FINAL hisco ceo
Student: Nicholas Redden
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Annual Operating Review
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)
From an annual operating review perspective, there were several areas of the business that Hisco did
well to meet commitments. The planned taxable income was $343.2K; hence the after-tax income
would be 50% of the $343.3k. The after-tax income is $171.65k. Compared with the actual pre-tax
income of $176k, this gives the real after-tax gain of $88k. When compared with each other, these
two values, the exact after-tax amount was lower than the planned income. This result was a drop in
the income tax, which is attributable to the reduced funding in marketing. Even though the income tax
growth was by $1.8m, the market share, on the other hand, was reduced by $1.8m. the reduction in
the market share resulted from intensified competition whereby the competitors boosted their market
penetration. The number of sales should always tally the available inventory. Otherwise, you cannot
sell goods that have not been manufactured yet. The available inventory consists of inventory carried
forward from the previous quarter into the current quarter. When planning for production, the amount
of output should be equal to the human resource capacity available. This is a key factor employed in
determining the quantity available for sale. The correct pricing of products is key to the amount of
revenue received. When the prices are too low, the revenue targets may not be achieved at all.
How well did your initial strategy work and did you maintain that strategy
throughout the year?
The initial strategy for Hisco was to take advantage of what it did well, which was in its skilled
engineering capabilities. By knowing what Hisco did well, the plan was to focus time, effort, and
resources on its weaknesses, which was developing skills in manufacturing and marketing to become
competitive in the medical device industry. With the skills in engineering, Hisco would have been
able to hone those skills and improve its efficiencies within the product development process. A
greater than average allocation was made to the manufacturing and marketing areas of the business,
in a way to hone those skills to catch up with the market. There are cases when the first draft of your
marketing strategy works somewhat well, yet there's still room for improvement.
Student: Nicholas Redden
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What revisions would you make to your original SWOT analysis going
forward over the next 2 to 3 years?
I think that the strengths and weaknesses were pretty accurate in describing Hisco Corporation. There
are elements of the business that it does well and is efficient at, which is engineering. None of the staff
has changed from the beginning of the year and the plan is to maintain the same resources for the next
2 to 3 years. Similarly, the opportunities of improving manufacturing and marketing are still the same
as well since not enough time and resources were put into those areas this year. Additional notes would
be made regarding the notes, however, since we were able to gather a year’s worth of competitive data
and analysis regarding Hisco’s primary competitors, Matek and Redex. To produce affordable, smart,
and high effective mobile devices that will revolutionize the world of mobile phone technology today,
tomorrow and the future, for the growth and expansion of Business. •Effective innovation process and
shaped by marketing goals and objectives, marketing strategy and performance, current and
anticipated organizational resources, and cultural and structural issues. The strategic goal is to increase
product expansion into the untapped markets and increase the firm’s market share through market
expansion and penetration
What inference can you draw about your competitor’s strategy? Both competitors, Matek and Redex, focused their strategy on optimizing their sales and gross
margins.
The competitors continue to dominate the market in two ways. The product quality and the product
marketing. The companies have maintained their standards high which requires that this company take
stern measures to get any inch closer to the two competitors. the need to increase marketing penetration
was a contributing factor to the need to have a new project launch. The project is aimed at increasing
the research and development needs of the company. this will ensure that it improves production,
affordability, and quality. adding this new improvement, it is expected to increase the usage of the
products translating them to profits. Getting to match the competitor is advantageous especially when
targeting an already defined niche, more investment into marketing, research, and development is
ideal now.
Q1
It was important to make the company increase its market share. through intensive marketing, the
sales were expected to skyrocket. there was an amount set for marketing and advertising. However,
due to the need of reaching more customers, I made a tough decision of increasing the
amount of money set for marketing. another tough decision was to increase the product
Student: Nicholas Redden
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price. Even though the sales were impressive, I believed that additional marketing funding was not
going to be effective in the short run. I, therefore, increased the price of the products for the current
loyal customers in a bid to meet the targets of the owner. The results were amazing as we were able
to surpass the targets. The need to have better sales led to uncontrolled funding for the marketing
activities.
