Marketplace-Live Simulation: case of Falcon Computers - Research Paper Example

Executive Summary The executive team of the company includes the managing director, the heads of various departments of the company, the assistant manager and the line managers. The Falcon computers have a reputation of delivering of high quality computer machines. The company manufactures high quality computers, which are customized and tailor made for specific purposes. The majority of the computers manufactured by the company are for gaming enthusiasts. The computers also have attractive and unique graphical features. The firm offers its service through many forums including the social media and other support services. One of the innovations of the company is the unique accelerator card that the company installs in its computers hardware. The card utilizes low-latency RAM and some handpicked accelerator chips. The main objectives of financial wing are the attaining of maximum sales volume and continuous increase in the cash flow. Indeed, the revenue from the Falcon Computers business must surpass the costs incurred in delivery of the services. This will ensure that the business runs at a profit rather than on losses. Windham, Trevas, and Reiff (2010) assert that the financial component is the major determinant of other components in the balanced scorecard. The financing methods applied in the business include debt financing and equity financing. Feasible business proposals can guarantee loan funds from lending institutions. Debt financing is the best source of financing of a business given that the debt interest is tax deductible. In this regard, the debt reduces taxable income hence the entrepreneur earns tax savings. Furthermore, the debt financing is cheap compared to equity financing. On the other hand, Equity financing is also a good source because there is no debt interest charged in order to be guaranteed of the funds. However, the financiers of this financing must be privy to the insider information of the business. Description of Business and Industry The company was established in the 1992 by KLelt reeves, who carried out a research study on the flight simulations for some students at a Florida Aeronautical university (Windham, Trevas, and Reiff, 2010). The company never outsources its operations because of its sophisticated technology. The company’s operations and networking is based on online and telephone sales. The company has been progressive over the years. Its maiden series was Mach V, which offered the best computers. The computers of this series had high performance in games like the PC games. Falcon is the major provider of electronic manufacturing services in a global scale. It has subsidiaries, which complete its networking across the world. It usually operates in three categories. These include the diversified manufacturing services, infrastructure and enterprise services. According to Windham, Trevas, and Reiff (2010), the company manufactures high velocity systems for sophisticated machinery. It is important for investors to know that this company qualifies to be the best for an investment because it offers tailor- made electronic products, which are ingenious for respective purposes. The investor should feel safe to invest in the company because of the fact that the company qualifies as a conglomerate entity because it also offers product management to companies dealing with networking, and telecommunication services. This implies that the company has a wide array of options for a wide range of investors. The number of sectors covered by the entity is high. Therefore, it is prudent for an investor to buy Falcon stock given its high reputation and value on the stock market (Windham, Trevas, and Reiff, 2010). Additionally, the risk spread in the electronic manufacturing company is high. This implies that the investor resources are always safe from misuse. The investor should also be aware that the company’s services are integrated designing and engineering, automated assembling, product testing and systems assembling. Additionally, the company offers precision machining services and injection molding. The provision of parallel global production contributes in the global influence of the company. This is a competitive advantage for the company. An investor should critically consider this benefit to make sound and informed decisions on purchasing of Falcon stock. The company also provides peripheral products, which have high demand in the modern product market. The provision of mobility services also boosts the delivery of its products to the various consumer locations. In this regard, the company’s service delivery is of high quality. According to Windham, Trevas, and Reiff (2010), the provision of peripheral products like point of sale terminals and photocopying machines leads to provision of derivative services and products. This leads to high turnover for the company products. This contributes to the high performance of Falcon Company. The provision of all the products and services qualifies the company as a blue-chip company. This has enabled the entity to create collaboration with high caliber companies in a bid to advance its service delivery and product innovation. The other point an investor should consider in favor of Falcon Company is that it has employed proficient employees who uphold professionalism in their service delivery. The subsidiaries, which are established in more than thirty-three countries, exceed ninety. The workplace computers are ideal for business users. According to Windham, Trevas, and Reiff, (2010), these computers possess a broad array of characteristics, which appeal to the working class people. In fact, these computer machines differ from other computers with regard to the processor installed. Moreover, this category of computers has extra capabilities compared to the other computers. For instance, they have the convertibility and internal