MILAN FASHIONS COAT COMPANY

A CASE STUDY ANALYSIS

Marjorie M. Bedoya

Renz Michael D. Boongaling

Angelyka Grace A. Cadiz

Ma. Mirelle B. Opiz

Elica Willoj A. Tolorio

 February 26, 2018
I. TIME FRAME

II. VIEW POINT

The case will be solved if the bank, First United, will approve their loan request
of $3,000,000. Therefore, it is up to First United whether or not they will approve the
loan from Milan Fashions Coat Company.

III. STATEMENT OF THE PROBLEM

Milan Fashions Coat Company is ultimately looking to expand its manufacturing
operations by selling more of its products via the internet. The reasons for its need for
financial assistance are the following:
 1. Expansion, enhancement and maintenance of the company’s website
a. To interact better with customers regarding their orders
b. To enable customers to design their preferred coat or outerwear
2. Expansion and enhancement manufacturing operations
a. To be able to handle unique customer orders
b. To be able to operate efficiently and effectively
3. Creation and maintenance of customer service center
a. To be able to handle technical issues and customer complains accordingly

PROBLEMS
▪ SHORT TERM - How will the company obtain the necessary finances needed
for their expansion
▪ LONG TERM - How will the company use its resources to increase their market
share and profits; right planning and implementation
- How will the company maintain its being efficient and
effective considering that their market expansion
IV. SWOT ANALYSIS
STRENGTH WEAKNESSES

▪ Efficient and Effective ▪ Lack of financial capital (for

Orders were always met on a timely basis and expansion)
quality exceeded their expectation. The company is better for online
▪ Physical Expansion sales according to a local
There’s still plenty of vacant land by their university study, but they don’t
manufacturing facility which could make have enough finances for such
expansion fairly easy to do. expansion.
▪ Flexibility ▪ Need of additional manpower
They can cope with different problems as they
arise.
 OPPORTUNITY THREATS

▪ Expansion through internet ▪ Foreign competitors

▪ Strategic Location
United States is a key selling point area.
▪ Low interest rate
They can consider borrowing money to raise
the finances needed for their expansion.
They need to do something new
and different because of the severe
pressure from foreign competitors.
▪ Tariffs and strong exchange rate
in foreign markets

V. ALTERNATIVE COURSES OF ACTION

In the event that the bank rejects their request for a loan, the following can be
done by the Milan Fashions Coat Company:
1. They can partner with other companies in order to market their products to a
bigger audience.
a. displaying their products on more retail stores
b. being the official provider of coats and outerwear for companies
c. advertising through festival or other events
2. They may consider getting investments from other companies in order to obtain
the necessary finances for their expansion through internet.

VI. DECISION CRITERIA

They can partner with other companies in order to market their products
to a bigger audience.
PROS CONS
1. They will be exposed to more 1. They might end up partnering with the
potential customers. wrong company which would result to
2. They can have a more solid market their brand name being tainted.
that will be loyal in buying their 2. They have to postpone their original
products. plan of selling through the internet and
 diversifying their products until they
obtain the needed finances for it.

They may consider getting investments from other companies in order to obtain the
necessary finances for their expansion through internet.
PROS CONS
1. They can proceed with their original 1. They​ loss control on the direction of
your business. ​When the private
plan of selling through the internet equity firm may get larger share and
and diversifying their products since they want to be actively involved in
they already have the finances for it. the setting of control basic elements
like strategy, hiring, firing employees
2.
and choosing the management team.
2. Since it will be their first time
borrowing from them, Milan might be
rejected by the other financing​ ​entity.

VII. RECOMMENDED SOLUTION

In a study conducted by a local university’s economic and finance department, it

was concluded that Milan Fashions Coat Company can further diversify their product
line so that they can see an increase in their market share and an increase by 20 to
25% in their revenues and net profits in the next decade. They have originally
planned of selling through the internet and diversifying their product line in order to
diversify their revenue streams. But due to the lack of financial capital they cannot
proceed with such plan and is now looking into alternative ways for them to expand
(in all positive aspects).

Milan Fashions Coat Company can consider getting investments from other
companies in order to obtain the necessary finances for their expansion, in the event,
First United will not accept its request for a loan. Putting into consideration that the
company has been in existence for nearly 5 decades and has already set a mark in the
coat and outerwear industry, it would be safe to assume that a lot of companies have
already been eyeing on them. Especially now that Milan has seen an increase in their
market/customers and sales, companies would be willing to invest once they would
open themselves for external financing.