Introduction Welcome to Week 2 of the MBA Capstone. This week your business analysis and decision making skills will be utilized in the business simulation. You will submit your budget for the year....

Annual Operating Review (AOR) of Hisco
How well did you meet your commitments? (Pre-tax Income Variance to plan), and where did the growth come from? (Pre-tax Income Variance to prior year)
The pre-tax income variance to plan was tried to be met as best as possible. I tried my best to restrict the price per unit of output to +/- 20% as suggested by Hisco owner. I tried to control the variable cost (inflation) by lower the prices as far as possible. I also, negotiated with various sales representatives and suppliers of Hisco on various issues. I tried to increase the new hired effectiveness training program in Hisco at a reasonable rate. Discussions were conducted with the owner of Hisco for solar panel plantation also and it was a successful project.
The growth came from lowering of the quality engineering expenses, marketing and advertising expenses, Research & development and lean sigma expenses.
How well did your initial strategy work and did you maintain that strategy throughout the year?
The initial stage of strategy work was not well planned as the previous quarter i.e. Q4’19 had negative cash flows. Also there was little scope of development and changes in the initial stages due to lack of negotiation policies and inexperience.
Yes, I tried my best to further innovate the strategy from a loss in Q1’20 to a profit in Q2’20. This followed for all the other 2 quarters and as a result my company Hisco ranked 2nd in the strategy contest. There were various difficulties which I tried to manage with my management and financial knowledge, experience and skills.
What revisions would you make to your original SWOT analysis going forward over the next 2 to 3 years?
In SWOT Analysis:
1. Strength: I will try to stick to the company’s brand and quality which is so high that once it reaches the retailers the same takes few time to get sold in the market. Also the market size of the company is huge.
2. Weaknesses: The weaknesses should be the inability of company to adjust the price of its products as per the market price. This is harming the profit of the company. Also tax on R&D is a big issue which is hampering the growth of the company.
3. Opportunities: Hisco can employee skilled people instead of spending huge on new hires. This will save their cost. There is a tremendous opportunity for growth in medical products all over US and other parts of the world.
4. Threats: Though cyber security is a big threat to Hisco also there is a threat from the new entrants like Eastern company.
What inference can you draw about your competitor’s strategy?
The competitor is Matek who is the winner in this financial year 2020. Matek’s winning strategy was to increase sales per employee which is thereby increasing the profit of the company. There is limited raw material acquired by the competitors and the finished goods were supplied on time. This help in a sound flow of inventory turnover. There was no stock piling as a result of this. Most of the investment was made by Matek on Lean six sigma expenses. This was a strategic move by Matek which resulted in their...