From both a qualitative and quantitative perspective, how would you value
your business relative to Redex and Matek?
As the executive in charge of Hisco’s overall business, I was responsible for several concurrent
projects to compete against competitors, Redex and Matek. Those various initiatives allowed the value
creation metrics for each company at the end of the year, Hisco ranked 2nd across most of those
categories.
And
while the time, effort, and funds were invested in the organization from the beginning of the quarter,
not enough strategic action was put in place to be declared the overall winner of the campaign. Most
importantly, because quantitative research is mathematically based, it’s statistically valid. This means
you can use its findings to make predictions about where your business is headed. Qualitative research
isn’t so much about numbers as it is about people – and their opinions about your business.
Typically conducted by asking questions either one-on-one or to groups of people, qualitative
research. The qualitative approach concentrates on the quality of the company. Emphasis is put on the
company’s products, services, management, competitors, etc. Special attention is given to finding
companies with sustainable competitive advantages. Qualitative investing requires assumptions about
the future that are made based on quality. The analyst will make judgements on the prospects of the
stock based on the qualitative attributes of the company.
Were you surprised by the final team rankings in the value creation winning?
Why or why not? I was surprised by the final team rankings in the value creation winning. The entire goal and
purpose of this campaign was to win by outperforming competitors, Redex and Matek. The former
manager that oversaw running the operations for Hisco laid out a robust strategy and action plan. But
the reason I was brought into the role was to take it to the next level and increase the net income for
the business. However, a poor performance for Q1, the strategies shifted, and we were focused more
on getting back below the credit line. During that time, the other competitors made
Student: Nicholas Redden
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improvements to their manufacturing and marketing strategies that put them ahead and difficult to
catch up to. Theory and empirical research show only a shaky connection between value creation and
two of the most popular performance measures: earnings per share (EPS) growth and sales growth.
hat are the key ingredients needed to develop winning teams and a winning environment? Managers
and the executive team employ regression analysis as it entails statistical equations that can predict
the significance of one variable on another. Businesses will utilize data mining where programming
skills and statistical methodologies are applied. Several corporations have sufficient resources. Linear
programming is a quantitative technique employed to ensure increased productivity using the least
resources. When analyzing business components, there are qualitative methodologies utilized.
Managers can use interviews to ensure that the product is placed in the market and exceeds the clients'
expectations (Mosteanu et al., 2019). Managers can also employ observations and opinions about
other people to make the business effective and efficient.
Where will organic growth come from over the next 2 to 3 years? What is
potential new market/product/service opportunities?
Growth is top of mind at many companies, according to respondents: 93 percent say theirs have
pursued at least one strategy to generate organic growth in the past three years, and nearly two thirds
agree or strongly agree that organic growth is at the top of their executive teams’ agendas. But
regarding the three strategies of growth, we explored (investing, creating, and performing However,
the end of year outlook shifted, and budgets needed to be cut across various departments with
marketing and advertising taking the biggest hit for the company. New budgets and allocation
strategies will allow Hisco to focus its efforts on increasing brand awareness and sales from those
channels.
How will you create economic value for your customers going forward? The cost of taxation can be described in terms of the effects on consumer and producer surplus. Tax
is a form of government intervention in the economic market. The absence of tax in the market causes
an equilibrium in the market and an increase in the producer and consumer surplus. Taxation leads to
the shift of the supply curve upwards in the amount of tax paid thus leading to an equal decrease in
the producer and consumer surplus and this is referred to as the cost of taxation. The loss that is
experienced in the decrease in the consumer and the producer surplus because of imposing taxes on
Student: Nicholas Redden
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the supplier is called the deadweight loss and the government does not benefit from the taxation.
