Challenges Faced by Focus HighTech Com in Todays Competitive Marketplace

Focus HighTech. Com is a 5-year-old computer consultant and reseller with sales of $4 million per year, with declining gross margins and market pressure. It has a good reputation, excellent and professional people, and a steady position in both local and international market, but has been having trouble to maintain healthy financials. Focus HighTech. Com Ownership Focus HighTech. Com is a privately-held corporation owned in majority by the founder father and managing director, Richard Davidson.

The company has four other part owners, including two investors and four past employees.

The largest percentage of ownership is Wilberforce Macnon, the Information System director, and Paul Nephat, who is a technical consultant. Neither of them owns more than 12%, but they are both active participants in the management decisions. Company History Focus HighTech. Com has been caught in the vise grip of margin squeezes that have affected computer consultancy and resellers activities worldwide.

Although the recent chart which was entitled ''Past Financial Performance'' showed that the company have had healthy growth in its sales and consultancy services it also showed declining gross margin and declining profits.

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These concerns is part of the general trend which is affecting computer resellers and consultancy. Research has shown that the margin squeeze is happening throughout the computer industry worldwide. Balance Sheet: 1996 Short-term Assets Cash $55,432 Accounts receivable $395,107 Inventory $651,012 Other Short-term Assets $25,000

Total Short-term Assets $1,126,551 Long-term Assets Capital Assets $350,000 Accumulated Depreciation $50,000 Total Long-term Assets $300,000 Total Assets $1,426,551 Debt and Equity Accounts Payable $223,897 Short-term Notes $90,000 Other ST Liabilities $15,000 Subtotal Short-term Liabilities $328,897 Long-term Liabilities $284,862 Total Liabilities $613,759 Paid in Capital $500,000 Retained Earnings $238,140 Earnings $437,411 $366,761 $74,652 Total Equity $812,792 Total Debt and Equity $1,426,551 Other Inputs: 1996 Payment days 30 Sales on credit $3,445,688

Receivables turnover 8. 72 Company Locations and Facilities Focus HighTech. Com have one location,a 6,500 square foot store in the outskirt of the city shopping center located conveniently close to the downtown area in New York City. It includes a consultancy and training area, service department, offices, and showroom area. 3. 0. Products and Services Focus HighTech. Com is a dealer in personal computer technology basically for small business including personal computer hardware, peripherals, networks, software, support and technical service, and training.

Ultimately, the company really sells information technology. They sell reliability and confidence, this provide assurance to small business people who have confidence that their business will not suffer or experience an information technology disaster. The company serves its clients as a trusted ally, providing them with the loyalty of a business partner and the economics of an outside vendor. This is made possible because many of Focus HighTech. Com information applications are mission critical, it give their clients the confidence that they will be there when they need them.