Collage of Business Administration

Management and Marketing Department

Case Study Analysis

Submitted by:
Fojas, Renneil L.
Harris, Bradly John F.
Morales, Ella Rose A.
Panagsagan, John Lester M.
Ruiz, Franz Xavir L.
Toring, Renella Jade M.

Submitted to:

Dr. Maria Nimfa R. Diaz

Date: April 11, 2022.
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 A CASE STUDY ANALYSIS OF

ATLAS ELECTRICA

A CASE STUDY

Presented to the Faculty of Management and Marketing

College of Business Administration

Adamson University

In Partial Fulfilment

of the Requirements for the Degree of

Bachelor of Science in Operations Management

By:

Fojas, Renneil L.
Harris, Bradly John F.
Morales, Ella Rose A.
Panagsagan, John Lester M.
Ruiz, Franz Xavir L.
Toring, Renella Jade M.

APRIL 2022

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 ATLAS ELECTRICA
TABLE OF CONTENTS
Pages

COVER PAGE…………………………………………………………………………1

TABLE OF CONTENT………………………………………………………………..3

Background of the study…………………………………………………..……4-6

Viewpoint………………………………………...……………………………...6-7
Time Context…………………………………………..………………….………7

CHAPTERS

I. Statement of the Problem……………………..…………..…………...7-8

II. Statement of the Objective………………………..………..…………….8
III. Areas of Consideration…………………………..….……………………9
IV. Assumptions………………………………..….………………………..10
V. Alternative Course of Action…………………………...………………10
VI. Analysis……………...………………………………………………….11
VII. Conclusion…………………..………………………………………12-14
VIII. Recommendations………………..…………………………………14-15
IX. Plan of Action……………………………………...………………..15-17

Appendices and Bibliography………….……………………………………18-20

Resume………………..………………………………….…………………...21-27

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BACKGROUND OF THE STUDY

Atlas Electrica, a company based in Costa Rica, serves the market by providing products

such as refrigerators and stoves in Central America and the Dominican Republic. Atlas is the

number one company in the Central American region garnering at least 50% market share

competing with products from Asia and America. The company also manufactures products in the

name of some private companies like White Westinghouse and Kelvinator. In 1976, Atlas

becomes the first company to issue shares on Bolsa Nacional de Valores (BNV), Costa Rica’s

stock exchange. Atlas’s estimated total revenue for the year 2006 is amounting to $100 Million

due to the sales from Central America, Mexico, Jamaica, and other parts of North America. One

strategic plan made by the company is the export market expansion that brought sales increase in

a year by creating value products with aesthetic designs and excellent quality for the targeted

clients.

As of September 30, 2004, Atlas’s share price was amounting to 18.28 Costa Rican Colons.

It suddenly fell to 17.50 Colons the next year. This happens due to the absence of control in the

company. Decisions were only made by the majority shareholders that are present at their Annual

General Meeting and the minority shareholders of the company are not provided with their tag-

along rights.

On the other hand, Atlas has two board committees that determine and approve matters

relating to the remuneration and benefits of the company -- Audit Committee and the

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 Compensation Committee. The two committees are the one that analyzes and approves the

financial results, budgets, and strategy of the company.

Moreover, the Consejo Nacional de Supervision del Sistema Financiero (CONASSIF), the

supervisory body of financial institutions in Costa Rica, issues new rulings regarding the

establishment of guidelines in corporate governance. The ruling is designed to manage the audit

firms and assure the Chairman of the Board and CEO of every company that every financial

information was free from omissions and has internal control before it goes out to the public. One

task of the new ruling of CONASSIF is to create an Audit Committee on the Board of Directors

of every company. The new rulings issued by the CONASSIF made other companies unhappy

because the process of developing these rulings was not consulted with the private sector making

other companies reject being listed to the BNV.

Furthermore, the share price of the majority of the companies in the Costa Rican stock

market has been negatively affected by the limited companies that are still listed in the BNV. It

scares off investors to invest in the market and creates a smaller number of demands resulting to

the fall in the price of the shares of the BNV participants. Small shareholders will be forced to sell

their shares at whatever price it is because of the nonappearance of buyers in the market. Atlas’s

small shares were also affected by this and they only sold these small shares for as low as 25%

below book value.

