Financing Strategy
Financing Strategy Problem and Virtual Organization Strategy Paper There are many options for expansion for a privately held company. The Huffman Trucking Company has options to expand the operations of the business. The three best options that the firm faces are; going public through an IPO, acquiring another organization in the same industry, or merging with another organization. With each of these being a possibility, there are some aspects that must be taken into consideration. First there are strengths of the option, as well as weaknesses. Each option also comes with its own opportunities as well as threats, which must not be over looked. While there are pros and cons to any decision that will be made as far as going forward is concerned, expanding operations is imperative to staying competitive in the business world this day in age. Weighing each option will allow The Huffman Trucking Company’s decision makers to come to the best conclusion when moving forward.
Going Public through an IPO An initial public offering (IPO) is a process in which a private company issues shares of stock to the public for the first time. Often times this process is known as “going public”. Regardless of how people refer to it though, it is extremely important for Huffman Trucking to consider this option for further expansion ("Encyclopedia Of Business", 2013).
The strength in this approach is that it could generate revenues that do not have to be paid back. The initial purchasers of the stock are buying a portion of the company in hopes that the value will increase. Huffman Trucking can then use those funds to purchase new equipment, hire more employees, and more importantly to expand their service area in the United States. However, there are weaknesses in this decision. The current ownership and management would lose a great deal of decision making power for the company. In an instant, the entire management team would have a group of stockholders to answer
Going Public through an IPO An initial public offering (IPO) is a process in which a private company issues shares of stock to the public for the first time. Often times this process is known as “going public”. Regardless of how people refer to it though, it is extremely important for Huffman Trucking to consider this option for further expansion ("Encyclopedia Of Business", 2013).
The strength in this approach is that it could generate revenues that do not have to be paid back. The initial purchasers of the stock are buying a portion of the company in hopes that the value will increase. Huffman Trucking can then use those funds to purchase new equipment, hire more employees, and more importantly to expand their service area in the United States. However, there are weaknesses in this decision. The current ownership and management would lose a great deal of decision making power for the company. In an instant, the entire management team would have a group of stockholders to answer