The Fashion of Zara

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Internal auditor is necessary to hire since external auditor and internal auditor can supervise each other’s financial statement. However, Paul rejected the idea of hiring an internal auditor. His behavior is doubtful although his explanation is that BML would suffer from extra cost if hiring an internal auditor. Thus, we may suspect that he is afraid the internal auditor’s supervision.

In terms of whether need to keep a separate record of sales in United States. Paul and Bill Bragan hold different opinions. Paul thinks it is not necessary to keep a separate record since these sales are not different from any other sales. However, I suppose it is necessary to keep separate record because around 30% productions sell in U.S., which is one third of total sales volumes. Keeping separate record of sales in U.S. market can also make it easier to analyze the sales condition in U.S. thereby determining the future strategy management.

In conclusion, BML should proceed with the production of “Bobby Bully”. In order to make this new project more profitable, BML should recognize those following strategies: First of all, increasing market share and product value should be the core strategic objectives for BML. To do that, they should make more marketing surveys to get feedback from customers and then improve their production to satisfy more customers’ need. They also should set relative lower price at the beginning of the sale period since this product is totally new for customers, so lower price may be more attractive. Increasing market share can be achieved by making more budgets into advertisements and public activities. Besides, buying high-quality materials, hiring high-skilled employees and monitoring the producing process are important to guarantee the product’s quality.

Secondly, decreasing manufacturing cost is also necessary for BML. In order to do that, BML should seek supplier who has high-quality materials and keep good relationship with them to get lower price for materials. BML also should provide training program to supervisors to make them produce more productions, thus reducing supervision costs. Besides, BML should lease equipment instead of buying equipment.

Thirdly, BML should keep good relationship with bank to receive more bank loans. As a result, they have more budgets that could be invested in advertise and production process.

Lastly, the separate record of sales in U.S. should be made in order to analyze the sales condition of “Bobby Bully” in U.S. market. According to the sales condition in U.S. market, BML also be able to analyze whether “Bobby Bully” has market share in other market such as China, India and Russia that have more populations. Developing abroad market should be a continuous strategical objective for BML.

BUS 424 Case 2

Chujiao Qi

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