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Corporate Objective
La-Z-Boy Company has a corporate objective to continue growing while remaining profitable within the furniture industry. ... 7
% Increase 20 20 20 20 20 20
Assumptions:
1) According to La-Z-Boy’s current sales trends, sales have increased at an average rate of 19. ...
2) Although the company wishes to reduce their currently high selling and general administrative expenses, operating income was compounded at a rate of 14% based on previous financial statement data. ...
- Largest competitor, Action Chair, specializes in selling through department stores. ...
Manufacturing
o Long adaptation before the company uses new technologies. ...
Product Planning and Development
o New versions of the reclining chair are being developed. ...
- Most company plants are not unionized. ...
- Impact on employees and their opinion
Alternatives
1) Status Quo
2) Allow for LZB takeover
3) Merge with another market leader
4) Acquire smaller furniture manufacturing companies
Analysis of Alternatives
1) Status Quo
Pros No additional required
Traditional corporate image and policies maintained
Approval and support of employees
Cons No growth potential
Possibility of lost sales
Loss of market share to competition
Competition will capitalize on opportunities
Internal problems not being addressed
2) Allowing for LZB takeover
Pros No additional funding required
Possibility of positive restructuring and company build-up
Shift away from current conservative corporate mentality
Negative effect on LZB Stock
Cons Loss of corporate image/identity
Stockholder approval voting required
Necessary buyout of family stock
Negative impact on employees
Unavoidable management shift and possible lay-offs
3) Merge with another market leader
Pros Considerable market share gain
Possibility of additional revenue
Become market leader in the industry
Sharing of company resources, technologies and knowledge
Increase price of LZB stock
Possible extension of product line
Cons Loss of managerial control
Issues arising from conflicting corporate commitments and policies
Possibility of a difficult transition period
Negative impact on employees
High costs attached to merging companies
4) Acquiring smaller furniture manufacturing companies
Pros Increase market share
Possibility of additional revenue
Possible extension of product line
Add prestige to brand name
Increase price of LZB stock
Increase LZB’s assets
Cons Additional funding required
Take-over of the acquired company’s debt
Internal problems not being addressed
Recommendation
Considering that LZB’s financial data reveals that they are already very competitive within the furniture industry, my recommendation is that the simply acquire smaller furniture manufacturing companies in order to experience growth while remaining stable.
Approximate Word count = 1353
Approximate Pages = 5.4
(250 words per page double spaced)
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