To investigate the business activity of Chocoholics plc
To investigate the business activity of Chocoholics plc. With regard to securing its position as a leading chocolate manufacturer. Chocoholics is a chocolate company making selection boxes using a mass-production line. The factory also makes hand-made luxury chocolates which are very popular with customers. Because of this, production of selection boxes stops every Friday so that the staff usually working on the machinery can concentrate on making the hand-made chocolates.
Chocoholics sells its products to wholesale outlets across the UK but it wants to investigate new markets and increase their trade. There are approximately 70 staff employed by Chocoholics and over half of them work in production. The company takes pride over the quality of their products and all their products are delivered to customers by their own vans and drivers. The rival company to chocoholics is ‘Sweet Tooth plc.’ And they have recently approached Chocoholics board of directors to discuss a merger. Chocoholics do not want this and are now worried that Sweet Tooth may consider making a takeover bid.
There are three types of production Primary This is the extraction of raw materials from land and/or sea. Examples of this type of production are:Chocoholics falls into the secondary section of these three types of production- chocolate is made with the raw products from primary and then sold on in tertiary. Mergers Mergers are another method of growth within a company. This type of growth involves other companies, as two or more companies agree to merge to make one new company.
Takeovers A takeover is when one company wants to take over another and make it part of its existing business, often against the other companies will. The takeover company will try to persuade shareholders of the other company to sell their shares to them. They do this by offering a higher price than the current market value. Most takeovers are larger companies taking over smaller companies. Sometimes the takeovers may be aggressive or hostile, for example, when a company is trying to eliminate a rival.
Advantages of Mergers and Takeovers When companies join together they will both be able to reach a wider market. Company growth is quicker, the company can double immediately through a merger or takeover. Batch Production This type of production is where products are not made individually, but where a range of different products are made. This method lies between job and flow production. The firm can set up a production line for this type of production because it does involve some repetition of particular tasks. After the batch has been produced another product can be made instead An example of this type of production is in a bakery where different sorts of breads and cakes are made.
Job Production This is when something is produced as a one off. Products made in this way require great expertise and skill. They are mostly expensive and quite large. This type of production is often used by relatively small, specialist firms as it is difficult for it to have a flow line. Examples of this are bridge building, tankers and in a jewellers when making a one-off piece of jewellery. Flow Production This type of production usually involves a continuous production line. The product is moved along a conveyor belt to the workers who add components and carry out tasks. Unlike batch production, this method is continuous. This type of production is best suited to products that can be mass produced such as cars, washing machines and computers. Food is also often mass produced using the flow production method.