Strengths: High quality, quick delivery, fast customer service, pattern of increasing net income, 12.33% reduction in total liabilities and 45.9% increase in retained earnings from 2019 to 2020.

 I’m working on a accounting multi-part question and need an explanation and answer to help me learn.

Strengths: High quality, quick delivery, fast customer service, pattern of increasing net income, 12.33% reduction in total liabilities and 45.9% increase in retained earnings from 2019 to 2020.

Weaknesses: Cash has decreased by nearly 79% within one year, growing inventory (becoming frozen assets in a declining market segment).

Opportunities: Outsource to reduce cost and do more volume while still maintaining high quality expectations, find an all inclusive processor for the materials which reduces the middlemen, direct marketing in sports related mediums, pitch brand to sports teams (professional to minor), offer bulk pricing, expand into other sports, expand product line to go beyond apparel.

Threats: Accounts receivable has increased, shipments of sports uniforms have been declining, overall participation in baseball is decreasing.

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Strengths

By choosing to manufacture in the US, C&C is able to offer quality products, with faster delivery and excellent customer service.

By focusing on 3 specific items, C&C is able to specialize and create products that are not offered by the big retailers.

Staying local to the Brownsville area has helped them build up a home-grown reputation with the community, which could help them retain business if priced out by a competitor.

They have been responsible with their resources and have paid off more debt than they have borrowed, which increases their credit rating and allows them to borrow more in the future.

Despite fluctuations in the market, they have the operational flexibility to increase net income year over year.

Weaknesses

C&C operates in a niche market with a limited product line. Combine this with the small profit margins that come with being a small company, they are susceptible to being put out of business if a competitor moves into their area with lower prices.

Because the US Census Bureau does not show baseball uniforms as a separate category, market research is more difficult. This, in turn, makes it more difficult to forecast yearly/seasonal needs.

Although income has increased, so has Accounts Receivable; and with C&C taking on short-term debt to pay for long-term debt, the company has little cash on hand for emergencies or immediate investment opportunities.

C&C is not investing in the market, which may not hurt, but it is a weakness as they are losing out on market gains as well as investment revenue.

Opportunities

Promoting their website and selling online could drastically increase their exposure and sales.

Expanding their product line to other sports could increase sales and shield them from competitors that also focus on baseball and undercut their prices.

Move, or open up additional stores in larger markets. Metropolitan suburbs are where youth baseball is predominantly found. Expanding your footprint not only creates more opportunities for sales, it also helps to build brand recognition. By marketing and selling in Houston, Dallas, Austin, and San Antonio area suburbs, C&C would give itself sales opportunities and exposure to a greater talent pool of salesmen.

Threats

The obvious threat is China. Prices that undercut to such a degree are hard to beat. Although many would prefer to buy quality products from the US, those that are struggling financially may not have that luxury.

Because of the ambiguity of market research, lost revenue to overproduction is more of a threat to C&C than it is to larger companies that can absorb those loses.

Not having control over the manufacturing process puts C&C at the mercy of the supply chain. As we have seen across the country in the last few years, access to raw materials is becoming harder and prices are rising because of it. With the number of companies involved in getting the final product to C&C, one can expect the prices associated with small, local companies, that sell American made products to rise significantly. Moreover, operating within small margins may end up pricing the company out of the market completely.

Though there is always a demand for C&C products, demand is fairly elastic. Baseball is a leisure activity that attracts disposable income. If the market tanks, as reported in the reading, we can expect sales to decline also.

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