Summary of Facts
In 1979 Bailey’s Woodworking was established by Tom Bailey, this company offered door to door custom built wooden structures in the domestic and commercial market. Throughout the early 1980’s sales ascended rapidly, given Mr. Bailey’s “good quality” work, this built him a good reputation, which lead to the birth of bailey’s interior a registered partnership, however due to the national economic recession, failure to implement relevant marketing strategies and the contraction of the construction industry the company sales began to decline tremendously, accumulating a loss of $43,093 by 1986 and loans totaling $125,000 by 1989.The partnership was later dissolved on April 4th 1989leaving tom bailey founding manager as onus. In the household market Mr. Bailey is unable to determine the definite size of this market and his market share. However it is clear that the market has contracted as a result of socio economic conditions. There are 9 competing firms other than bailey’s each offering different services and price ranges. In the commercial market bailey’s is also unaware of the exact size of the market or his company’s share in the commercial sector. In this market as well, a few prominent firms compete with smaller ones; the commercial is more competitive in relation to pricing. Ms. Marlene smith, a local marketing consultant estimated that bailey’s could capture 50% of market share depending on it is marketed. Mr. Bailey strongly believed that if there’s one thing that all businesses need, is working capital; however, baileys financial position was weak .Bailey’s former accountant did not always complete financial statements and had the company’s accounting history in a general state of disorder. Mainly because of the company’s weak financial state it had limited working capital which is necessary for the procurement of materials.
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