You are on page 1of 5

ARMOUR

GARMENTS
COMPANY

CASE STUDY ANALYSIS


GROUP II
I. EXECUTIVE SUMMARY

Armour Garments Company was established in 1954 here in the Philippines as a


manufacturer of high quality undershirts. They have two popular brands: the
"Armour" and "Marca Troca". The company's popular design and styles are from
Hong Kong. The company's products are a superior quality and twice more
durable than its competitors. AGC sells all his products in the Divisoria. Then, the
Divisoria will just distribute it in the whole country. The peak season of the
business is during June and December. Then in 1971, the company experiences
a dilemma because of a change in the market preferences and taste. As a move,
the AGC introduces "Blossom" in order for them to deal with the market.
"Blossoms" become more profitable than "Armour" and "Marca Troca" but the
company withdraws "Blossoms" because of the fact that they want "Armour" and
"Marca Troca" to be their last selling product. In 1973, they added a couple of
lines like jeans and printed shirts but they failed to the point that they think that
they have to liquidate to avoid financial difficulties. But there is another way to
save the company; it is to invest more capital to modernize the factory and to
have better quality products.

II. PROBLEMS ENCOUNTERED

A. MAJOR
How does Armour Garments Company develop strategies in the
changing taste and preferences in the market?

B. MINOR
Is it a wise decision for the owners to infuse additional funds to the
company?

III. SWOT ANALYSIS

STRENGTH
AGC is in the business world for 21 years which means they have
already established legacy.
AGCs products are in a superior quality and twice more durable than
others.
The companys style and designs are from Hong Kong.
WEAKNESSES
The companys products become obsolete or unfashionable because
of the changes in the taste and preferences in the market.

OPPORTUNITY
AGC is to invest additional capital to improve their equipments and
also to develop new design and style for their products.

THREATHS
They might have bigger losses which will totally leads to bankruptcy.

IV. ALTERNATIVE COURSE OF ACTIONS

1ST Alternative: Blossom should stay in the market.


Pros: It is profitable for the company.

Cons: The Company cant maintain Armour and Morca Troca to be


their best selling product.

Cost-Benefit Analysis
It is desirable for the company to maintain Blossom in the market as
long as it maximizes the profit of AGC.

2nd Alternative: Invite or extend additional fund for the company


Pros: It could improve the production and to design a style which suits
the taste and preference in the market.

Cons: Its hard to ask for big funds if the company has a bad record in
the past.

Cost-Benefit Analysis
The higher the risk, the higher the return.
3rd Alternative: Extend credit terms and enhanced trade
discounts.
Pros: Their distributors will be attracted to it and AGC will be their
consistent supplier. The company then can compete in the market.

Cons: The Company might experience low credit turnover.

Cost-Benefit Analysis
The Company will benefit in this situation because their distributers will
be faithful to AGC and the consistency of the company to their
distributors is a good indication of a good relationship.

4th Alternative: Change the Marketing team


Pros: They could bring new ideas and strategies that could save the
company.

Cons: Its time consuming and Costly.

Cost-Benefit Analysis
The planning and implementing of the new idea and strategies might
be costly but if effective, it can increase companys sales.

V. RECOMMENDATION

As a group we recommend alternative 1, 2, & 3. Alternative 1:


since blossom brand was profitable when it's still out in the market,
then it could help the company financially .Alternative 2: since the
company is in a bad financial condition, it could be hard for them to
execute other solution which will cost a lot of money. Alternative 3:
extending the credit term and enhancing trade discounts could attract
distributors since it could be a win-win situation, the company will earn,
distributors will also earn. It could also established loyalty from them
that could secure the company's income.
VI. CONCLUSION
If Armour Garments Company will apply our recommendations to
them, their business would undoubtedly result to maximize its profit.
Their business could grow again like it used to be. Most especially
AGC can adapt to the changing taste and preferences in the market.

VII. MANAGEMENT PRINCIPLES APPLIED

The Management principles applied in this case study is Unity of


direction. The company is a group aiming to sell Armour and Marca
Troca to be their legacy. Team spirit they possess that spirit to
develop and improve their activities in order for them to achieve their
goal.

Recommended Answers for the Questions Given:

1. Yes, the owners of Armour Garments Company should infuse funds to the
company so that the factory and product quality could be improved that will be
their biggest advantage from other competitors. The company badly needed the
additional fund in order for them to remain in the business world.

2. The Company could have avoided the company losses if they continue to
enhance their product and the business marketing strategies. AGC could
have avoided losses if they carefully think of the decisions they make at
the first place.