Evaluate your client company’s contingency plan

Read your client company’s response, see whether it is consistent with lessons we learned in chapter seven and whether you can improve it by applying this week’s lessons. Elaborate at least in 200 words and cite the lessons from the Best Practices 7 assignment.

So my company is Grappone and there response was pretty solid I felt personally and let me explain to you why and maybe what they can add. So lets go over the contingency plan in a recession. In best practices 7 we are taught that capital spending should be cut entirely or almost entirely. Grappone plan is to limit discretionary expenses and to delay intensive capital projects. My suggestion to this would be to cut almost all discretionary expenses. Grappone also states “keeping our team members fully engaged” that could honestly mean like a bunch of different things I’d clarify more on that,cause I can think of 20 ways that can be interpreted. But what I would suggest based on best practices 7 is to limit hiring employees while in the recession. Grappone’s plan of tightening inventory levels goes hand in hand with best practices 7. Think their plan seems pretty structurally sound with also making sure they have available credit as that will help give them more flexibility if faced in a pinch. Not only that but having good creditors can help a customer trying to finance a car as well which is having a harder time selling than normal.

Business response to the questionnaire

Grappone

Question Response from the company
Please, discuss your contingency plan for dealing with recession, if you have one.

Our contingency plan include:

  1. Tighter control of our inventory levels
  2. Managing our cash. Making sure we have enough liquid reserves to get us through the downturn
  3. Limiting discretionary expenses. Including delaying intensive capital type projects.
  4. Keeping our team members fully engaged
  5. Making sure we have available credit (to finance cars that are not selling as well as lines to draw down for working capital).

Bank of New Hampshire

Question Response from the company
Please, discuss your contingency plan for dealing with recession, if you have one. As previously mentioned, we build loan loss reserves and carefully monitor for signs of economic stress that may impact our business. We have sources of emergency liquidity available, and other similar tools to ensure the viability of the bank through a very severe downturn. Furthermore, we stress test our loan portfolios and entire balance sheet to determine how the bank would perform in various economic scenarios. This allows us to determine is additional reserves, liquidity, etc. are needed.

Comptus

Question Response from the company
Please, discuss your contingency plan for dealing with recession, if you have one. We do not have a contingency plan for an extended recession.