Managers prepare every year profit plans to evaluate if the business performance is going to meet expectations and achieve planned goals.
The first step in building profit plans requires managers to agree on assumptions about the future of the company. These assumptions are based on relevant information gathered and shared on how the various markets on the competitive environment of the business will evolve in the future.
In this report we are analyzing Walker and Company, a medium sized book publisher. It competes with other small to medium sized publishers that cover a variety of segments, and enjoyed established reputations in the marketplace that allowed them to continue publishing a more general list. The most important suppliers of the business are printing companies because of critical factors like quality, price and reliability. The company traditionally sells to public libraries, specialty stores, general and specialized retail bookstores, wholesalers and schools, and the most important customers we must focus on are the last three mentioned because these are the buyers for the children´s book line, which is the line discussed, on how to manage it to reach the company´s cash flow and profit goals. We can assume that there will be a growing demand for books in general because there is a growing population and books are the basis of the educational material. And even though there are other entertainment businesses like music or films, books are always sold.The company´s situation now is negative with low profits and cash flows, so we can assume that at first, it had a strong brand franchise because it is one of the few companies that had survived for 35 years in the industry but now is facing challenges like having minimal profit and cash flow, and has to publish a smaller number of titles to differentiate in the marketplace.( page 19 & 20 competitive market dynamics)
Therefore, to complete Ramsey´s Walkers profit plan for the children´s book line...