Case study of Allen Lane Example | Topics and Well Written Essays - 750 words

Of Allen Lane - Case Study Example Hence Allen will have problem in prospering with the company in a slowing economy. However, the death of Elson will give him a chance to create a new product line as PTI has good cash flow and cheap labor but he has no idea here to begin. For a change he attempts to find a distribution type of business and faced deal with Ace Electronics, Gardenpro, and Hydrapress. How all these deals becomes a failure and only option he has is PTI. The strategy of Allen Lane is to make use of the lesser contingent liabilities of the PTI because it was in business for 25 years and has good will in the market. According to ( Christie,2012) â€Å"Just as a good reputation is vital for the social standing of a person, goodwill is vital to the long-term success of any business†. The financial strategy of Allen is was to first value the business, and then price it. Obviously, he wanted price to be lower than the businesss value but high enough for the bid to get him to the bargaining table with the bank. Also he should also analyze whether the strategies he knew and the management skill and experience align with the PTI he has also confusion to whether maintain the old employees of the company or recruit the new one. Allen also have concerns over the profit of the business, potential partners, financial issues and other problems that can arise during the running of PTI. The company once acquired can lose the current employees and it will affect the company. He also needs to merge the two companies under which PTI is working so that is a risk he is facing otherwise he will have problem in managing the business. The company has inflated proprietary assets which can give problems to Allen in a slowing economy in future. The bidding for the company is also a risky affair as other companies will also bid for the same. The lack of knowledge of Allen in technology is a risk for him. Also he would face lot of competition