burkinshaw
An objective is a goal or target that must be achieved in order to realize the stated aims of an organization, department or individual team. Andrew’s strategy to transfer production to China was beneficial in relation to successfully fulfilling the company’s objectives. Andrew’s initial objectives entailed that the company will expand and return to profitability. By 2010, the company was no longer making a 50 million pound loss (2005) but was actually making a much larger profit of 175 million pounds. This was achieved due to many reasons, such as the improved efficiency within the business. The asset turnover in 2005 was at 1.17 whereas in 2010, it was at 2. This meant the company was using their assets much more effectively. One of Andrew’s aims was to ‘implement plans to improve efficiency of the UK factories’. As a result of moving production to China, this was achieved. The company was now working at almost full capacity (95%) compared to in 2005 when it was at 60%. This allowed the company to produce more, quickly, so they could meet demand. The higher levels of profitability were also a result of the decrease in unit and labor costs. The company was now receiving 200 million pounds higher revenue compared to in 2005. This could suggest Andrew’s decision to invest in new machinery had been successful in the fact that capacity had increased and therefore the revenue was higher. This could not have been possible if he were still running the business in the UK. The return on capital had also increased from -9.24% to 29.07%. ‘Andrew’s marketing strategy focused on entering new geographical markets’. Moving production to China benefitted this immensely. An ‘objective of achieving a 5% share of the Chinese market by 2010’ was set. In 2009, Burkinshaw quickly gained a 3% market share. Other than China, the percentage sales growth in Europe as well as the USA had also increased notably during 2011-2015. Although the majority of Andrew’s objectives were