SAMPLE 1

Background:
Quality Metals had a very old history about 100 years. In the beginning it was a
local metals distributor. Nowadays, it had been a famous national distribution,
and had a great of sales which exceeded $750 in 1991. I will give the SWOT anal
ysis and discussing some questions to explain why it can become the leader of th
e industry.
1． SWOT analysis.
Strengths:
1) Target markets more effectively.
2) Better understanding customers’ needs in different geographic.
3) Develop techniques to increase market shares.
4) The strategy provides the framework for the development of the goal.
5) Excellent products and services, such as clean-room, high quality plastic.
6) The focus which on market is very collect and it can identify its market posi
tion very clearly.
7) A wide variety of products and a wide market (globalization).
8) High quality standards of products and production flexibility.
Weaknesses:
1) The organization is a little bit complex to control.
2) Because it just focuses on some specialty users, it will lose other customer
and reduce the profits.
3) Because of two forms for company, thus, it is very hard to control the whole
organization.
4) The organization structure is very clearly but it’s difficult to communicate be
tween the board and superiors.
5) Rapid development of technology will expense too much cost and reduce the pro
fit of company.
Opportunities:
1) The retrenchment can save time and force size in order to improve the quality
of the service of the wide product lines and increase profits.
2) Just- in- time inventory management.
3) Better understanding of customers’ needs.
4) Few competitors.
5) Have major quality and productivity improvement program.
Threats:
1) Highly competitive.
2) Fragmented industry suppliers.
3) Financial problems.
4) Pricing fights.
5) Rapidly changing in business environment.
2. The metal distribution industry is highly competitive. The reason is that the
re are fewer companies in this field than those retail business or service indus
try, so more and more newer want to share a piece of cake in the market. QMSC is
in the middle of the value chain. The company has its own part to treat the two
different parts such as the purchase manager and the sales manager. Their respo
nsibility is both inside and outside. First, there are some mills but not as man
y as they can. QMSC can only choose from them. And the suppliers sell their prod
ucts in large lots. However, the buyers buy smaller lots the threat of substitut
es are smaller than other elements.
3. Yes, in the investment center. The managers are responsibility for the segmen
t’s, investment and asset base as well as the profits. Usually, evaluate based on
the return on assets employed, evaluation might include a variety of measures su
ch as profit, return on investment, residual income, economical valued added and
a range of non-financial measures. Hence the manager in the districts should co
nsider about the acquisition of new equipment, which is an investment for the se
gment. And also, they evaluated equipments and accounts receivable etc. based on
the return on assets employed.
May be it can also be the profit center because the managers usually evaluated i
n terms of effectiveness in raising segment profit level and controlling costs.
4. Investment in machine $540,000
10 years cash inflow $286,000
PV of cash inflow $39,182
5. The expenditure is more than $10,000. Thus exhibit 5 is not good for him it c
an get longest management goals as close as to the company.
6. Yes, it more effective. Commence:
Multiple performance measure
Management service histories
Strategy paining
Management’s knowledge different operation.

SAMPLE 2
1. Conduct a SWOT analysis
Strengths:
1) Better understanding customers’ needs in different geographic.
2) Target markets more effectively.
3) Sell high-technology metals such as carbon alloy bars, stainless steel, alumi
nium, titanium, copper and brass.
4) Excellent products and services, such as clean-room, high quality plastic.

Weaknesses:
1) The organization is a little bit complex to control.
2) Because it just focuses on some specialty users, it will lose other customer
and reduce the profits.
3) Not in a form of a flat structure organization.
Opportunities:
1) Just- in- time inventory management.
2) Few competitors.
Threats:
1) The price of raw material increases.
2) Rapidly changing in business environment.
3) It’s a mature industry, so the company must keep up with industry trends to not
to lose customers.
2. Outline the competitive strategy of QMSC. (Hint: you need to consider the met
al distribution industry and where QMSC is in the value chain. You can include i
n your answer issues such as: supplier power, buyer power, threat of substitutes
, entry barriers (if any), competition or rivalry among existing companies).
QMSC bases strategy on product differentiation. And there are three fundamental
objectives guided Quality. Objective 1: To focus sales efforts on targeted marke
ts of specialty metal users. Objective 2: to identify those industries and geogr
aphic markets where these metals were consumed. Objective 3: to develop techniqu
es and marketing programs that would increase market share. QMSC is in the middl
e of the value chain. It purchases from mills including USX, Bethlehem, Aloca, e
ct. and is able to get inventory for a cheap price from purchasing by bulk.
The company has its own part to treat the two different parts such as the purcha
se manager and the sales manager. Their responsibility is both inside and outsid
e.
3. Responsibility structure: should districts be investment centres? What else c
an they be? Why?
The districts should be investment centres. QMSC has 4 regions, and each of whic
h had about 6 districts, totally 23 districts. There are staff departments in fi
nance, marketing, operations and human resources. So, it makes it easier for ope
ration and better manage and evaluation if the districts are investment centres.
Besides investment centres, responsibility centres can act as expense centres, r
evenue centres as well as profit centres.
The following questions are from the text p.305
4. Is the capital investment proposal described in Exhibit 3 an attractive one f
or Quality Metal Service Center?
Yes, the purpose of a company is to maximum the profit, and as Elizabeth Barret
suggested, it can help company to make more profit. So the capital investment pr
oposal described in Exhibit 3 is an attractive on for QMSC.
5. Should Ken Richards send that proposal to home office for approval?
Ken need send this proposal to home office for approval, because this proposal i
s good for the company and can make a lot of profit for the company. And another
reason is, capital expenditures in excess of $10,000 and all capital leasing de
cisions require corporate approval.
6. Comment on the general usefulness of ROA as the basis of evaluating district
managers’ performance. Could this performance measure be made more effective?
The Return on Assets (ROA) percentage shows how profitable a company s assets ar
e in generating revenue. An indicator of how profitable a company is relative to
its total assets. ROA gives an idea as to how efficient management is at using
its assets to generate earnings. ROA can be computed as
Net Income/ Total Assets