Salem Telephone Case

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Written by:

Lucille B


Date added:

August 15, 2012








No of pages / words:

7 / 1871


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Unfortunately, after 3 years, SDS has not met profit expectations. In fact, SDS continued to experience losses at the rate of $40-$45k per month making it necessary to reassess operations. While providing services to both internal and external customers, SDS found that their computer system had surplus capacity to support additional commercial sales...
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Based on the amount of unsold monthly computer hours, Salem Data has about $190k of revenue potential from the commercial sales. With increasing pressure from shareholders and record low financial performance, Salem Telephone reexamined the current business model for SDS. However, Salem Data’s ability to reduce costs is limited based on 91% of expenses being fixed presents a challenge to overcome losses...
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