Sofia Klotz
Professor Lamel
Sept 25th 2012
Section 001
Blog #1 Weis Markets, Inc.
New Weis Market is a large company that
operates in Pennsylvania and employ’s over 17,000 people. I realized two really
interesting things while reading the SWOT (strengths, weaknesses,
opportunities, and threats) analysis for this company.
The first
interesting fact that I found was that one of the strengths in this company’s
analysis stated that they are a debt free capital structure. The benefits of this
are that the company has the ability to reinvest profits back into the company,
versus allocating the money towards paying off a loan. The second benefit , which is even more
beneficial, is that the company does not have to worry about the fluctuations
and increases in interest rates. This is
good for two reasons, the first being that they do not have to pay more for
money that they borrowed when interest rates increase. The second reason is
that without the added pressure of owing a third party money, the company does
not have to stress about earning a certain quota in order to pay the loan back.
This makes it so that the company does not have to make their products cheaper
in order to gain a higher profit and therefor can maintain high quality product
standards.
I was
not only impressed that this company had managed to grow and become profitable
without any sort of loan from either banks or investors but curious as to how that
is possible. This idea of a debt free capital structure is defiantly something
I would like to learn more about as I explore the grocery market industry. It also got me thinking that if more company’s
conducted their business with a debt free capital system it could, in the
future, increase the quality in not only Weis Inc. but also in all grocery
company’s.
The second fact that I found
interesting was in the company’s opportunity section. The report stated that the rapidly growing Hispanic
population in the United States creates a large opportunity for this company. This
is because the Hispanic population has nearly doubled in ten years and is
expected by the year 2050 to account for 29% of the total U.S population thus
creating an enormous market for producers like Weis Markets, Inc. to fill. It will be fascinating to see what this large
Hispanic influence does to the Grocery market in the future.
http://360.datamonitor.com/Product?pid=50F3A7BC-A243-4A71-AE91-B90B73155A80&view=SWOTAnalysis
Reports and B
Obviously the free capital structure gives this company a greater degree of independence. That is probably the reason for their grow despite the financial crisis. My question is: What kind of legal procedures does a company has to go through in order to assimilate a similar system? Is it something intrinsically developed by the company's policies? Did they need some special licence for it?
ReplyDeleteI would say that the growing Hispanic influence in the marketplace is also going to affect the Grocery Industry. We are going to see more and more Hispanic endemic products on the shelves in the next years.
a debt free capital structure as far as i know is not a legal procedure of any sort but simply a way in which the company decides to conduct theirs business. The only reason that many people do not have this is because it is much slower to grow a business without initial large investments even though in the future it may benefit the company to do otherwise.
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