The paper "Blade Inc Human Resources Process" is an outstanding example of a human resources case study. Blade Inc. would be better off acquiring Skates ‘ n’ Stuff other than establishing a subsidiary in Thailand. Skates n stuff has a positive NPV thus implying it will turn out to be a profitable venture for Blade Inc. The NPV being 2,290,916, 656 is the first positive sign that the Chief Financial Officer for Blades should highlight for the Board. Setting up a subsidiary company is a very expensive venture. First, the location must be identified.
This could incorporate land buying costs, leasing or renting. When considering the location, factors like closeness to potential customers and raw materials might force the company to buy a high valued piece of property to set up the business on. Extensive research must be done in the area so as to establish the appropriate places. For Blade Inc. to open a subsidiary branch in Thailand, they would have to go through the cost of market research, identify an appropriate site or property and then acquire it. This is a costly and time-consuming process which would be by-passed if they acquired Skates n stuff which would come with the already acquired property. After the site has been acquired, appropriate buildings have to be put up or if a property was leased, renovations are done to transform the building into a business area for Blade Inc.
the complete building is also furnished according to Blade Inc. ’ s specifications. This is also a costly affair. The acquisition of Skates n stuff would be way less costly. Other than necessary renovations (which might not be necessary since it is at the same level of production and operations as Blade Inc) there is no other money consuming procedures are required for a business to proceed. Another point that the Chief Financial Officer for Blades should highlight is the fact that in the event Blade Inc.
decides to establish a subsidiary, they will have to incur the cost of staff training. After setting up in the new location, Blade Inc. will be required to look for new staff and get some people from the already existing branches to train the new staff.
This training period costs a lot since the new staff is already on the payroll and the inconvenience of getting trainers from their other branches also affects business. When training is complete, the new staffs take over the branch. Their salaries will have to come from Blade Inc. ’ s reserves before the branch breaks even. This could take months. This cost cannot be compared with the situation where they decide to acquire Skates n stuff. Skates n staff will have their already trained staffs who are already accustomed to working there. For the subsidiary company’ s business to pick, Blade Inc.
will have to spend a lot of money in marketing and advertising so as to establish itself in the market. Advertising can be approached in many angles depending on the kind of clientele Blade Inc. is targeting. Skates n stuff has already established itself in the market and has a good distribution network. Thus, if Blade Inc. decides to acquire Skates n stuff, they will not incur the expenses attached to advertising and marketing and business will pick at a very fast since there is an already established distribution network.
Skates n stuff has formed its own customer base over the period of time and these customers will still transact business with Blade Inc. when the acquire Skates n stuff. In general, the chances of Blade Inc. to succeed are higher if they decide to acquire Skates n stuff. If the board disagree with the Chief Financial Officer and go with the subsidiary company option, they will be putting Blade Inc. through a very risky venture.
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