Entrepreneurship

MedicAnimal (Part C): Growth vs. Profitability

After a series of hurried negotiations, Ivan and Andrew managed to reduce the amount payable to suppliers from £12 million to £6 million. However, they still only had 60 days to pay up. This was technically impossible owing to the fact they were on 90 day payment terms, meaning they would have had to stop trading 2 months previously were they to reach the target set out by their supplier. How would they negotiate payment terms on a more reasonable basis? More fundamentally, how would they de-risk and diversify without spooking other suppliers? The most recent shock had raised much bigger questions on how MedicAnimal could adopt a more mature operational model without compromising growth in order to demonstrate their profitability.

 

Topics/Industry: customer acquisition costsprofit-maximisation

Publication date: 01/07/2014

Published by: ELITE

Authors: Chris Corbishley, Gerry George

Length: 11 pages

Geography: UK

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