This is a very brief and heavy assignment and it has finance, accounting, and management tasks involved. I have not posted the case yet. The attachment is just a list of introductions that need to be

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This is a very brief and heavy assignment and it has finance, accounting, and management tasks involved.

I have not posted the case yet. The attachment is just a list of introductions that need to be followed so accurately.

So, please see and read through the attached file first and then let me know if you think can take the assignment and complete it with the least possible flaws then I would upload the case that you need to work on.

I would really appreciate your help…

PLEASE PLEASE PLEASE do not take it if you do not think you can maintain the quality of the assignment.

Please follow the new attachment name “Instructions” along with the other instructions and the case attachment is “522001”.

This is a very brief and heavy assignment and it has finance, accounting, and management tasks involved. I have not posted the case yet. The attachment is just a list of introductions that need to be
The purpose of these guidelines is to help students develop critical thinking through examination of organizational cases. The case analysis should have the following sections (these sections add to a total of 8 pages of text (plus exhibits) in the following format: Double-space, one-inch (2.5 cms) margins on all sides, Times New Roman, 12 point font). Executive Summary (not to exceed 1 page) External Assessment (about 1 page) Internal Assessment: Resources and Capabilities (about 1 page) Internal Assessment: Financial Performance and Future Financial Capacity (about 0.5 page) Current Strategies (about 0.5 page) Key Issues (about 0.5 page) Implementable Strategic Alternatives (about 1 page) Criteria and Evaluation of Alternatives by Criteria (about 1.5 pages) Recommendation and its Implementation (about 0.5 page) Limitations and Critique of Recommendation (about 0.5 page) Exhibits 1 Definition written for the National Council for Excellence in Critical Thinking. Cited in Elder, L. and Paul, R. (2008), The Thinker’s Guide to Intellectual Standards, page 58. Foundation for Critical Thinking Press, Dillon Beach, CA, USA. www.criticalthinking.org 2 Bloom, B.S. (ed.) (1956) Taxonomy of Educational Objectives, the classification of educational goals – Handbook I: Cognitive Domain New York: McKay. Keep in mind that each section in the paper is important. However, coherence among various sections is even more important. Therefore, writing a paper is an iterative process by which you improve each section as well as coherence among various sections in subsequent steps. For example, be sure to use the opportunities and threats you assess in the external section along with the strengths, weaknesses, distinctive competencies and sustainable distinctive competencies you propose in the internal assessment to suggest alternatives. These alternatives, of course, must address the key issues of the case. Executive Summary (Not to exceed 1 page) Write the executive summary in the form of a consulting letter but do not write your name at the end. The executive summary is a concise and persuasive summary of the report. It outlines the recommendations that you make as well as the supporting evidence for your recommendations. It must be concise enough to give the reader all the relevant information needed to assess your recommendations, yet comprehensive enough to convince the reader of the thoroughness of your analysis. It should stand on its own. If the executive summary were to become detached from the rest of your report, it should still be able to get your message across to your reader. An executive summary should contain, at minimum, the following: the strategy that you recommend. the implications of implementing your strategy, both financial and non-financial. how you will finance any costs associated with your recommended strategy; and the expected benefits of your recommended strategy. Generally, more effective executive summaries are written in a persuasive tone that outlines the context for the decision and develops a clear and coherent argument for accepting the recommendations of the writer. Executive summary must be one page. It must not exceed one page. Begin external assessment with a new page. External Assessment: Opportunities and Threats (about 1 page) Strategy relates the organization to its environment. Therefore, we must understand the relevant environment in order to determine which strategies have potential for success. Chapter Two of Hill, Schilling, and Jones’ book provides you with concepts for this assessment. The process of developing an external assessment consists of at least three stages: Stage One—the analysis that includes systematic identification and consideration of the key aspects of the firm’s environment; Stage Two—the synthesis of the key aspects into an understanding of the strategic opportunities and threats facing the firm; and Stage Three—the determination of the necessary key success factors (resources and capabilities) for any firm to successfully address those unfolding opportunities and threats It is the results of Stages Two and Three that are detailed and discussed in this section of the paper. More specifically, you will focus on the three key opportunities/threats and related key success factors for the future. Key success factors are the resources and capabilities that will be required for any organization to take advantage of the opportunity or neutralize the threat in the future. They will provide a link to the internal analysis, where you would look for the required resources and capabilities in the specific firm you are studying. Keep in mind that the external assessment is more general so as to avoid tunnel vision. Please note, strategic opportunities and threats result from changes and discontinuities in one or more aspects of the firm’s external environment, and not from the firm’s internal strengths or weaknesses. An opportunity is more than a general option – it is an actual change in the environment that signals the possibility of success if the firm can develop a strategy to take advantage of that change. Examples include an emerging market segment, an imminent change in government regulation, and a new technological development. Similarly, a threat is a change in the external environment that signals possible trouble for the firm. Examples include imminent entry of a new, powerful competitor; changes in government regulations; and decreasing consumer preferences for a product because of its effect on the environment. Sometimes changes in the environment can be both opportunity and threat, depending on how the firm chooses to act. Some opportunities and threats may emerge from continuing conditions in the environment rather than changes because of market imperfections. Also, opportunities and threats may not have been perceived earlier because of existing mental models and blind spots. New events may trigger new thinking, which may help actors connect the dots and perceive new opportunities and threats. The critical part of an external assessment is synthesis rather than identification. Thus, it is not enough to simply list elements of the environment, for example, what comprises each of the five forces in an industry. Rather it is important to draw out the strategic implications of each key part of the external environment. Moreover, the assessment needs to be future-oriented because that is the only way it can provide a strong foundation for the subsequent sections of the paper (e.g., for building alternatives and recommendations). In your examination of the environment, you may use all models and concepts that are given in Chapter 2 of the textbook such as five forces model, strategic group analysis, etc. However, the synthesis is in the form of top three opportunities and threats. How to Write This Section? In the first paragraph, define the industry succinctly by naming the industry, major business segments, and geographical coverage of the industry. Also, do not add anything else in the first paragraph to keep it concise. Further, keep the analysis broad (at the industry level), and do not mention the name of the company in the external assessment section. Then, write one paragraph on each opportunity or threat. Within each paragraph: Name the opportunity and identify whether it is an opportunity or threat. Frame it accordingly so it reads like an opportunity (which is positive) or a threat (which is negative). Keep in mind, they should both come from the external environment so if you have written something that is not coming from the external environment, think again; it may not belong in this section. Give positive evidence of the existence of an opportunity or threat. Absence of threat is not sufficient to be listed as an opportunity! Finally, write at least two relevant key success factors for each opportunity/threat discussed and provide the rationale for each of the key success factors. It is possible that some key success factors (resources and capabilities) relevant for various opportunities and threats may be the same. For example, a product development capability may help address a threat of intense competition at home as well as facilitate expansion to the Asian market (an opportunity). Rather than repeating the same resource or capability for the other opportunity or threat, think of a different resource or capability that a firm may need in the future. You should pay particular attention to the new key success factors that may be emerging that could lead to competitive advantage in the future. You may look at a value chain to figure out the possible key success factors (resources and capabilities). Avoid using the words as follows: The firms may need “ability to cater to the changing needs of the customers.” Avoid it because a firm may need numerous resources and capabilities to do so. Instead, name the specific resources and capabilities such as supply chain management, human resources management, financial resources, etc. Further, the focus here is on the resources and capabilities rather than on strategies so you can look for the required resources and capabilities in the Internal Assessment section. In addition, keep in mind it is premature to make recommendations at this point. Do not propose the same point as an opportunity and a threat. Also, please note that each opportunity/threat should be unique and distinct from other opportunities/threats that you have provided. Write three paragraphs for the external assessment, one on each opportunity or threat. Add an exhibit to further strengthen your external assessment. The point of the exhibit is NOT to compress as much text as possible but to clarify and support your external assessment given in the text. Remember to refer to your exhibit in your external analysis write-up. Note: You are expected to bring no more than three items in total for opportunities and threats. It may mean two opportunities and one threat, or one opportunity and two threats, etc. We are NOT asking for three opportunities and three threats—i.e., we are not asking for six items for this section in total. We are asking for a total of three items for opportunities and threats! If this section is shorter than one page, you may start the next section where it ends. Internal Assessment: Resources & Capabilities (about 1 page) Similar to the external assessment assignment, this part of the case write-up concentrates on the nature of the internal environment of the company. Chapter three of Hill, Schilling, and Jones’ book and Barney’s VRIO framework (see readings on Looking Inside for Competitive Advantage and Crown Cork and Seal example included in the course package) provides you with concepts for this assessment. What key strengths, weaknesses, distinctive competencies, or sustainable distinctive competencies can it call upon and exploit for future benefit and growth? Can the firm sustain its competitive advantage? How will the firm’s weaknesses affect its future performance? What role will stakeholders’ preferences play in the future for this firm? How financially healthy is the firm? These are all questions you should consider when examining the current health and strength of the company. You may begin with the key success factors that you identified in the external assessment to evaluate whether the company has them, if they are rare, and hard to copy for other firms. You should also think about the key success factors this company lacks so as to build the required competencies. Keep in mind that even though the facts given may be about the past or current state of the company (as you know, facts about the future are usually not available to decision-makers!), your task is to draw out the strategic implications of the elements mentioned above for the future. That is the only way this assessment can provide a strong foundation for the subsequent sections of the paper (e.g., for building alternatives and recommendations). Be sure to conduct a VRIO analysis and Financial Analysis before writing this section. How to Write This Section? The objective of an internal assessment is to determine what the company can do in the future. Definition of Business. First, provide a definition of the business of the company in the first paragraph succinctly. Be sure to name the business of the company, major business segments, and geography. VRIO Analysis. Second, use Barney’s VRIO framework to uncover a firm’s key weaknesses, strengths, distinctive competencies, and sustainable distinctive competencies. Again the critical part is not to identify but to analyze and synthesize. As you write this section, think of top three key strengths, weaknesses, distinctive competencies or sustainable distinctive competencies (S/W/DC/SDC). Write one paragraph on each of them, clearly revealing whether the selected resource/capability is valuable, rare, and inimitable and WHY? Be sure to give the rationale in the text (not in the exhibit). Also, address whether the firm has the organization (structure) and complementary resources to take advantage of the resource/capability being discussed in the paragraph. Also be sure to mention whether the resource/capability is a weakness, strength, distinctive competence, or sustainable distinctive competence. In the past, we have seen some students name three S/W/DC/SDCs in one paragraph. Then, in the second paragraph, they evaluate whether or not each of them is valuable. After that, in the third paragraph, they go on to analyze whether they are rare. Over the years, we have found that the “bunched up” format is more confusing for the reader. Therefore, it is better to focus on one S/W/DC/SDC in each paragraph. A special note about weaknesses. Students often ask whether they should bring up a weakness or not. Our response is: Bring it up if it is a strategic weakness that you think is important for the top management to address for their strategy to be successful in the next five years. If you do bring it up, keep it mind that you should analyze whether or not it can become strength, distinctive competency, or sustainable distinctive competency, if the company invests in it. Also, be sure to come up with ways to make up the weakness as part of your strategy when you are building the strategic alternatives! In the text, you will raise the top three items for strengths, weaknesses, distinctive competencies, and sustainable distinctive competencies. Therefore, look at an Appendix given in the course package after the Barney’s article on Looking Inside for Competitive Advantage. Before writing the text for internal assessment, prepare an exhibit (similar to the one given for the Crown Cork and Seal Company) that shows all relevant areas (not just the top three items) of the value-chain and whether or not they are valuable, rare, and inimitable (see Exhibit A in this document). We are not expecting you to provide rationale for each of the items in the exhibit. When you are examining the value chain, you may add an activity that is relevant for the case under study or delete an activity that is not relevant. For example, for a service firm, you may use “Operations” rather than “Manufacturing” given in the value chain. Remember to refer to your exhibit in your internal analysis write-up. Note: In the text, you are expected to bring no more than three items in total for strengths, weaknesses, distinctive competencies, and sustainable distinctive competencies. Keep in mind two points: (1) We are NOT asking for three items for strengths, three item for weaknesses, three items for distinctive competencies, and three items for sustainable distinctive competencies. That is, we are not looking for a total of 12 items; we are only looking for a total of three items. (2) The three items do not have to include one item from each category (categories being strengths, distinctive competencies, and sustainable distinctive competencies). They could all be strengths, distinctive competencies, or sustainable distinctive competencies. As mentioned above, students may include strategic weaknesses as well but the total number of items must not exceed three. Internal Assessment: Financial Performance and Future Financial Capacity (about 0.5 page) Make an overall assessment of the financial performance of the organization based on your analysis and indicate the financial strength and future financial capacity of the firm to carrying out possible future initiatives/strategies (Future financial capacity refers to the amount of capital (money) the company can raise to invest in the next five years?) Can the company raise the money that you will be using for your recommendation? If yes, how? (e.g., debt, equity). Keep in mind the future orientation of the assessment rather than living in the past. Add an exhibit on ratio and other financial analysis (see Exhibit B in this document) and be sure to refer to it in your text. Current Strategies and their Implementation (about 0.5 page) In this section, analyze and evaluate the current business (Chapters 5 and 6), corporate (Chapters 9 and 10), global (Chapter 8), and major functional strategies (Chapters 4, 6 and 7), as well as important issues related to implementation: organizational structure, control systems, culture, and processes (see Chapter 12 in the textbook).3 You may have noticed, business strategy is key to competitive advantage, therefore the most focus in the course and in this paper is on business strategy. Keep the future orientation in your mind as you analyze them so your analysis and synthesis are relevant for the next sections of this paper. These strategies represent status-quo in the company. This section will clarify the current practice of strategic management in the 3 You are welcome to consult the chapters in the textbook in advance but the instructor’s expectation will be that you will consider the chapters that have been covered up to the point of the case assignment, the midterm, or the final exam. company so it is easier for the reader to understand how strategies will be changed when you present the strategic alternatives in section VII. Be sure to complete Exhibit C before writing this section and provide a succinct write up of the same in the text. Needless to say, both Exhibit C and this section should be consistent with each other. Key Issue(s) of the Case (about 0.5 page) In this section, you are to further zoom in on, synthesize, and clarify in a paragraph or two what you think the firm’s key issues are in going forward successfully into the future. There are likely three types of issues present: (1) the readily visible and pressing; (2) the more underlying and long term; and (3) the future ones not yet impacting the firm, but identified in your preceding sections. The visible issues are the challenges that you readily identify in reading the case. For example, decreasing profitability in the face of increasing sales might be an issue in a case. Other examples include diminishing market share, obsolescence of machinery, and need to expand operations. The visible issues can often be seen as symptoms of more long term and substantive underlying issues or problems facing the firm. For example, decreasing net margin may be because of inefficient production, increased administrative spending, or falling market interest in your product. The purpose of this section is to link these issues with your external and internal observations and to summarize what it all means for the firm and its future. If there is any ambiguity or inconsistency in the case, it is within this section that you clarify them in terms of key issues, and set the launch point for the next section—strategic alternatives. Be sure to structure the key issues of the case in the three categories mentioned above rather than providing a laundry list of the key issues. Students often ask how many issues should they identify as the key issues. Our response is that you may have 1-2 issues in each of the three categories mentioned above and in total you may have 4-6 issues. Implementable Strategic Alternatives (about 1 page) In this section, you should identify and develop two strategic alternatives that the firm could pursue. They should take into account the internal and external assessment (feasibility), be consistent with the organization’s mission (legitimacy) and should provide a way of dealing with the key issues of the case (relevance). The alternatives should also be representative of the key feasible, legitimate, and relevant choices that management has at the time of the decision making without gaining the advantage of hindsight. A good set of alternatives, therefore, must involve major differences (and real choices) rather than different variations of the same strategy. Your two alternatives should be mutually exclusive because strategy requires commitment and risk-taking. It involves selecting some paths and rejecting others. However, if there is a compelling case to follow two alternatives simultaneously then combine them into a separate “composite” alternative and compare it to another composite alternative. Keep in mind that the alternatives need to be comparable. If one alternative is clearly superior then it is not a fair comparison. Sometimes, students tend to come up with a weak alternative to make their preferred alternative look better. It is not a good practice and should be avoided. If there are things that you would like to do irrespective of the alternatives, you may write them in this section in a separate paragraph before describing your two alternatives. Alternatives must be strategic (not operational) in nature and consider the usual planning horizon for organizations, which is about five years. Any alternative that deals with the issues for the next six months to one year and then asks the management to re-assess its situation is an operational alternative and may be suitable for a functional-area case analysis but not for a strategic management case analysis. For example, a marketing campaign by itself is a popular operational (not strategic) alternative. A marketing campaign along with other functional areas such as starting a new manufacturing plant, changes in supply chain management, introducing new products, etc. can form the basis of a strategic alternative. These alternatives may be framed in terms of business strategies and corporate strategy terms, depending on the issues of the case. However, do not neglect consideration of other important issues that may hinder implementation of your strategies. Therefore, consider issues of structure, systems, processes, resources, culture, etc. when formulating alternatives, developing criteria, evaluating alternatives, and making recommendation. For example, it is important to think of a multilateral match of environment, strategy, structure, systems, technology, culture, etc. before recommending a major strategic change. It is never easy to match several different elements so creativity with a solid foundation is important for the paper. It is essential that the paper flows from one section to another and this section is an important linchpin in building that flow. To help you think of the strategic alternatives, we have attached Exhibit D. You are required to complete this form for each of the alternatives (two exhibits for the two alternatives) and attach it with your paper and concisely describe the alternative in the text. Do not refer to the alternatives by number. Use a short name (for example: the low-cost strategy) as an identifier. All exhibits must also be