MANAGEMENT 12 H

CAMPUS COOPERATIVE
STORE
CASE ANALYSIS

PREPARED FOR
ASST. PROF. DINA WONG REMOTO

PREPARED BY
MANANQUIL, CARMELA NOELLE
MANINGO, JOSHUA MIGUEL
MONTENEGRO, ADRIANA
NILLAS, MARIELLE GEM
TEVES, SABRINA MARIA
YBANEZ, YUNELL FORTUNE

CAMPUS COOPERATIVE STORE

I.

Central Problem
Should the Board push through on expanding the cafeteria? If yes, what actions
must be taken?

II.

Alternative Courses of Action

1. Expand
- Loan from a bank P3 million and expand the cafeteria outside the store.
2. Do not expand
- Leave it as it is and do not expand the cafeteria.
3. Improve facilities
- Install air conditioning units, renovate the cafeteria, rearrange and
reorganize shelves, purchase modern equipment.
4. Hire employees for maintenance
- Hire more employees to take care of the maintenance of the building.
5. Add Other products to Inventory
- Since there are complaints about the limited variety of goods for sale, looking
for more products to sell may solve the problem.
6. Look for Suppliers who offer cheaper prices for goods
- Look for suppliers who can offer cheaper prices or order in bulk to avail of
discounts. (Ordering in bulk should be complemented with a high inventory
turnover and sales)

III.

Advantages and Disadvantages

1. EXPAND
ADVANTAGES
- Greater source of income
- Cater more customers
DISADVANTAGES
- Return on investment will take a longer time

o Since the corporation has to pay the interest expense on the loan, there
will be less net income during the first few years
No assurance that sales will increase

2. DO NOT EXPAND
ADVANTAGES
- Chances of incurring losses are avoided
DISADVANTAGES
- Fewer sources of income
3. IMPROVE FACILITIES
ADVANTAGES
- Store and cafeteria will look cleaner and better
- Can attract more customers
- Updated and modern store facilities and equipment
DISADVANTAGES
- Incur higher cost
- Takes longer time for a return on investment
- Takes time
- Sales for a number of weeks may be compromised
o Since the stores facilities will be improved and renovated, the store has
to stop its operations for a while, thus sales for the period will be
compromised
4. HIRE EMPLOYEES FOR MAINTENANCE
ADVANTAGES
- Assurance that facilities will be in good hands and maintained properly
- Cleaner facility
DIADVANTAGES
- Incur higher costs

5. ADD PRODUCTS TO INVENTORY

ADVANTAGES
- Cater more people
- Generate more cash
- Vast number of products to choose from
DISADVANTAGES
- Incur higher cost
- Need for a higher capital
- No assurance that new products will be sold
6. LOOK FOR SUPPLIERS WHO OFFER CHEAPER PRICES OR ORDER IN BUL
ADVANTAGES
- The store can offer products at lower prices
- More people will patronize the store
- Less complaints
DISADVANTAGES
- Inventory turnover for a certain products must be high
- Suppliers may not agree
o The company has a high Inventory Turnover ratio for the year, computed
as follows:
COST OF SALES
AVERAGE INVENTORY

IV.

25,032,033
= 7.57
(3,155,451+3,456,188)/2

Recommendation

The group recommends ACA # 1 (Expand) only after any, or all of the four ACAs (#3 to #6)
are accomplished. Based on the companys comparative statement of income, the stores sales
are doing well and the net income is increasing every period. Also, the business inventory
turnover ratio is great and this makes it easier to look for suppliers. With this, we have decided
to expand because we believe that the store has potential to grow into something bigger, only
if it was handled or managed well. ACA numbers 3 to 6 are necessary before expanding so as to
gain more customers, to cater to more people and to improve the performance of the business.

V.

Conclusion

We believe that if our recommendations were to be implemented, the store would improve
its performance and the store would generate more cash given a number of years. With these
recommendations implemented, surely, the organizational objectives will be achieved and
success is probable.