Strategic Planning and Control - Coursework Example

Strategic Plan and Control Table of Contents Learning Statement 2 Performance 3 Group Assignment – Business Plan 3 Application of Theory 4 SWOT Analysis 5 Action Plan 6 Mobile Inc Mission Statement: 6 Mobile Inc Vision Statement: 7 Conclusion 7 Appendices 8 Appendix 1: Percentage of global Smartphone market share 8 Appendix 2: SWOT Matrix for Mobile Inc 8 Appendix 3: Unweighted Decision Matrix 8 Appendix 4: Weighted Decision Matrix 8 Appendix 6: Forecasted Ratios 9 Appendix 7: Company's Key Financial Indicators 9 Appendix 8: Projected Income Statement 9 Appendix 9: Balance Sheet 10 Appendix 10: Cash Flow Statement 11 References 13 Summary Strategic planning and control is my favorite course. I have learned a lot of things in this course (strategic planning and control). I can easily reflect my know ledge and experiences gained after its completion. This module was rich in providing me technical skills set (concepts of accounting, finance, strategic planning and their integration) and soft skills set (academic writing, time management, group work, communication skills, conflict resolution). I can easily integrate all coursework covered in this module. Corporate strategy concepts, accounts and finance concepts and principles, business simulation game and other activities have provided me with rich and sound subject knowledge and provided me an edge over graduates of other university. So here I am devising a reflective learning log based on my knowledge and experiences through this course. My learning statement would exhibit what I have learned in this module. Learning statement is followed by an action plan. Action plan would highlight my future plans with special reference to this strategic planning and control (SPAC) course. There are five main phases of a strategic plan and control: Mission and Objective, Environmental Scanning, Strategy Formulation, Strategy Implementation and Evaluation and Control. All these steps are important to achieve desired goals. And these steps need to be adopted step by step. Learning Statement This module is a great success in terms of learning. I can easily reflect my learning experiences in words. The coursework of strategic plan and control course enables me to independently work on a strategic plan, oversee the implementation phase, and monitor the results of the strategy. I can easily apply the principles of accounts, finance, and corporate strategy in every situation. Business simulation game was an important part of this module. Me and my group members played it a lot and simulated the real life problems and found their solutions successfully. The previous group task was very important in terms of soft skills. We learned the use of soft skills when the teacher assigned us group tasks. During group tasks, we learned time management, conflict resolution, report writing, communication skills, etc. Performance We have performed very well in group assignment, business simulation game, etc. We came with a plan to establish a cell phone manufacturing company. Intensive research had been conducted by me and my other two group members. We had studied about case studies of other Small (like HTC), Medium (like Huawei ) and Large (like Samsung) cell phone manufacturing companies. We later adopted many changes in our plan as we moved forward. Sometimes there were conflicts of opinions among team members but we sort those conflicts out by discussing those conflicts. After completing out plan we moved ahead to implement the plan using business simulation game. Astonishingly, the difference between our budget and actual expenses incurred was low. Then we did variance analysis and further made corrections in our plan. All these activities went very well and we learned all concepts practically. Group Assignment – Business Plan Group work was a great success. We successfully worked in a group of three persons namely; Huang Tianchi, Ma Sichao and Lang Liang. We worked in a group of 3 persons to formulate a business idea. It was a very distinct experience. We all enjoyed working in a group. We learned a lot of things from each other. We learned technical and soft skills by working together. We performed well and we successfully formed a feasible business plan. It was mad e possible by supporting each other and avoiding conflicts of ideas among the group members. There is always room for improvement. So I believe that we can improve our business plan by studying more and more about related cell phone manufacturing companies. Business Simulation Game: Like the group assignment of formulating a business plan, business simulation game was also supposed to be played by that particular group. So like we worked to form a business plan, we also played together the business simulation game. This game gave us competitive edge and transformed our view when we practically applied and observed the results of our plan and our knowledge. Application of Theory We have learned a lot of models during this course. We also applied all those models in our plan and business simulation model. We have applied major theoretical frameworks of Accounting, Finance and Corporate Strategy. I have briefly described the application of concepts and principles of Accounting, Finance and Corporate Strategy. Accounting Principles Applied: We have applied major