typewritten or word-processed (not handwritten). It is a good practice to first complete the exhibits and then summarize the alternatives in the text. Keep in mind that the point is to strategically manage the company and thus simply selling the company or the status quo are not acceptable alternatives. If you are recommending an alliance or merger with a company, name the company with which to have an alliance or a merger. Also, be sure to provide positive evidence that the target company will be interested in an alliance or a merger. Criteria and Evaluation of Alternatives by Criteria (about 1.5 pages) In this section, first, you should outline and justify the three or four criteria (not more than four) by which you will evaluate the strategic alternatives developed in the preceding section. There should be some financial and some non-financial criteria. Financial criteria often include net present value and payback period. Other financial criteria may be dictated by the circumstances of the case. For example, there may be the need to achieve a certain return on investment in order to attract investors. Values and preferences of the managers or other stakeholders, as outlined in internal assessment, may influence non-financial criteria. In addition to the effect on shareholders (which may be captured in terms of profitability or net present value), another important criterion is the effect of decisions on other stakeholders. These stakeholders may include customers, employees, environment, government, community, etc. Here are two criteria that are required for your case analysis: (1) Net Present Value (2) Effect on Various Stakeholders (other than shareholders). Among the stakeholders, at least choose customers, employees, and environment (sustainability) as stakeholders. You may also add other stakeholders, depending on their relevance. In addition, you may choose one or two other criteria that may be relevant to your case analysis. However, be careful to choose output- oriented criteria rather than input-oriented criteria (such as level of investment, ease of implementation, etc.). Further, as noted in the Implementable Strategic Alternatives section, each alternative must be feasible, legitimate, and relevant. Thus, feasibility (taking into account external and internal assessment), legitimacy (consistency with the organization’s mission), and relevance (addressing key issues) cannot be used as criteria for evaluation. In addition, your strategic alternatives should be strong enough to produce positive results within five years. If it is impossible to get positive results of your strategy in five years, you may extend your evaluation of the alternatives to ten years. Finally, your criteria and evaluation should be structured as provided in Exhibit E rather than having a laundry list of criteria. Once you have chosen the criteria by which you will assess the alternatives, you must then evaluate each of the alternatives using (all) these criteria. Besides financial and non-financial costs and benefits, consider risks involved in the alternatives. What financial projections and computations need to be made will depend on your criteria (Keep in mind that you must have some financial and some non-financial criteria). Do not get misled by the apparent precision of the numbers in your forecasts. These numbers may represent an average of a range of values from pessimistic to optimistic scenarios. In fact, the numbers may change dramatically depending on your assumptions. All assumptions must be realistic, defendable and clearly presented in the exhibits. You may comment on the sensitivity of your findings with respect to your starting assumptions. Please remember that this is a strategy assignment, and not an accounting one. You may thus adopt accounting procedures accordingly. If you choose to use strictly accounting guidelines, however, feel free to do so. There are two ways of writing this section. You may choose to write it either way: Evaluate both alternatives by criterion one in the first paragraph, followed by evaluating both alternatives by criterion two in the second paragraph and so on; or Evaluating the first alternative by all the criteria in the first paragraph, followed by evaluating the second alternative by all the criteria in the second paragraph, and so on. Recommendation and its Implementation (about 0.5 page) Drawn from the previous sections of the report, state your strategy recommendation, followed by an implementation discussion. You should include a brief reiteration of the recommended strategy and a discussion of how it meets the selected criteria. If it has not been explicitly stated before, the recommendation should cover all relevant aspects of strategy, structure, control, resources, culture, etc. as applicable in the case. Never recommend a combination (of two or more alternatives) that was not proposed as a single alternative in the strategic alternatives section and was not evaluated in comparison with the other alternative in the previous section. The implementation discussion will describe how the recommended strategy will be translated or made into reality. Discuss the relevant action steps, their timing, and implementation budget with respect to the issues of structure, process, control, resources and culture. Be sure to address how you will finance any costs/investments associated with your recommended strategy as well as its expected benefits. Please do not suggest that the company should study the issues further and then decide about its strategies. You have been selected as a consulting company to analyze, synthesize, and make recommendations for the company’s strategy for the next five years. Add an exhibit on action steps, their timings, and levels of investment to support your implementation discussion. Limitations and Critique of Recommendation (about 0.5 page) In this section, you should discuss the implications of your recommendation as well as its limitations. For example, are there any negative consequences to your recommended strategy? What are other costs or risks that were not considered at the time of evaluation of alternatives? How can they be minimized? Is your recommended solution able to address all the underlying issues, or does it have limitations? Do you foresee changes that will impact on your recommendations? This section can help strengthen your strategic alternatives. For example, if you are writing limitations that you may have control over, you may prefer to incorporate ways of dealing with them in your alternatives. In other words, this section should represent things that you may not have control over. Exhibits Keep in mind that all important points need to be brought into the text. The exhibits should be used to support the points in the text. Do not skip any section (For example, a student who thought of saving space referred the reader to the exhibits and did not summarize the alternatives in the body of the text. This resulted in a huge loss for the student). Other than the required exhibits listed below, you may not attach any more exhibits to your paper. All attachments must be relevant, and they must be referred to in your write-up. The conclusion and key figures (if applicable) from each exhibit should be referenced and drawn into the text at the appropriate point; the reader should not have to flip from the text to the exhibit in order to understand your point. Analogously, each exhibit should include one or two lines of text at the bottom, stating its conclusion, and demonstrating its relevance to your argument. The reader should never be left wondering why a particular exhibit was included. The point of the exhibits is NOT to compress as much text as possible but to clarify and support your assessments given in the main body of the paper. Please make sure that the font in the exhibits is as mentioned below. IMPORTANT NOTE ABOUT EXHIBITS All the 11 exhibits mentioned below are required. Do not attach any other exhibit. Each exhibit must begin on a new page. Each exhibit must be one page only (Exhibit 1 is one-half page). Here are further details regarding each of the 11 exhibits: Exhibit 1: External Analysis (one-half page; double space, 12 point font; basically mention top 3-5 major points in bullet form in not more 10 lines. In this exhibit, you may: (a) further clarify the three opportunities/threats you raised in the External Assessment section; (b) provide further evidence for the three opportunities/threats you raised in the External Assessment section; c) provide three additional opportunities/threats, their evidence, or key success factors; and/or d) analyze five forces model, strategic group analysis, macro-environmental forces, etc. None of the items mentioned above are required. However, this exhibit is required so simply use your judgment to provide further information about external assessment on any aspect. You may avoid running text, except 2-3 lines the conclusion of the exhibit). Please note the conclusion for this exhibit and other exhibits (as noted below) is expected to be 2-3 lines, not 2-3 sentences because sometimes a sentence can be very long! Exhibit 2: Internal (VRIO) Analysis (one page, follow the format given in Exhibit A, 12 point font; no running text, except 2-3 lines of conclusions) Exhibit 3: Financial Analysis: Ratio Analysis of the current (and historical situation) (one page; double space, 12 point font). See Exhibit B. The objective is to give the numbers, not the running text, but be sure to include 2-3 lines of conclusion of the exhibit. The numbers should enable you to diagnose the current situation and estimate the future financial capacity of the firm (to be given in the last paragraph of Internal Assessment section of the paper). For the ratios, there is no need to show the calculations. Provide all the ratios in a table for at least three years so one can see the trends. Evaluate the company’s past and current financial performance and assess its future financial capacity to formulate and implement strategies. In the write-up, you will interpret the ratios and their trends that help you figure out the financial performance of the company. The goal is to know financial capacity of the company, i.e., how much capital (money) can the management raise for implementing the strategy in the next five years? The exhibit should have the financial ratios, depending on the availability of data: Profit ratios, liquidity ratios, activity ratios, leverage ratios, and shareholder return ratios. Further, you may consult the note on “Analyzing a case study and writing a case study analysis” in Hill, Schilling, and Jones’s book (pages C8-C12) given in 11th and 12th edition of the book. No running text in the exhibit, except 2-3 lines of conclusions. You may use single spacing for the exhibit. Exhibit 4. Current Strategies and their Implementation (See Exhibit C, one page, 12 point font, use bullet points rather than sentences here, single or double space, no need of conclusion of exhibit) Exhibits 5-6: Strategic Alternative Descriptions (See Exhibit D, one page for each alternative so you will have Exhibit 5 for the first alternative and Exhibit 6 for the second alternative; 12 point font, use bullet points rather than sentences here; single or double space; no need of conclusion of exhibit) Exhibit 7: Assumptions and Justifications (One page; 12 point font, double space). Provide assumptions (for NPV projections as well as other decisions) and their justifications. These assumptions may include, but are not limited to: realistic growth rates (for revenues, costs, and expenses incurred by the firm), interest rates, income taxation rate, exchange rates, and many others that you need to make useful projections and make other decisions in the case. See page 24 (i.e., the last exhibit) of the Westover Inn (A) Case also. There is no need of conclusion of this exhibit. (Please use a separate page for this exhibit rather than providing the assumptions and justifications at the bottom of the NPV exhibit so that you have more space. Use numbers (e.g., 1, 2, 3, …) to cross-reference the NPV exhibit and the Assumptions and Justifications exhibit. As you will note, in the last exhibit of the Westover Inn case, the authors provide assumptions at the bottom. But, their justifications are in the case. However, we expect that you will provide assumptions as well as justifications on a separate page. Be sure to use double space in the exhibit even though you may be tempted to use single space. We are interested in the major assumptions and justifications and understand that you can provide all the details on one page. Each though you will have two exhibits for NPV analysis (Exhibits 8-9); you will have only one exhibit for assumptions and justifications. Exhibits 8-9: Strategic Alternative Net Present Value (NPV) Analysis (not more than one page for each exhibit, i.e., maximum two pages for Exhibits 8-9; single or double space, 12 point font). Avoid running text, except 2-3 lines of conclusion. For the numbers, you may avoid the use of decimals and/or represent the numbers in 000’s or millions to save space. See page 24 (last exhibit) of the Case: Westover Inn (A) in the course package for an example to use for team assignment and team exams. For individual assignment or exam, you may use the same format or a summary format to show the financial revenues and costs of each alternative. Exhibit 10: Evaluation of Alternatives by Criteria (see Exhibit E). Please indicate your assessment of how the alternatives will impact each part of the criterion. Be sure to discuss your assessments (along with the NPV numbers) as well as their rationales in the “Criteria and Evaluation of Alternatives by Criteria” section of the paper. The exhibit should not exceed one table/one-half page. Avoid running text, except 2-3 lines of conclusion. Use 12 point font, single or double space. Exhibit 11: Implementation Schedule / Action Plan (one-half page, double space, 12 point font); Use bullet form and avoid running text, except 2-3 lines of conclusion. Be sure to show the timeline, actions, and the level of investment for each step for the normal planning horizon of strategies, which is about 5 years. This document includes Exhibits A1, A2, B, C, and D. EXHIBIT A VRIO ANALYSIS OF THE COMPANY (Example: Crown Cork and Seal, from Jay Barney (Gaining and Sustaining Competitive Advantage, 1997; Modified slightly to show more variety of competitive implications)) (Use any value chain depending on its suitability to the company you are studying. Add value chain activities and attributes that are relevant to the case and delete those that are not. Be sure to mention in this exhibit if something is a strategic weakness and how you plan to overcome that weakness.). Your particular company will demand special and unique treatment, but the following is intended to serve as an illustration of the format for a fictitious company expected within the Internal Assessment Exhibit. EXHIBIT # (INTERNAL ASSESSMENT) Value Chain Activities Specific Attributes Along the Value Chain V R In W/S/DC/SDC O Competitive Implication: Likely to have Purchasing high quality inputs Yes No Strength Yes Competitive Parity Inventory Holding reliable supply able to meet unexpected orders on short notice Yes Yes No Yes Yes Strength Sustainable Distinctive Competence Yes Yes Competitive Parity Sustainable Competitive Advantage Design & Engineering speciality containers for multiple purposes Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Manufacturing inconsistent product quality No Weakness Competitive Disadvantage* Distribution speedy & flexible delivery Yes Yes No Distinctive Competence Yes Temporary Competitive Advantage Sales fast, reliable order processing Yes Yes Yes Sustainable Distinctive Competence No Unrealized Sustainable Competitive Advantage Service & Tech Support speedy & competent maintenance and quality technical advice Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Use the following space for two or three lines of CONCLUSIONS concerning the company’s value chain competencies and how you will overcome the weakness(es)*. VRIO Supplemental Material Below are questions to ask to help determine whether a particular resource or capability is a STRENGTH or WEAKNESS by referring to the table on the following page. (Note you will first have to identify specific resources and capabilities (e.g. from a Value Chain) prior to using the VRIO analysis and the questions below for analyzing each resource or capability one by one) VALUABLE “Is the resource or capability likely to enable a firm to capitalize on opportunities and/or neutralize threats in the future?” Why? (provide the rationale and name an opportunity that the organization can capitalize on or a threat the organization can neutralize? RARE “Is the resource or capability likely to be rare in the future?” Why? INIMITABLE “Is the resource or capability likely to be inimitable in the future (difficult to copy—consider cost and time for imitation)?” Why? ORGANIZATION “Is the firm likely to be organized to exploit the full competitive potential of its resources and capabilities in the future?” Why? Valuable? Rare? Inimitable (Costly to Imitate?) W/S/DC/SDC Exploited by organization? Competitive Implication: Likely to have Weakness Competitive Disadvantage Strength Competitive Parity N Unrealized Competitive Parity Distinctive Competence Temporary Competitive Advantage N Unrealized Temporary Competitive Advantage Sustainable Distinctive Competence Sustainable Competitive Advantage Unrealized Sustainable Competitive Advantage VRIO ANALYSIS OF THE COMPANY (Example: Crown Cork and Seal, from Jay Barney (from the textbook Gaining and Sustaining Competitive Advantage, 1997)) (Use any value chain depending on its suitability to the company you are studying. Add value chain activities and attributes that are relevant to the case and delete those that are not. Be sure to mention in this exhibit if something is a strategic weakness and how you plan to overcome that weakness.). Your particular company will demand special and unique treatment, but the following is intended to serve as an illustration of the format for the Internal Assessment Exhibit. Value Chain Activities Specific Attributes Along the Value Chain V R In W/S/DC/SDC O Competitive Implication: Likely to have Purchasing high quality inputs Yes No Strength Yes Competitive Parity Inventory Holding reliable supply able to meet unexpected orders on short notice Yes Yes No Yes Yes Strength Sustainable Distinctive Competence Yes Yes Competitive Parity Sustainable Competitive Advantage Design & Engineering speciality containers for multiple purposes Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Manufacturing inconsistent product quality No Weakness Competitive Disadvantage* Distribution speedy & flexible delivery Yes Yes No Distinctive Competence Yes Temporary Competitive Advantage Sales fast, reliable order processing Yes Yes Yes Sustainable Distinctive Competence No Unrealized Sustainable Competitive Advantage Service & Tech Support speedy & competent maintenance and quality technical advice Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Use the following space for two or three lines of CONCLUSIONS concerning the company’s value chain competencies. In addition, you may add how you will overcome the weakness(es)*. EXHIBIT B FINANCIAL ANALYSIS: RATIO ANALYSIS Note: We have listed five types of about 25 ratios here. You may consider these and other relevant ratios. Please provide at least 10 ratios in this exhibit covering each of the five types of ratios mentioned here. Thus, be sure to include at least two ratios of each type. Then, write the conclusion in 2-3 lines. Name Year Year Year PROFIT RATIOS 1. Return on Investment 2. Return on Assets 3. Return on Equity 4. Gross Margin 5. Operating Margin 6. EBIT Margin 7. EBITDA Margin 8. Pre-tax Profit Margin 9. Net Profit Margin LIQUIDITY RATIOS 1. Current Ratio 2. Quick Ratio ACTIVITY RATIOS 1. Asset Turnover Ratio 2. Inventory Turnover Ratio 3. Receivable Turnover Ratio 4. Days Sales in Receivables LEVERAGE RATIOS 1. Debt to Assets Ratio 2. Debt to Equity Ratio 3. Long-term Debt to Capital Ratio 4. Interest-Coverage Ratio SHAREHOLDER-RETURN RATIOS 1. Total Shareholder Returns 2. Price-Earnings Ratio 3. Market-to-Book Ratio 4. Dividend Yield 5. Book Value Per Share 6. Operating Cash Flow Per Share 7. Free Cash Flow Per Share EXHIBIT C CURRENT STRATEGIES AND THEIR IMPLEMENTATION (Use bullet points rather than complete sentences. Fill in the answers using wordprocessor in the space provided. The exhibit should not exceed one page) Name(s) of the Business Strategy(ies) Customer Needs (If fulfilling multiple needs, be sure to specify which needs in what markets; see Chapters 3, 5 & 6) Customer Groups (may involve geographic, demographic or other market segmentation parameters; Chapters 3, 5 & 6) Basis for Competition (Be sure to be specific in non-generic terms. For example, for Low Cost, is it superior efficiency due to low cost production or something else? For Differentiation, is it based on superior quality, innovation, and/or customer responsiveness; for Focus, what parameters, e.g., is it customer segment, product segment, market segment, etc.; Chapters 3, 5 & 6) Corporate Strategies (Single business, vertical integration, horizontal integration, related diversification, unrelated diversification, strategic alliances, outsourcing, etc. Chapters 9 & 10). Placement in the Value System (e.g., retailer, wholesaler/distributor, manufacturer, importer, or combination thereof; for details, you may see Chapters 9 & 10) Global Strategies (you may see Chapter 8 for details) Major Functional Strategies (Chapters 4, 6 & 7) Implementation: Structure, Process, Controls, and Culture (you may see Chapter 12 for details). Others EXHIBIT D COMPREHENSIVE STRUCTURE OF A STRATEGIC ALTERNATIVE (Use bullet points rather than complete sentences. Fill in the answers using wordprocessor in the space provided. The exhibit should not exceed one page) Name of the Alternative or Strategic Goal Identifier (Write the name of the strategy here with any special characteristics, e.g., Focused low cost with expansion to Mexico) Customer Needs (If fulfilling multiple needs, be sure to specify which needs in what markets; see Chapters 3, 5, & 6) Customer Groups (may involve geographic, demographic or other market segmentation parameters; Chapters 3, 5 & 6) Basis for Competition (Be sure to be specific in non-generic terms. For example, for Low Cost, is it superior efficiency due to low cost production or something else? For Differentiation, is it based on superior quality, innovation, and/or customer responsiveness; for Focus, what parameters, e.g., is it customer segment, product segment, market segment, etc.; see Chapters 3, 5 & 6) Corporate Strategies (Single business, vertical integration, horizontal integration, related diversification, unrelated diversification, strategic alliances, outsourcing, etc. see Chapters 9 & 10). Placement in the Value System (e.g., retailer, wholesaler/distributor, manufacturer, importer, or combination thereof; Chapters 9 & 10) Other (could include points related to functional strategies (chap. 4, 6 & 7), global strategies (Chapter 8), implementation (Chapter 12), or anything else that is important for the alternative) Key Issue(s) Addressed by this Alternative FEASIBILITY JUSTIFICATION FOR THIS STRATEGIC ALTERNATIVE Environmental Opportunity(ies) (evidence, independent of the organization, which suggests that this alternative could meet with success) Environmental Threats, Risks (that could limit success of this alternative. Be sure to address how these can be overcome) Present Corporate Attributes relevant and sufficient to this alternative (Strengths, Distinctive Competencies, or Sustainable Distinctive Competencies): Missing and/or insufficient Corporate Attributes (Weaknesses) (Attributes that would have to be acquired and/or improved in order to implement this alternative. Be sure to address how these can be overcome) EXHIBIT E EVALUATION OF ALTERNATIVES BY CRITERIA (Please indicate your assessment of how the alternative will impact each part of the criterion. Be sure to discuss your assessments (along with the NPV numbers) as well as their rationales in the “Criteria and Evaluation of Alternatives by Criteria” section of the paper. Fill in the answers using wordprocessor in the space provided. The exhibit should not exceed one table/one-half page) Criteria Name of Alternative 1 Name of Alternative 2 Shareholders Net Present Value Provide NPV number here along with units of money Provide NPV number here along with units of money Stakeholders Customers Effect: Positive/Negative Level of effect: High/Moderate/Low Effect: Positive/Negative Level of effect: High/Moderate/Low Employees Effect: Positive/Negative Level of effect: High/Moderate/Low Effect: Positive/Negative Level of effect: High/Moderate/Low Environment (Sustainability) Effect: Positive/Negative Level of effect: High/Moderate/Low Effect: Positive/Negative Level of effect: High/Moderate/Low Other stakeholder(s) (Optional): Please specify Effect: Positive/Negative Level of effect: High/Moderate/Low Effect: Positive/Negative Level of effect: High/Moderate/Low Other (required) Please specify Other (optional) Please specify Page 1 of 40
