Integrative Problems And Virtual Organization Strategy

1256 words - 6 pages

Integrative Problems and Virtual Organization Strategy

Integrative Problems and Virtual Organization Strategy
The Huffman Trucking Company was founded by K. Huffman in Cleveland, Ohio in 1936 with one tractor-trailer. By 1945 the company grew to 16 tractors and 36 trailers. Some of the most important clients are the U.S. Government, automotive, electronic, and plastic industries. The company has four locations: Cleveland, OH, Los Angeles, CA, St. Louis, MO, Bayonne, NJ (Apollo Group, Inc. 2011).
The company grew through the increase of internal sales, and the acquisition of five different carriers from the East. Up until now, this growth has enabled the Huffman Trucking to ...view middle of the document...

The exchange rate can affect the company negatively, if a market in which the company has invested or is doing business with crashes ("Webfinance, Inc. ", 2012). The Montalbano (2012), mitigation can be used to reduce the risk when investing, or doing any kind of business abroad. Different measures can be taken when dealing with international markets or companies to avoid risk. Some of the most popular methods are the contract of a broker who specializes in foreign trading, the negotiation of payments made in United States dollars, and the purchase of stock from companies that use the United States dollars as currency. These steps can help the company minimize the risk when trading or expanding to other countries around the world.Acquiring Another Organization |
“Our mission is to be a profitable, growing, adaptive company in an intensively competitive logistical services business environment” ("Virtual Companies", 2011).
12% increase in the revenue for the next 3 to 5 years is the growth strategy plan for Hoffman Company: “Attracting new customers. The expanded set of offerings developed will attract customers that required more a services intensive shipper”. ("Virtual Companies", 2011).
To achieves the goal of increasing 12% in revenues, one option is to acquire another carrier organization, the following it will the analysis of the strengths, opportunities, weaknesses and threats of the approach of acquiring another trucking carrier company.

Huffman Trucking |
Statement of Income |
| | | | | | | 2006 | 2005 |
| | | | | | | | |
Revenue | | | | | | | $879,944 | $807,288 |
| | | | | | | | |
Operating Expenses | | | | | | |
| | | | | | | | |
Salaries | | | | | | | $353,739 | $330,597 |
Fuel expenses | | | | | | 217,363 | 192,357 |
operating supplies | | | | | 152,318 | 136,319 |
purchased transportation | | | | | 89,957 | 82,529 |
operating taxes | | | | | | 18,613 | 17,989 |
insurance & claims | | | | | 13,526 | 13,006 |
provision for depreciation | | | | | 2,726 | 2,738 |
| | | | | | | | |
Total Operating expenses | | | | | $848,242 | $775,535 |
| | | | | | | | |
operating income for continuing operations | | | $31,702 | $31,753 |
| | | | | | | | |
interest expense | | | | | | $790 | $901 |
tax expense | | | | | | 11,701 | 12,050 |
| | | | | | | | |
NET Income | | | | | | $19,211 | $18,802 |

The Huffman Trucking Company is considering whether or not to buy a new trucking company based in Salt Lake City, Utah. The cost of the new company is $1,576,000 and it is expected to have a twenty years life with annual depreciation expense of $86,000. Annual sales from the new company are expected to be 1,990 units with a price of $970 per unit. Variable production cost is $590 per unit, while fixed cash expenses are $73,000 per year.


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