Over and above that, Atlas plans to create a strategy in spreading control policies and

courses of action around the company. Also, Atlas’s board members think that the benefits from

listing to the BNV outweigh the inconveniences in the new ruling issued and also consider having

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 a new formal requirement in assigning the Audit committee. The company is also

considering developing corporate governance guidelines, guidelines for investor relations, and

providing alternatives for the investors. Atlas Electrica strives to improve its internal control

procedures to greater extents to assure the financial information free from omissions before it gets

out to the public and to assure investors that all the procedures are done are stated in the approved

policies.

VIEWPOINT

The introductory article to this special issue points out that export-oriented policies have

proven superior to inward-oriented policies in delivering both long-term economic growth and

quality of life indicators. One reason is that export-oriented policies demand economic

liberalization as well as reductions in market distortions from import barriers, subsidies, and

internal market inefficiencies. However, a number of management writers, including Porter,

Michael E., The Competitive Advantage of Nations, Free Press, New York, (1990), have suggested

that factor costs and availability are not a sufficient basis for sustainable competitiveness in world

markets. Nations will attain global competitive advantages to the extent that they are able to foster

a spectrum of related industries led by companies possessing a broad set of managerial

competencies. Understanding how world-class industries and companies develop remains one of

the major research issues in public and corporate policy. The case lends itself to other teaching

purposes as well. It illustrates the scope, uses, and limitations of market research; it also is good

for a discussion of the company-level process of industrial reconversion in countries that are

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 liberalizing their economies. The case also would be suited to a discussion of the effects of

development policies on company and industry performance.

TIME CONTEXT

The problem was observed after the Consejo Nacional de Supervision del Sistema

Financiero (CONASSIF) issued new rulings in establishing guidelines in corporate governance.

The new rulings negatively affect the shares of Atlas and other companies whose shares have been

issued on the Bolsa Nacional de Valores (BNV). The issue will be analyzed on April 12, 2022.

I. STATEMENT OF THE PROBLEM

• Control. As stated in the statement, the share price was once lowered because of the lack

of control in the company.

• Sells products on the continent. Since the company is selling products in Asia and America,

it is only natural that they are receiving a lot of demand all around this area.

• Limited products. Since it mostly sells electronics, this may lower the advantages in the

future due to the increased number of new products that can be sold.

• Competitors. There are a lot of competitors in the market industry and in order to maintain

the high position of the company it is required to have progressed from now then.

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 • Strategies. It is only natural to always think of a better strategy in the world of market

competition in order to beat the competitors that sells the same kind of products.

II. STATEMENT OF THE OBJECTIVE

Atlas Electrica International Strategy Financial analysis is the assessment of the stability,

viability as well as profitability of a sub-business, business, or project. It is the process that is

widely used for identifying the financial weaknesses and strengths of the corporations, this can be

done by building the relationship between items of the profit & loss account and balance sheet. It

can be used for examining the business operations from a variety of perspectives for determining

the ways that can be used to strengthen the business and understate the greater financial condition

or situation. The process scans the financial statement to evaluate the relationship between the

disclosed items. In other words, the analysis keeps focusing on the past performance evaluation in

terms of profitability, liquidity, growth potentiality, and operational efficiency. The analysis of the

financial statement involves the methods used in interpreting and assessing the outcome of the

current and past financial position or performance since they associate with particular interest

factors in investment decisions. Thus, the analysis of the financial statement is an important mode

of assessing past performance as well as planning and forecasting the future performance

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 III. AREAS OF CONSIDERATION / SWOT ANALYSIS

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 IV. ASSUMPTIONS

These are some of the assumptions that affected Atlas Electrica. It is assumed that

CONASSIF’s decision was the one that brought down Costa Rica’s economy. It is

assumed that improving management skills can affect company goals. It is assumed that

Atlas Electrica’s market share dropped to 25 percent.

