Goodwill Industries of Greater Grand Rapids Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Problem statement

Currently, the company is considering the option to improve its revenues by selling the donated books online. The suggestion is in the form of a proposal that is based on two phases; the first phase recommends the company to change its cost structure. While the second phase relates to the operating cycle of the company. The CEO is concerned about the selection criteria of the proposal, which is based on three principles that the proposal must support the strategic and financial aspect of Goodwill. Secondly, it must include the operational and revenue side of the company and finally it must be aligned with the mission statement of the company.

Introduction

Goodwill is a nonprofit organization, with its focus being on floating down barriers for those with disabilities. Goodwill Industries is a renowned economic store to the common public. The company has mainly focused on the needs of those individuals with inabilities to provide them with self-governing living skills, and job placement skills that can help them in learning the new ways of living a functional life in society nowadays. A nonprofit organization always wants to maintain the main theme of their business as well as wanting to help needy people with little or great assistance from the society. It is primarily an organization that greatly depends upon the support of the community and its operations in running on the community donations. Goodwill Industries have been working around since late 90s, having a very success rate as well as working opportunities with people who are willing to support disabled humans. These are the people whose values and mission of life are aligned with the mission statement of goodwill.

In the current scenario, the company sells the donated books through online selling. The company is running through the problem in which they are unable to generate revenue from the donated books. The reason behind this is that the unsold books are not worn and torn with the usage of people and are not in a position for further sales. Now the company has placed itself in a situation where they will examine different ways to overcome this loss and use the unsold books for generating profits to help the needy population.

ANALYSIS

If the company would select a suitable method to increase the number of books sold, then it will eventually increase its revenue. Currently the company, is selling 34152 books from the accumulated amount of 523636 books. However, the company has estimated that in the second year they will be able to sell 40290 books at the same price. This increment in the units sold will increase the Total Profit of the company from 57148 to 267405.75. Our analysis is based on the reasons that how a company will reduce the cost and increase the volume of units sold. Moreover, we will also analyze the impact price increase or decrease on the Total profit of the company.

The company has estimated their loss in terms of number of books that were unsold from 523636 books were 489373 units. The company is now planning to build some strategy with which the company would be able to overcome its losses and sell more books than previously sold. If goodwill would be able to sell all the donated books, then its total revenue would reach till $ 665452 as shown in Exhibit 3 for the last three years, but the donated books are not in good condition and the buyers are unwilling to purchase those books.

In phase one, the revenue of the company is highly affected by its cost of sales and overhead expenditure. In the year one, the company has generated 388406 total sales revenue; however, the mass burden of expenditure has reduced its gross profit to $57148. This negative effect in the revenue is mainly because of the shipping cost which is adding a burden of $136266 on the company. The company has estimated that the shipping cost will be approximately $3.99 or $4 per units that has increased the entire cost of the project.................................

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President and Chief Executive Officer (CEO) Goodwill Industries Greater Grand Rapids Inc (goodwill) was the analysis of the staff proposal to start selling donated books online. Her initial reaction to this proposal was to approve the idea without any reservations, but some critical issues raised during the discussion at the recent meeting of the board made it to reconsider its support for the project. The Director-General has determined that make a thoughtful recommendation of the proposal, it is necessary to assess the three main criteria: 1) strategic and financial fit of the proposal with respect to current customers save books Goodwill's website, 2) operating income and the needs of Goodwill's retail stores, and and 3) Coordination with the proposed goodwill mission to "Hide
. by Tony Francolini, W. Glenn Rowe Source: Richard Ivey School of Business Foundation 14 pages. Publication Date: September 15, 2010. Prod. #: 910M81-PDF-ENG