Sunday, June 2, 2019

Developing implementation action plan

Capsim Core Simulation Strategy

 

Introduction: objectives

This implementation plan is designed for Andrews Company for the year ending December 31st 2023. The main purpose of developing this implementation plan is to develop comprehensive and multifaceted strategic action plans to help address issues that are critical to the success or failure of the company.
Objectives of different departments in the company:
Research and development
Some of the goals and objectives of this department include the following;
-       To improve technical and analytical skills of personnel; with the increasing advancement in technology, this is the main objective of this department.
-       To improve employee retention.
-       To develop leadership abilities and potential of the team hired.
Finance department
-       To increase revenue; since the company’s current revenue ($40,800) is less than the potential expenses leading to a net loss and an increase in operating income of $4,839, the company plans to increase its revenue to reduce the increased operating income.
-       To manage costs; this objective goes hand in hand with the objective to increase revenue. The company pan to manage costs as it grows.
-       To maintain appropriate finance leverage; the company plans on increasing debt from $58,433 to some higher value since debt financing is cheaper as compared to equity financing.
-       Diversify and increase revenue streams; the company plans on increasing sales of different products to increase its general revenue since the company only receives revenue from the sale of Able.
-       To maintain profitability; the company plans on not only increasing its revenue and reducing thus increasing its profits but also to make it somehow constantly growing. Profitability of a company should not fluctuate much.
-       To ensure financial sustainability; since the external environment is uncertain and out of control of the management, the company need to remain financially stable and this may sometimes encompass seeking outside sources of finance.
-       To maximize shareholder’s wealth; the company since is a business unit plans to satisfy the business units’ common economic objective.
Marketing department
-       To offer the best products; the department aims at providing the best products in the market to allure customers to the company’s products. This will happen especially when high tech is used to produce products. Some of the products that may be used include;
Name              price
Bold                $41.90
Dabble            $44.50
Fast                 $42.50
Feast                $42.50
-       To increase market share; the company’s market share when high tech is used is 0.7% and 6.5% when low tech is used, therefore the company may decide to use low tech to produce products to increase its market share.
-       To improve customer retention by using customer database like customer relationship management (CRM).
Production department
-       To increase mass production; the company aims at increasing its production level since this will help in reducing costs.
-       To produce innovative products that help increase customer base
-       Differentiation of products; the company aims at producing unique products to help customers differentiate the company with others in the market.
-       To minimize production time; the company aims at ensuring production is done at the minimum time possible. This will help to free up some corporate resources to help in additional production lines or production of other products.
-       To use resources efficiently; another objective of production department is to maximize efficient use of company’s resources and this can be accomplished through capacity requirements planning.

Strategic initiatives and timeframe for these initiatives

The company plans at completing the following high level activities to accomplish some of its prioritized goals and objectives;
Ø  Increase participative leadership style – this is a continuous process in the company throughout its life or so long as the company is not dissolved.
Ø  To carry out comprehensive and strategic environmental scanning to find required information in the research and development department. The company can conduct a SWOT analysis to get data – environmental scanning is a continuous process and shall be carried out so long as the company exists.
Ø  To conduct cash budgeting- financial planning will be carried out quarterly for efficiency.
Ø  Effective communication in the organization - this will happen as a daily system of the company.
Ø  To be market oriented to increase the sales revenue – daily market research to be familiar with the market information.

Ø  To retain the best personnel – best personnel shall be retained for a period of 10-20 years or till retirement.

Balanced scorecard

Andrews is a manufacturing company and just like other manufacturing companies, its main concern is operational efficiency, that is, increasing output and decreasing production cost. The company can achieve these objectives by pricing products correctly, ensuring consumers can access products easily.
Andrew’s balanced scorecard
Profit and revenue
Low cost production
Product and revenue mix
Lower costs of production operations
Additional production lines to maximize revenue
Head count management

Optimal value for price
Ensure product accessibility
Appropriate product assortment
Ensure consumer preference
Timely distribution
Management of finance
Comprehensive environmental scanning
Efficient purchasing process

Safety at all production levels
Effective communication of information and internal transparency
Retain the best personnel

Critical success factors

Ø  Relationship between customers and the company; the company need to develop strong positive relationship with its customers to achieve its revenue goal.
Ø  Cost reduction; in order for the company to meet its cost reduction goal, it should constantly embrace product designs and efficiency.
Ø  Employee turnover; the company should reduce employee turnover to increase employee retention.
Ø  Product quality
Ø  Market share
Ø  Customer satisfaction
Ø  Productivity

