Blaze Manufacturing produces special order textile products such as bedspreads and

curtains, their primary customers are hotels and hospitals. Despite the cut-throat industry, Blaze

has been operating for 20years. Recently, however, the company has struggled with profitability

as a large number of long-standing customers cut ties with the firm and moved to foreign

competitors (Fuertes, 2020).

1. Identify the problem: Define the problem in financial terms.

 The problem in financial terms is that Blaze Manufacturing is not profitable. In

2016, the company had a net loss of $600,000.

 This is a problem because it means that the company is not generating enough

revenue to cover its costs.

 The company's costs include its raw materials, labor, and overhead costs.

2. Diagnose the cause(s): What operational situation(s) created the problem?

 The operational situation that created the problem is that the company is not

selling enough products.

 In 2016, the company only sold 9,000 units of its product.

 This is not enough to cover the company's costs. The company needs to sell more

products in order to become profitable.

 There is also a problem in the company’s reporting system. First, Wendy the new

manager finds it difficult to report Bob’s labor earnings as his payment system as

a plant manager is different from other managers and employees (Fuertes, 2020).

He earns a salary plus an amount of overtime. The problem with his allocation is

that he also spends time repairing and operating the plant (Fuertes, 2020).
3. Prescribe possible alternatives: The case study provides proposed solutions on page 16 of

the case. Review and evaluate these solutions by providing pros and cons for each.

 The proposed solutions are to either increase the price of the product or to

decrease the cost of production.

 The pros of increasing the price of the product are that it would generate more

revenue for the company.

 The cons of increasing the price are that it would make the product less

competitive and it would not solve the underlying problem of the company not

selling enough products.

 The pros of decreasing the cost of production are that it would lower the

company's costs and make the product more competitive (Bryson,2018).

 The cons of decreasing the cost of production are that it would require the

company to make changes to its manufacturing process and it is not guaranteed to

be successful.

4. Recommend a plan of action (decision/implementation)

 The recommended plan of action is to increase the price of the product.

 This will generate more revenue for the company and is the most likely to be

successful.

 The recommended plan of action is to increase the price of the product. This will

generate more revenue for the company (Bryson,2018). For example, if the

company sells its product for $100, it will generate $900,000 in revenue. This is

more than enough to cover the company's costs and make a profit.
5. In addition, each case study response should also state why this case is important and

relevant to a study of business.

 This case is important and relevant to a study of business because it shows the

importance of profitability.

 A company cannot survive if it is not generating enough revenue to cover its

costs.

 This case also shows the importance of pricing.

 A company needs to price its products in a way that is competitive but also

generates enough revenue to cover its costs.

6. Support your observations with research and logic. Discuss what limitations exist with

the case study information provided. What other material would be important to your

analysis?

 The observations are supported by research and logic because they are based on

the information in the case study.

 The limitations of the case study are that it does not provide information on the

long-term viability of the proposed solutions.

 Other material that would be important to the analysis is information on the

company's sales and costs over time.

 This would allow for a more complete analysis of the company's financial

situation.
Bibliography

Bryson, J. M., & Edwards, L. H. (2018). Getting strategic about strategic planning. Public
Management Review, 317-339.

Fuertes, G. (2020). Conceptual Framework for the Strategic Management: A Literature Review
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