Assignment:
Global Business Relationships.
Within the GLO-BUS simulation, you should complete the first-year decision, Year 8. This Year 8 decision will be graded. Go to the GLO-BUS Web site and review the Year 7 information on your company's operating results. You may wish to print a copy of the Year 7 company operations reports to easily review the information.
When you complete your decision activity, write and submit a short paper (approximately 1-2 double-spaced pages) analyzing your previous and current decisions, and your anticipated results. This paper is meant to be a rolling analysis assessment, which looks backward and forward in time. It is not expected you will have a full and complete picture of that week's results, prior to writing the paper. The intention for this assignment is for you to indicate:
Question: 1 What strategy you will be implementing.
Question: 2 What your most recent decisions are, and why.
Question: 3 What your current view of your anticipated results is. And
Question: 4 Optionally, where you are going in the future.
You should relate your analysis to your overall strategy, discuss why you made decisions you did, discuss the results, and discuss the short- and long-term business and financial implications of your decisions.
DigitCam Company Background:
At this time, our company proposes to sell close to 800,000 entry-level cameras and 200,000 multi-featured cameras annually. Prior-year revenues were US$ 206 million and net earnings were US$ 20 million, equal to US$ 2.00 per share of common stock.
GLO-BUS - Decision for Year 7
DigitCam Company is in sound financial condition and is performing well. Its products are well regarded by digital camera users. DigitCam's board of directors has charged the co-managers with developing a winning competitive strategy-one that capitalizes on growing consumer interest in digital cameras, keeps the company in the ranks of the industry leaders, and boosts the company's earnings on an annual basis.
Develops a strategic plan depicting reasons within a scenario, critiques team decisions and corresponding results associated with business management, and evaluates both short- and long-term implications.
As is apparent from the GLO-BUS - Decision for Year 6, our company's Decision for Year 7 will major in utilizing the employee reward strategy - in an effort of achieving the maximum competition status. With the realization that the global market is growing stiff with competition, the decision was arrived at after a long review and evaluation of the co-managers opinions and views on the next decision to be made for Year 7. Hand in hand, this decision will not only make it possible for DigitCam as a new company, to hit roof top success but also grow employees who are willing and engaged in their work as far as the company's success is concerned (Ekins, 2011).
With the Year 6 in mind, the positive financial prospect was quite a success. Among others, the Decision for Year 6 was to create a company's brand that enables DigitCam Company to get access to a wide range of professional staff. It is especially important that there is a business need to venture into new products and management skills, branding our company products in an effort to recruit qualified staff. Therefore, DigitCam Company will enable to achieve effective management and drive innovations (Veltman, 2009).
Here again, the Decision for Year 6 was a successful one. Certainly, the co-management can confidently rely on the outcome to predict the future. Due to the fact that it has been elevated and propelled to some extend beyond the decision for Year 7 and its accomplishments. The future or the next decision Year 7 seems to be valid and achievable. During this period, DigitCam Company's success is mainly due to the fact that the employees and management are the formulators of the Year 7 decisions. Collectively, it was based on their anticipations and the management strategy needed to compete effectively in the global market (Chandler, 2013).
In big and little ways, DigitCam Company has developed vision to continuously stay on top of changing market and competitive conditions in today's increasingly interdependent and turbulent business world. With that in mind, our company is formulating a mission statement that forms the basis for the strategic management process because there is a tradeoff between the company philosophy, survival, growth and profitability - that is, the ability to create higher profitability for the company and stakeholders (Pearce & Robinson, 2015).
On the balance, the co-managers of this great company are seeking to differentiate it from numerous competitors in the digital cameral market - by gaining a majority of market share within the next five years, and as a long-term goal. In keeping with that, Pearce and Robinson (2015) point out "The unique purpose that sets a company apart from others of its type and identifies the scope of its operations. In product, market, and technology terms" employees are required to successfully observe an expectation in reaching goals towards increasing brand identity of the company (p. 12).
Provides successful financial results within a scenario, critiques team decisions and corresponding results associated with financial results management, and evaluates both short- and long-term implications.
In keeping with that, DigitCam as a new company, is determined to exceed our investors and consumers expectation by increasing performance measures: Earning Per Share (EPS) and Return on Equity (ROE); providing "second to none" customer service; and by maintaining at all times an "A-" credit rating for a foreseeable future time. The DigitCam's Decision for Year 7 on EPS is improving significantly, and it is been expected that the company would rebound to be one of the leaders in the digital camera industry on the long run.
From the expected performance in year 7, it would be justifiable to note that DigitCam Company has positive financial prospects. The company's Projected Year 7 scoring measures are as follows:
Projected Year 7 Performance
Scoring Measures Year 7 Investor Expectation
Earnings Per Share $3.37 $1.75
Return On Equity 36.30% 20.0%
Credit Rating A B+
Image Rating 72 70
Other Measures Year 7 Change from Y6
Net Revenues ($000s) 483,045 +27.10%
Net Profit ($000s) 67,309 +81.30%
Ending Cash ($000s) 65, 278 +47,317
Projected Year 6 Performance
Scoring Measures Year 6 Investor Expectation
Earnings Per Share $2.31 $1.00
Return On Equity 33.6% 17.0%
Credit Rating A- B+
Image Rating 71 70
Other Measures Year 6 Change from Y5
Net Revenues ($000s) 413,810 +23.8%
Net Profit ($000s) 46,253 +208.4%
Ending Cash ($000s) 23,422 +18,422
Evidently, it has been noted that the expected return on equity is 36.30%. Accordingly, it has been observed that the return on equity indicates the profitability of a company. Further, the company generates the money that has been invested by shareholders of our company. It has been observed that our expected Earnings Per Share of $3.37 is relatively high. Hence on basis of the specific ratio it is justifiable to claim that our company has positive financial prospects; when compared to our performance the previous year vis-à-vis our financial tools: net revenues, net profit, earning per share (EPS), returns on equity (ROE), credit rating, image rating, cash balance and loans outstanding (www.glo-bus.com).
Conclusion:
Taken together, it is our major organizational objective to maximize the wealth of the shareholders. The management of DigitCam Company has assessed the viability of gauging the company's quest to maximize the wealth of the shareholders - as a major factor to consider. Thinking it through, our company has a promising return on equity, as an indication that we could be maximizing profitability over time - a justification that our company has positive financial prospects. It is also worth noting that the ending cash has a positive change on Decision and Reports for Year 6 (Brigham & Ehrhardt, 2013).
Collectively, DigitCam's Decision and Reports for Year 7 has positive change in revenues between year 7 and year 6. This is an indication that the company is undertaking to maximize its sales volume; which is likely to maximize profitability with all other relevant factors held constant. Certainly, the rolling analysis assessment of the liquidity of our company is thus promising - a factor that would further be used as a basis of justifying the viability of investing in DigitCam Company (Brigham & Ehrhardt, 2013).