concepts and principles of Accounting. We have prepared income statement, balance sheet and cash flow statement for our plan. This was very good experience to practically apply all these concepts for our plan. We also discovered mistakes in our plan by doing preparing final accounts of our proposed company. Then we made corrections in our plan. Income statement, balance sheet and cash flow statement can be seen in appendices. Finance Principles Applied: We have applied major concepts and principles of Finance. We prepared statement of financial position and performed accounting ratio analysis. By doing so we reached to amazing results about out plan. We also discovered mistakes in our plan by doing financial analysis. Then we made corrections in our plan. Statement of financial position of our company can be seen in appendices. Corporate Strategies Applied: We have applied major concepts and principles of Corporate Strategy in our plan. We have also applied major concepts and principles of Corporate Strategy in business simulation game. SWOT Analysis We have also done SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of our plan. One of Mobile Inc’s best competitive levels is at the internal level. Internally, the quality of mobile phones from Mobile Inc is considered to be of superior standard. On its own, Mobile Inc has also achieved a strong brand name and have distinctive aesthetic look for its mobile phones. This means that as far as the outcome of production which takes place at Mobile Inc is concerned, the company can be said to have a major strength with its products. Some weaknesses however draw the company back regardless of the strengths identified. One major weakness of the company is its limited advertisement and promotion, which makes it difficult for new customers to associate with the company’s brand. Internally, there are opportunities available for the company to ride above its weaknesses. First, there is a strong presence of diversity within the work structure of the company. Most forms of the diversity are in terms of nationality, gender and age. This makes it possible for workers to understand the needs of different demographic segments based on which strategic marketing planning can be undertaken to boost the company’s sales. Lastly, there are some few threats that militate against the company internally. One of these is the need for the company to deal with ever popularising low prices even among well known brands. This situation puts pressure on the company’s marketing team when it comes to the selection of the most preferred strategic option. This is because when competitors, due to the large volume of their operating income are able to produce quality products at cheaper prices, the marketing team is forced to go with cost leadership even though it cannot guarantee lower cost of production. SWOT analysis matrix is shown in appendix. Action Plan I have a lot of action plans for future learning. I would try my level best to shape my skills and knowledge by the passage of time. This process of strategic planning and control would last throughout my life. I strongly look forward to apply the knowledge, skills and principles gained in strategic planning and control course; in practical life. By 2020, I want to be a corporate strategist of international stature. I would like to work on key strategic position of any large and mega companies, where I would be able to further enhance my strategic plan and control skill. And at the same time I would be able to utilize my existing knowledge, skills and abilities. Following are mission and vision statements of our company, Mobile Inc Mission Statement: “Mobile Inc is a global communication giant with empowered spirit to reinvent the way in which the world connects and communicates. The company offers communication solutions that put individuals, businesses, organisations and governments on the go with just the click of a mobile icon.” Mobile Inc Vision Statement: “Mobile Inc’s vision is to build on its rich history to gaining a dynamic and versatile future that is able to meet the prevailing changes of the mobile phone industry.” This module has realized me that each time I take a task, I must always try to do it perfectly. Mistakes at any level can be lethal. A single mistake is enough to lose ones job. Conclusion At the end I would like to present a brief overview of all discussion. Once again I would like to assert that this course has been a great success. I have learned a lot of concepts related to this course. This course has enabled me to work independently on strategic plan. Moreover, I have also become adept at implementing the plan once it is complete. There are five main phases of a strategic plan and control: Mission and Objective, Environmental Scanning, Strategy Formulation, Strategy Implementation and Evaluation and Control. All these steps are important to achieve desired goals. And these steps need to be adopted step by step. . Appendices Appendix 1: Percentage of global Smartphone market share Period Samsung Apple Huawei Lenovo LG Others Q2 2014 24.9% 11.7% 6.7% 5.2% 4.8% 46.7% Q2 2013 32.2% 13.0% 4.3% 4.7% 5.1% 40.7% Q2 2012 32.2% 16.6% 4.1% 3.1% 3.7% 40.2% Q2 2011 17.0% 18.8% 2.5% 0.2% 5..7% 55.7% Source: IDC (2014) Appendix 2: SWOT Matrix for Mobile Inc Strength Weakness 1. Superior brand quality 