Possible solutions for the dropping sales

and manpower related problem of Suprema Cars

Prepared for

Jack Dexter

Managing director, Suprema Cars

Prepared by

Shahzeb Ahmed

Member, Suprema Cars’ Management Team

May 09,2020

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Summary:

The report includes some problems being faced by a car manufacturing company
named ‘Suprema Cars’ related to their dropping sales and unhappy manpower. Also, some of
the most practical solutions to these problems are presented in the report for the company.
The author hopes that the solutions presented might help the company to recover from the
position of a loss-making firm.

Introduction:

This report is written in order to address some of the major issues being faced
by the Suprema Cars company in the past five years and to suggest some possible solutions to
their problems. Considering the past performance and reputation of the Suprema Cars, the
report suggests the most practical steps that the company can take in order to tackle the issues
emerging in the past years.

Body:

The Suprema Cars company is currently facing the problems related to their dropping
sales and unhappy manpower. As Suprema cars is a very well-known car manufacturer and
has a good reputation in the market, it needs to develop such solutions which will help them
to retain their current reputation and also to save themselves from loss and going out of
business.

Suprema cars is currently producing five hundred cars each year which is the real reason
behind their excellent quality and innovation in their classic designs. Therefore, increasing
the productivity to four thousand cars per year would not help them increase sales. This is
due to the fact that increase in productivity make their employees unhappy and in turn
sacrifices the quality of the cars, which makes their customers unhappy.

The most practical solutions that the company can adopt are;

1. Lowering the prices of the cars and accepting a lower profit margin at least for some
specific time period. Lowering the prices does not mean that they cut the prices to
half, instead, they should try lowering the profit margin to 45-50% instead of 60%
which they have now. This will make their sales grow again and slowly drag the
company out of the danger.

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 2. Secondly, the company could try to modernize their factory and adopt better
technology. This would help them to become more efficient in their work, lower their
variable cost, and also provide a better environment to their workers who have been
complaining about hard environmental conditions at the factory.

Conclusion:

The Suprema Cars company is in a situation where they need to produce more sales in
order to survive in the market. But doing that on the cost of quality would not be a very
intelligent solution. Just trying to increase their production will make their employees
unhappy and this will cause their customers to become unhappy due to low quality
maintained by employees. Also modernizing their factory is also an essential part in their
journey out of danger.

Recommendations:

Recommendations for the Suprema Cars include’

1. Accepting a slightly lower profit margin.

2. Upgrading their factory.
3. Being more efficient.
4. Investing on employees.

Appendices:

Suprema Cars is not in a position of increasing their prices and achieving a higher profit than
what they currently have right now. Being a well-known brand and having a very good brand
image and reputation of being innovative, quality product manufacturer and a luxury brand,
they should not go towards profit only. Instead, they should try to again earn the trust of
customers which is damaged due to lower quality cars being manufactured during the past
five years. They should focus on their manpower and make them happy in order to again earn
a nice brand image.

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