V. ALTERNATIVE COURSE OF ACTION

• The company’s history can be used as its alternative- the thing is, the company went a little

negative side but it can also be used as a positive by taking advantage of the fame that the

company gained.

• Another alternative is to focus on one continent at a time because the company will have a

hard time if they try to rush the process of earning.

• Always try to gain even by a bit of gain against the competitors. Whether in costumer or

in the products the company should at least have the advantage at all times.

• Try and make full advantage of the company's extent of reach. like making sure that the

reach of the company is not only to the daily buyers but also to those they recommend the

market with.

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 VI. ANALYSIS

Atlas Electrica is a company based in Costa Rica. Atlas is the largest appliance

manufacturer in Central America (with a primary concentration on refrigerators and stoves). One

of the major causes of the company’s problem is the lack of control over the company which is a

major reason for the fall in the market share price. An alternative way to solve the problem is to

improve the corporate governance policy to further strengthen the environment of trust and

accountability necessary for the development of long-term investment, financial stability, and thus

further growth of the company. Focusing on one continent is a big help to solve the problem of

Atlas Electrica focusing only on one area to maintain the market leadership of Atlas Electrica and

focus on old customers because it will further strengthen the company and prepare for the

expansion of market share throughout Central America. Another effective solution to further grow

market share is to form alliances with other companies to further strengthen the company and

further expand the market share in the future of the company. They lack strategies and are unwell-

planned in their company so they need to fulfill the loyalty of their customers and provide high-

quality products. An alternative solution to market share growth is for the company to offer

promotion and membership cards for customers and potential customers to better get to know the

company and to attract more potential customers which will help increase the company and expand

market share.

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 VII. CONCLUSION

In conclusion, Atlas Electrica, a Costa Rican corporation, services the market throughout

Central America and the Dominican Republic by offering equipment such as refrigerators and

stoves. Atlas is the leading company in Central America, with at least a 50% market share in an

area where products from Asia and America compete. In addition, the corporation produces items

under the names of private companies such as White Westinghouse and Kelvinator. In 1976, Atlas

was the first company to offer shares on the Costa Rican stock exchange, the Bolsa Nacional de

Valores (BNV). Atlas expects an overall income of $100 million in 2006, thanks to sales in Central

America, Mexico, Jamaica, and other parts of North America.

Aside from this, one of the company’s strategic plans is to expand its export market, which

resulted in a year-over-year sales increase by generating value products with attractive designs and

high quality for the targeted clients. On September 30, 2004, Atlas had a share price of 18.28 Costa

Rican Colons. The following year, it dropped to 17.50 colons. This occurs as a result of the

company’s lack of control. The majority shareholders who are present at the Annual General

Meeting make the decisions, and the company’s minority shareholders do not have tag-along

rights. Atlas, on the other hand, has two board committees that determine and approve matters

concerning the company’s remuneration and benefits: the Audit Committee and the Compensation

Committee. These two committees are responsible for analyzing and approving the company’s

financial results, budgets, and strategies.

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 To prove a point, according to the introductory essay to this special issue, export-oriented

policies have outperformed inward-oriented policies in terms of long-term economic growth and

quality of life measures. One explanation is that export-oriented policies necessitate economic

liberalization as well as market distortions such as import restrictions, subsidies, and inefficiencies

in the domestic market. However, other management experts, such as Michael E. Porter, The

Competitive Advantage of Nations, Free Press, New York, (1990), have argued that factor costs

and availability are insufficient for long-term competitiveness in global marketplaces. Nations will

gain global competitive advantages to the extent that they can develop a diverse range of connected

industries managed by enterprises with a diverse set of managerial skills. One of the primary

research issues in public and business policy is figuring out how world-class industries and

companies arise. The case can also be used for other educational reasons. It demonstrates the

breadth, usefulness, and limitations of market research, as well as the process of industrial

reconversion at the corporate level in countries that are liberalizing their economies. The case

would also be appropriate for a discussion of how development policies affect firm and industry

performance.

