It's required and mandatory that the expert have a Business Strategy Game knowledge and experience. Please see assignment questions in the attached word file named "Assignment Questions"
You are required to prepare a report of 1,200 words incorporating the following: 1. A summary of your company’s performance to date (ie: Year 15). 2. Based on your evaluation of the performance of your company, develop specific strategies for Year 16 and beyond. Briefly explain the approach you have taken and the reasons why with reference to the industry and competitors within the industry. 3. You will then need to outline the Business Strategy Game (BSG) decisions you would make, specifically addressing each of the following aspects: a. Financial Management– Based on your company’s current financial position, outline and justify your approach to the ongoing financing of your company. Include aspects such as investments in assets, debt and/or equity financing, credit rating, refinancing as required and cash flow. b. Operations – Justify your forward operational strategy based on your company’s overall strategy (Refer to lecture 2, slide 4 in particular) and tactical changes you may need to make. Include discussion on asset utilisation, plant upgrades, new plant, plant productivity, etc. c. Human Resourcing – Outline and justify your approach to ongoing resourcing and worker productivity. d. Marketing – Using the competitive intelligence data in the BSG, develop and justify the marketing activities for Year 16. Based on a-d above: a. Briefly outline key decisions you would make in the Business Strategy Game. b. Justify your decisions with reference to your strategy AND the current market (Year 15) conditions within your industry. 4. Discuss how you would ensure that the five key shareholder expectations continue to be met or how you will ensure that you address any shortcomings. YEAR 15 Table of Contents EXECUTIVE SUMMARY……………………………………………………………………………………………………….3 OVERALL STRATEGY……………………………………………………………………………………………………..3 COMPANY’S PRIMARY TACTICS………………………………………………………………………………......3 KEY OUTCOMES……………………………………………………………………………………………………………6 STOCK PRICE…………………………………………………………………………………………………………………6 FORWARD STRATEGIES…………………………………………………………………………………………………7 MAIN REPORT……………………………………………………………………………………………………………………..7 FINANCIAL PERFORMANCE…………………………………………………………………………………………..7 SUMMARY OF KEY PERFORMANCE INDICATORS…………………………………………………….7 FINANCIAL RESULTS……………………………………………………………………………………………….8 FINANCIAL DATA ANALYSIS…………………………………………………………………………………….8 LIQUIDITY AND OTHER RATIOS……………………………………………………………………………….9 CASH POSITION…………………………………………………………………………………………………….11 OPERATIONS……………………………………………………………………………………………………………….11 STOCK LEVEL…………………………………………………………………………………………………………11 PLANT CAPACITY AND PRODUCTION LEVEL…………………………………………………………..12 PLANT UPGRADE…………………………………………………………………………………………………..12 CUSTOMER MARKETING……………………………………………………………………………………………..13 SALES PER SEGMENT…………………………………………………………………………………………….13 BRANDED UNIT SALES PER REGION……………..….……………………………………………….…..13 INTERNET UNIT SALES PER REGION………………………………………………………………………14 PRICING………………………………………………………………………………………………………………..14 ADVERTISING SPEND…………………………………………………………………………………………….15 RESOURCES/LEARNING……………………………………………………………………………………………….16 OVERALL SUMMARY…………………………………………………………………………………………….16 EMPLOYEES PRODUCTIVITY VS INDUSTRY AVERAGE…………………………………………….16 CONCLUSION AND SWOT ANALYSIS………………………………………………………………………………….17 STRATEGIES FOR NEXT DECISION ROUNDS………………………………..……………………………………..18 1. EXECUTIVE SUMMARY 1. OVERALL STRATEGY: All Sports Shoes Company is proud to announce its successfulachievementof all its targets in Year 15. The company has consistently focused on each region separately and customized marketing tactics depending on each marketing demand. The management has employed a more value for the money strategy also in Year 15 and dedicated all its resources to produce premium quality shoes that satisfy every taste. The company has embarked a strategy of doubling its investment in advertising and increasing the bids of the celebrities’ contracts in Year 14 that paid off this year. This tactic led to an outstanding increase on the company’sreputation, revenue and distribution. The company has improved yearly multiplying its styling and quality rating from 4 starsin Year 10 to 7.8 stars in Year 15. All Sports Shoes Co. has utilized its profit annually, including Year 15, to improve its equipment, to minimize its reject rate and enhance its styling and quality. PREMIUM SHOES FOR EVERY TASTE is the company promise to all customers. 1. COMPANY’S PRIME TACTICS Year 15: All Sports Shoes Co. had a vision since the beginning to deliver an affordable end product that is made out of the finest materials in the market with varieties of models that satisfy all tastes, ages, genders and sports. In order to achieve the same, the management had continuously tried to reduce its production cost to be able to deliver its promise and in Year 15, the company is proud to announce that this goal has been achieved. The company’s reputation and awareness was on the company’s focused list, where it dedicated all its resources to reach all consumers and become the market leader in the industry. In Year 15, the company has been the leader in its products’ demand, where its shoes has been listed the most in Europe Africa and Latin America retail outlets. By monitoring the market changes and its rivals’ competition, the following Scorecard has been put up in place to monitor and measure its performance towards achieving its strategic targets: The company has improved its profitability in Year 15 by 12% compared to Year 14 and became a 1 BILLION SALES COMPANY: understanding the need of expending globally, huge efforts has been dedicated to improve the company’s sales online in Year 14 and 15 where 2’438’000 shoes has been sold in Year 15, recording its highest sales in North America. Focusing on customer satisfaction, the management continued