventory, merchandising, warranty repair service, terms of retailer promotional programs, and terms of retail customer financing.
Players of the industry are also at a high risk due to the cyclical and seasonal nature of the business. Changes in national economic conditions, housing supply and demand, availability of financing, availability of raw materials, and interest rates all affect the sales in some degree. The sales during March to
Background
This memorandum is presented in order to assess the risk Triangle Manufactured Homes (TMH) is engaged in. To assess the risk, we have thoroughly gone through the Company’s annual report and selected analyses of its financial condition and results of operations. These analyses have become the base of the level of risks that we determine TMH is exposed of.
Business Analysis
According to the Company’s annual report, TMH is a business that engages in the retailing of manufactured homes. It is one of the leading players in the manufactured homes industry, representing about 45 percent of the total U.S. market. Operating a total of 114 retail sales outlets, TMH generated sales of record high by the end of 2007 with the amount of $267 million.
Industry and Competition
The retailing of manufactured homes is a highly competitive industry, where new players can constantly enter due to the low barriers of entry and forced to leave due to the fierce competition. Therefore, the merger of small companies has become a new trend in the industry so as to expand companies’ size to compete with the larger competitors. Companies involved in this industry not only compete with each other, but also compete with businesses that deal with other forms of low-cost housing, such as rental housing and conventionally built homes. The competition between businesses is mostly based on price, product features, reputation for quality and service, depth of inventory, merchandising, warranty repair service, terms of retailer promotional programs, and terms of retail customer financing.
Players of the industry are also at a high risk due to the cyclical and seasonal nature of the business. Changes in national economic conditions, housing supply and demand, availability of financing, availability of raw materials, and interest rates all affect the sales in some degree. The sales during March to