This is a very brief and heavy assignment and it has finance, accounting, and management tasks involved. I have not posted the case yet. The attachment is just a list of introductions that need to be
External Assessment The strategic group that this external is based on is the health care industry consists of businesses which provide medical services and instruments, Equipment and facilities. The health care industry includes various segments with major being Health care services, Medical equipment and Gadgets e.g. Health Technology, Pharmaceuticals, Hospital Supplies, Medical Insurance. (KHARTIT, 2021). Geographic healthcare access includes availability, service variety and distribution, and physical accessibility. An opportunity of substantially lower ratio of new entrants in the healthcare industry is considered to be true as companies in pharmaceuticals and medical instruments & equipment manufacturing industry usually have to invest a very big amounts of set and R&D. Also, they need to go through a number of restrictions from regulatory authorization for drugs and have to face regulatory hurdles when setting up the manufacturing plant. Many of the smaller size companies which try to enter the industry or to setup manufacturing units are usually acquired by other companies having grater market share and new entrants mostly end up being merged with one of them. (Hotiya, 2020) A threat of substitute products are considered to be of highest importance in the healthcare industry. According to various studies, customers prefer cheaper prescription products. Cheaper drugs of same prescriptions by competitors may cause a direct threat to the company with expensive drugs in the health care industry (Hotiya, 2020). Another threat of competitive rivalry is also considered to be one of the biggest threats. Every company is investing huge amounts on R&D to develop new drugs to cure diseases or inventing new ways and procedures to make surgical procedure safer and better. And the companies wanted and needed to do such before their competitors. After that, they needed to spend big amounts on advertising and marketing of the products. This way the companies try to seek top mind share of their prescribers, introducing samples to clinics and hospitals. All this lead to a heavy price competition in the market. Internal Assessment For a company like Philips operating in Health care industry and more specifically health technology got to have the key success factors as mentioned in Exhibit B to be able to attain sustainability and future benefit. The Philips Company has been in the tech world for a very long time and had the innovations way before other companies. Innovations in Medical devices, Equipment and pharmaceutical divisions have made Philips company unreachable for its competitors. (Bina, 2014) Diversity has been one of the main strength and key success factor for the company. The company is currently working in following segments of the industry: developing medical equipment, drugs, vaccinations, procedures, and systems to address a health issue. (Bina, 2014) Following are the key success factors that the company is currently lacking The Company is currently limited to some geographical areas and has not expanded in a while so lacking experience in other health care industry internationally. This could create a gap between international demand and trade of such industry. (Ito, 2019) Reengineer fundamental patient procedures along with patients to take use of technology and provide a vastly improved patient engagement and experience. To conclude with the VRIO analysis (Exhibit B), the Philips Company has competitive advantage over its rival firms in R&D and Medical Equipment manufacturing. But the company do have Weaknesses e.g. Marketing, Selling & Distribution. Financial assessment We will use the following ratios from Exhibit C to assess Philips group’s financial performance: Return on Assets (ROA), Return on Equity (ROE), Quick Ratio, Debt to Equity Ratio (D/E), and Price-Earnings Ratio (P/E). Their ROA shows that they have managed to effectively use their assets to generate profit steadily. The impact of Covid-19 has dramatically reduced major healthcare groups’ ROA to extremely low values – some at around 1% (Macrotrends, 2022). Philips group has proven to be robust of their environment and we expect them to elevate their ROA in the next five years after Covid-19. In contrast, their ROE is low and D/E ratio is high compared to their peers (Macrotrends, 2022). They are borrowing money and that will increase their annual fixed expenses and decrease their dividends to shareholders. This is undesirable for their stockholders and will not attract future investors in the long-run. They have high leverage which will be detrimental in the next five years if there is no direct action taken. Their Quick Ratio is below 1 and retains its trend in subsequent years, which indicates that they do not have strong capabilities to quickly liquidate their assets in order to pay their short-term debts (Hill et al, 2017). They need convert their assets into liquid assets better in the next five years. Philips group’s P/E ratio is in the higher tiers compared to their peers (Macrotrends, 2022). This means their investors are willing to pay substantially more than how much the company is earning. In the upcoming five years, Philips group will need to increase their payouts to investors and prove that they are, in fact, growing more yearly in order to retain their capital. References Bina, S. S. (2014, May 19). 10 Critical Success Factors for the Future of Healthcare. Retrieved from beckershospitalreview.com: https://www.beck ershospitalreview.com/hospital-management-administration/10-critical-success-factors-for-the-future-of-healthcare.html Google.com/finance Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: Theory & cases: An integrated approach. Cengage Learning. Hotiya, S. (2020). Porter’s five forces model – Health Care Industry. Retrieved from 12manage.com: https://www.12manage.com/forum.asp?TB=healthcare_management&S=2 Ito, R. (2019, October). Health Care Industry: Special Issues. Retrieved from insigniam.com: https://insigniam.com/indispensability-improving-medical-service/ Khartit, K. (2021, October 31). Healthcare Sector. Retrieved from Investopedia: https://www.investopedia.com/terms/h/health_care_sector.asp Macrotrends.net EXHIBIT A (EXTERNAL ASSESSMENT) Sr. No. Opportunities / Threats Key Success Factors 1 Opportunity of substantially lower ratio of new entrants Indispensability Expanding operations geographically 2 Threat of substitute products Reinventing Patient Experience Innovation 3 Threat of competitive rivalry Indispensability Diversity EXHIBIT B (VRIO) Value Chain Activity Specific Attributes Along the Value Chain V R I W/S/DC/SDC O Competitive Implication Likely to have Sales Expanding Operations Geographically Subscription Based, Big Network Strength Competitive Parity R&D Innovation, Staff Training, Product Diversity Competitive Advantage Competitive Advantage Marketing and Distribution Insufficient Reach to potential subscribers or contractors Weakness Competitive Parity Service and Support Service Division, Reparability, Reinventing Patient Experience Strength Competitive Parity Medical Service & Facilities Fast, Reliable Strength Competitive Parity Medical Equipment Manufacturing Innovative and Reliable Medical Equipment Competitive Advantage Competitive Advantage EXHIBIT C (FINANCIAL RATIOS) Name Year 2018 Year 2019 Year 2020 PROFIT RATIOS       1. Return on Assets (ROA) 4.78% 4.05% 4.03% 3. Return on Equity (ROE) 9.45%  8.56% 5.70% 4. Gross Margin 47.20% 45.55% 44.95% 5. Operating Margin 9.49% 8.44% 7.89% 6. Net Profit Margin 6.05% 6.02% 6.12% LIQUIDITY RATIOS       1. Current Ratio 1.21 1.36 1.45 2. Quick Ratio 0.87 0.96 1.06 ACTIVITY RATIOS       1. Asset Turnover Ratio 0.53 0.41 0.55 2. Inventory Turnover Ratio 5.42 3.97 5.18 3. Receivable Turnover Ratio 3.43 2.51 3.43 LEVERAGE RATIOS       1. Debt to Assets Ratio (D/A) 0.19 0.20 0.25 2. Debt to Equity Ratio (D/E) 1.15 1.32 1.33 SHAREHOLDER-RETURN RATIOS       1. Price-Earnings Ratio (P/E) 26.47 34.34 33.94 2. Dividend Yield 2.61% 1.93% 1.94% *share prices provided by Google.com/finance Investors seem to over-value Philips group, Gross margin is lower than competitors ROA is promising but ROE and Leverage Ratios are worsening Current and Quick Ratios are not optimistic, Activity Ratios are low compared to peers Net Present Value (NPV) Assessment (EXHIBIT) After taking a look at the assessments, we are now able to discuss and configure two alternatives that may help Philips to increase their earnings and improve the quality of their company. What we can see from the VRIO analysis is that they have competitive advantages as well as one weakness in their marketing sector. This makes it obvious that we can use the competitive advantages to our benefit and that we need to do something about their marketing strategies. We have come up with two alternatives which are both focusing on the marketing sector. Phillips needs to build up an online presence to increase the exposure it receives as well have more communication with its customers. Our second alternative focuses on another marketing strategy which involves using billboards as well as print ads which will be distributed across the country and their geographic focus area. Each of the alternatives should increase the exposure that the company receive but we will decide upon one of them depending on the effects that it will have on the different criterias. If they invest another value of 210 million dollars for either alternative we can calculate it at a discount rate of 5% for the online presence and 10% for the billboard/print option over the next 5 years. Criteria Online Presence Billboard/Print Shareholder NPV 164540495 130393477.8 Stakeholders Customers Effect: Positive Level of effect: High Effect: Positive Level of effect: Moderate/Low Employees Effect: Positive Level of effect: Moderate Effect: Positive Level of effect: Moderate Environment Effect: Positive Level of effect: Low Effect: Negative Level of effect: Moderate Assumptions and Justifications (EXHIBIT) The company will need to implement some necessary changes in their marketing and selling/distribution sectors. We strongly believe that by first focusing on the marketing sector, the selling sector will increase simultaneously. Our assumption is that the company will need to invest a percentage of their profits into developing new marketing strategies to increase their exposure. Viral graphic content will also give customers the option to see their product in use and get an idea of what the product looks like, how it is used, and if it fits their needs. Since the company is very focused on oral health in the retail area, they can start offering their products different forms such as online. However for the online service they would need to ensure that the customers get all the information they need to make an informed decisions, which is very vital in healthcare. Philips group should think about having a consultant ready for live-time chat on their online platforms, this could include websites, online stores, and social media profiles. This should give the company a boost in the right direction, because in todays world people grow more and more health conscious and having a live consultant available when browsing through the products available, it can help them to find the perfect fit for them. These two projects are focusing on a short term change. For this company to be successful in the long run, they need to work on developing a service that is in-person and online for the customers ease and will be able to be one without leaving the house. The consultant online is a start, however it will need to be developed and changed to include video-calls, diagrams, and more data that can help customers decide even better what kind of health products/services they want and need.
This is a very brief and heavy assignment and it has finance, accounting, and management tasks involved. I have not posted the case yet. The attachment is just a list of introductions that need to be
External Assessment The strategic group that this external is based on is the health care industry consists of businesses which provide medical services and instruments, Equipment and facilities. The health care industry includes various segments with major being Health care services, Medical equipment and Gadgets e.g. Health Technology, Pharmaceuticals, Hospital Supplies, Medical Insurance. (KHARTIT, 2021). Geographic healthcare access includes availability, service variety and distribution, and physical accessibility. An opportunity of substantially lower ratio of new entrants in the healthcare industry is considered to be true as companies in pharmaceuticals and medical instruments & equipment manufacturing industry usually have to invest a very big amounts of set and R&D. Also, they need to go through a number of restrictions from regulatory authorization for drugs and have to face regulatory hurdles when setting up the manufacturing plant. Many of the smaller size companies which try to enter the industry or to setup manufacturing units are usually acquired by other companies having grater market share and new entrants mostly end up being merged with one of them. (Hotiya, 2020) A threat of substitute products are considered to be of highest importance in the healthcare industry. According to various studies, customers prefer cheaper prescription products. Cheaper drugs of same prescriptions by competitors may cause a direct threat to the company with expensive drugs in the health care industry (Hotiya, 2020). Another threat of competitive rivalry is also considered to be one of the biggest threats. Every company is investing huge amounts on R&D to develop new drugs to cure diseases or inventing new ways and procedures to make surgical procedure safer and better. And the companies wanted and needed to do such before their competitors. After that, they needed to spend big amounts on advertising and marketing of the products. This way the companies try to seek top mind share of their prescribers, introducing samples to clinics and hospitals. All this lead to a heavy price competition in the market. Internal Assessment For a company like Philips operating in Health care industry and more specifically health technology got to have the key success factors as mentioned in Exhibit B to be able to attain sustainability and future benefit. The Philips Company has been in the tech world for a very long time and had the innovations way before other companies. Innovations in Medical devices, Equipment and pharmaceutical divisions have made Philips company unreachable for its competitors. (Bina, 2014) Diversity has been one of the main strength and key success factor for the company. The company is currently working in following segments of the industry: developing medical equipment, drugs, vaccinations, procedures, and systems to address a health issue. (Bina, 2014) Following are the key success factors that the company is currently lacking The Company is currently limited to some geographical areas and has not expanded in a while so lacking experience in other health care industry internationally. This could create a gap between international demand and trade of such industry. (Ito, 2019) Reengineer fundamental patient procedures along with patients to take use of technology and provide a vastly improved patient engagement and experience. To conclude with the VRIO analysis (Exhibit B), the Philips Company has competitive advantage over its rival firms in R&D and Medical Equipment manufacturing. But the company do have Weaknesses e.g. Marketing, Selling & Distribution. Financial assessment We will use the following ratios from Exhibit C to assess Philips group’s financial performance: Return on Assets (ROA), Return on Equity (ROE), Quick Ratio, Debt to Equity Ratio (D/E), and Price-Earnings Ratio (P/E). Their ROA shows that they have managed to effectively use their assets to generate profit steadily. The impact of Covid-19 has dramatically reduced major healthcare groups’ ROA to extremely low values – some at around 1% (Macrotrends, 2022). Philips group has proven to be robust of their environment and we expect them to elevate their ROA in the next five years after Covid-19. In contrast, their ROE is low and D/E ratio is high compared to their peers (Macrotrends, 2022). They are borrowing money and that will increase their annual fixed expenses and decrease their dividends to shareholders. This is undesirable for their stockholders and will not attract future investors in the long-run. They have high leverage which will be detrimental in the next five years if there is no direct action taken. Their Quick Ratio is below 1 and retains its trend in subsequent years, which indicates that they do not have strong capabilities to quickly liquidate their assets in order to pay their short-term debts (Hill et al, 2017). They need convert their assets into liquid assets better in the next five years. Philips group’s P/E ratio is in the higher tiers compared to their peers (Macrotrends, 2022). This means their investors are willing to pay substantially more than how much the company is earning. In the upcoming five years, Philips group will need to increase their payouts to investors and prove that they are, in fact, growing more yearly in order to retain their capital. References Bina, S. S. (2014, May 19). 10 Critical Success Factors for the Future of Healthcare. Retrieved from beckershospitalreview.com: https://www.beck ershospitalreview.com/hospital-management-administration/10-critical-success-factors-for-the-future-of-healthcare.html Google.com/finance Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: Theory & cases: An integrated approach. Cengage Learning. Hotiya, S. (2020). Porter’s five forces model – Health Care Industry. Retrieved from 12manage.com: https://www.12manage.com/forum.asp?TB=healthcare_management&S=2 Ito, R. (2019, October). Health Care Industry: Special Issues. Retrieved from insigniam.com: https://insigniam.com/indispensability-improving-medical-service/ Khartit, K. (2021, October 31). Healthcare Sector. Retrieved from Investopedia: https://www.investopedia.com/terms/h/health_care_sector.asp Macrotrends.net EXHIBIT A (EXTERNAL ASSESSMENT) Sr. No. Opportunities / Threats Key Success Factors 1 Opportunity of substantially lower ratio of new entrants Indispensability Expanding operations geographically 2 Threat of substitute products Reinventing Patient Experience Innovation 3 Threat of competitive rivalry Indispensability Diversity EXHIBIT B (VRIO) Value Chain Activity Specific Attributes Along the Value Chain V R I W/S/DC/SDC O Competitive Implication Likely to have Sales Expanding Operations Geographically Subscription Based, Big Network Strength Competitive Parity R&D Innovation, Staff Training, Product Diversity Competitive Advantage Competitive Advantage Marketing and Distribution Insufficient Reach to potential subscribers or contractors Weakness Competitive Parity Service and Support Service Division, Reparability, Reinventing Patient Experience Strength Competitive Parity Medical Service & Facilities Fast, Reliable Strength Competitive Parity Medical Equipment Manufacturing Innovative and Reliable Medical Equipment Competitive Advantage Competitive Advantage EXHIBIT C (FINANCIAL RATIOS) Name Year 2018 Year 2019 Year 2020 PROFIT RATIOS       1. Return on Assets (ROA) 4.78% 4.05% 4.03% 3. Return on Equity (ROE) 9.45%  8.56% 5.70% 4. Gross Margin 47.20% 45.55% 44.95% 5. Operating Margin 9.49% 8.44% 7.89% 6. Net Profit Margin 6.05% 6.02% 6.12% LIQUIDITY RATIOS       1. Current Ratio 1.21 1.36 1.45 2. Quick Ratio 0.87 0.96 1.06 ACTIVITY RATIOS       1. Asset Turnover Ratio 0.53 0.41 0.55 2. Inventory Turnover Ratio 5.42 3.97 5.18 3. Receivable Turnover Ratio 3.43 2.51 3.43 LEVERAGE RATIOS       1. Debt to Assets Ratio (D/A) 0.19 0.20 0.25 2. Debt to Equity Ratio (D/E) 1.15 1.32 1.33 SHAREHOLDER-RETURN RATIOS       1. Price-Earnings Ratio (P/E) 26.47 34.34 33.94 2. Dividend Yield 2.61% 1.93% 1.94% *share prices provided by Google.com/finance Investors seem to over-value Philips group, Gross margin is lower than competitors ROA is promising but ROE and Leverage Ratios are worsening Current and Quick Ratios are not optimistic, Activity Ratios are low compared to peers Net Present Value (NPV) Assessment (EXHIBIT) After taking a look at the assessments, we are now able to discuss and configure two alternatives that may help Philips to increase their earnings and improve the quality of their company. What we can see from the VRIO analysis is that they have competitive advantages as well as one weakness in their marketing sector. This makes it obvious that we can use the competitive advantages to our benefit and that we need to do something about their marketing strategies. We have come up with two alternatives which are both focusing on the marketing sector. Phillips needs to build up an online presence to increase the exposure it receives as well have more communication with its customers. Our second alternative focuses on another marketing strategy which involves using billboards as well as print ads which will be distributed across the country and their geographic focus area. Each of the alternatives should increase the exposure that the company receive but we will decide upon one of them depending on the effects that it will have on the different criterias. If they invest another value of 210 million dollars for either alternative we can calculate it at a discount rate of 5% for the online presence and 10% for the billboard/print option over the next 5 years. Criteria Online Presence Billboard/Print Shareholder NPV 164540495 130393477.8 Stakeholders Customers Effect: Positive Level of effect: High Effect: Positive Level of effect: Moderate/Low Employees Effect: Positive Level of effect: Moderate Effect: Positive Level of effect: Moderate Environment Effect: Positive Level of effect: Low Effect: Negative Level of effect: Moderate Assumptions and Justifications (EXHIBIT) The company will need to implement some necessary changes in their marketing and selling/distribution sectors. We strongly believe that by first focusing on the marketing sector, the selling sector will increase simultaneously. Our assumption is that the company will need to invest a percentage of their profits into developing new marketing strategies to increase their exposure. Viral graphic content will also give customers the option to see their product in use and get an idea of what the product looks like, how it is used, and if it fits their needs. Since the company is very focused on oral health in the retail area, they can start offering their products different forms such as online. However for the online service they would need to ensure that the customers get all the information they need to make an informed decisions, which is very vital in healthcare. Philips group should think about having a consultant ready for live-time chat on their online platforms, this could include websites, online stores, and social media profiles. This should give the company a boost in the right direction, because in todays world people grow more and more health conscious and having a live consultant available when browsing through the products available, it can help them to find the perfect fit for them. These two projects are focusing on a short term change. For this company to be successful in the long run, they need to work on developing a service that is in-person and online for the customers ease and will be able to be one without leaving the house. The consultant online is a start, however it will need to be developed and changed to include video-calls, diagrams, and more data that can help customers decide even better what kind of health products/services they want and need.