In addition to what preceded, Atlas Electrica’s board members believe that listing on the

BNV outweighs the drawbacks of the new regulation and therefore propose a new formal condition

for appointing the Audit Committee. The corporation is also considering developing corporate

governance principles, investor relations guidelines, and providing investment alternatives. Atlas

Electrica tries to strengthen its internal control procedures to ensure that financial information is

free of omissions before it is released to the public, as well as guarantee investors that all operations

performed are detailed in the authorized policies. Businesses must maintain their customers’

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 loyalty by providing high-quality products. Consumers and potential customers should be

given promotional and membership cards. This will assist them in attracting more potential clients,

allowing the company to grow and expand its market share.

VIII. RECOMMENDATIONS:

1. Buy La Indeca and the store chain La Curacao in order to keep market shares and leadership in

Central America, and deeper market coverage by taking long-term loans.

2. Focus on Central America in order to keep the market leadership in that region with deeper

coverage of its natural market. It will strengthen the company - and prepare it to expand or win

market shares in The Caribbean and South America.

3. Atlas Electrica must produce more products.

4. Atlas Electrica must strengthen its financial situation in order to have the resources to expand

in other regions (it will need to put emphasis on marketing and develop products that correspond

to customer needs in the other regions, especially regarding stoves).

5. Keep the focus strategy so that it’s cheaper to keep the old customers than to find new ones.

6. Atlas Eléctrica should focus on its strengths like the main product lines such as refrigerators and

stoves in which Atlas Eléctrica has its core competencies.

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7. Atlas Eléctrica will have to redesign its organizational structure into a more international-

oriented structure in order to correspond to the strategy, otherwise, it will not be able to realize the

strategy.

IX. Plan of Action

The action plan’s objective is to specify what resources will be needed to achieve the goal,

create a timeline for when certain activities must be done, and establish what resources are needed.

• Atlas Electrica’s market share is supposed to have plummeted to 25%.

• Atlas Electrica Export Plan Financial analysis is the process of a sub-company, business,

or proposal’s sustainability, viability, and profitability.

• Atlas Electrica's cash flow must improve in order for the company to be able to expand

into new markets.

• It is a frequently used method for evaluating a company’s financial problems and

achievements by making a connection between items on the income statement and the cash

flows.

• It could be used to examine business operations from a range of perspectives in order to

determine methods to strengthen the organization and to comprehend the larger financial

status or issue. The technique evaluates the relationship between the revealed items by

scanning the financial statement.

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 • To put it another way, the research continues to focus on evaluating past performance in

terms of profitability, liquidity, growth potential, and operating efficiency.

• Atlas intends to develop a system for disseminating control rules and procedures

throughout the organization.

• Financial statement analysis is a key method of evaluating recent achievements as well as

making plans and identifying possible success.

• The Audit Committee and the Compensation Committee are two of the most important

committees in the organization. The two committees are in charge of analyzing and

approving the financial performance of a business, expenditures, and strategy.

• This can be done by identifying a connection between the financial report and the cash

flows.

• The methods used in evaluating and assessing the outcome of the present and historical

financial condition or performance, as they relate to specific interest elements in investment

decisions, are referred to as financial statement analysis.

• As a result, financial statement analysis is an important technique for evaluating previous

performance as well as planning and projecting future performance.

• There are many competitors in the market industry, and it is necessary to make

development from time to time in order to keep the company’s top position.

• Enhance business strategic plan to further reinforce the camaraderie and integrity required

for long-term investment, economic security, and hence firm growth.

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 • The vulnerability was discovered after the Consejo Nacional de Supervision del Sistema

Financiero (CONASSIF) published new guidelines on the corporate governance

framework. The new rules have a negative impact on Atlas and other companies whose

stock is traded on the Bolsa Nacional de Valores (BNV). The problem will be evaluated in

March 2022.

• Atlas Electrica’s monetary status must improve in order for the company to be able to grow

into additional markets.

• It will need to fixate on advertising and developing items that satisfy customer needs in

various locations, particularly when it comes to stoves.

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 APPENDICES AND BIBLIOGRAPHY
Before

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 APPENDICES AND BIBLIOGRAPHY
During

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 APPENDICES AND BIBLIOGRAPHY
AFTER

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 RESUME

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