Cameron Auto Parts
✓ Case Analysis:
Cameron Auto Parts was founded in 1965, as consumer’s they haver three biggest car manufacturers. Cameron Auto Parts began having crisis in 2000 due two major problems: the first is about the drop in sales that were stopped at $ 48 million and in 2001 dropped to $ 18 million, and the second one is because the entry of Japanese competition to the market. Because of these losses Alex was in need for modernization, for this I borrowed $ 10 million.
In 2001 Alex began the "Operation Survival", taking the decision of reducing costs, mainly in labor force. Alex cut its workforce from 720 to 470. At the beginning of 2002 the revenue would raise to $ 45 million and there were small gains. In the midst of …show more content…
All this operation would generate more costs to the company.
Another important point that Cameron must take care is about ithe currency rate risk, they work with the currency U.S., but they don’t not know how the exchange rate fluctuates in the European Union, for what they have to know how to handle all costs and whether it will be able to make a profit at the end of the operation. Cameron did not know basically what kind of economical barriers exist within the European market and what kinds of regulations must meet in order to enter there.
Which is why as soon as we mentioned above that the solution to these problems must be a graduate with Mc Taggart, which offers a deal for 5 years and once expired can renew it if they like it or not, so Cameron sign this agreement only for 5 years and then no longer renewed, they will know the market without doing a study of it, thanks to the feedback between the firms, and the information gathered during the years.
It required a big investment, but what better way to work if it is not only leaving his partner that invests capital with her. Cameron manages to increase its production capacity because it has money to do so, also manages to get new technology from its partner, allowing you to keep up with competition.
Due to the agreement, Cameron no longer has to worry about the exchange rate since Mc Taggart will be in