Ten Alpina Tools

Giulia seems to be excite about the opportunity to own her own stage business doing something that she loves. on that point is a high level of hesitation here in whether or not Giulia would make a profitable business. It seems that there is room for advantage in the current operations since all 6 workers were cross trained and they were currently only restless for about one weeks worth of labor time per month. Giulia does have an MBA and may be able to actualize ways to use the resources more efficiently and keep production cost down. Giulia will need to employ her strategic thinking to determine how to balance the resources on hand to make this situation work. If she can invite the units for $11.70 or higher, she may be able to maintain the business but she will need to stick down the production costs to sustain profits. If any equipment needs repairs or the building needs renovations, those costs are not going to be covered under her current pricing plan. Also, if produc tion increases, versatile costs may also increase so it will be important for Giulia to pay besotted attention to this.After reading the case we identified the following risks1) Graduate School/ MBA The case takes place as Giulia is returning from summer break after her first year. Given the intense work load of an MBA course of study and the workload requirements of a startup/expansion, we have to question if she can do both effectively. Quantitative psychoanalysis LOW. This is more of a time and lifestyle come to.2) Loss of the single customer study Anytime a business is relying on a single customer its a risk. Giulia is using the cash extend from this customer to support the new venture. There is not a strong history here for her to believe on and lack of data increases risk. In addition she also is highly at risk should her customer go out of business or find another supplier she would be hard press to meet her monthly burn rate.In fact there is no evidence in the case that her business could survive without that contract. Quantitative Analysis HIGH.. The key issue here is that the business is running on very thin margins and the cash flow from this customer is critical for Giulia to cover her fixed and variable costs. There is no evidence that she has cash reserves or any access to investors.3) Employee/Operations issues Giulia has no get wind in this industry and we have no evidence that she has ever managed people or managed a manufacturing process. imputable to her thin margins any interruption in production would be devastating. Quality is a huge continue here and although her team is cross trained on all the equipment its reasonable to assume that there will be employee turnover.She will need to replace them and we dont know what they training rhythm method of birth control is and how it will impactproduction and quality. Qualitative Analysis HIGH Production ties directly to the ability to finish the contract. This contract is key to her cash flow and the margins are small. Giulia needs to determine the new employee training motorbike and factor that into production and cash flow projections.4) Increased Costs If Giulia experiences an increase in production or fixed costs she is in a very risky situation. Her margins are thin and we have no evidence of cash reserves. Qualitative Analysis HIGH.. Any increase to costs cuts into margins. Giulia is not in a position to handle such increases.5) Re negotiation or delays on the single contract The single customer could ask for a lower price point, lower volume or drive to renegotiate payment terms. Qualitative Analysis HIGH.. As we have seen a key concern in this case are the margins. Any decrease in price or payment roll will have a direct impact on Giulias ability to cover her costs