I.

Summary

 Martyn Roper has a passion for wood work and wood carving and it leads
him an idea to open and start a business that is related to his passion. And
that’s the birth of the wisdom toys.
 Wisdom toys are a type of business that is a family owned business. All
of the family members of Martyn including his eldest sister, Jane and
external investor, who is Martyn’s friends, help him to manage this
business.
 Pam and Martyn owned 50% share of the business, his three children
Paul, Tom, and Laura owned 5% each of the share, while Jane owns 10%
of the share and the other 20% share were owned by some external
investor. With the help of Jane’s share it was used to develop new
products that cause firms turnover grew rapidly as they began to export
their product. While with the help of external investors it helps to bring
in capital to start Martyn’s built teams division for making antique
replicates. Also with the help of his children and wife it contributes a lot
that makes the business growth
 Laura as a chartered accountant and manager, Paul a design engineer who
managing for the team of designers and Tom is in the marketing side of
Wisdom Toys.
 Tom has been offered the possibility of a multimillion dollar contract for
an American firm specializing in educational and recreational toys for
pre-school children. However, the toys will have to be plastic and profit
margins per unit will be as low as 3 percent on some lines, volume should
easily make this up. The US Company will also take nearly four months
to pay invoices and Wisdom Toys will have to pay for machine tools and
recoup this from sales.

II. Problem Statement

 Given the new opportunity that has been offered to Wisdom Toys with a
possibility of a multimillion contract and considering the company’s
constraint with regards to fund the investment, what should be done to
double the sales in next two years and triple current turnover by year four?
III. Objectives

 To be able to employ professionals that help the company that create

success to its clientele.
 To have all products (Toys) produced meet the standard of the clientele.
 Achieve and maintain outstanding products and services
 To be able make an efficient way of producing toys made of plastic.
 To develop a good decision making within the company

IV. Areas of Consideration

Strengths
 Wisdom Toys are now the most successful of their type in UK
 High turnover through export sales
 Most of shares are owned by family members of CEO
 Departments like marketing, design and accounting are head by family members
and most qualified.
 The company is competitive
 They are well established in the market

Weaknesses
 Lack of funds for new big investment
 Run by family members and might conflict in terms of decision making.
 CEO is too conservative in investing to new product line like toys made of plastics.

Opportunity
 Well known company in UK and already engaging in export, can be globally in
demand
 Be one of the best toy company in the world
 Expand more globally.

Threats
 Competitors that are aggressive globally and got enough funding in investing to
some projects or contracts.
V. Alternative Course of Actions and Analysis

1. Accept the offer and make loans from financial institution for funding.

Advantages
 Funds for investment will be available
 Able to purchase machineries to produce toys made of plastics
 New product line will be introduced as an expansion of the business

Disadvantages

 Additional expense through interest

 Might not meet the client standards since it is the first time to produce toys made
of plastic
 Some existing transactions maybe compromise due to division of attention.

2. Not to accept the offer and focus on the existing client

Advantages
 They can give more focus on existing transactions
 Can think more on innovations to its existing product line
 No additional cost
 Able to maintain increase of sales

Dis advantages

 Clients from the other state might lose confidence to have a deal with them
 Not able to increase its sale to its maximum point
 The company will be static to its current post in the market

3. Not to accept the offer yet open a new product line that toy made of plastic

Advantages
 It will become aggressive to enter new market in the toy industry
 Cost will be minimize if ever plastic toys production fails
 Will give a wide scope of product line in the market
Disadvantages
 Additional to the expense of the company
 Will take time
 Creates division of focus in the company

4. Accept the offer and outsource a third party that will produce the toys made of
plastic.

Advantages
 It save time in producing toys made of plastic
 Less expenses may incurred
 More efficient and gives a little effort in accepting the offer
 Chances to double sales and earn more profit

Disadvantages

 Might not able to find third party to do the production

 Chances of producing a substandard quality of toy

VI. Recommendation

Taking considerations of the current status of Wisdom Toys and how

conservative Martyn Roper is in making decisions. It is appropriate to the
company to apply alternatives 4 and 1.
First Wisdom Toy will for a third party that will produce the toy which made
of plastic that will be supplied to the American firm, and still capital is still
needed here since the company doesn’t have sufficient fund for this investment,
Wisdom Toys can loan to any financial institution that offers a very minimal
interest rate. Through this although expenses will increase because of this project
yet it will be compensated through the contract from the US Company, without
compromising others existing transactions they have. With this also it broaden
their market through penetrating plastic toys which will their new product line.
This recommendation will not just boom the profit through expanding the market
of the Wisdom Toys, it will also train Martyn Roper to be a moderate risk taker
and that makes him a good entrepreneur and it will build a unified decision or
achieved consensus within the company since it is a family business, which run
by family members that through this it will be an avenue for them to decide
always for the benefit or interest of the Company. Accepting challenges given
by the client to Wisdom Toys will make a good impression to the market that
the company is competitive with the state and also globally.