Case analysis on arrow printing and publications

1. BC CASE ANALYSIS
ARROW PRINTING AND PUBLISHING
Submitted to:
Dr. Niva Bhandari
Submitted by:
Shashank Agrawal(PGFB1446)
Saurav Dey (PGFB1444)

2. Situational Analysis
The case is set upon the dilemma faced by the owner of the Arrow Printing and Publishing, Mr.
Dunnet. Mr. Dunnet purchased the company in 1979 at 60,000$ from its previous owners. Now
he has developed this firm into a very profitable venture with some very loyal customers. The
firm has two employees that is himself and his son peter, he is also helped in petty affairs by his
wife who otherwise work a fulltime job.Mr. Dunnet has a heart for politics and has been
associated with local politics for quite some time, so he needs to make a decision of what to do
with the firm. He has multiple options from which he could choose, the major ones include
selling the firm or continue running it and, expand it.
Problem Statement
The problem statement is what should Mr. Dunnet do based on the data on hand, what decision
he should make for future of Arrow Printing and Publishing.
Options
The options available to Mr. Sam Dunnet are:
 Selling
 Sell to his son Peter
 Sell to an external buyer
 To expand the business by inviting a salesperson from an existing company
Criteria for Evaluation
Selling to peter:
Available work hours
Monthly rent
Interest in the business
Knowledge of the business

3. Selling to an external buyer:
Advertisement cost
Uncertainty regarding operations
Chance of bad debts
Increased need for advertising
Decrease in production cost by 10%
Expanding the business:
Available market opportunity
Growth rate of 25%
Ownership reduced to 51%
Funds for new machinery could be obtained easily
Evaluation of options
 For selling to peter
Rent= $5000
Amount Mr.Dunnett would generate: $60,000
 For selling to external buyer
Calculating Profit of buyer:
Profit= $93,173
Bad Debt Expense= $ 920
Deducting 10% cost of production= $6315.6
Total Expense= $57,164.4
Profit earned= $36,008.6
Therefore the external buyer will pay Mr.Dunnett the amount less than this,
estimating the amount to be $ 30,000

4.  For expanding
Sales: 200,000
Machinery cost: 500000
75% of the total cost is non-repayable: $375000
Therefore the Amount he have to pay= $125000
Also he would be selling 49% of the company Stocks.
Estimating 1 Stock value = $600
Therefore Amount earned= $29400
Also profit Earned by Mr.Dunnett will be around= $75000
As he would be Expanding in the field of four color specialty web work.
Recommendation
Therefore most benefits would be enjoyed in the case of expansion where all the good
opportunities for both peter and sam would be present. Peter would get to work and sam will get
to serve his loyal customers while enjoying even more profits, so expansion is the best option.
Action Plan
The action plan could be implemented in steps:
 To find a suitable partner for the business
 To procure proper machineries for expansion
 Advertise to get attention of new segments of customer, interested in their new services
ContingencyPlan
The contingency plan should be in order to back up all the data in case of some disaster. Also
proper insurance should be planned to cover damages in case of disasters. So, Mr. Dunnet needs
to have proper plans to deal with any problem that may harm the business.