Merill Electronics Case
Merrill Electronics Corporation
Case Context Merrill Electronics Corporation, founded by Thomas Miller in 1950 and a major distributor for the Global Electrical Company (GEC), is one of the largest manufacturer of electrical and electronics products for consumer and institutional markets. Over the years, it has expanded its operations with its noncompeting lines of electrical appliances, records, compact discs, and cassettes and through importing from and distributing to Taiwan and Japan.
However, Merrill is faced with steadily severe declining margins in the electrical distribution business in recent years. This worsens its poor financial condition and inability to meet payments to suppliers and the current $3 million debt to its
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To control for the large influx of inventory, slashing some of the products that the company is currently selling might be needed. The Vortex division must be monitored very closely to ensure that it can still be profitable in the future or not. The Small-Appliance Division is now a candidate for divestiture because of quality issues and losses because of huge carrying costs. Implementation of a more efficient receivables management must also be spearheaded if the current strategy is to be continued. More funding from any optimal provider must be sourced out because the strategy requires more money to be sustainable. Also, it could improve customer and supplier relations to ensure that the quality of the products is high and the inflow of cash (from receivables) is continuous and efficient. Suitability: This would be a very effective choice if ever it is implemented because this addresses the need of the more competitive business environment. Also, the current strategy will be immortalized if its flaws are remedied by the complementary actions that are supposed to be implemented.
Sustainability: It can never be ultimately sure if this strategy could last until