DIRECTIONS FOR PAPER Read the case carefully before you start your paper. A well-written case is characterized by clear organization of information, thoughtful analysis, and realistic, workable solutions to the problems presented in the case. Make sure that your paper is not merely a rehash of the case: do not copy sections from the case into your paper. Your paper should include the following: 1. What are the company’s vision/mission and objectives? a. Mission statement answers the question “Why do we exist?” i. Customer Needs: What is being satisfied? ii. Customer Groups: Who is being satisfied? iii. Distinctive Competencies: How are customer needs being satisfied? b. Vision statement focuses on FUTURE. c. Companies may have mission or vision or both. i. Both are often accompanied by a company values statement 2. Corporate strategy and business (or competitive) strategy What have been the key elements of the company’s corporate strategy up until the time of the case? What is the company’s business strategy? What role does corporate culture play in the implementation of the company’s strategies? a. Corporate Strategy (CEO) i. What business(es) should we be in? ii. CEO and senior executives HQTS. iii. To establish a strategy for managing a set of businesses in a diversified, multi-business company. b. Business Strategy (Division Heads) i. How do we compete in our business? ii. General Manager of business division(s) c. Functional Strategy i. How do we allocate our resources to functional areas (R&D, HRM, FIN, MKTG,OPER, ETC.)? 3. Industry analysis Define the industry to which the company belongs. Using Porter’s five forces model, analyze the competitive forces in this industry. Discuss those factors or problems which are most important for this industry and why they are important. a. 5 competitive forces i. Rivalry ii. Bargaining power of buyers iii. Threat of new entrants to the marketplace iv. Bargaining power of suppliers v. Threat of substitutes 4. Company situation analysis Make lists of internal strengths, internal weaknesses, external opportunities, and external threats. Be sure to include analysis of financial information in examining the company’s internal capabilities. Based on your analysis, summarize the major strategic issues facing the company and industry. a. SWOT i. Internal – Strengths & Weaknesses 1. financial position: relative & changes over time 2. functional capabilities: sustainable? distinctive? ii. External – opportunities and threats 1. demographic & socio-cultural changes 2. economic & political/legal changes 3. industry & technological changes 5. Financial analysis Analyze the financial part of the company through the ratio (you can see the word document), and see whether the company doing good or not. 6. Recommendation Select and describe a strategy for this company. Your strategy recommendations should be justified in terms of how well they deal with environmental threats, take advantage of opportunities, minimize internal weaknesses, and utilize the organization’s competitive strengths. a. b. c. d. e. Paper format Where do we go from here? Shift from analysis- synthesis (integrate, combine, fuse) How do your recommendations line up with your SWOT analysis? Is there a fundamental shift in strategy required or not? Is this a feasible, (creative) solution that is supported by your analysis? Write down the number of the question and give your answers. For example: 1. 2. 3. 4. 5. Your answers Your answers Your answers Your answers Your answers MGMT 497 Some Notes on Financial Ratio Analysis Profitability Ratios (1) Net Profit Margin (NPM) = Net Income  100% Total Revenues This indicates how much a company actually keeps in earnings per dollar of sales after all expenses (including interest and taxes) are paid. It shows the company’s ability to sell a product or service at a low cost or a high price. NPM can be significantly different from OPM in size due to the impact of interest and tax expenses. (2) Return on Asset (ROA) = Net Income = Net Profit Margin  Asset Turnover Ratio Total Assets This is a measure of profit per dollar of assets, a common measure of managerial performance. It indicates how efficiently the firm uses its assets. Since the return on asset can be expressed as the net profit margin (which shows the level of operational efficiency) times the asset turnover ratio (which indicates the degree of asset use efficiency), the firm may increase ROA by expanding profit margins or increasing asset turnover. (3) Return on Equity (ROE) = Net Income = ROA  (1 + Debt-to-Equity Ratio) = ROA x Equity Shareholders' Equity Multiplier It measures how efficiently a company is using shareholders’ money to generate profits. It shows how efficiently the firm manages its overall operations (including operational efficiency, asset use efficiency, and use of financial leverage). Financial Leverage Ratios (for Debt Management) (4) Debt-to-Asset Ratio = Total Debt Total Assets The debt-to-asset ratio indicates the proportion of assets that are financed with debt (total liabilities that include all shortterm and long-term liabilities). It gauges the degree of the firm’s financing obligations and its ability to meet all these obligations. It also shows the firm’s ability to obtain additional financing for potential expansion and growth opportunities. (5) Total Debt Total Shareholde rs' Equity Equity Multiplier =Total Assets/Total Shareholders’ equity Debt-to-Equity Ratio = The debt-to-equity ratio indicates the relative use of debt and equity as sources of capital to finance the firm’s assets. *** Calculate the number of above ratios and analysis the performance and relationship of the company with related ratios.
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