Strategic Options to Turnaround Telford

Engineering Post-MEXIT

Cost Reduction:
• Cost reduction is the method by which companies reduce costs in order to increase
profits. This method can be carried out in multiple ways depending on the nature of
the industry.
• For Telford engineering, cost reduction will be important to ensure that sufficient
cashflow is available so that short-term obligations can be met.
• One of the ways that Telford Engineering has already saved costs is by outsourcing
some of the accounting tasks.
• One of the challenges that Telford Engineering faces is the depreciating currency
subsequent of Mexit.
• A way of overcoming this could be to find a new supplier that sells materials at a
cheaper price.
• Telford Engineering will need to ensure that quality is acceptable however this
would be a plausible way of counteracting the currency issue that Telford are
currently facing.
Diversification
 Diversification is the process by which businesses distribute capital in a particular
way in order to reduce risk.
 A way that Telford Engineering may diversify their business is by creating new
business in Menai where they have confidence that business would be successful
due to sufficient resources.
 By doing this, Telford Engineering are reducing risk which helps to protect the
company and the going concern.
 When a product range is diversified, it helps to protect against unforeseeable
changes in the industry. For example, legislation changes or changes in culture may
affect the particular area that Telford Engineering specialise in (bridges).
 Telford engineering could look to create new products that venture into a new
market and client base.
 For example, spare capacity could be used to design and create dams or railways.
 As a result, this would reduce risk in the business and protect against
unforeseeable future changes.