This is a very brief and heavy assignment and it has finance, accounting, and management tasks involved. I have not posted the case yet. The attachment is just a list of introductions that need to be
The purpose of these guidelines is to help students develop critical thinking through examination of organizational cases. The case analysis should have the following sections (these sections add to a total of 8 pages of text (plus exhibits) in the following format: Double-space, one-inch (2.5 cms) margins on all sides, Times New Roman, 12 point font). Executive Summary (not to exceed 1 page) External Assessment (about 1 page) Internal Assessment: Resources and Capabilities (about 1 page) Internal Assessment: Financial Performance and Future Financial Capacity (about 0.5 page) Current Strategies (about 0.5 page) Key Issues (about 0.5 page) Implementable Strategic Alternatives (about 1 page) Criteria and Evaluation of Alternatives by Criteria (about 1.5 pages) Recommendation and its Implementation (about 0.5 page) Limitations and Critique of Recommendation (about 0.5 page) Exhibits 1 Definition written for the National Council for Excellence in Critical Thinking. Cited in Elder, L. and Paul, R. (2008), The Thinker’s Guide to Intellectual Standards, page 58. Foundation for Critical Thinking Press, Dillon Beach, CA, USA. www.criticalthinking.org 2 Bloom, B.S. (ed.) (1956) Taxonomy of Educational Objectives, the classification of educational goals – Handbook I: Cognitive Domain New York: McKay. Keep in mind that each section in the paper is important. However, coherence among various sections is even more important. Therefore, writing a paper is an iterative process by which you improve each section as well as coherence among various sections in subsequent steps. For example, be sure to use the opportunities and threats you assess in the external section along with the strengths, weaknesses, distinctive competencies and sustainable distinctive competencies you propose in the internal assessment to suggest alternatives. These alternatives, of course, must address the key issues of the case. Executive Summary (Not to exceed 1 page) Write the executive summary in the form of a consulting letter but do not write your name at the end. The executive summary is a concise and persuasive summary of the report. It outlines the recommendations that you make as well as the supporting evidence for your recommendations. It must be concise enough to give the reader all the relevant information needed to assess your recommendations, yet comprehensive enough to convince the reader of the thoroughness of your analysis. It should stand on its own. If the executive summary were to become detached from the rest of your report, it should still be able to get your message across to your reader. An executive summary should contain, at minimum, the following: the strategy that you recommend. the implications of implementing your strategy, both financial and non-financial. how you will finance any costs associated with your recommended strategy; and the expected benefits of your recommended strategy. Generally, more effective executive summaries are written in a persuasive tone that outlines the context for the decision and develops a clear and coherent argument for accepting the recommendations of the writer. Executive summary must be one page. It must not exceed one page. Begin external assessment with a new page. External Assessment: Opportunities and Threats (about 1 page) Strategy relates the organization to its environment. Therefore, we must understand the relevant environment in order to determine which strategies have potential for success. Chapter Two of Hill, Schilling, and Jones’ book provides you with concepts for this assessment. The process of developing an external assessment consists of at least three stages: Stage One—the analysis that includes systematic identification and consideration of the key aspects of the firm’s environment; Stage Two—the synthesis of the key aspects into an understanding of the strategic opportunities and threats facing the firm; and Stage Three—the determination of the necessary key success factors (resources and capabilities) for any firm to successfully address those unfolding opportunities and threats It is the results of Stages Two and Three that are detailed and discussed in this section of the paper. More specifically, you will focus on the three key opportunities/threats and related key success factors for the future. Key success factors are the resources and capabilities that will be required for any organization to take advantage of the opportunity or neutralize the threat in the future. They will provide a link to the internal analysis, where you would look for the required resources and capabilities in the specific firm you are studying. Keep in mind that the external assessment is more general so as to avoid tunnel vision. Please note, strategic opportunities and threats result from changes and discontinuities in one or more aspects of the firm’s external environment, and not from the firm’s internal strengths or weaknesses. An opportunity is more than a general option – it is an actual change in the environment that signals the possibility of success if the firm can develop a strategy to take advantage of that change. Examples include an emerging market segment, an imminent change in government regulation, and a new technological development. Similarly, a threat is a change in the external environment that signals possible trouble for the firm. Examples include imminent entry of a new, powerful competitor; changes in government regulations; and decreasing consumer preferences for a product because of its effect on the environment. Sometimes changes in the environment can be both opportunity and threat, depending on how the firm chooses to act. Some opportunities and threats may emerge from continuing conditions in the environment rather than changes because of market imperfections. Also, opportunities and threats may not have been perceived earlier because of existing mental models and blind spots. New events may trigger new thinking, which may help actors connect the dots and perceive new opportunities and threats. The critical part of an external assessment is synthesis rather than identification. Thus, it is not enough to simply list elements of the environment, for example, what comprises each of the five forces in an industry. Rather it is important to draw out the strategic implications of each key part of the external environment. Moreover, the assessment needs to be future-oriented because that is the only way it can provide a strong foundation for the subsequent sections of the paper (e.g., for building alternatives and recommendations). In your examination of the environment, you may use all models and concepts that are given in Chapter 2 of the textbook such as five forces model, strategic group analysis, etc. However, the synthesis is in the form of top three opportunities and threats. How to Write This Section? In the first paragraph, define the industry succinctly by naming the industry, major business segments, and geographical coverage of the industry. Also, do not add anything else in the first paragraph to keep it concise. Further, keep the analysis broad (at the industry level), and do not mention the name of the company in the external assessment section. Then, write one paragraph on each opportunity or threat. Within each paragraph: Name the opportunity and identify whether it is an opportunity or threat. Frame it accordingly so it reads like an opportunity (which is positive) or a threat (which is negative). Keep in mind, they should both come from the external environment so if you have written something that is not coming from the external environment, think again; it may not belong in this section. Give positive evidence of the existence of an opportunity or threat. Absence of threat is not sufficient to be listed as an opportunity! Each paragraph should have 2 key success factors on how to successfully address the O/T. Finally, write at least two relevant key success factors for each opportunity/threat discussed and provide the rationale for each of the key success factors. It is possible that some key success factors (resources and capabilities) relevant for various opportunities and threats may be the same. For example, a product development capability may help address a threat of intense competition at home as well as facilitate expansion to the Asian market (an opportunity). Rather than repeating the same resource or capability for the other opportunity or threat, think of a different resource or capability that a firm may need in the future. You should pay particular attention to the new key success factors that may be emerging that could lead to competitive advantage in the future. You may look at a value chain to figure out the possible key success factors (resources and capabilities). Avoid using the words as follows: The firms may need “ability to cater to the changing needs of the customers.” Avoid it because a firm may need numerous resources and capabilities to do so. Instead, name the specific resources and capabilities such as supply chain management, human resources management, financial resources, etc. Further, the focus here is on the resources and capabilities rather than on strategies so you can look for the required resources and capabilities in the Internal Assessment section. In addition, keep in mind it is premature to make recommendations at this point. Do not propose the same point as an opportunity and a threat. Also, please note that each opportunity/threat should be unique and distinct from other opportunities/threats that you have provided. Write three paragraphs for the external assessment, one on each opportunity or threat. Add an exhibit to further strengthen your external assessment. The point of the exhibit is NOT to compress as much text as possible but to clarify and support your external assessment given in the text. Remember to refer to your exhibit in your external analysis write-up. Note: You are expected to bring no more than three items in total for opportunities and threats. It may mean two opportunities and one threat, or one opportunity and two threats, etc. We are NOT asking for three opportunities and three threats—i.e., we are not asking for six items for this section in total. We are asking for a total of three items for opportunities and threats! If this section is shorter than one page, you may start the next section where it ends. Internal Assessment: Resources & Capabilities (about 1 page) Similar to the external assessment assignment, this part of the case write-up concentrates on the nature of the internal environment of the company. Chapter three of Hill, Schilling, and Jones’ book and Barney’s VRIO framework (see readings on Looking Inside for Competitive Advantage and Crown Cork and Seal example included in the course package) provides you with concepts for this assessment. What key strengths, weaknesses, distinctive competencies, or sustainable distinctive competencies can it call upon and exploit for future benefit and growth? Can the firm sustain its competitive advantage? How will the firm’s weaknesses affect its future performance? What role will stakeholders’ preferences play in the future for this firm? How financially healthy is the firm? These are all questions you should consider when examining the current health and strength of the company. You may begin with the key success factors that you identified in the external assessment to evaluate whether the company has them, if they are rare, and hard to copy for other firms. You should also think about the key success factors this company lacks so as to build the required competencies. Keep in mind that even though the facts given may be about the past or current state of the company (as you know, facts about the future are usually not available to decision-makers!), your task is to draw out the strategic implications of the elements mentioned above for the future. That is the only way this assessment can provide a strong foundation for the subsequent sections of the paper (e.g., for building alternatives and recommendations). Be sure to conduct a VRIO analysis and Financial Analysis before writing this section. How to Write This Section? The objective of an internal assessment is to determine what the company can do in the future. Definition of Business. First, provide a definition of the business of the company in the first paragraph succinctly. Be sure to name the business of the company, major business segments, and geography. VRIO Analysis. Second, use Barney’s VRIO framework to uncover a firm’s key weaknesses, strengths, distinctive competencies, and sustainable distinctive competencies. Again the critical part is not to identify but to analyze and synthesize. As you write this section, think of top three key strengths, weaknesses, distinctive competencies or sustainable distinctive competencies (S/W/DC/SDC). Write one paragraph on each of them, clearly revealing whether the selected resource/capability is valuable, rare, and inimitable and WHY? Be sure to give the rationale in the text (not in the exhibit). Also, address whether the firm has the organization (structure) and complementary resources to take advantage of the resource/capability being discussed in the paragraph. Also be sure to mention whether the resource/capability is a weakness, strength, distinctive competence, or sustainable distinctive competence. In the past, we have seen some students name three S/W/DC/SDCs in one paragraph. Then, in the second paragraph, they evaluate whether or not each of them is valuable. After that, in the third paragraph, they go on to analyze whether they are rare. Over the years, we have found that the “bunched up” format is more confusing for the reader. Therefore, it is better to focus on one S/W/DC/SDC in each paragraph. A special note about weaknesses. Students often ask whether they should bring up a weakness or not. Our response is: Bring it up if it is a strategic weakness that you think is important for the top management to address for their strategy to be successful in the next five years. If you do bring it up, keep it mind that you should analyze whether or not it can become strength, distinctive competency, or sustainable distinctive competency, if the company invests in it. Also, be sure to come up with ways to make up the weakness as part of your strategy when you are building the strategic alternatives! In the text, you will raise the top three items for strengths, weaknesses, distinctive competencies, and sustainable distinctive competencies. Therefore, look at an Appendix given in the course package after the Barney’s article on Looking Inside for Competitive Advantage. Before writing the text for internal assessment, prepare an exhibit (similar to the one given for the Crown Cork and Seal Company) that shows all relevant areas (not just the top three items) of the value-chain and whether or not they are valuable, rare, and inimitable (see Exhibit A in this document). We are not expecting you to provide rationale for each of the items in the exhibit. When you are examining the value chain, you may add an activity that is relevant for the case under study or delete an activity that is not relevant. For example, for a service firm, you may use “Operations” rather than “Manufacturing” given in the value chain. Remember to refer to your exhibit in your internal analysis write-up. Note: In the text, you are expected to bring no more than three items in total for strengths, weaknesses, distinctive competencies, and sustainable distinctive competencies. Keep in mind two points: (1) We are NOT asking for three items for strengths, three item for weaknesses, three items for distinctive competencies, and three items for sustainable distinctive competencies. That is, we are not looking for a total of 12 items; we are only looking for a total of three items. (2) The three items do not have to include one item from each category (categories being strengths, distinctive competencies, and sustainable distinctive competencies). They could all be strengths, distinctive competencies, or sustainable distinctive competencies. As mentioned above, students may include strategic weaknesses as well but the total number of items must not exceed three. Internal Assessment: Financial Performance and Future Financial Capacity (about 0.5 page) Make an overall assessment of the financial performance of the organization based on your analysis and indicate the financial strength and future financial capacity of the firm to carrying out possible future initiatives/strategies (Future financial capacity refers to the amount of capital (money) the company can raise to invest in the next five years?) Can the company raise the money that you will be using for your recommendation? If yes, how? (e.g., debt, equity). Keep in mind the future orientation of the assessment rather than living in the past. Add an exhibit on ratio and other financial analysis (see Exhibit B in this document) and be sure to refer to it in your text. Current Strategies and their Implementation (about 0.5 page) In this section, analyze and evaluate the current business (Chapters 5 and 6), corporate (Chapters 9 and 10), global (Chapter 8), and major functional strategies (Chapters 4, 6 and 7), as well as important issues related to implementation: organizational structure, control systems, culture, and processes (see Chapter 12 in the textbook).3 You may have noticed, business strategy is key to competitive advantage, therefore the most focus in the course and in this paper is on business strategy. Keep the future orientation in your mind as you analyze them so your analysis and synthesis are relevant for the next sections of this paper. These strategies represent status-quo in the company. This section will clarify the current practice of strategic management in the company so it is easier for the reader to understand how strategies will be changed when you present the strategic alternatives in section VII. Be sure to complete Exhibit C before writing this section and provide a succinct write up of the same in the text. Needless to say, both Exhibit C and this section should be consistent with each other. Key Issue(s) of the Case (about 0.5 page) In this section, you are to further zoom in on, synthesize, and clarify in a paragraph or two what you think the firm’s key issues are in going forward successfully into the future. There are likely three types of issues present: (1) the readily visible and pressing; (2) the more underlying and long term; and (3) the future ones not yet impacting the firm, but identified in your preceding sections. The visible issues are the challenges that you readily identify in reading the case. For example, decreasing profitability in the face of increasing sales might be an issue in a case. Other examples include diminishing market share, obsolescence of machinery, and need to expand operations. The visible issues can often be seen as symptoms of more long term and substantive underlying issues or problems facing the firm. For example, decreasing net margin may be because of inefficient production, increased administrative spending, or falling market interest in your product. The purpose of this section is to link these issues with your external and internal observations and to summarize what it all means for the firm and its future. If there is any ambiguity or inconsistency in the case, it is within this section that you clarify them in terms of key issues, and set the launch point for the next section—strategic alternatives. Be sure to structure the key issues of the case in the three categories mentioned above rather than providing a laundry list of the key issues. Students often ask how many issues should they identify as the key issues. Our response is that you may have 1-2 issues in each of the three categories mentioned above and in total you may have 4-6 issues. Implementable Strategic Alternatives (about 1 page) In this section, you should identify and develop two strategic alternatives that the firm could pursue. They should take into account the internal and external assessment (feasibility), be consistent with the organization’s mission (legitimacy) and should provide a way of dealing with the key issues of the case (relevance). The alternatives should also be representative of the key feasible, legitimate, and relevant choices that management has at the time of the decision making without gaining the advantage of hindsight. A good set of alternatives, therefore, must involve major differences (and real choices) rather than different variations of the same strategy. Your two alternatives should be mutually exclusive because strategy requires commitment and risk-taking. It involves selecting some paths and rejecting others. However, if there is a compelling case to follow two alternatives simultaneously then combine them into a separate “composite” alternative and compare it to another composite alternative. Keep in mind that the alternatives need to be comparable. If one alternative is clearly superior then it is not a fair comparison. Sometimes, students tend to come up with a weak alternative to make their preferred alternative look better. It is not a good practice and should be avoided. If there are things that you would like to do irrespective of the alternatives, you may write them in this section in a separate paragraph before describing your two alternatives. Alternatives must be strategic (not operational) in nature and consider the usual planning horizon for organizations, which is about five years. Any alternative that deals with the issues for the next six months to one year and then asks the management to re-assess its situation is an operational alternative and may be suitable for a functional-area case analysis but not for a strategic management case analysis. For example, a marketing campaign by itself is a popular operational (not strategic) alternative. A marketing campaign along with other functional areas such as starting a new manufacturing plant, changes in supply chain management, introducing new products, etc. can form the basis of a strategic alternative. These alternatives may be framed in terms of business strategies and corporate strategy terms, depending on the issues of the case. However, do not neglect consideration of other important issues that may hinder implementation of your strategies. Therefore, consider issues of structure, systems, processes, resources, culture, etc. when formulating alternatives, developing criteria, evaluating alternatives, and making recommendation. For example, it is important to think of a multilateral match of environment, strategy, structure, systems, technology, culture, etc. before recommending a major strategic change. It is never easy to match several different elements so creativity with a solid foundation is important for the paper. It is essential that the paper flows from one section to another and this section is an important linchpin in building that flow. To help you think of the strategic alternatives, we have attached Exhibit D. You are required to complete this form for each of the alternatives (two exhibits for the two alternatives) Missing and attach it with your paper and concisely describe the alternative in the text. Do not refer to the alternatives by number. Use a short name (for example: the low-cost strategy) as an identifier. All exhibits must also be typewritten or word-processed (not handwritten). It is a good practice to first complete the exhibits and then summarize