Question

Sarah is a CFO at PT Kembang Gula, a FMCG company which manufactures and sells products necessities of the day which consist of:

1. Foods like: Chili sauce, soy sauce, tea etc.

2. Personal Care such as: shampoo, soap, moisturizer, toothpaste, etc.

3. Home Care such as: detergent, fabric softener, washing kitchen soap, floor cleaners, etc.

One day Sarah received an email from the CEO, the email content :

Seeing more and more not sure the business situation, national and global economy, and also still the length of travel Pandemi COVID19, then please give reviews and recommendations on the subject matter as follows:

QUESTIONS :

1. With many variables that continue to change rapidly and significantly, how do we regulate the profitability and fundamental financial conditions of the company (the balance of loss/profit, balance sheet, cash flow) so that we remain healthy in the company and at the same time can still take any opportunities that arise in the market?

2. Please provide what is the example of business action that can be done by each section: Consumer & Market Insight, Marketing, Sales, Supply Chain and R&D, which is a unity with the corporate action above?

Answer 1

1- Since the company is manufacturing and dealing with mostly essential items, the sales of the company are unlikely to go down. Since people are left with less disposable income, the company can introduce small packs/quantities of the items manufactured by the company. Also the already manufactured items are not sold and lying as inventory can be sold at some discount since they might be approaching expiry dates. Selling them at discounted prices will keep the comapny afloat and at the same time it will generate cash flows for the company which are very much required to meet any market opportunity.
2- Examples of business action - consumer and market insight - The company can make use of the data and supply goods in the area where the lockdown isn't imposed or the areas which are not under containment zones.
The marketing of goods can be taken online since most of the people have gone social by the means of social media platforms. Supply chain would be massively affected and can be taken care by removing some of the middle man to reduce the cost of the product to the customer and thus increasing the sales and profitability. The company needs to invest in R&D related to hygiene and since the company is already into perosnal care and home care, the company should launch its own sanitizer since it is in very much demand.