Durafit Case Analysis

1087 Words5 Pages
1: Unfortunately in spite of these measures, the financial crisis in late 2008 resulted in a sales slump in the construction industry and by 2013 Durafit revenues had reduced further to £1.2bn. Although the UK construction market is now recovering, industry sources predict that the trend towards modular building will continue and that overseas suppliers will continue to dominate the traditional structural component market. As we know the market for Durafit’s traditional steel components in the UK had steadily declined before 1990s. The new modular construction techniques have replaced traditional building methods, so there was less demand for the products of Durafit. Moreover it was that cheap Far Eastern imports meant Durafit and competitive price, because you can use Durafit elements, which were becoming harder to win business in construction projects. As we know the sales durifit reduced from 10% to 1.6% from 1998 to 2008. The Company appointed john Austin in 2007 and acted quickly and reduce the cost 50% by closing and reducing number of employees. On 2008 the revenue was £1.6bn but when the gross margin was 43-44% then 2013 it reduced and become £1.2bn. Within 15th year the sales reduced £8bn. Besides the purchase of Stellex which consolidates our foothold in the modular construction sector, Waldron also invested in new factory plant, fixtures and fittings during 2013, replacing out-dated factory equipment in the Durafit division and expanding the production and warehouse facilities for Elite to cope with the rapid increase in sales and stock levels required to fulfil the JIT distributor promise. The Elite division sells a highly technical range of composite polymer and resin products designed for specialist civil engineerin... ... middle of paper ... ... winning bid was less than 10% of the price difference. The full cost of production plus a profit and contingencies Stellex expect a detailed calculation based on a mark -up will be determined for each tender. Stellex's operational structure exhibits a very high proportion of fixed costs. In calculating the cost of each Tender Bid Management is therefore high levels of fixed cost allocation. An example of the tender cost of work -up is shown overleaf. Stellex's fixed cost structure represents a major threat to the achievement of its 2014 budget. Because it’s costing and pricing policies in a loss of sales , but sales of £ 2.5bn , while sales of £2bn sub created a cost structure for supporting the effects reported in this section are to be hit directly PBIT Not just 2014. Stellex's fixed cost structure represents a major threat to the achievement of its 2014 budget.

    More about Durafit Case Analysis

      Open Document