the alternatives in the text. Keep in mind that the point is to strategically manage the company and thus simply selling the company or the status quo are not acceptable alternatives. If you are recommending an alliance or merger with a company, name the company with which to have an alliance or a merger. Also, be sure to provide positive evidence that the target company will be interested in an alliance or a merger. Criteria and Evaluation of Alternatives by Criteria (about 1.5 pages) In this section, first, you should outline and justify the three or four criteria (not more than four) by which you will evaluate the strategic alternatives developed in the preceding section. There should be some financial and some non-financial criteria. Financial criteria often include net present value and payback period. Other financial criteria may be dictated by the circumstances of the case. For example, there may be the need to achieve a certain return on investment in order to attract investors. Values and preferences of the managers or other stakeholders, as outlined in internal assessment, may influence non-financial criteria. In addition to the effect on shareholders (which may be captured in terms of profitability or net present value), another important criterion is the effect of decisions on other stakeholders. These stakeholders may include customers, employees, environment, government, community, etc. Here are two criteria that are required for your case analysis: (1) Net Present Value (2) Effect on Various Stakeholders (other than shareholders). Among the stakeholders, at least choose customers, employees, and environment (sustainability) as stakeholders. You may also add other stakeholders, depending on their relevance. In addition, you may choose one or two other criteria that may be relevant to your case analysis. However, be careful to choose output- oriented criteria rather than input-oriented criteria (such as level of investment, ease of implementation, etc.). Further, as noted in the Implementable Strategic Alternatives section, each alternative must be feasible, legitimate, and relevant. Thus, feasibility (taking into account external and internal assessment), legitimacy (consistency with the organization’s mission), and relevance (addressing key issues) cannot be used as criteria for evaluation. In addition, your strategic alternatives should be strong enough to produce positive results within five years. If it is impossible to get positive results of your strategy in five years, you may extend your evaluation of the alternatives to ten years. Finally, your criteria and evaluation should be structured as provided in Exhibit E rather than having a laundry list of criteria. Once you have chosen the criteria by which you will assess the alternatives, you must then evaluate each of the alternatives using (all) these criteria. Besides financial and non-financial costs and benefits, consider risks involved in the alternatives. What financial projections and computations need to be made will depend on your criteria (Keep in mind that you must have some financial and some non-financial criteria). Do not get misled by the apparent precision of the numbers in your forecasts. These numbers may represent an average of a range of values from pessimistic to optimistic scenarios. In fact, the numbers may change dramatically depending on your assumptions. All assumptions must be realistic, defendable and clearly presented in the exhibits. You may comment on the sensitivity of your findings with respect to your starting assumptions. Please remember that this is a strategy assignment, and not an accounting one. You may thus adopt accounting procedures accordingly. If you choose to use strictly accounting guidelines, however, feel free to do so. There are two ways of writing this section. You may choose to write it either way: Evaluate both alternatives by criterion one in the first paragraph, followed by evaluating both alternatives by criterion two in the second paragraph and so on; or Evaluating the first alternative by all the criteria in the first paragraph, followed by evaluating the second alternative by all the criteria in the second paragraph, and so on. Recommendation and its Implementation (about 0.5 page) Drawn from the previous sections of the report, state your strategy recommendation, followed by an implementation discussion. You should include a brief reiteration of the recommended strategy and a discussion of how it meets the selected criteria. If it has not been explicitly stated before, the recommendation should cover all relevant aspects of strategy, structure, control, resources, culture, etc. as applicable in the case. Never recommend a combination (of two or more alternatives) that was not proposed as a single alternative in the strategic alternatives section and was not evaluated in comparison with the other alternative in the previous section. The implementation discussion will describe how the recommended strategy will be translated or made into reality. Discuss the relevant action steps, their timing, and implementation budget with respect to the issues of structure, process, control, resources and culture. Be sure to address how you will finance any costs/investments associated with your recommended strategy as well as its expected benefits. Please do not suggest that the company should study the issues further and then decide about its strategies. You have been selected as a consulting company to analyze, synthesize, and make recommendations for the company’s strategy for the next five years. Add an exhibit on action steps, their timings, and levels of investment to support your implementation discussion. Missing Limitations and Critique of Recommendation (about 0.5 page) In this section, you should discuss the implications of your recommendation as well as its limitations. For example, are there any negative consequences to your recommended strategy? What are other costs or risks that were not considered at the time of evaluation of alternatives? How can they be minimized? Is your recommended solution able to address all the underlying issues, or does it have limitations? Do you foresee changes that will impact on your recommendations? This section can help strengthen your strategic alternatives. For example, if you are writing limitations that you may have control over, you may prefer to incorporate ways of dealing with them in your alternatives. In other words, this section should represent things that you may not have control over. Exhibits Keep in mind that all important points need to be brought into the text. The exhibits should be used to support the points in the text. Do not skip any section (For example, a student who thought of saving space referred the reader to the exhibits and did not summarize the alternatives in the body of the text. This resulted in a huge loss for the student). Other than the required exhibits listed below, you may not attach any more exhibits to your paper. All attachments must be relevant, and they must be referred to in your write-up. The conclusion and key figures (if applicable) from each exhibit should be referenced and drawn into the text at the appropriate point; the reader should not have to flip from the text to the exhibit in order to understand your point. Analogously, each exhibit should include one or two lines of text at the bottom, stating its conclusion, and demonstrating its relevance to your argument. The reader should never be left wondering why a particular exhibit was included. The point of the exhibits is NOT to compress as much text as possible but to clarify and support your assessments given in the main body of the paper. Please make sure that the font in the exhibits is as mentioned below. IMPORTANT NOTE ABOUT EXHIBITS All the 11 exhibits mentioned below are required. (4 exhibits are given so far) rest are missing Do not attach any other exhibit. Each exhibit must begin on a new page. Each exhibit must be one page only (Exhibit 1 is one-half page). Here are further details regarding each of the 11 exhibits: Exhibit 1: External Analysis (one-half page; double space, 12 point font; basically mention top 3-5 major points in bullet form in not more 10 lines. In this exhibit, you may: (a) further clarify the three opportunities/threats you raised in the External Assessment section; (b) provide further evidence for the three opportunities/threats you raised in the External Assessment section; c) provide three additional opportunities/threats, their evidence, or key success factors; and/or d) analyze five forces model, strategic group analysis, macro-environmental forces, etc. None of the items mentioned above are required. However, this exhibit is required so simply use your judgment to provide further information about external assessment on any aspect. You may avoid running text, except 2-3 lines the conclusion of the exhibit). Please note the conclusion for this exhibit and other exhibits (as noted below) is expected to be 2-3 lines, not 2-3 sentences because sometimes a sentence can be very long! Exhibit 2: Internal (VRIO) Analysis (one page, follow the format given in Exhibit A, 12 point font; no running text, except 2-3 lines of conclusions) Exhibit 3: Financial Analysis: Ratio Analysis of the current (and historical situation) (one page; double space, 12 point font). See Exhibit B. The objective is to give the numbers, not the running text, but be sure to include 2-3 lines of conclusion of the exhibit. The numbers should enable you to diagnose the current situation and estimate the future financial capacity of the firm (to be given in the last paragraph of Internal Assessment section of the paper). For the ratios, there is no need to show the calculations. Provide all the ratios in a table for at least three years so one can see the trends. Evaluate the company’s past and current financial performance and assess its future financial capacity to formulate and implement strategies. In the write-up, you will interpret the ratios and their trends that help you figure out the financial performance of the company. The goal is to know financial capacity of the company, i.e., how much capital (money) can the management raise for implementing the strategy in the next five years? The exhibit should have the financial ratios, depending on the availability of data: Profit ratios, liquidity ratios, activity ratios, leverage ratios, and shareholder return ratios. Further, you may consult the note on “Analyzing a case study and writing a case study analysis” in Hill, Schilling, and Jones’s book (pages C8-C12) given in 11th and 12th edition of the book. No running text in the exhibit, except 2-3 lines of conclusions. You may use single spacing for the exhibit. Exhibit 4. Current Strategies and their Implementation (See Exhibit C, one page, 12 point font, use bullet points rather than sentences here, single or double space, no need of conclusion of exhibit) Exhibits 5-6: Strategic Alternative Descriptions (See Exhibit D, one page for each alternative so you will have Exhibit 5 for the first alternative and Exhibit 6 for the second alternative; 12 point font, use bullet points rather than sentences here; single or double space; no need of conclusion of exhibit) Exhibit 7: Assumptions and Justifications (One page; 12 point font, double space). Provide assumptions (for NPV projections as well as other decisions) and their justifications. These assumptions may include, but are not limited to: realistic growth rates (for revenues, costs, and expenses incurred by the firm), interest rates, income taxation rate, exchange rates, and many others that you need to make useful projections and make other decisions in the case. See page 24 (i.e., the last exhibit) of the Westover Inn (A) Case also. There is no need of conclusion of this exhibit. (Please use a separate page for this exhibit rather than providing the assumptions and justifications at the bottom of the NPV exhibit so that you have more space. Use numbers (e.g., 1, 2, 3, …) to cross-reference the NPV exhibit and the Assumptions and Justifications exhibit. As you will note, in the last exhibit of the Westover Inn case, the authors provide assumptions at the bottom. But, their justifications are in the case. However, we expect that you will provide assumptions as well as justifications on a separate page. Be sure to use double space in the exhibit even though you may be tempted to use single space. We are interested in the major assumptions and justifications and understand that you can provide all the details on one page. Each though you will have two exhibits for NPV analysis (Exhibits 8-9); you will have only one exhibit for assumptions and justifications. Exhibits 8-9: Strategic Alternative Net Present Value (NPV) Analysis (not more than one page for each exhibit, i.e., maximum two pages for Exhibits 8-9; single or double space, 12 point font). Avoid running text, except 2-3 lines of conclusion. For the numbers, you may avoid the use of decimals and/or represent the numbers in 000’s or millions to save space. See page 24 (last exhibit) of the Case: Westover Inn (A) in the course package for an example to use for team assignment and team exams. For individual assignment or exam, you may use the same format or a summary format to show the financial revenues and costs of each alternative. Exhibit 10: Evaluation of Alternatives by Criteria (see Exhibit E). Please indicate your assessment of how the alternatives will impact each part of the criterion. Be sure to discuss your assessments (along with the NPV numbers) as well as their rationales in the “Criteria and Evaluation of Alternatives by Criteria” section of the paper. The exhibit should not exceed one table/one-half page. Avoid running text, except 2-3 lines of conclusion. Use 12 point font, single or double space. Exhibit 11: Implementation Schedule / Action Plan (one-half page, double space, 12 point font); Use bullet form and avoid running text, except 2-3 lines of conclusion. Be sure to show the timeline, actions, and the level of investment for each step for the normal planning horizon of strategies, which is about 5 years. This document includes Exhibits A1, A2, B, C, and D. EXHIBIT A Completely missing this part VRIO ANALYSIS OF THE COMPANY (Example: Crown Cork and Seal, from Jay Barney (Gaining and Sustaining Competitive Advantage, 1997; Modified slightly to show more variety of competitive implications)) (Use any value chain depending on its suitability to the company you are studying. Add value chain activities and attributes that are relevant to the case and delete those that are not. Be sure to mention in this exhibit if something is a strategic weakness and how you plan to overcome that weakness.). Your particular company will demand special and unique treatment, but the following is intended to serve as an illustration of the format for a fictitious company expected within the Internal Assessment Exhibit. EXHIBIT # (INTERNAL ASSESSMENT) Value Chain Activities Specific Attributes Along the Value Chain V R In W/S/DC/SDC O Competitive Implication: Likely to have Purchasing high quality inputs Yes No Strength Yes Competitive Parity Inventory Holding reliable supply able to meet unexpected orders on short notice Yes Yes No Yes Yes Strength Sustainable Distinctive Competence Yes Yes Competitive Parity Sustainable Competitive Advantage Design & Engineering speciality containers for multiple purposes Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Manufacturing inconsistent product quality No Weakness Competitive Disadvantage* Distribution speedy & flexible delivery Yes Yes No Distinctive Competence Yes Temporary Competitive Advantage Sales fast, reliable order processing Yes Yes Yes Sustainable Distinctive Competence No Unrealized Sustainable Competitive Advantage Service & Tech Support speedy & competent maintenance and quality technical advice Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Use the following space for two or three lines of CONCLUSIONS concerning the company’s value chain competencies and how you will overcome the weakness(es)*. VRIO Supplemental Material Below are questions to ask to help determine whether a particular resource or capability is a STRENGTH or WEAKNESS by referring to the table on the following page. (Note you will first have to identify specific resources and capabilities (e.g. from a Value Chain) prior to using the VRIO analysis and the questions below for analyzing each resource or capability one by one) VALUABLE “Is the resource or capability likely to enable a firm to capitalize on opportunities and/or neutralize threats in the future?” Why? (provide the rationale and name an opportunity that the organization can capitalize on or a threat the organization can neutralize? RARE “Is the resource or capability likely to be rare in the future?” Why? INIMITABLE “Is the resource or capability likely to be inimitable in the future (difficult to copy—consider cost and time for imitation)?” Why? ORGANIZATION “Is the firm likely to be organized to exploit the full competitive potential of its resources and capabilities in the future?” Why? Valuable? Rare? Inimitable (Costly to Imitate?) W/S/DC/SDC Exploited by organization? Competitive Implication: Likely to have Weakness Competitive Disadvantage Strength Competitive Parity N Unrealized Competitive Parity Distinctive Competence Temporary Competitive Advantage N Unrealized Temporary Competitive Advantage Sustainable Distinctive Competence Sustainable Competitive Advantage Unrealized Sustainable Competitive Advantage VRIO ANALYSIS OF THE COMPANY (Example: Crown Cork and Seal, from Jay Barney (from the textbook Gaining and Sustaining Competitive Advantage, 1997)) (Use any value chain depending on its suitability to the company you are studying. Add value chain activities and attributes that are relevant to the case and delete those that are not. Be sure to mention in this exhibit if something is a strategic weakness and how you plan to overcome that weakness.). Your particular company will demand special and unique treatment, but the following is intended to serve as an illustration of the format for the Internal Assessment Exhibit. Value Chain Activities Specific Attributes Along the Value Chain V R In W/S/DC/SDC O Competitive Implication: Likely to have Purchasing high quality inputs Yes No Strength Yes Competitive Parity Inventory Holding reliable supply able to meet unexpected orders on short notice Yes Yes No Yes Yes Strength Sustainable Distinctive Competence Yes Yes Competitive Parity Sustainable Competitive Advantage Design & Engineering speciality containers for multiple purposes Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Manufacturing inconsistent product quality No Weakness Competitive Disadvantage* Distribution speedy & flexible delivery Yes Yes No Distinctive Competence Yes Temporary Competitive Advantage Sales fast, reliable order processing Yes Yes Yes Sustainable Distinctive Competence No Unrealized Sustainable Competitive Advantage Service & Tech Support speedy & competent maintenance and quality technical advice Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Use the following space for two or three lines of CONCLUSIONS concerning the company’s value chain competencies. In addition, you may add how you will overcome the weakness(es)*. EXHIBIT B FINANCIAL ANALYSIS: RATIO ANALYSIS Note: We have listed five types of about 25 ratios here. You may consider these and other relevant ratios. Please provide at least 10 ratios in this exhibit covering each of the five types of ratios mentioned here. Thus, be sure to include at least two ratios of each type. Then, write the conclusion in 2-3 lines. Name Year Year Year PROFIT RATIOS 1. Return on Investment 2. Return on Assets 3. Return on Equity 4. Gross Margin 5. Operating Margin 6. EBIT Margin 7. EBITDA Margin 8. Pre-tax Profit Margin 9. Net Profit Margin LIQUIDITY RATIOS 1. Current Ratio 2. Quick Ratio ACTIVITY RATIOS 1. Asset Turnover Ratio 2. Inventory Turnover Ratio 3. Receivable Turnover Ratio 4. Days Sales in Receivables LEVERAGE RATIOS 1. Debt to Assets Ratio 2. Debt to Equity Ratio 3. Long-term Debt to Capital Ratio 4. Interest-Coverage Ratio SHAREHOLDER-RETURN RATIOS 1. Total Shareholder Returns 2. Price-Earnings Ratio 3. Market-to-Book Ratio 4. Dividend Yield 5. Book Value Per Share 6. Operating Cash Flow Per Share 7. Free Cash Flow Per Share EXHIBIT C CURRENT STRATEGIES AND THEIR IMPLEMENTATION (Use bullet points rather than complete sentences. Fill in the answers using wordprocessor in the space provided. The exhibit should not exceed one page) Name(s) of the Business Strategy(ies) Customer Needs (If fulfilling multiple needs, be sure to specify which needs in what markets; see Chapters 3, 5 & 6) Customer Groups (may involve geographic, demographic or other market segmentation parameters; Chapters 3, 5 & 6) Basis for Competition (Be sure to be specific in non-generic terms. For example, for Low Cost, is it superior efficiency due to low cost production or something else? For Differentiation, is it based on superior quality, innovation, and/or customer responsiveness; for Focus, what parameters, e.g., is it customer segment, product segment, market segment, etc.; Chapters 3, 5 & 6) Corporate Strategies (Single business, vertical integration, horizontal integration, related diversification, unrelated diversification, strategic alliances, outsourcing, etc. Chapters 9 & 10). Placement in the Value System (e.g., retailer, wholesaler/distributor, manufacturer, importer, or combination thereof; for details, you may see Chapters 9 & 10) Global Strategies (you may see Chapter 8 for details) Major Functional Strategies (Chapters 4, 6 & 7) Implementation: Structure, Process, Controls, and Culture (you may see Chapter 12 for details). Others EXHIBIT D COMPREHENSIVE STRUCTURE OF A STRATEGIC ALTERNATIVE (Use bullet points rather than complete sentences. Fill in the answers using wordprocessor in the space provided. The exhibit should not exceed one page) Name of the Alternative or Strategic Goal Identifier (Write the name of the strategy here with any special characteristics, e.g., Focused low cost with expansion to Mexico) Customer Needs (If fulfilling multiple needs, be sure to specify which needs in what markets; see Chapters 3, 5, & 6) Customer Groups (may involve geographic, demographic or other market segmentation parameters; Chapters 3, 5 & 6) Basis for Competition (Be sure to be specific in non-generic terms. For example, for Low Cost, is it superior efficiency due to low cost production or something else? For Differentiation, is it based on superior quality, innovation, and/or customer responsiveness; for Focus, what parameters, e.g., is it customer segment, product segment, market segment, etc.; see Chapters 3, 5 & 6) Corporate Strategies (Single business, vertical integration, horizontal integration, related diversification, unrelated diversification, strategic alliances, outsourcing, etc. see Chapters 9 & 10). Placement in the Value System (e.g., retailer, wholesaler/distributor, manufacturer, importer, or combination thereof; Chapters 9 & 10) Other (could include points related to functional strategies (chap. 4, 6 & 7), global strategies (Chapter 8), implementation (Chapter 12), or anything else that is important for the alternative) Key Issue(s) Addressed by this Alternative FEASIBILITY JUSTIFICATION FOR THIS STRATEGIC ALTERNATIVE Environmental Opportunity(ies) (evidence, independent of the organization, which suggests that this alternative could meet with success) Environmental Threats, Risks (that could limit success of this alternative. Be sure to address how these can be overcome) Present Corporate Attributes relevant and sufficient to this alternative (Strengths, Distinctive Competencies, or Sustainable Distinctive Competencies): Missing and/or insufficient Corporate Attributes (Weaknesses) (Attributes that would have to be acquired and/or improved in order to implement this alternative. Be sure to address how these can be overcome) EXHIBIT E EVALUATION OF ALTERNATIVES BY CRITERIA (Please indicate your assessment of how the alternative will impact each part of the criterion. Be sure to discuss your assessments (along with the NPV numbers) as well as their rationales in the “Criteria and Evaluation of Alternatives by Criteria” section of the paper. Fill in the answers using wordprocessor in the space provided. The exhibit should not exceed one table/one-half page) Criteria Name of Alternative 1 Name of Alternative 2 Shareholders Net Present Value Provide NPV number here along with units of money Provide NPV number here along with units of money Stakeholders Customers Effect: Positive/Negative Level of effect: High/Moderate/Low Effect: Positive/Negative Level of effect: High/Moderate/Low Employees Effect: Positive/Negative Level of effect: High/Moderate/Low Effect: Positive/Negative Level of effect: High/Moderate/Low Environment (Sustainability) Effect: Positive/Negative Level of effect: High/Moderate/Low Effect: Positive/Negative Level of effect: High/Moderate/Low Other stakeholder(s) (Optional): Please specify Effect: Positive/Negative Level of effect: High/Moderate/Low Effect: Positive/Negative Level of effect: High/Moderate/Low Other (required) Please specify Other (optional) Please specify Page 1 of 40