2. Distinctive aesthetic looks of products 3. Formidable workplace telepathy 1. Limited advertising 2. Limited promotions 3. High internal spending Opportunity Threat 1. Presence of innovative designs and superior quality hardware 2. Diversity among workforce 3. Knowledgeable consumer base with technological innovation 1. Low prices from market competitors 2. Currency risk Appendix 3: Unweighted Decision Matrix Factors Cost Quality Market size Innovation Location Weights Cost leadership 3 1 2 1 2 Focus 2 2 3 2 2 Differentiation 0 3 1 3 1 Appendix 4: Weighted Decision Matrix Factors Cost Quality Market size Innovation Location Total Weights 5 4 3 2 1 Cost leadership 15 4 6 2 2 29 Focus 10 8 9 4 2 33 Differentiation 0 12 3 6 1 22 Appendix 5: Cost Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Cost per unit $70 $67 $64 $61 $58 Total units produced 3,960,000 4,158,000 4,356,000 4,554,000 4,752,000 Yearly cost $277,200,000 $278,586,000 $278,784,000 $277,794,000 $275,616,000 Appendix 6: Forecasted Ratios Year ending 2018 2017 2016 2015 2014 Market capitalisation of the company (k USD) 12,300,500 12,100,000 11,500,000 11,200,000 11,020,546 Shares outstanding (k share) 26,000 24,500 25,000 25,000 29,863 Share price (USD) 450 430 390 370 369 Average trading price (USD) 195 200 200 200 194 Dividend yield 0 0 0 0 0 P/E ratio 30 30 30 30 28.9 Cumulative total shareholder return (p.a), % 92.0 92.0 93.0 92.05 91.06 Appendix 7: Company's Key Financial Indicators Year ending 2018 2017 2016 2015 2014 Operating profit before depreciation (EBITDA) 39.9 39.6 39.0 39.0 37.16 Operating profit (EBIT) 33.5 32.3 32.0 32.0 30.36 Return on sales (ROS) 22.0 21.5 22.0 21.5 20.54 Equity ratio 65.0 65.0 64.5 64.0 62.59 Net debt to equity (gearing) -25.5 -20.0 -25.5 -25.0 -26.80 Return on capital employed (ROCE) 42.5 40.2 38.5 36.5 39.71 Return on equity (ROE) 44.5 44.5 43.5 42.5 44.08 Earnings per share (EPS), USD 15.0 14.5 13.5 13.5 12.77 Appendix 8: Projected Income Statement Period Ending Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Sale Revenue 2,428,594 2,160,242 2,124,459 1,945,535 1,856,141 Cost and expenses Variable production cost 335,500 350,000 360,283 363,290 379,642 Feature cost 50,000 54,000 55,000 50,000 58,417 Contract manufacturing costs 80,000 80,000 85,000 80,500 86,902 Transportation and tariffs 90,500 95,000 90,000 95,500 95,554 R&D 390,000 400,000 400,000 450,000 423,543 Promotion 20,000 18,000 20,000 22,500 23,180 Administration 90,000 95,000 97,000 98,500 99,076 Cost and expenses total 1,056,000 1,092,000 1,107,283 1,160,290 1,166,315 OPERATING PROFIT BEFORE DEPR. (EBITDA) 750,000 735,500 739,000 702,086 689,827 Depreciation from fixed assets 100,000 120,000 125,000 125,000 126,225 OPERATING PROFIT (EBIT) 650,000 615,500 614,000 577,086 563,602 Net financing expenses 6,500 7,000 7,000 7,000 7,191 PROFIT BEFORE TAXES 643,500 608,500 607,000 570,086 556,411 Income taxes 175,000 175,000 180,000 180,000 175,206 TOTAL PROFIT 468,500 433,500 427,000 390,086 381,205 Appendix 9: Balance Sheet Period Ending Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Assets Fixed assets 850,000 850,000 750,000 750,000 715,275 Inventory 10,000 10,000 0 0 0 Receivables 75,000 80,000 75,000 75,000 71,461 Cash and cash equivalents 1,200,000 1,100,000 1,100,000 900,000 878,409 Total assets 2,135,000 2,040,000 1,925,000 1,725,000 1,665,146 SHAREHOLDER’S EQUITY AND LIABILITIES Equity Share capital 350,000 350,000 340,000 340,000 338,630 Other restricted equity 13,000 12,500 12,5000 12,000 11,594 Profit for the year 450,000 450,000 420,000 400,000 381,205 Retained earnings 335,000 330,000 330,000 310,000 310,738 Total equity 1,148,000 1,142,500 1,215,000 1,062,000 1,042,167 Liabilities Long-term loans 400,000 550,000 500,000 500,000 509,791 Short term loans (unplanned) 0 50,000 50,000 0 89,298 Payables 35,000 30,000 25,000 25,000 23,890 Total liabilities 435,000 630,000 575,000 525,000 622,978 Total shareholders’ equity and liabilities 1,583,000 1,772,500 1,790,000 1,587,000 1,665,146 Appendix 10: Cash Flow Statement Period Ending Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Net income 1,132,780 1,113,422 1,172,862 1,150,086 1,155,824 Operating activities, cash flows provided by or used in Depreciation 23,232 25,232 23,232 25,000 20,000 Adjustments to net income (13,239) (16,232) (16,000) (16,000) (16,000) Changes in accounts receivables (5,343) (3,282) (3,000) (4,000) (4,000) Changes in liability (30,232) (25,233) (25,000) (25,000) (25,000) Changes in inventories (7,500) (9,002) (8000) (9,000) (9,000) Changes in other operating activities 90,000 120,132 150,000 200,000 200,000 Total cash flow from operating activities 1,075,862 1,021,807 1,051,630 979,086 989,824 Investing activities, cash flows provided by or used in Capital expenditures (62,329) (60,000) (60,000) (50,000) (50,000) Investments 350,232 300,000 300,000 200,000 250,000 Other cash flows from investing activities 876 (9000) 845 (5000) 2500 Total cash flows from investing activities 288,779 231,000 240,000 145,000 202,500 References Michael Porter (1980), “Competitive Strategy”, Free Press IDC. (2014, October 29). Worldwide Smartphone Shipments Increase 25.2% in the Third Quarter with Heightened Competition and Growth Beyond Samsung and Apple, Says IDC - prUS25224914. Retrieved from http://www.idc.com/getdoc.jsp?containerId=prUS25224914 Read More