Key performance indicators

High level key performance indicators will measure the overall performance of the company while low level key performance indicators will focus on the processes at departmental level such as research and development, production, marketing and finance.
 High level key performance indicators: Financial metrics
Ø  Profit; the company’s potential of generating high net profit is relatively low since its projected income statement shows a net loss of $12,523.
Ø  Cost; the company is assessing efficient ways of reducing costs through additional production lines.
Ø  Cash flow financing activities; the company has a low financial strength because it has negative net cash flow of $27,325.
      Low level key performance indicators
(i)             Research and development
Low tech
·      Price range: $15 - $35
·      Performance: 7.3
·      Reliability: 14000 – 20000 hours
High tech
·      Price range: $25 - $45
·      Performance: 10.9
·      Reliability: 17000 – 23000 hours
(ii)           Marketing
Low tech
Market share: 6.5%
High tech
Market share: 0.7%
(iii)         Production
Low tech
Name
Automation
capacity
Utilization
Able
3.0
800
163%
Baker
6.5
1350
133%
Cake
7.5
1150
136%
Cent
4.5
700
200%
Daze
6.0
1300
119%
Eat
6.0
1000
140%
East
6.0
750
200%

High tech
Name
Automation
Capacity
Utilization
Bold
4.0
800
127%
Dabble
4.0
850
157%
Fast
4.9
1000
130%
Feast
4.9
800
200%

(iv)          Finance
The company plans on selling more products to offset the loss it is experiencing.

Guiding policies

The company will not only develop internal policies but it will also develop external policies that will help in guiding the company in trying to control the external environment factors that may affect the performance of the company.
·      Financial management policies to help in cash budgeting
·      Confidentiality policies to help the company in keeping its information to gain a competitive edge.
·      Equal opportunities policies that help guide the development of participative leadership style.
·      Complaints policies that help guide achievement of effective communication in the organization
·      Recruitment policies that guide the human resource department in employing the best personnel.

Enforcement policies

Normally leaders often blame subordinates when the company performance is not appealing and they take credit when the company performs well. This can be reduced by the following policies;
·      Work allocation policies; these help in knowing who exactly lead to the failure of the company or which department specifically did not perform as required that lead to the company experiencing net losses.
·      Communication policies; leaders or management personnel of the company should use effective communication mediums to help in laying information quite effectively in the company.
·      Team development policies; the company’s management should embrace team work since each team member will be responsible to their teammates to be accountable to a clear plan of action.
·      Another thing that can enforce accountability in the company is when the management knows the guiding policies of the company. Knowing what policies to follow in every situation help one in taking the initiative and being able to own their own mistakes and not to blame them on others. 

Systems to support strategic initiatives

·      Financial systems; these include computerization of accounting, cash budgeting and finance operations of a company. This system also include personnel system because headcount control and payroll of a company is an important concern for the company.
·      Operational systems; these systems help operational managers to run the company in a daily routine. These systems affect the company’s profitability and they include computer capacity planning, technology forecasting and personnel performance planning.
·      Strategic systems; these are information systems that help the company gain sustainable competitive advantage (SCA) which can be gained if the company possesses and employs resources and capabilities that are rare, non-substitutable, expensive and those that cannot be merely duplicated by competitors.

Processes to facilitate strategic initiatives

Some of the processes that can fasten the strategic activities planned include;
               i.         Determining the company’s readiness to be involved in taking the strategic initiatives.
             ii.         Developing departmental teams and schedule for taking the planned activities.
            iii.         Conducting a comprehensive and continuous environmental scanning.
            iv.         Reviewing the data collected from the conduct of environmental scanning and making the necessary decisions.

 Standard operating procedures

They help the company in taking the strategic operations correctly and in the same manner. Some of these procedures include:
      i.         Safety precautions; they include procedures taken to improve safety in every production level of the company.
    ii.         Quality assurance; they include procedures the company can take to assure customers that their products are of high quality. The company use the issue of samples prior to release of new products.
   iii.         Complaints management; these help the company to deal with the customer complaints.
   iv.         Fundamental operational procedures; these help the company to develop other procedures.
     v.         Standard procedures for operating plant and equipment; these help the organization in operating the production levels.

Resources needed

Allocation of resources is one of the basic activities in strategy implementation. This include both financial and non-financial resources that are available to the company and those that are not available but are needed in the implementation process therefore the company need to find a way to get them at the required time.
These resources include financial resources, time, human and intellectual resources,     technological resources and physical resources.

Accountability

The results and outcome of the strategic initiatives are made possible by everyone in the company since every employee had a role to play in the process and they all had their roles played so well.

Core competency diagram

This diagram connects the company’s objectives, key performance indicators and core strategic competencies. Objectives are what the company need to achieve at the end of the year or its existence, key performance indicators help the company to what know what it has achieved after some time and core strategic competencies are the unique resources or systems the company has that can make it more competitive in the market to easily achieve its objectives.

References

Podeswa, H. (2009). The business analyst's handbook.
Harvard Business Review Press. (2011). HBR’s 10 must reads on strategy.
Walter III, K. (2010). The lords of strategy: the secret intellectual history of the new corporate world.
The Blackwell Encyclopedia of Management. (2005). J. McGee (Ed.), 2nd ed., Vol. 12. Malden, MA: Blackwell.




       





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