Annual Review

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Student: Jillian Harvey

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) We were able to make more savings from our solar project even though it made us use lots of

money in the beginning. We were also able to recruit experienced employees who worked

diligently thereby contributing to success of our firm. In terms of tax, we managed to pay the taxes

imposed to us on time and so there were no penalties. We managed to sell more of our products to

our customers, and in the end we were able to acquire much profit. We sold our products at a

favorable price, something that attracted more customers to purchase our produce. The fact that we

produced goods and services as per our customers’ tastes and preferences, most of them were

motivated to buy from us thereby adding much profit to our savings.

How well did your initial strategy work and did you maintain that strategy

throughout the year? This yeah we had a log of competition with two competitors in the market who also were competing

for the same parts. We had to learn how to out maneuver them when it came to budget, business

decisions and relationships that we were building. We took advantage of a solar project that

ultimately cost us money up front but was a huge saving on the expenses. We kept our advertising

budget lower than plan due to the amazing buzz our product has. We accelerated our hiring and

training plan to ensure our teams were more productive faster. While we were against a plan to

borrow cash for a stake in the company in Q3 ultimately we thought it would be the best idea to

ensure that we were able to purchase enough parts to make our product and keep up with demand.

We do believe this is what set us a part from the other businesses.

What revisions would you make to your original SWOT analysis going forward

over the next 2 to 3 years? One of the original weaknesses we pointed out was that there was little capital backing. This needed

to change to allow HISCO to take more risk and spend more in the research and development space.

This overtime will become one of their strengths. Engineering, will remain a strength as we will

continue to develop our teams. We will need to ensure that we focus a bit more on marketing in the

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Student: Jillian Harvey

near future once the patent for the chip becomes available to more companies. We will need to

ensure we understand the market place and work on ensuring our purchasers know that our product

will continue to use the best more reliable chips. We will not shortcut on quality

What inference can you draw about your competitor’s strategy? Our competitors seem more focused on time to market versus quality engineering. They are working

to create market share and are doing so by sending out lavish remarks and marketing

announcements letting people know who they are and creating a buzz around their products. They

are taking risk by focusing on their marketing and not of the engineering of the product itself. We

believe that if they continue on this trend, the marketing will overshadow the product itself and their

product will not continue to grow as fast as the company. Their engineering will fail and ultimately

through word of mouth, they may run into issues with their sales.

From both a qualitative and quantitative perspective, how would you value your

business relative to Redex and Matek? I would rate my business high compared to my competitors. Hisco has built a reputation of quality

and being a leader in the market. We played it a little too safe as our sales ranked the lowest among

our competitor. We were not able to product the amount of product needed to keep up with the

demand. I Believe if we would have been a little more aggressive when marketing to sales

executives of the hospitals, we would have met our sales goals a little faster. People quickly

recognized our competitors due to their very elaborate marketing tactics. I cut the budget slightly in

regards to marketing due to the buzz the product had already received.

Were you surprised by the final team rankings in the value creation winning?

Why or why not? Slightly, i knew that Redex was making a large stride in Q3 due to their commitment to investing in

Project 3. This sparked my interest in project 3 and also helped me make the decision to request

Victoria Cash to back our product. We needed the extra cash as we had already taken a conservative

approach from a marketing and sales perspective. We played it safe, i believe if we would have took

a bit more risk out of the gate I believe our sales would have been higher. Though we did rank #1

overall, I would have liked to see the sales ranking also be #1.

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Student: Jillian Harvey

Where will organic growth come from over the next 2 to 3 years? What are

potential new market/product/service opportunities? Organic growth will continue to evolve over the next 2-3 years as the engineering team will

continue to work on the products efficiency and technology. Over time the units that are on the

market today will become obsolete as technology is ever changing. We will need to ensure we

remain relevant and work with our buyer to ensure that when/if their product becomes obsolete, they

come back to Hisco to purchase a new unit. I would recommend an exchange program to allow the

buyers to turn in their old unit to allow them to upgrade to a new unit. We could offer an recycle

program that would benefit both parties.

How will you create economic value for your Customers going forward? We will create our economic value for our customers by determining which customers to invest in,

Identifying new customers and markets to target, Agreeing which product and service lines that

should be offered and promoted and changing the price to extract more value. In addition, we can

also create economic value for our customers by identifying the unprofitable customers that we

should fire and also understanding where to cut costs and investments that are not generating

growth. We must continue to keep our customers in mind and ensure we are listening to their desires

and the needs to ensure we are creating a product that they will want to use.

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? The following are 4 risks to Hisco`s continued growth over the next 2 to 3 years; changes in

consumer preference and increased competition, Failure or interruptions to the supply chain of

products, Cash flow shortages and customers not paying for the products as agreed, Damage of the

firm`s property and equipment` such as bursting of the electric wires and security issues such as

theft. To reduce these risks, Hisco need to understand the tastes and preferences of its customers

concerning its products and services, implementing what their competitors do, e.g. by copying the

various positive techniques they do apply for them to excel. These risks can also be reduced by

producing sufficient products and services all the time to avoid shortages, raising enough capital to

cater for every operation taking place, putting into place strong security measures to reduce theft

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Student: Jillian Harvey

cases and buying of durable tools to avoid damages. From this analysis, all these risks are

controllable.

How did you use role play to create value over the year? Going forward? We used role play to create value over the year by doing the following; monitoring the

proceedings of various processes and identifying whether there is a problem, and in case there is a

problem, we usually gather all employees together and then encourage an open discussion so as

solve the issue, Discussing with other employees the new things we have learnt and assigning

employees their roles as per their qualifications or effectiveness to ensure that they produce the best

service. We also train and educate the new hired employees so that they offer quality work and

lastly managing our finances throughout so as to avoid difficulties in running various projects.

What were the 3 toughest decisions made during the year? The three toughest decisions made during the year include; hiring ideal employees to offer quality

services in each department as some employees pretended to portray effective traits during the

hiring process, Predicting on the exact amount of cash needed by each operation to carry on till the

end since the set capital for the operations were insufficient in most of the times and therefore most

of them lacked capital to operate. Lastly We were unable to expand our business or our firm since

we feared that if it`s expanded, it would change the entire face of our company and sometimes

growing to fast can be detrimental over time.

What are 5 key learnings from the year? The 5 key learning from the year include;

-It’s important to understand your customers in terms of whom they are and what exactly they need

(likes and dislikes) and then try to satisfy their wants.

-It’s good to involve your employees in the process of decision making since you will learn more of

what you never knew before.

-Always try to monitor and evaluate your business so as to know whether you are in the right path to

make profit or not.

-Before undertaking any project, always ensure you have sufficient capital that will be able to carry

the project successfully till the end.

-During the hiring process of employees, always select effective individuals who have all the

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Student: Jillian Harvey

required qualifications since they will be able to offer quality work.

If you could re-play what would you do differently? Why? If I could replay I would have likely taken the extra cash in Q3 vs Q4. Waiting on this decision cost

me money and ultimately time. Also, we could introduce new ways of motivating employees, i.e. by

rewarding the best performing employees and also giving them incentives. This will motivate other

employees to work hard so as to be rewarded and in the process contributing to the company’s

success i.e. in terms of making much profit.

We could also put tough measures to those individuals (employees) who violate the business laws

by example demoting them from their positions. This will make employees to be attentive at all

times and do the right things and in the process there will be no conflicts.