Guide lines for this 5-year strategic planning. Develop a five-year strategic plan with cost...

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Guide lines for this 5-year strategic planning. Develop a five-year strategic plan with cost estimates and a time line. It should be 5-7 double-spaced, typed (12 point) pages plus exhibits. Please add page numbers to your document. Your plan should include/address the following points: 1. Describe the situation facing Mensa at the time of the case. This should include the major issues facing the company and the decisions that need to be made. You are to spend no time on corporate history. You must consider the past, but your analysis and recommendations should be forward looking. (30 points) 2. List your specific recommendations for the firm in detail. Explain why each recommendation was made including the information used and the logic (or analysis) applied to reach your conclusion. As you prepare your analysis, remember that no decision is complete until the financial impact of the decisions is determined. Don't forget to use cash flow analysis and Net Present Value techniques when analyzing the four divisions within Mensa, Inc. Use a discount rate of 10% and perform these analyses for at least 10 years. (45 points) 3. If your recommendation(s) need to be taken in a particular sequence, be sure to indicate the proper sequence and the reasons for that sequence. (45 points) 4. Discuss the events or uncertainties that are most likely to cause trouble in the implementation of your recommendations and how you would react to them if they were to occur. (30 points)

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Mensa, INC. (A fictional company) Mensa, Inc. was a firm with a long and uneven history. It was started in 1974 and at one time or another had been a competitor in more than two dozen industries with varied success. Each of the several CEOs had developed a different strategy and over the decades the firm had had many manifestations. The only real constant in Mensa’s strategy had been a commitment to the packaging business in its several forms. But, even in this business there had been any number of changes in direction which diluted the impact of capital spending and had the effect of Mensa never achieving a strong position in any of the packaging segments although, briefly, in the early 1980s Mensa’s total packaging revenues made it the largest packaging company in the world. The lack of a competitive advantage in any of the large packaging segments resulted in Mensa being pushed into producing commodity products which had them penned between powerful steel and tinplate suppliers and powerful food and beverage producers as customers. Also, as their large customers grew there was pressure for them, especially in the low margin food business, to build their own packaging facilities, especially can plants. The long term effect of this was to cause Mensa’s packaging profitability to lag its better positioned competitors. At one time or another during the 1980s and 1990s the company produced auto parts, electrical equipment, power equipment, electric motors, metal alloys, airplane wings, furniture, appliances, communications equipment, specialty chemicals, and consumer products, to name only the most important of their many businesses. They also bought several regional retail chains. None of these businesses worked out well and all were either sold or liquidated at a loss. The financial and human capital devoted to these businesses was largely lost. Further, the problems they caused diverted capital and management attention from better...

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Robert · Accepted Answer

Mensa Strategic Plan
ANSWER TO QUESTION 1 
Mensa, INC. had undergone a major renovation in its business portfolio and investment 
sectors. In the 1990’s, the firm sold out most of its non-profitable units and assets. It 
generated a capital of about 450 million$, 250 million$ short of their original target. Most of 
this capital generated was re-invested in their current 4 main business groups. They were: 
 Financial Services 
 Energy 
 Packaging  
 Forest Products 
The company is not yet firmly settled in the market and has mixed reviews in its performance 
in its different sectors. Some of them look promising while others have bleak prospects. The 
problems faced by them will be discussed separately. 
Financial services: 
Mensa, INC. bought Columbus Financial Corporation in the early 2000’s. The corporation 
was making good profits and had a positive cash flow and these were the reasons why Mensa 
decided to take over the firm. It soon added a chain of other insurance companies, including 
American Life Insurance Company and other mortgage and mortgage insurance companies. 
Soon the company had insurance underwritings in 3 major sectors; life, real estate and 
casualty.  
 The company’s position in this sector looks pretty good. Although the company is not 
yet competing among the giants but it has a decent position in the market and occupies quite 
a decent market share. Now they have a decision to make, whether they are happy with the 
comfortable position their company is at or do they want to make any further investments and 
risk getting into the more competitive section of the market. Currently, Mensa is investing 
more capital per dollars of sale than their competitors. This can be solved by investing more 
money and increasing their sales. But that will lead them to be viewed as threats by the major 
companies who can then try to remove the competition from the market. So the decision at 
hand is an important one. 
Energy: 
In the energy sector, Mensa, INC. has bought Easy Gas Energy. This company is a reputed 
one and is involved in the exploration, development and production of oil and gas. It is the 
largest supplier of natural gas to the state of Florida. It is one of the six companies which are 
licensed by the Mexican National Oil Company to buy gas from it. Thus, it is a well set and 
profitable investment with relatively low risk. In 2006, with the help of Allied Corporation, 
Mensa took over Suppan Energy Corp. This helped the company in its efforts in exploration 
and it spent over 400 million$ in 2006 in exploration.  
 The problem facing the company is that it is in no position to undertake such 
expensive exploration projects. The company did not have a strong capital to support these 
activities unlike its competitors. The risk involved is too high and may well lead to the 
collapse of the company in this sector. Hence they are faced with a decision to put a stop on 
such huge exploration and development projects. Then there is a question of further 
investment which seems to be futile. No matter the amount of investment Mensa might make, 
it has no scope of competing with the other companies in this sector.  
Packaging: 
In the packaging sector, the company has decided to adopt a new approach in catering the 
needs of the consumers. They decided to let the consumers determine the technologies that 
they required in the manufacturing of the containers. They even closed down many non-
profitable units.

Guide lines for this 5-year strategic planning. Develop a five-year strategic plan with cost estimates and a time line. It should be 5-7 double-spaced, typed (12 point) pages plus exhibits. Please add...

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