Business finance management Cascade Ceramics Company

Cascade Ceramics Company is a small division of a multinational corporation which supplies the ceramic parts necessary in making the cast turbine blades for jet engines and other high heat parts in the manufacturing of cast blades and vanes for turbine engine applications. It acts as an independent company from the parent company, Cascade Company. At the time CCC was formed, management of CC believed that by bringing the ceramic manufacturing “in house” as opposed to outsourcing it, certain supply chain advantages could be realized. They could reduce costs associated with outsourcing and increase control over the quality of the products among other advantages. After five years, CC is beginning to question their decision to bring manufacturing in house; the cost of maintaining the initial operation is 30% higher than forecasted and the cost of in house versus outsourced is 20% higher to date. While internal quality is reported to be higher than the outsourced products, there appears to be no measurable comparison to the outsourced products or hard data to back up this claim. The major reason CCC costs are much higher than predicted is they are operating at 40% below their maximum capacity and output while trying to retain as many of its employees as possible. Status report as of today: The executive team at CCC has identified the following parameters within which to increase its production capacity and identify new revenue generating opportunities. 1. The demand for CCC’s ceramic parts is expected to be at current levels for at least the next five years according to contracts on orders already placed with the parent company. 2. Increasing capacity by selling the same ceramic parts currently manufactured to other companies (competition) is not an option as CC will not allow one of its divisions to sell to direct competitors. 3. Since CC is a privately held corporation, financial data is difficult to obtain, however, the CFO of the ceramics division states the ceramics division has been operating at a net loss for the last three years and if conditions do not change a financial turnaround will be impossible for CCC, making outsourcing imminent. 4. Due to the ceramics division currently operating at a net loss, funds for expansion into new markets are limited. For example, investing large amounts of capital in state-of-theart robotics to keep up with current competition in the ceramics and aerospace market does not make financial sense to the parent company. However, if a long term viable solution is presented to the parent company, they would be willing to invest in the division. Case Problem Whatever solutions are suggested, it must have low barriers to entry, generate revenue quickly (12 months), require minimal capital investment, not spend several months on contracts, research, or development and create a sustainable revenue stream. The company needs to make money quickly and must take some sort of action soon or the parent company will discontinue their operations and close down their division. The CEO of CCC is concerned they do not have sufficient information to make a valid decision about which direction to take the company to improve its capacity and revenue position, but he knows if he does not act quickly, he will lose any chance of keeping his job and the company will be dissolved. He calls your consulting team to help him assess the situation and wants you to recommend a plausible and effective course of action. The deliverables are: CCC has hired you as a consulting team to help them with this problem.  Your goal is to create a sustainable long-term solution that will generate revenue for the next 5 years and beyond. This could be the same product or a different product.  Absolute solution, create a long term revenue generating solution that will withstand the test of time and give you a competitive advantage over your competition. This paper is focusing on the long-term strategy in Medical Field. How the company can create value by using ceramic technology in Medical Field. You need to do a Business Model Strategy analyzation on: 1. Value Propositions 2. Customer Segments 3. Channels 4. Customer Relationships Feel free to use the concept from the book “Strategic Management” that I provided. The following sources can give you a better understanding what you need to focus on. https://link.springer.com/chapter/10.1007/978-0-387-46271-4_35 https://www.azom.com/article.aspx?ArticleID=17408

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