FINAL hisco ceo

Student: Nicholas Redden

Page 1 of 8

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

Page 2 of 8

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

Page 3 of 8

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

Page 4 of 8

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

Page 5 of 8

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

Page 6 of 8

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

Page 7 of 8

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

Page 8 of 8

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