Quintiles can continue to thrive in research and develop their Web to attract customers through easy access to the website. The company can focus on making it easier to navigate and search for services on the website, so that the customers stay interested and not irritated. Another opportunity that Quintiles can focus on is the “acquisition of Encore”, which will most likely be able …show more content…
PAREXEL has a higher chance of increasing profitability than its competitors, because Covance is already acquired by LabCorp which means it will no longer have a brand recognition for itself and will continually be associated with LabCorp. Quintiles on the other hand, although has recognition and excel in research the amount to debt needs to be decreased or else interest rates will significantly affect the company’s financial flexibility.
The average net profit margin of PAREXEL is 4.2% the lowest out of all of the thirty companies in the pharmaceutical industry. The group net profit average is 14.7%, the goal of plan A is to raise PAREXEL’s profit margin to approximately 17.7%, 3% above the average. Totaling to a difference of 13.5%. The mathematical model for profitability improve is as follows: NI= 0.08(#of Sales) – 0.09(CGS)-3.84(State Tax). As of 2014 the company’s Net income is 129.094 (in millions), to improve the company the Net profit margin within two years the net income should at least reach 401 million with approximately 2268 million in sales to reach a 17.7% profit margin. To increase sales from the company average sale of 1727.7684 to 2268 million the company needs to raise the …show more content…
By reducing state taxes net income will increase .PAREXEL is located in New Jersey that has a tax rate of 9%. To significantly improve profit margin by 13.5% then moving headquarters to state’s where tax rates are low is suggested. The best alternative is Ohio, there is no corporate income tax rates there, and geographically it borders many other states which means that sales can expand in many directions outside of Ohio. Additional wages trigger employment tax costs for the company, but the company can avoid paying taxes if it is willing to pay the fringe benefits for the employees. Other than state taxes, PAREXEL can find ways to deduct business supplies bought such as pens, ink, and paper. Technology is a major factor that contributes to the research and developing aspect of a pharmaceutical company because it is needed to execute rigorous and detailed research. Items such as computers are also tax deductible. PAREXEL can expand international to Germany that has a relatively high population estimated at about 82 million. With a decent aging population in Germany and low corporate tax rates of 15.8 %, about half of United States corporate tax makes it attractable to provide PAREXEL services there and increase