its investment in retail support, where $63 Million has been budgeted to support customers in all the regions. The management has improved all deliveries from the previous year by allocating additional $3 Million to make sure everyone receives their orders on time, including the internet sales. Also this year, the company continued its high investments in marketing activities, where the company allocated additional $ 50 Million to support its advertising and marketing campaigns after its successful impact in increasing revenue and company’s awareness. The company’s distribution goal in Year 14 was set to reach 5’000 stores in the four regions by Year 15 but the results were extraordinary and beyond expectation: the company is present this year in 10’627 stores across its distribution territory. Moreover, the company has invested this year as well in improving the workplace conditions and it is committed every year to create an enjoyable workplace and optimize employees’ productivity. In Year 15, productivity in Asia Pacific has increased 44.3% versus Year 14 and in Latin America 35.9% respectively. The North America plant’s production was suspended in Year 15 due to equipment upgrades; however, the company has offered generous remunerations for its employees to compensate this event and looking forward to resuming its operations in Year 16. 1. KEY OUTCOMES: Below is a quick overview of the company’s key achievements and opportunities for Year 15: · +12.22% enhancement of the retail market share and +3.5% of the internet market share · +11.73% Net Revenue growth compared to Year 14. · +11.4% Improvement of the styling/quality rating. · +77.5% growth of the Earning per Share’s expectation of the shareholders versus Year 14. · + 10.5% improvement of image rating. · +122% wider distribution of retail outlets compared to Year 14. · +64.4% growth of the Return on Equity versus investors’ expectation. 1. STOCK PRICE: This year, the company’s prospect became rosier; its stock price has doubled since Year 14 “$163.25 per share” and has increased enormously its value in the market scoring third place among the highest stock value companies in the industry. 1. FORWARD STRATEGIES: The management will continue prioritising its market leader strategy, focusing on reaching the biggest number of consumers in each region. It will also monitor closely its performance versus its rivals in each market, and optimize its advertising and marketing activities to improve constantly the image of All Sports Shoes. The styling and quality will continue to improve to achieve the company’s goal and deliver affordable premium quality products. 2. MAIN REPORT 1. FINANCIAL PERFORMANCE 1. SUMMARY OF KEY PERFOMANCE INDICATORS: The company has decided in Year 15 to lower slightly its prices and improve its styling and quality to offer a better value for money for the consumers. This led to an increase in Net sales especially in Asia Pacific where the region recorded +29.6% compared to the previous year. The management has allocated high budgets for investments and operations spend in Year 14 and 15 which finally paid off this year, recording +88.4% ROE growth versus last year. The company is expected to record higher results in Year 16. 1. FINANCIAL RESULTS: The EPS’ (Earning per Share) target has exceeded the investors’ expectation, achieving +77.5 % compared to the last year performance. The company didn’t have any new borrowings in Year 15 and relied on its profits to finance its operational activities. 1. FINANCIAL DATA ANALYSIS: 1. The net revenue of the company has increased in Year 15 by 11.7% compared to Year 14. The sales value didn’t increase much as the sales volume due to the slightly decreased prices; however, the company was able to improve its sales volume by 18.99% versus the previous year selling 2’000’000 more than Year 14. 1. Due to the aggressive marketing strategies, the demand for the shoes of the company has increased and the company became the leader in the demand of shoes in Europe Africa and Latin America markets. The company has been constantly focusing on decreasingitsproduction costs which was finallypossible in Year 15. This decrease has contributed in improving and restoring its Net Profit to become 14.2% this year. 1. Although the credit rating of the company has fallen to B+,the company image rating increased to 84 from 76 in Year 14. The stock price has recorded its highest this year, being $163.25 per share. This shows that the company is a trustworthy and financially stable. 1. The Return on Equity has increased by almost two times of what it was in Year 14 due to the elevated Earnings per share and the higher Net profit margin achieved. 1. The total assets of All Sports Shoes Co.in Year 15 were valued at $747’148’000, out of which$351’242’000represent its current assets and the remaining was investment in improvingits equipment and facilities. The current assets of the company have been constantly increasing and the same trend of increase was followed in this year as well. 1. LIQUIDITY & OTHER RATIOS: 1. Liquidity Ratio ALL SPORTS SHOES CO. $ '000 YEAR 12 YEAR 13 YEAR 14 YEAR 15 Current Assets 244,615 290,341 295,452 351,242 Current Liabilities 104,663 61,819 88,792 73,282 Current Ratio 2.34 4.70 3.33 4.79 The current assets of the company decreased at a higher rate in the year 14 but the same improved in the year 15 again and is the best in the past 4 years. This reflects that the liquidity position of the company has improved and therefore the company is performing well. 1. Interest Coverage Ratio Earnings before interest and taxes / Interest expense = 232,473/ 25,753 = 9.03 Albeit the interest coverage ratio has decreased from 10.19 in Year 14 to 9.03 in Year 15, the ratio remains a positive sign that the company is earning approximately 9 times the fixed interest expense. 1. Debt to AssetsRatio Long Term Debts/Total Assets = 253,000 / 747,148 =0.3386 The long-term debt to assets ratio of the company has been reduced from