The benefits of international trade in terms of consumer and producer surplus are because of the
benefits or the losses that are experienced when there are importation and exportation. When a country
exports it can reduce the prices for consumers in the country and suppliers are able to sell their
products at a high price, therefore, leading to an increase in producer and decrease in consumer surplus
Buyer Willingness to Pay Carlos $10 Quilana $15 Wilbur $35 Ming-la $45 Refer to Table 7-3. If there
is only one unit of the good and if the buyers bid against each other for the right to purchase it, then
the consumer surplus will be A. $0 or slightly more. Financial services had become so commoditized,
only an engaging experience would expose customers to its financial offerings Similarly, Hisco can
offer a similar experience but create a showroom for interested customers to try and test out the
medical reader.
What are 4 to 5 risks to Hisco’s continued growth over the next 2 to 3 years,
and what options would you pursue to mitigate those risks? Are these risks
controllable or non-controllable?
Although it can seem like a good problem to have, a risk for Hisco as an organization is growing too
big, too fast. If there became a greater demand for the medical reader device, then Hisco has no choice
but to ramp up production to meet those growing demands, which result in hiring of employees across
the board from sales to manufacturing to marketing and customer service. But if not planned
accordingly, that growth can come to a halt at any point and put Hisco in a difficult position regarding
Being in a market that is oversaturated. We saw firsthand how a new competitor in Eastern
Electronics that can come up out of nowhere. Who knows how many of those types of companies will
be a threat in 2-3 years? It is important for Hisco to constantly update its SWOT analysis and keep an
eye on the potential competitors in the market.
4. Having a product that is outdated. Technology advances very quickly, if Hisco does not keep up,
they will be left behind. It is important for Hisco to maintain its R&D budget to be aware of up-and-
coming technology systems that can be integrated into the reader. Determine a consistent cadence of
updating the reader and refreshing it completely to meet the high technology standards the consumers
are already used to. Falling behind the competition is a whole lot easier than you might previously
have thought. With that in mind, here are some things that you can do to keep your business ahead of
the game. Over the past 20 years, I have observed 10 recurring risks for growing business and have
helped clients address them.
Student: Nicholas Redden
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How did you use role play to create value over the year? Going forward? The Role play segment was an important feature that happen to be in this simulation. One of the
advantages of this is that I was able to practice a real negotiation. This made me understand that in
Page 3 of 3 Student: Nicholas Redden any business conversation, it must be done in a manner that
there is an agreement or a balance between the two parties. It has effects on each other's financial
position, the negotiation must ensure that each party's needs are considered so that the parties feel
contended. this experience gave me a glimpse into what it is about working with stakeholders in a
business environment. This, therefore, prepares me to sharpen my negotiation skills to get the best of
deals from the suppliers and service providers. The use of role-playing in this quarter was very much
enticing business-wise. In this quarter Q3, the deal that I sealed was with Lona lines. The deal included
an expedition of three lines worth $17000 each. This Enhanced the throughput by 275 per line at a
$14,250 upgrading fee for 15 existing lines another deal included Discounted Pricing for Long-Term
Commitment: in Q3'22 for five lines and Q4'22 for five lines with a 5.0% discount on leasing price.
One of the most complex decisions in this quarter included the deal that Sloane assisted. He facilitated
the purchase of the conversion into Page 3 of 3 Student: Nicholas Redden a solar-powered business.
Solar Panels Purchased: $150,000 cash for new solar panels
What were the 3 toughest decisions made during the year? The company is in horrible shape regarding the cash flows. The shaping saw during the quarter the
bad debts' likelihood to go higher if some purchases are made using the current cash—also, the need
to increase productivity through the improvement of the efficiency and production processes. The
first decision was to overlook the impending cash crisis and do solar panels procurement. The
purpose of the change to solar power is due to the attempt to reduce electricity costs and support our
sustainability mission. The second difficult decision is the purchase of 3 lines to enhance production.
The third most tough decision I made was to increase the number of staff despite the condition of the
business being so unaffordable to doing business.