This is a very brief and heavy assignment and it has finance, accounting, and management tasks involved. I have not posted the case yet. The attachment is just a list of introductions that need to be
Case Analysis: MasterCard: Creating a World Beyond Cash Student Name Course Title and Name Instructor Name Due Date Case Analysis: MasterCard: Creating a World Beyond Cash Executive Summary MasterCard has continued to flourish despite facing severe competition from Visa, Financial Institutions, and new emerging payment methods in the global payment Industry. Among the players in this business are Visa, PayPal, Alipay, Apple pay, and Google Wallet, as well as other worldwide payment companies. Mastercard reported a growth rate of 23.4 percent, up from negative 21 percent in 2020. The Covid-19 pandemic largely caused this fall. MasterCard has been able to hedge against competition from digital wallets by getting into strategic alliances and partnerships instead of viewing the players as rivals. MasterCard can boost its market share by forming alliances with other companies. Mastercard can leverage its innovation, financial strength, and technological expertise to increase its market share. MasterCard maintains its competitiveness and increases its market share by diversifying and expanding its product portfolio and changing its marketing focus to regions not well exploited. The recommended plan includes expanding payment services, particularly value-added services, in the existing market. The long-term implications of the approach include an increase in the revenue stream, a rise in the profit margin, and an increase in the annual dividend payout. The non-financial implications include an improvement in reputation and consumer happiness and a reduction in the risk connected with payment transactions. Due to the high value of the firm’s debts, the strategy will be financed by retained earnings and equity. Any more loans would greatly increase the firm’s risk of insolvency. A budget will be created to account for the costs associated with implementing the proposed strategies. The expected benefits of the chosen strategy include increasing revenue streams, improved brand reputation, and market share enhancements. II. External Assessment: Opportunities and Threats Name the opportunity and identify whether it is an opportunity or threat. Frame it accordingly so it reads like an opportunity (which is positive) or a threat (which is negative). (Supposed to have 3 opportunities/threats in total with two relevant key successes for each opportunity/threat). You should pay particular attention to the new key success factors that may be emerging that could lead to competitive advantage in the future. You may look at a value chain to figure out the possible key success factors (resources and capabilities). Avoid using the words as follows: The firms may need “ability to cater to the changing needs of the customers.” Avoid it because a firm may need numerous resources and capabilities to do so. Instead, name the specific resources and capabilities such as supply. The players in the global payment industry are accountable for network-based card transaction processing. The payment industry services segment includes consumer bill payments, mobile banking applications, B2B payment facilitation, and facilitating disbursements and remittances. The leading companies in this industry have a global presence in nearly every country. In the 21st century, commerce shifted to digital platforms, and consumers used at least one online payment method. Therefore, as the global e-commerce industry continues to grow, global payment companies have the chance to leverage e-commerce growth to increase market share and enter into partnerships to enjoy the large pool of consumer base (Andriotis, 2018). The global players may leverage human capital to negotiate a mutually beneficial arrangement that might assist the players in capitalizing on e-commerce growth. The shift in consumer behavior creates a new market opportunity for companies in the global payment business, who can capitalize on it by establishing new revenue streams and diversifying into new products. Consumers are more likely to utilize digital wallets to pay for goods and services than in the past. Wide product services will accommodate the changing needs of its customer base. The global payment industry is highly competitive, with a range of worldwide and well-established firms competing in all payment categories. Some of these businesses have distinct business models that provide them with pricing advantages (Andriotis, 2018). Increased levels of competition create price pressures. The global players use partnerships with other players within the industry. They have different business models to enable them to handle better competitive risks posed by digital wallets and financial institutions and reduce price pressure threats. III. Internal Assessment: Resources & Capabilities MasterCard Inc. is one of the world’s major payment networks and a leading provider of financial services. MasterCard is a global payment industry that provides many payment solutions and services, such as automated clearing houses, multi-rail payment, and acquiring and issuing banks communicating over the card network to authorize transactions. MasterCard Inc. is a multinational payment company with a presence on almost every continent. One of MasterCard’s strengths is its financial strength based on the company’s sales success. From 2010 through 2020, the company generated sustained sales and net income growth. Strong financial resources show the company’s capacity to fund research and innovation and its ability to recruit top talent. The company’s financial performance demonstrates distinctive, durable competencies that will be advantageous in the long run. MasterCard invested a lot in developing a robust product portfolio that required innovation and the development of new methods for obtaining market share. Wide and diverse services diversify the existing offering to mitigate product risk. Included in the value-added product are data analytics and cyber security. This product will be valuable for satisfying varied market needs and diversifying revenue streams. The extensive and varied product portfolio provides MasterCard with a unique competency that it can employ to remain competitive and give consumers exclusive offerings (Andriotis, 2018). Involvement in claims and legal actions is a weakness associated with MasterCard Inc. MasterCard faces various lawsuits that will cost the company $73 million in 2020 and $94 million in 2021. This suggests an increase in legal spending, which could negatively impact the firm’s bottom line. MasterCard should utilize its talented employees to advise the corporation on interchange fees and privacy regulations to avoid incurring unnecessary legal expenses. IV. Internal Assessment: Financial Performance and Future Financial Capacity According to Exhibit 3, MasterCard’s constant revenue increase from 2018 to 2020 suggests strong financial health, even if the company recorded a major revenue and net profit fall of 9 and 21 percent in 2020. In 2021, the business reported positive revenue and net income. The firm’s time interest earned ratios show that it will be able to pay all debt costs more than 24 times in 2021, compared to 39 times in 2018, indicating a fall in capability despite the firm’s stability in paying all due debt costs. The debt ratios reveal that overall debt is equivalent to 80 percent of total assets, indicating an increase in debt value. The equity-to-debt ratios indicate that MasterCard has four times as much debt as it does equity, indicating a significant level of leverage. The current ratio is more than one, showing that the company has steady current liquidity, which is critical for day-to-day operations. Since the company’s obligations are already substantial relative to its assets, acquiring financing through borrowing may be difficult. However, since the equity share is low, corporations can raise more equity capital through the security market. However, Equity financing is expensive since it dilutes payable dividend per share, and increasing cost of capital. It is anticipated that the corporation will record increasing revenues and net profits. V. Current Strategies and their Implementation MasterCard’s business strategy is to increase payments by concentrating on its core network to enable payment flows for customers, businesses, governments, and others, thereby providing customers with options and the flexibility to transact across different payment rails (Furr & Shipilov, 2018). The objective is to diversify the product line so that the company’s core revenue growth is stifled and has another growth stream. MasterCard’s functional strategy involves investing in human capital development by recruiting talented and Technological savvy with diverse experience. This talented workforce will have the technological know-how to assist companies in establishing grounding-breaking services and achieving their immediate objectives of closing deals and educating clients. MasterCard’s global and corporate strategies include diversifying new products into new markets and locations. This plan will assist the company meets the needs of a diverse group of customers, including financial institutions, retailers, the government, and digital players while expanding its geographic reach. MasterCard will support this plan by enhancing new network capabilities, such as increasing digital identity-related services and employing banking and open data knowledge. VI. Key Issue(s) of the Case MasterCard Inc.’s ongoing legal is the most pressing concern. For instance, the firm faces a legal battle associated with facilitating and managing payments and fees. The corporation is accused of colluding with the Pornhub Corporation to disseminate unlawful photos (Haines, 2020). MasterCard’s brand reputation may be affected now and in the future if these legal challenges are not well addressed. MasterCard’s global credit card issuer market share is only 25.6%, compared to Visa’s 50.0%. In order to recoup a portion of the market share, MasterCard should increase its market share by forming partnerships and strategic alliances and increasing its global footprint through acquisitions. The firm’s debt-to-asset ratio is 80 percent, which is a significant amount. This issue may not have any effect at this time, but in the future, when the company wants capital to fund an acquisition or merger, it may face borrowing restrictions. The firm’s ambition to increase the value of its debt will generate bankruptcy concerns and make it difficult to service its debt obligations. VII. Implementable Strategic Alternatives MasterCard Inc. can utilize a growth strategy for its offered services to suit consumers’ different needs and mitigate product risk. The companies should expand their value-added services, such as data analytics and cyber security because they will allow MasterCard Inc. to gain market competitiveness. The data analytics will allow the company to produce insights and analytics and provide banks with a dashboard for seeing aggregate card portfolio comparisons. MasterCard will be able to generate value through cyber and intelligence solutions, insight and analytics, test and learn loyalty, and payment gateway solutions for e-commerce firms. The plan will allow MasterCard to improve top-line performance by bolstering revenue growth and gaining a larger market share in value-added services, a market that competitors may not have explored (Mulheron & Edlin, 2018). MasterCard should implement a strategy to expand its market and revenue base outside the United States. Besides the United States, no country earned more than 10 percent of total revenue, indicating that the company’s strategy must shift from focusing on local revenue generation to focusing on the worldwide market to boost the revenue getting outside the North American market segment. Focusing on these countries requires MasterCard to form partnerships with digital wallet players to facilitate digital wallet transactions and facilitate cyber and intelligence solutions that assist the company in creating alternative revenue streams not only from the United States but also from other countries (Mulheron & Edlin, 2018). The plan will enhance the number of revenue streams and ensure that the company is not unduly dependent on the United States, as any economic changes in the United States could substantially impact the company’s bottom line. Diversification focusing on other worldwide markets for revenue development will generate alternate and sustainable revenue sources. VIII. Criteria and Evaluation of Alternatives by Criteria The market share growth since the introduction of each strategic option can be used to evaluate the two strategic alternatives. In 2017, MasterCard held a market share of 25.4 percent among global card issuers, according to the case excerpt. However, MasterCard’s internal records could be utilized to determine the company’s current market share in terms of global payment, particularly for value-added services. For instance, the success of expanding product services and focusing on markets outside the United States will be measured by the increase in market share relative to the existing rival offering comparable services and the overall company presence across all global payment systems. The Net present value will be a helpful metric for comparing the performance of each alternative method. For instance, the firm’s needed rate of return (RRR) can be calculated using the dividend discount model (DDM) and the capital asset pricing model (CAPM) (CAPM). The sales reported throughout the period will be used to calculate the Net present value by discounting the operating cash flows and deducting the initial cost of capital. Assuming revenue growth of 10%, a cost of capital of 10.66%, and all other parameters remaining constant, the expansion of product services will result in a positive value. Positive NPV indicates that the plan is profitable and that the company should go ahead and implement the strategy. Similarly, a growth rate of 10% for the focus strategy on the new market, especially in developing countries, will result in a positive net present value. Each measure will have a positive NPV, but each strategy will face it unique issues which is not factored in this analysis. The value generated from each strategy will indicate whether it is profitable to invest in one of the strategies. The effects of various stakeholders will be determined through predicted dividend payouts, job and promotion prospects, and the means through which the strategic alternative would promote environmental sustainability. The NPV suggests that the company will achieve profit growth, and shareholders will therefore be pleased with the company’s performance. The impact of the two strategic options will have a beneficial effect on the stakeholders’ perceptions of the firm’s future. MasterCard Inc. employees’ prospects are secure, and they will have opportunities for career advancement, as the company’s sales performance shows a sustainable revenue stream (Stone, & Fatima, 2020). Other stakeholders, such as communities, are sure of employment prospects and sustainable social support. The firm’s market dominance is stabilized by an increase in MasterCard’s market share, granting the firm market power to influence prices and fees in the market. MasterCard is unable to affect market prices and fees due to its lack of global market presence and market share since the shifting cost is low. VIX. Recommendation and its Implementation MasterCard Inc. has the chance to accomplish its expansion strategy by leveraging its financial strength, skilled and talented personnel, and innovative spirit. Increasing revenue streams is the objective of the strategies linked with this strategy. The profit margin is a key performance indicator (KPI). The marketing, human resources, and finance manager will be involved in developing the budget and strategies required to increase the income stream and enhance revenue. The functional activities required to support this approach include improving marketing and employee training to line with the competencies required to promote customer-focused services and innovation throughout the organization. There is a requirement for effective communication plans, which will be required for updating stakeholders, such as executives and shareholders, who are eager to know more about the company’s performance. Three to five years will be spent monitoring the strategy. Financial resources, artificial intelligence (AI) tools, an enterprise resource planning (ERP) system, and a customer relationship management (CRM) system would be required resources in implementing this strategy. X. Limitations and Critique of Recommendation If the strategy is not implemented effectively, it could negatively impact the organization’s cost management. Inadequate alignment with the company’s culture and limited time needed to execute the plans may create barriers to implementing the strategy. Plan execution will be hindered by a lack of management buy-in due to the cost of the strategy and by ineffective, unrealistic strategies. Despite MasterCard’s promotion of the strategy, there is a high probability that the company will continue to face competition from new rivals, as well as legal regulation for specific countries’ payment measures and taxation, which will have an impact on the anticipated revenue after strategy implementation. The organization might eliminate a portion of this burden by selecting employees based on market needs and involving employees and management in strategy formulation to secure their support in the change implementation. Establishing a risk management plan that identifies the risks and risk mitigation strategies crucial in hedging against unanticipated risks could prevent MasterCard from incurring losses or effectively managing risk. Exhibit 1: External Analysis Growing e-commerce businesses provide the opportunity for global payment players to improve growth. Consistent growth in e-commerce platforms encourages firms to engage in partnerships and strategic alliances. Consumer shift in behavior Online purchase is growing, providing a new revenue stream for global payment firms. Customer trust in the online transaction has improved over time Competitive threat Increase prices pressures, entry barriers, and substitute threats Players include Visa, Financial Institutions, Digital wallet Exhibit 2: Internal (VRIO) Analysis Value Chain Activities Specific Attributes Along Value Chain V R In W/S/DC/SDC O Competitive Implication: Like to have Purchasing Acquisition of Startup payment firm Yes No Strength Yes Competitive Parity Design & Engineer Creating Innovation Labs Yes No Weakness Competitive Disadvantage Operations Customization and efficient scheduling of Takes Yes Yes No Distinctive competence Yes Temporary Competitive advantage Distribution Service is delivered to customers as requested Yes No Strength Yes Competitive Parity Marketing and Sales Secure and Scales Solution Yes No Distinctive competence Temporary Competitive advantage Service & Tech Support Top Brand in the payment industry Yes Yes Yes Sustainable Distinctive competence Yes Sustainable Distinctive competence Services Diverse product Portfolios Yes Yes No Distinctive Competition Yes Temporary Competitive advantage MasterCard Inc. will be able to capitalize on the growling market as more people attitudes toward shopping online or using a digital platform to transact. MasterCard prides itself on having talent, a distinctive workforce, inimitable intellectual rights and innovation, and high financial power. Exhibit 3: Financial Analysis: Ratio Analysis Name Year Year Year PROFIT RATIOS 1. Operating Margin 53.4% 52.8% 57.2% 2. EBIT Margin 53.4% 52.8% $57.2% 3. Net Profit Margin 46% $49.9 48.1% LIQUIDITY RATIOS 1. Current Ratio 1.29 1.61 1.42 2. Quick Ratio 0.86 0.86 0.91 ACTIVITY RATIOS 1. Inventory Turnover Ratio 12.16 12.83 15.11 2. Receivable Turnover Ratio 15.16 14.96 17.02 LEVERAGE RATIOS 1. Debt to Assets Ratio 0.80 0.81 0.78 2. Debt to Equity Ratio 4.1 4.2 3.9 3. Interest-Coverage Ratio 24.4 21.3 43.1 SHAREHOLDER-RETURN RATIOS 1. Price-Earnings Ratio 3.50 4.76 3.74 2. Market-to-Book Ratio 16.28 19.79 14.08 MasterCard Inc. has positive current ratios meaning the firm can repay current dues. The firm has higher debt which is 80 percent of the total assets, and the equity to debts is higher, whereby the debt is approximately four times the equity owned. The efficiency in converting credit sales is high even though, according to the computation, the firm seems to have declined credit collections. Exhibit 4: Current Strategies and their Implementation Business Strategy: Increase sales Revenue Diversify product line, so that company core revenue growth is stifled Market focus on markets outside North American Functional Strategy: Investing in Human Capital Recruiting talent with technological savvy with experience The talented workforces have the technological know-how to assist the company meets its immediate objectives. Corporate Strategies: Diversification of new products into new markets and locations The company meets the diverse need of customers, retailers, and the government while expanding its geographical reach. MasterCard will support this plan by enhancing new network capabilities Strategic alliances with local government Key Issue(s) Addressed by this Alternative Increased Revenue stream from new markets Name of the Alternative or Strategic Goal Identifier: Expand payment Concentrating on its core network to enable payment for customers, businesses, government, and others Diversify product line, so that company core revenue growth is stifled Market focus on markets outside North American Functional Strategy: Investing in Human Capital Recruiting talent with technological savvy with experience The talented workforces