Like many family held businesses, CIMA Mountaineering, Inc. (Cima) finds itself at a strategic crossroads. After having enjoyed a whirlwind rise to success, Cima has now begun to experience a slow down in growth in revenues and profits. Faced with a substantially changed environment, Cima must decide either to remain in its present niche or to move the company into new markets. These two different alternatives are represented by two distinct proposals. One of these is to pursue the "Weekender" segment with two to-be-designed boots for the recreational hiker. The second alternative is to follow a product line extension strategy and increase the breadth of the offering within the "Mountaineers" and "Serious Hiker" segments.
The company's financial condition (highly leveraged, high liabilities and below industry average return on assets) is not particularly good. The situation is such that it is very unlikely (almost impossible) that Cima could entertain both plans simultaneously. But an unusually strong cash flow could support one of the two proposals. Next I am going to review one of the proposals and make projections regarding its potential impact on Cima.
Select one of the proposals and submit with the completed test your prepared sketch showing the style that you propose for the boot's uppers. Be certain to include your rationale in support of your sketched style. Also include a statement justifying your choice of leather and color combination.
Next take either of the proposals (assumably the one that you have already prepared) and complete the following:
Boot Model
#HX10 Boot Model
#HX50 Boot Model
#MX350
Retail's Unit Price $__________ $__________ $__________
Manufacturer's Unit Price $__________ $__________ $__________
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