It was important to make the company increase its market share. through intensive marketing, the
sales were expected to skyrocket. there was an amount set for marketing and advertising. However,
due to the need of reaching more customers, I made a tough decision of increasing the amount of
money set for marketing. another tough decision was to increase the product price. Even though the
sales were impressive, I believed that additional marketing funding was not going to be effective in
the short run. I, therefore, increased the price of the products for the current loyal customers in a bid
to meet the targets of the owner. The results were amazing as we were able to surpass the targets.
The need to have better sales led to uncontrolled funding for the marketing activities.
What are 5 key learnings from the year?
Student: Nicholas Redden
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2. Sales volumes are still an important factor in business operations, so the production limits must
remain high as the demand for sales remains high enough. The costs associated with business
productivity, manufacturing costs, expansion costs, and goods and services must be minimized to
increase the net profit. When business marketing has been effectively done before, the wave of good
sales performances will be experienced much later, even when the business is not actively conducting
marketing campaigns. This is because the information remains with the target customers who make a
busy decision later. In the line of operations, a business should increase its line efficiency by acquiring
new efficiency assets and increasing employees and increasing price per unit improves production.
On a similar note, don't get discouraged with one poor quarter. Sometimes things don’t go exactly as
they are planned, no one can accurately predict the future. We must simply use our best judgement
and hope for the best.
3. The number of sales should always tally the available inventory. Otherwise, you cannot sell
goods that have not been manufactured yet. The available inventory consists of inventory carried
forward from the previous quarter into the current quarter. When planning for production, the amount
of output should be equal to the human resource capacity available. This is a key factor employed in
determining the quantity available for sale.
4. The correct pricing of products is key to the amount of revenue received. When the prices are
too low, the revenue targets may not be achieved at all. Product pricing is very dependent on labor
available, the market demand, and the marketing intensity. Low labor will not meet the mare demand,
high prices will reduce the sales volumes, less human resources will lead to underproduction. Don't
be afraid to ask for help or advice, particularly, the role play option. One area that several SMEs don’t
consider when looking at significant growth is the internal structural changes which need to be made.
A larger business won’t be able to operate in the same way that a much smaller one can; quite often
smaller businesses have ways of managing employees and dealing with HR in ways that aren’t
scalable.
It is dangerous to go beyond the credit line limits. when the debt goes beyond the credit limit line, the
business must cut some costs just to ensure that the debt equals the credit limit or is below the credit
limit. one of the methods of adding more cash float into the business is by cutting rental and leases
costs, cutting marketing costs, and research costs. By doing the costs cuts, makes it possible to have
some cash to redeem the credit limit. When working on credit, always pay attention not to exceed the
limit. This is in terms of the cash sales as well as the cash receivables as this is likely to put the
business' transactional accounts in jeopardy.
If you could re-play, what would you do differently? Why?
Student: Nicholas Redden
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It can help you decide what strategies to use in the future so that you see continued success. Let’s
break down SWOT analysis a bit more. SWOT stands for strengths, weaknesses, opportunities, and
threats. It helps you to build on what you do well, address what you're lacking, and minimize risks.
Use a SWOT Analysis to assess your organization's position before you decide on any new strategy.
Start by assessing your Strengths, Weaknesses, Opportunities, and Threats, with a team of people from
a range of functions and levels in your organization. When the business was performing badly due to
bad debt, it was very difficult to operate. All the other departments were locked from transacting
business. After fixing the budget cuts, still, the credit limit was low, that is the available cash could
not offer smooth transactions, with the use of role-playing, I was able to negotiate for additional
investment. I relinquished 7% of the company stake to an investor who offered $110k. This is an
amount that will be able to pay the company. s existing loan while also providing extra cash for
research and development, marketing, and advertising. to increase the company’s effectiveness in the
labor sector, I was able to also negotiate for additional New Hired Effectiveness that was increased to
70.00% for $5,000.00