have the technological know-how to assist the company meets its immediate objectives. Corporate Strategies: Diversification of new products into new markets and locations The company meets the diverse need of customers, retailers, and the government while expanding its geographical reach. MasterCard will support this plan by enhancing new network capabilities Strategic alliances with local government Key Issue(s) Addressed by this Alternative Increased Revenue stream from new markets FEASIBILITY JUSTIFICATION FOR THIS STRATEGIC ALTERNATIVE Environmental Opportunity: E-commerce groups more opportunity for strategic alliance and partnership Environmental Threats, Risks: Competitive threat causing prices pressures Present Corporate Attributes relevant and sufficient: Financial muscles, diverse product portfolio which is values and not easy to acquire. Insufficient Corporate Attributes: Increases legal claims and related expenses eat portion of the income and interfere with firm brand reputation. Exhibits 5: Strategic Alternative Descriptions Strategy alternative Growth strategy for its offered services Suit consumers’ different needs and mitigate product risk. Value-added services, such as data analytics and cyber security because they will allow MasterCard Inc to gain market competitiveness. The data analytics will allow the company to produce insights and analytics and provide banks with a dashboard for seeing aggregate card portfolio comparisons. Generate value through cyber and intelligence solutions, insight and analytics, test and learn loyalty and payment gateway solutions for e-commerce firms. Top-line performance by bolstering revenue growth and gaining a larger market share in value-added services, Expand the services to the market not yet explored by competitor may not have explored (Mulheron & Edlin, 2018). MasterCard should implement a strategy to expand its market and revenue base outside the United States. Besides the United States, no country earned more than 10 percent of total revenue, indicating that the company’s strategy must shift from focusing on local revenue generation to focusing on the worldwide market to boost the revenue getting outside the North American market segment. Exhibits 6: Strategic Alternative Descriptions Focusing Strategy MasterCard to form partnerships with digital wallet players to facilitate digital wallet transactions and Facilitate cyber and intelligence solutions that assist the company in creating alternative revenue streams not only from the United States but also from other countries The plan will enhance the number of revenue streams and Ensure that the company is not unduly dependent on the United States Diversification focusing on other worldwide markets for revenue development will generate alternate and sustainable revenue sources. Exhibit 7: Assumptions and Justifications The assumption of the projects is that Growth rate for the forecasted sales from 2021 to 2026 will be 10% The growth rate for expenses, taxes, interest, exchange, operating income and net income will not change. The percentage will be determine through vertical analysis to determine value of each item in the net revenue Vertical analysis will be conducted on 2021 data and the revenue is forecasted to future data The cost of capital is 10.46 as per the Guru focus computation Justification Each project may contribute differently to the company’s total revenue growth and will encounter unique obstacles not accounted for in the above assumption. As a result, there is a possibility that one plan could encounter obstacles connected with government regulation and competitive threat in a new market, which may result in less revenue than anticipated. Both strategies are long-term, as the company seeks new opportunities to capitalize on new markets, expand revenue streams, and improve market share. Visa now dominates the market, but this must change if the plan happens to be successful. Exhibit 8: Strategic Alternative NPV: Expanding Product Services   2021   2022 2023 2024 2025 2026 Total Revenue 18,884 1.10 20772 22850 25135 27648 30413 Operating Expense $8,802 47% 9682 10650 11715 12887 14176 Admin Expense 7,087 38% 7796 8575 9433 10376 11414 Depreciation and Amortization 726 4% 799 878 966 1063 1169 Operating Income 10,082 53% 11090 12199 13419 14761 16237 Total Interest Expense 225 1% 248 272 299 329 362 Pre-tax Income 10,307 55% 11338 12471 13719 15090 16600 Tax Provision 1,620 9% 1782 1960 2156 2372 2609 Net Income 8,687 46% 9556 10511 11562 12719 13991 Free Cash Flow 1950.9   10354 11,390 12,529 13782 15160 Present Value Factor 10.99%   0.90531 0.81958 0.74197 0.67171 0.60810 Present Value     9374 9335 9296 9257 9219 Total PV of CF   46480 Initial Investment   -21,000 Total Net PV             25,480 The NPV reported on this strategy was 24,820 indicating the project will be successful and profitable. However, the project may contribute differently to the company’s total revenue growth and will encounter unique obstacles not accounted for in the above assumption. Exhibit 9: Strategic Alternative NPV: Focus Strategy   2021   2022 2023 2024 2025 2026 Total Revenue 18,884 1.10 20772 22850 25135 27648 30413 Operating Expense $8,802 47% 9682 10650 11715 12887 14176 Admin Expense 7,087 38% 7796 8575 9433 10376 11414 Depreciation and Amortization 726 4% 799 878 966 1063 1169 Operating Income 10,082 53% 11090 12199 13419 14761 16237 Total Interest Expense 225 1% 248 272 299 329 362 Pre-tax Income 10,307 55% 11338 12471 13719 15090 16600 Tax Provision 1,620 9% 1782 1960 2156 2372 2609 Net Income 8,687 46% 9556 10511 11562 12719 13991 Free Cash Flow 1950.9   10354 11,390 12,529 13782 15160 Present Value Factor 10.99%   0.90531 0.81958 0.74197 0.67171 0.60810 Present Value     9374 9335 9296 9257 9219 Total PV of CF   46480 Initial Investment   -30,000 Total Net PV             16,480 The projects on focus strategy will generate a NPV of 15,820 since cost needed to execute the project is higher. There is need to expand marketing and research to understand the new market and promote consistent ads to create customer awareness about the product. Exhibit 10: Evaluation of Alternatives by Criteria Criteria Expand payment options Focus strategy on new Markets Shareholders Net Present Value $25,480 $16,480 Stakeholders Customers Effect: Positive Level of effect: High Effect: Positive Level of effect: High Employees Effect: Positive Level of effect: High Effect: Positive Level of effect: Low Environment (Sustainability) Effect: Positive Level of effect: High Effect: Positive Level of effect: Moderate Government Effect: Positive Level of effect: High Effect: Negative Level of effect: Moderate The focus strategy on new markets is more profitable since it has higher positive NPV. MasterCard should prioritize more on exploring and exploiting then untapped market in developing nations and countries with increase start-up especially on e-commerce. Exhibit 11: Implementation Schedule / Action Plan Strategic Objective 1: Expand payment services Increase revenue Stream Key performance Measure: Net Profit Actions: Developing revenue target, marketing strategy, communication channel, training staffs to be in line with internal operational efficiency Allocate Resources: HR, Finance Manager, Marketing and Sales personnel Timeline: Five year period Strategic Objective 2: Focus strategy in new Market in the developing countries Increase Revenue streams KPI: Net profit, Revenue growth rate Action: Developing revenue target, marketing strategy, communication and team interaction, and training staff. Allocate Resources: HR, Finance Manager, Marketing and Sales personnel Timeline: Five year period The two strategy will be implemented as project an each project will be allocated a projects managers and team of staffs that will be responsible for developing plans, executing the plans and evaluating the plans to gauge whether the sale expectation are met. Each plan has Time Horizon of five year period. References Andriotis, A. (2018). Shoppers Love Rewards Credit Cards. Retailers Hate Them. WSJ. com. Furr, N., & Shipilov, A. (2018). Building the right ecosystem for innovation. MIT Sloan Management Review, 59(4), 59–64. Guru Focus.(n.d) Mastercard (NYSE:MA) WACC % :10.46% (As of Today)https://www.gurufocus.com/term/wacc/MA/WACC-Percentage/MA Haines, A. (2020). This week in tax: Mastercard’s India case, tax treaties, and trade. International Tax Review. MasterCard Inc. SEC Filling. Retrieved from https://investor.mastercard.com/financials-and-sec-filings/sec-filings/default.aspx Mulheron, R., & Edlin, D. E. (2018). The Mere Mirage of a Class Action? A Challenge to Merricks v Mastercard Inc. CIVIL JUSTICE QUARTERLY, 37(2), 216-256. Stone, R & Fatima, A.(2020, Feb 5). Visa and Mastercard bet big on different growth strategies. S&P Global Market Intelligence. Retrieved from https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/visa-mastercard-bet-big-on-different-growth-strategies-56797573
This is a very brief and heavy assignment and it has finance, accounting, and management tasks involved. I have not posted the case yet. The attachment is just a list of introductions that need to be
Case Analysis: MasterCard: Creating a World Beyond Cash Student Name Course Title and Name Instructor Name Due Date Case Analysis: MasterCard: Creating a World Beyond Cash Executive Summary MasterCard has continued to flourish despite facing severe competition from Visa, Financial Institutions, and new emerging payment methods in the global payment Industry. Among the players in this business are Visa, PayPal, Alipay, Apple pay, and Google Wallet, as well as other worldwide payment companies. Mastercard reported a growth rate of 23.4 percent, up from negative 21 percent in 2020. The Covid-19 pandemic largely caused this fall. MasterCard has been able to hedge against competition from digital wallets by getting into strategic alliances and partnerships instead of viewing the players as rivals. MasterCard can boost its market share by forming alliances with other companies. Mastercard can leverage its innovation, financial strength, and technological expertise to increase its market share. MasterCard maintains its competitiveness and increases its market share by diversifying and expanding its product portfolio and changing its marketing focus to regions not well exploited. The recommended plan includes expanding payment services, particularly value-added services, in the existing market. The long-term implications of the approach include an increase in the revenue stream, a rise in the profit margin, and an increase in the annual dividend payout. The non-financial implications include an improvement in reputation and consumer happiness and a reduction in the risk connected with payment transactions. Due to the high value of the firm’s debts, the strategy will be financed by retained earnings and equity. Any more loans would greatly increase the firm’s risk of insolvency. A budget will be created to account for the costs associated with implementing the proposed strategies. The expected benefits of the chosen strategy include increasing revenue streams, improved brand reputation, and market share enhancements. II. External Assessment: Opportunities and Threats The players in the global payment industry are accountable for network-based card transaction processing. The payment industry services segment includes consumer bill payments, mobile banking applications, B2B payment facilitation, and facilitating disbursements and remittances. The leading companies in this industry have a global presence in nearly every country. In the 21st century, commerce shifted to digital platforms, and consumers used at least one online payment method. Therefore, as the global e-commerce industry continues to grow, global payment companies have the opportunity to leverage e-commerce growth to increase market share and enter into partnerships to enjoy the large pool of consumer base (Andriotis, 2018). The key success factors include human capital, entering to partnership and mutually beneficial arrangement to expand the network so as to capitalize on e-commerce growth. The consumer change in attitude and perception toward online purchase, and online transaction creates a new market opportunity for companies in the global payment industry. The global payment industry can grow its revenue streams by introducing and developing diverse product services. Consumers are more likely to utilize digital wallets to pay for goods and services than in the past. The key success factors include delivering services to customer as requested and creating innovation lab to introduce services that meets the changing needs of its customer base. The global payment industry players experience high competitive threats from well-established firms competing in all payment categories. Some of these businesses have different business models that provide them with unique pricing advantages (Andriotis, 2018). Low switching cost, entry barrier and threat of substitute create price and fees pressures. The success factors that could alleviate the threats include partnerships with other players within the industry, acquisition of startup digital wallet firm and strategic alliances. These factors could help address competitive risks and reduce price pressure threats. III. Internal Assessment: Resources & Capabilities This part should be written to explain about how the analysis of resources and capabilities are VRIO. You should state the name of the value chain activity, specific attribute of the R/C, state whether it is valuable, rare, inimitable (and their rationales), whether it is W/S/DC/SDC, organization and its rationale, and its competitive implication in each paragraph for the Resources/Capabilities. Address whether the firm has the organization (structure) and complementary resources to take advantage of the resource/capability being discussed in the paragraph. For the weakness part, please address the special caveat mentioned in the guidelines. That is, you need to discuss whether you believe it will be VRIO if they make investment into it to make it a strength, distinctive competence, or sustainable distinctive competence. Also, what will be the competitive implication. A special note about weaknesses. Students often ask whether they should bring up a weakness or not. Our response is: Bring it up if it is a strategic weakness that you think is important for the top management to address for their strategy to be successful in the next five years. If you do bring it up, keep it mind that you should analyze whether or not it can become strength, distinctive competency, or sustainable distinctive competency, if the company invests in it. Also, be sure to come up with ways to make up the weakness as part of your strategy when you are building the strategic alternatives! We are not expecting you to provide rationale for each of the items in the exhibit. When you are examining the value chain, you may add an activity that is relevant for the case under study or delete an activity that is not relevant. For example, for a service firm, you may use “Operations” rather than “Manufacturing” given in the value chain. Remember to refer to your exhibit in your internal analysis write-up. MasterCard Inc. is one of the world’s major payment networks and a leading provider of financial services. MasterCard is a global payment industry that provides many payment solutions and services, such as automated clearing houses, multi-rail payment, and acquiring and issuing banks communicating over the card network to authorize transactions. MasterCard Inc. is a multinational payment company with a presence on almost every continent. One of MasterCard’s strengths is its financial strength based on the company’s sales success. From 2010 through 2020, the company generated sustained sales and net income growth. Strong financial resources show the company’s capacity to fund research and innovation and its ability to recruit top talent. The company’s financial performance demonstrates distinctive, durable competencies that will be advantageous in the long run. MasterCard invested a lot in developing a robust product portfolio that required innovation and the development of new methods for obtaining market share. Wide and diverse services diversify the existing offering to mitigate product risk. Included in the value-added product are data analytics and cyber security. This product will be valuable for satisfying varied market needs and diversifying revenue streams. The extensive and varied product portfolio provides MasterCard with a unique competency that it can employ to remain competitive and give consumers exclusive offerings (Andriotis, 2018). Involvement in claims and legal actions is a weakness associated with MasterCard Inc. MasterCard faces various lawsuits that will cost the company $73 million in 2020 and $94 million in 2021. This suggests an increase in legal spending, which could negatively impact the firm’s bottom line. MasterCard should utilize its talented employees to advise the corporation on interchange fees and privacy regulations to avoid incurring unnecessary legal expenses. IV. Internal Assessment: Financial Performance and Future Financial Capacity Indicate the financial strength and future financial capacity of the firm to carrying out possible future initiatives/strategies (Future financial capacity refers to the amount of capital (money) the company can raise to invest in the next five years?) Can the company raise the money that you will be using for your recommendation? If yes, how? (e.g., debt, equity). Keep in mind the future orientation of the assessment rather than living in the past. According to Exhibit 3, MasterCard’s constant revenue increase from 2018 to 2020 suggests strong financial health, even if the company recorded a major revenue and net profit fall of 9 and 21 percent in 2020. In 2021, the business reported positive revenue and net income. The firm’s time interest earned ratios show that it will be able to pay all debt costs more than 24 times in 2021, compared to 39 times in 2018, indicating a fall in capability despite the firm’s stability in paying all due debt costs. The debt ratios reveal that overall debt is equivalent to 80 percent of total assets, indicating an increase in debt value. The equity-to-debt ratios indicate that MasterCard has four times as much debt as it does equity, indicating a significant level of leverage. The current ratio is more than one, showing that the company has steady current liquidity, which is critical for day-to-day operations. Since the company’s obligations are already substantial relative to its assets, acquiring financing through borrowing may be difficult. However, since the equity share is low, corporations can raise more equity capital through the security market. However, Equity financing is expensive since it dilutes payable dividend per share, and increasing cost of capital. It is anticipated that the corporation will record increasing revenues and net profits. V. Current Strategies and their Implementation Analyze major functional strategies as well as important issues related to implementation: organizational structure, control systems, culture, and processes. You may have noticed, business strategy is key to competitive advantage, therefore the most focus in the course and in this paper is on business strategy. Keep the future orientation in your mind as you analyze them so your analysis and synthesis are relevant for the next sections of this paper. These strategies represent status-quo in the company. This section will clarify the current practice of strategic management in the company so it is easier for the reader to understand how strategies will be changed when you present the strategic alternatives in section VII. Be sure to complete Exhibit C before writing this section and provide a succinct write up of the same in the text. Needless to say, both Exhibit C and this section should be consistent with each other. MasterCard’s business strategy is to increase payments by concentrating on its core network to enable payment flows for customers, businesses, governments, and others, thereby providing customers with options and the flexibility to transact across different payment rails (Furr & Shipilov, 2018). The objective is to diversify the product line so that the company’s core revenue growth is stifled and has another growth stream. MasterCard’s functional strategy involves investing in human capital development by recruiting talented and Technological savvy with diverse experience. This talented workforce will have the technological know-how to assist companies in establishing grounding-breaking services and achieving their immediate objectives of closing deals and educating clients. MasterCard’s global and corporate strategies include diversifying new products into new markets and locations. This plan will assist the company meets the needs of a diverse group of customers, including financial institutions, retailers, the government, and digital players while expanding its geographic reach. MasterCard will support this plan by enhancing new network capabilities, such as increasing digital identity-related services and employing banking and open data knowledge. VI. Key Issue(s) of the Case MasterCard Inc.’s ongoing legal is the most pressing concern. For instance, the firm faces a legal battle associated with facilitating and managing payments and fees. The corporation is accused of colluding with the Pornhub Corporation to disseminate unlawful photos (Haines, 2020). MasterCard’s brand reputation may be affected now and in the future if these legal challenges are not well addressed. MasterCard’s global credit card issuer market share is only 25.6%, compared to Visa’s 50.0%. In order to recoup a portion of the market share, MasterCard should increase its market share by forming partnerships and strategic alliances and increasing its global footprint through acquisitions. The firm’s debt-to-asset ratio is 80 percent, which is a significant amount. This issue may not have any effect at this time, but in the future, when the company wants capital to fund an acquisition or merger, it may face borrowing restrictions. The firm’s ambition to increase the value of its debt will generate bankruptcy concerns and make it difficult to service its debt obligations. VII. Implementable Strategic Alternatives Do not neglect consideration of other important issues that may hinder implementation of your strategies. Therefore, consider issues of structure, systems, processes, resources, culture, etc. when formulating alternatives, developing criteria, evaluating alternatives, and making recommendation. For example, it is important to think of a multilateral match of environment, strategy, structure, systems, technology, culture, etc. before recommending a major strategic change. It is never easy to match several different elements so creativity with a solid foundation is important for the paper. It is essential that the paper flows from one section to another and this section is an important linchpin in building that flow. Keep in mind that the point is to strategically manage the company and thus simply selling the company or the status quo are not acceptable alternatives. If you are recommending an alliance or merger with a company, name the company with which to have an alliance or a merger. Also, be sure to provide positive evidence that the target company will be interested in an alliance or a merger. MasterCard Inc. can utilize a growth strategy for its offered services to suit consumers’ different needs and mitigate product risk. The companies should expand their value-added services, such as data analytics and cyber security because they will allow MasterCard Inc. to gain market competitiveness. The data analytics will allow the company to produce insights and analytics and provide banks with a dashboard for seeing aggregate card portfolio comparisons. MasterCard will be able to generate value through cyber and intelligence solutions, insight and analytics, test and learn loyalty, and payment gateway solutions for e-commerce firms. The plan will allow MasterCard to improve top-line performance by bolstering revenue growth and gaining a larger market share in value-added services, a market that competitors may not have explored (Mulheron & Edlin, 2018). MasterCard should implement a strategy to expand its market and revenue base outside the United States. Besides the United States, no country earned more than 10 percent of total revenue, indicating that the company’s strategy must shift from focusing on local revenue generation to focusing on the worldwide market to boost the revenue getting outside the North American market segment. Focusing on these countries requires MasterCard to form partnerships with digital wallet players to facilitate digital wallet transactions and facilitate cyber and intelligence solutions that assist the company in creating alternative revenue streams not only from the United States but also from other countries (Mulheron & Edlin, 2018). The plan will enhance the number of revenue streams and ensure that the company is not unduly dependent on the United States, as any economic changes in the United States could substantially impact the company’s bottom line. Diversification focusing on other worldwide markets for revenue development will generate alternate and sustainable revenue sources. VIII. Criteria and Evaluation of Alternatives by Criteria Financial criteria often include net present value and payback period. Other financial criteria may be dictated by the circumstances of the case. For example, there may be the need to achieve a certain return on investment in order to attract investors. Values and preferences of the managers or other stakeholders, as outlined in internal assessment, may influence non-financial criteria. In addition to the effect on shareholders (which may be captured in terms of profitability or net present value), another important criterion is the effect of decisions on other stakeholders. These stakeholders may include customers, employees, environment, government, community, etc. Here are two criteria that are required for your case analysis: (1) Net Present Value (2) Effect on Various Stakeholders (other than shareholders). Among the stakeholders, at least choose customers, employees, and environment (sustainability) as stakeholders. You may also add other stakeholders, depending on their relevance. In addition, you may choose one or two other criteria that may be relevant to your case analysis. However, be careful to choose output-oriented criteria rather than input-oriented criteria (such as level of investment, ease of implementation, etc.). Further, as noted in the Implementable Strategic Alternatives section, each alternative must be feasible, legitimate, and relevant. Thus, feasibility (taking into account external and internal assessment), legitimacy (consistency with the organization’s mission), and relevance (addressing key issues) cannot be used as criteria for evaluation. In addition, your strategic alternatives should be strong enough to produce positive results within five years. If it is impossible to get positive results of your strategy in five years, you may extend your evaluation of the alternatives to ten years. Finally, your criteria and evaluation should be structured as provided in Exhibit E rather than having a laundry list of criteria. Which way did you follow? There are two ways of writing this section. You may choose to write it either way: a) Evaluate both alternatives by criterion one in the first paragraph, followed by evaluating both alternatives by criterion two in the second paragraph and so on; or b) Evaluating the first alternative by all the criteria in the first paragraph, followed by evaluating the second alternative by all the criteria in the second paragraph, and so on. The market share growth since the introduction of each strategic option can be used to evaluate the two strategic alternatives. In 2017, MasterCard held a market share of 25.4 percent among global card issuers, according to the case excerpt. However, MasterCard’s internal records could be utilized to determine the company’s current market share in terms of global payment, particularly for value-added services. For instance, the success of expanding product services and focusing on markets outside the United States will be measured by the increase in market share relative to the existing rival offering comparable services and the overall company presence across all global payment systems. The Net present value will be a helpful metric for comparing the performance of each alternative method. For instance, the firm’s needed rate of return (RRR) can be calculated using the dividend discount model (DDM) and the capital asset pricing model (CAPM) (CAPM). The sales reported throughout the period will be used to calculate the Net present value by discounting the operating cash flows and deducting the initial cost of capital. Assuming revenue growth of 10%, a cost of capital of 10.66%, and all other parameters remaining constant, the expansion of product services will result in a positive value. Positive NPV indicates that the plan is profitable and that the company should go ahead and implement the strategy. Similarly, a growth rate of 10% for the focus strategy on the new market, especially in developing countries, will result in a positive net present value. Each measure will have a positive NPV, but each strategy will face it unique issues which is not factored in this analysis. The value generated from each strategy will indicate whether it is profitable to invest in one of the strategies. The effects of various stakeholders will be determined through predicted dividend payouts, job and promotion prospects, and the means through which the strategic alternative would promote environmental sustainability. The NPV suggests that the company will achieve profit growth, and shareholders will therefore be pleased with the company’s performance. The impact of the two strategic options will have a beneficial effect on the stakeholders’ perceptions of the firm’s future. MasterCard Inc. employees’ prospects are secure, and they will have opportunities for career advancement, as the company’s sales performance shows a sustainable revenue stream (Stone, & Fatima, 2020). Other stakeholders, such as communities, are sure of employment prospects and sustainable social support. The firm’s market dominance is stabilized by an increase in MasterCard’s market share, granting the firm market power to influence prices and fees in the market. MasterCard is unable to affect market prices and fees due to its lack of global market presence and market share since the shifting cost is low. VIX. Recommendation and its Implementation MasterCard Inc. has the chance to accomplish its expansion strategy by leveraging its financial strength, skilled and talented personnel, and innovative spirit. Increasing revenue streams is the objective of the strategies linked with this strategy. The profit margin is a key performance indicator (KPI). The marketing, human resources, and finance manager will be involved in developing the budget and strategies required to increase the income stream and enhance revenue. The functional activities required to support this approach include improving marketing and employee training to line with the competencies required to promote customer-focused services and innovation throughout the organization. There is a requirement for effective communication plans, which will be required for updating stakeholders, such as executives and shareholders, who are eager to know more about the company’s performance. Three to five years will be spent monitoring the strategy. Financial resources, artificial intelligence (AI) tools, an enterprise resource planning (ERP) system, and a customer relationship management (CRM) system would be required resources in implementing this strategy. X. Limitations and Critique of Recommendation What are other costs or risks that were not considered at the time of evaluation of alternatives? How can they be minimized? Is your recommended solution able to address all the underlying issues, or does it have limitations? Do you foresee changes that will impact on your recommendations? This section can help strengthen your strategic alternatives. For example, if you are writing limitations that you may have control over, you may prefer to incorporate ways of dealing with them in your alternatives. In other words, this section should represent things that you may not have control over. If the strategy is not implemented effectively, it could negatively impact the organization’s cost management. Inadequate alignment with the company’s culture and limited time needed to execute the plans may create barriers to implementing the strategy. Plan execution will be hindered by a lack of management buy-in due to the cost of the strategy and by ineffective, unrealistic strategies. Despite MasterCard’s promotion of the strategy, there is a high probability that the company will continue to face competition from new rivals, as well as legal regulation for specific countries’ payment measures and taxation, which will have an impact on the anticipated revenue after strategy implementation. The organization might eliminate a portion of this burden by selecting employees based on market needs and involving employees and management in strategy formulation to secure their support in the change implementation. Establishing a risk management plan that identifies the risks and risk mitigation strategies crucial in hedging against unanticipated risks could prevent MasterCard from incurring losses or effectively managing risk. Exhibit 1: External Analysis Growing e-commerce businesses provide the opportunity for global payment players to improve growth. Consistent growth in e-commerce platforms encourages firms to engage in partnerships and strategic alliances. Success Factors include human capital, entering to partnership and mutually beneficial arrangement to expand the network so as to capitalize on e-commerce growth. Consumer shift in behavior Online purchase is growing, providing a new revenue stream for global payment firms. Customer trust in the online transaction has improved over time Key success factors: delivering services to customer as requested and creating innovation lab to introduce services that meets the changing needs of its customer base. Competitive threat Increase prices pressures, low switching cost, entry barriers, and substitute threats Players include Visa, Financial Institutions, Digital wallet Key success factors: Entering into partnerships with digital wallet firms, acquisition of startup digital wallet firm and strategic alliances. Exhibit 2: Internal (VRIO) Analysis Value Chain Activities Specific Attributes Along Value Chain V R In W/S/DC/SDC O Competitive Implication: Like to have Purchasing Acquisition of Startup payment firm Yes No Strength Yes Competitive Parity Design & Engineer Creating Innovation Labs Yes No Weakness Competitive Disadvantage Operations Customization and efficient scheduling of Takes Yes Yes No Distinctive competence Yes Temporary Competitive advantage Distribution Service is delivered to customers as requested Yes No Strength Yes Competitive Parity Marketing and Sales Secure and Scales Solution Yes No Distinctive competence Temporary Competitive advantage Service & Tech Support Top Brand in the payment industry Yes Yes Yes Sustainable Distinctive competence Yes Sustainable Distinctive competence Services Diverse product Portfolios Yes Yes No Distinctive Competition Yes Temporary Competitive advantage MasterCard Inc. will be able to capitalize on the growling market as more people attitudes toward shopping online or using a digital platform to transact. MasterCard prides itself on having talent, a distinctive workforce, inimitable intellectual rights and innovation, and high financial power. Exhibit 3: Financial Analysis: Ratio Analysis (missing year numbers) Name Year Year Year PROFIT RATIOS 1. Operating Margin 53.4% 52.8% 57.2% 2. EBIT Margin 53.4% 52.8% $57.2% 3. Net Profit Margin 46% $49.9 48.1% LIQUIDITY RATIOS 1. Current Ratio 1.29 1.61 1.42 2. Quick Ratio 0.86 0.86 0.91 ACTIVITY RATIOS 1. Inventory Turnover Ratio 12.16 12.83 15.11 2. Receivable Turnover Ratio 15.16 14.96 17.02 LEVERAGE RATIOS 1. Debt to Assets Ratio 0.80 0.81 0.78 2. Debt to Equity Ratio 4.1 4.2 3.9 3. Interest-Coverage Ratio 24.4 21.3 43.1 SHAREHOLDER-RETURN RATIOS 1. Price-Earnings Ratio 3.50 4.76 3.74 2. Market-to-Book Ratio 16.28 19.79 14.08 MasterCard Inc. has positive current ratios meaning the firm can repay current dues. The firm has higher debt which is 80 percent of the total assets, and the equity to debts is higher, whereby the debt is approximately four times the equity owned. The efficiency in converting credit sales is high even though, according to the computation, the firm seems to have declined credit collections. Exhibit 4: Current Strategies and their Implementation Business Strategy: Increase sales Revenue Diversify product line, so that company core revenue growth is stifled Market focus on markets outside North American Functional Strategy: Investing in Human Capital Recruiting talent with technological savvy with experience The talented workforces have the technological know-how to assist the company meets its immediate objectives. Corporate Strategies: Diversification of new products into new markets and locations The company meets the diverse need of customers, retailers, and the government while expanding its geographical reach. MasterCard will support this plan by enhancing new network capabilities Strategic alliances with local government Key Issue(s) Addressed by this Alternative Increased Revenue stream from new markets Name of the Alternative or Strategic Goal Identifier: Expand payment Concentrating on its core network to enable payment for customers, businesses, government, and others Diversify product line, so that company core revenue growth is stifled Market focus on markets outside North American Functional Strategy: Investing in Human Capital Recruiting talent with technological savvy with experience The talented workforces have the technological know-how to assist the company meets its immediate objectives. Corporate Strategies: Diversification of new products into new markets and locations The company meets the diverse need of customers, retailers, and the government while expanding its geographical reach. MasterCard will support this plan by enhancing new network capabilities Strategic alliances with local government Key Issue(s) Addressed by this Alternative Increased Revenue stream from new markets FEASIBILITY JUSTIFICATION FOR THIS STRATEGIC ALTERNATIVE Environmental Opportunity: E-commerce groups more opportunity for strategic alliance and partnership Environmental Threats, Risks: Competitive threat causing prices pressures Present Corporate Attributes relevant and sufficient: Financial muscles, diverse product portfolio which is values and not easy to acquire. Insufficient Corporate Attributes: Increases legal claims and related expenses eat portion of the income and interfere with firm brand reputation. Exhibits 5: Strategic Alternative Descriptions Strategy alternative Growth strategy for its offered services Suit consumers’ different needs and mitigate product risk. Value-added services, such as data analytics and cyber security because they will allow MasterCard Inc to gain market competitiveness. The data analytics will allow the company to produce insights and analytics and provide banks with a dashboard for seeing aggregate card portfolio comparisons. Generate value through cyber and intelligence solutions, insight and analytics, test and learn loyalty and payment gateway solutions for e-commerce firms. Top-line performance by bolstering revenue growth and gaining a larger market share in value-added services, Expand the services to the market not yet explored by competitor may not have explored (Mulheron & Edlin, 2018). MasterCard should implement a strategy to expand its market and revenue base outside the United States. Besides the United States, no country earned more than 10 percent of total revenue, indicating that the company’s strategy must shift from focusing on local revenue generation to focusing on the worldwide market to boost the revenue getting outside the North American market segment. Exhibits 6: Strategic Alternative Descriptions Focusing Strategy MasterCard to form partnerships with digital wallet players to facilitate digital wallet transactions and Facilitate cyber and intelligence solutions that assist the company in creating alternative revenue streams not only from the United States but also from other countries The plan will enhance the number of revenue streams and Ensure that the company is not unduly dependent on the United States Diversification focusing on other worldwide markets for revenue development will generate alternate and sustainable revenue sources. Exhibit 7: Assumptions and Justifications The assumption of the projects is that Growth rate for the forecasted sales from 2021 to 2026 will be 10% The growth rate for expenses, taxes, interest, exchange, operating income and net income will not change. The percentage will be determine through vertical analysis to determine value of each item in the net revenue Vertical analysis will be conducted on 2021 data and the revenue is forecasted to future data The cost of capital is 10.46 as per the Guru focus computation Justification Each project may contribute differently to the company’s total revenue growth and will encounter unique obstacles not accounted for in the above assumption. As a result, there is a possibility that one plan could encounter obstacles connected with government regulation and competitive threat in a new market, which may result in less revenue than anticipated. Both strategies are long-term, as the company seeks new opportunities to capitalize on new markets, expand revenue streams, and improve market share. Visa now dominates the market, but this must change if the plan happens to be successful. Exhibit 8: Strategic Alternative NPV: Expanding Product Services   2021   2022 2023 2024 2025 2026 Total Revenue 18,884 1.10 20772 22850 25135 27648 30413 Operating Expense $8,802 47% 9682 10650 11715 12887 14176 Admin Expense 7,087 38% 7796 8575 9433 10376 11414 Depreciation and Amortization 726 4% 799 878 966 1063 1169 Operating Income 10,082 53% 11090 12199 13419 14761 16237 Total Interest Expense 225 1% 248 272 299 329 362 Pre-tax Income 10,307 55% 11338 12471 13719 15090 16600 Tax Provision 1,620 9% 1782 1960 2156 2372 2609 Net Income 8,687 46% 9556 10511 11562 12719 13991 Free Cash Flow 1950.9   10354 11,390 12,529 13782 15160 Present Value Factor 10.99%   0.90531 0.81958 0.74197 0.67171 0.60810 Present Value     9374 9335 9296 9257 9219 Total PV of CF   46480 Initial Investment   -21,000 Total Net PV             25,480 The NPV reported on this strategy was 24,820 indicating the project will be successful and profitable. However, the project may contribute differently to the company’s total revenue growth and will encounter unique obstacles not accounted for in the above assumption. Exhibit 9: Strategic Alternative NPV: Focus Strategy   2021   2022 2023 2024 2025 2026 Total Revenue 18,884 1.10 20772 22850 25135 27648 30413 Operating Expense $8,802 47% 9682 10650 11715 12887 14176 Admin Expense 7,087 38% 7796 8575 9433 10376 11414 Depreciation and Amortization 726 4% 799 878 966 1063 1169 Operating Income 10,082 53% 11090 12199 13419 14761 16237 Total Interest Expense 225 1% 248 272 299 329 362 Pre-tax Income 10,307 55% 11338 12471 13719 15090 16600 Tax Provision 1,620 9% 1782 1960 2156 2372 2609 Net Income 8,687 46% 9556 10511 11562 12719 13991 Free Cash Flow 1950.9   10354 11,390 12,529 13782 15160 Present Value Factor 10.99%   0.90531 0.81958 0.74197 0.67171 0.60810 Present Value     9374 9335 9296 9257 9219 Total PV of CF   46480 Initial Investment   -30,000 Total Net PV             16,480 The projects on focus strategy will generate a NPV of 15,820 since cost needed to execute the project is higher. There is need to expand marketing and research to understand the new market and promote consistent ads to create customer awareness about the product. Exhibit 10: Evaluation of Alternatives by Criteria Criteria Expand payment options Focus strategy on new Markets Shareholders Net Present Value $25,480 $16,480 Stakeholders Customers Effect: Positive Level of effect: High Effect: Positive Level of effect: High Employees Effect: Positive Level of effect: High Effect: Positive Level of effect: Low Environment (Sustainability) Effect: Positive Level of effect: High Effect: Positive Level of effect: Moderate Government Effect: Positive Level of effect: High Effect: Negative Level of effect: Moderate The focus strategy on new markets is more profitable since it has higher positive NPV. MasterCard should prioritize more on exploring and exploiting then untapped market in developing nations and countries with increase start-up especially on e-commerce. Exhibit 11: Implementation Schedule / Action Plan Strategic Objective 1: Expand payment services Increase revenue Stream Key performance Measure: Net Profit Actions: Developing revenue target, marketing strategy, communication channel, training staffs to be in line with internal operational efficiency Allocate Resources: HR, Finance Manager, Marketing and Sales personnel Timeline: Five year period Strategic Objective 2: Focus strategy in new Market in the developing countries Increase Revenue streams KPI: Net profit, Revenue growth rate Action: Developing revenue target, marketing strategy, communication and team interaction, and training staff. Allocate Resources: HR, Finance Manager, Marketing and Sales personnel Timeline: Five year period The two strategy will be implemented as project an each project will be allocated a projects managers and team of staffs that will be responsible for developing plans, executing the plans and evaluating the plans to gauge whether the sale expectation are met. Each plan has Time Horizon of five year period. References Andriotis, A. (2018). Shoppers Love Rewards Credit Cards. Retailers Hate Them. WSJ. com. Furr, N., & Shipilov, A. (2018). Building the right ecosystem for innovation. MIT Sloan Management Review, 59(4), 59–64. Guru Focus.(n.d) Mastercard (NYSE:MA) WACC % :10.46% (As of Today)https://www.gurufocus.com/term/wacc/MA/WACC-Percentage/MA Haines, A. (2020). This week in tax: Mastercard’s India case, tax treaties, and trade. International Tax Review. MasterCard Inc. SEC Filling. Retrieved from https://investor.mastercard.com/financials-and-sec-filings/sec-filings/default.aspx Mulheron, R., & Edlin, D. E. (2018). The Mere Mirage of a Class Action? A Challenge to Merricks v Mastercard Inc. CIVIL JUSTICE QUARTERLY, 37(2), 216-256. Stone, R & Fatima, A.(2020, Feb 5). Visa and Mastercard bet big on different growth strategies. S&P Global Market Intelligence. Retrieved from https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/visa-mastercard-bet-big-on-different-growth-strategies-56797573

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