broadband qualities. The entity’s high performance in the electronic manufacturing industry arises from its combination of financial performance, analytics and outsourcing of global experts. The investor should also be aware that the company is reliable with regard to the provision of designing and branding of products. According to Frank, Falcon, the company also helps in the in the development of reliable supply chains, which result in efficiency and effectiveness in many companies. This shows that Falcon is the most suitable company for any investor (Windham, Trevas, and Reiff , 2010). The other factor that qualifies the company as the best destination for an investor is that it is competitive in the electronic manufacturing sector. The major competitors for the company include Benchmark electronics, Celestica, Flextronics international and Elcoteq ltd. In this analysis, the Falcon computers can be categorized into three categories depending on the application of the computers. This will only cover the computers available at the Falcon Company website. The first categories of computers are those suitable for home and workplace use. The other category consists of computers utilized for leisure activities like games and surfing. The last category only consists of computers machines specifically used for academic research. This classification is indispensable given that different clients have different and unique needs regarding computer use. Therefore, it is prudent for the Falcon Computers Company and other similar companies to design computers, which suit theses diverse needs of the customers. The second class of computers is usually hardware-driven. Furthermore, this class is preferred by many clients because of the computers’ flexibility and favorably low power consumption. According to the computers website, this category of computers is hypermedia and informal. This enables the people who are fond of computer games to select their favorite games subject to the computer design and the stream media available. This company designs high computers, which have high memory capacity, high quality screens, and high-speed microprocessors. Moreover, these computers possess extra ports for attachment of external devices. These features make this group of computers expensive. Furthermore, people have academic needs, which only the third category of computers can satisfy (Windham, Trevas, and Reiff, 2010). Falcon Computers’ websites provide long-lasting comfort for people. This class of computers offers convertibility and compatibility. These computers also offer other benefits like flexibility, speed, battery life, performance, and mobility, to a computer user. The company designs computers used at home and working environments. It also designs and manufactures computers for workplace routines (Windham, Trevas, and Reiff, 2010). These features make the computers suitable for assignments that involve office activities. These activities include typing, printing, arithmetic and programs. In this regard, workplace computers must satisfy these needs. In addition, these workplace computers offer quality interface because of their quality visual display unit, and enhance professionalism. They are also compatible with major corporate settings and networks globally. In this regard, this category of computers requires small hard drive volumes. In addition, these computers do not require sophisticated graphic designs in order to function well. Market Opportunity Analysis Falcon’s competitive advantage also stems from its rigorous research and development emphasis. This makes the company to be aware of many opportunities existing in various markets. An investor should also consider the company’s culture of outsourcing of resources, which boosts the performance of the firm. Falcon also focuses on favorable pricing, total quality management, application of advanced manufacturing techniques, and time-to-volume production process. The fact that the firm has a regionally spread business confirms its wide network in terms of its operation. This attribute has led to a wide customer base for the company. Consequently, the company’s annual revenue is high. The company also applies response management solution, which has made it a leader in the contact manufacturing. The management of Falcon is better because it runs the company in a professional manner all the time. The aspect of planning is helpful to employees whereas response management is applicable to many employees. In this respect, Falcon has many employees, which means that response management is the most appropriate means of operation of the manufacturing firm. The response management software helps in the initiation of change within an organization. Therefore, an investor should invest in the company because of the dynamism of the company. The software enables the employees to access adequate data to respond promptly to change within the organization (Windham, Trevas, and Reiff, 2010). Additionally, the company has a cost advantage because it buys its raw materials from reliable suppliers, who have low cost structures. The raw materials suppliers for Falcon Company offer their materials at a relatively low price because of the negotiations with Falcon and their compromising geographical location. The company also offers favorable pricing, which appeals to many investors. Falcon developments in the fields it specializes in boost the market share of the company. This enables the investors to have confidence in the organization. Additionally, the repute of the company boosts the company sales and profit margins. The Falcon computer company carries out SWOT analysis in order to have a glance of the business blueprint before venturing into it. According to Ronen (79), creativity in entrepreneurship is the ability to devise new ideas on improving the enterprise and make value out of the available resources. Innovation with regard to entrepreneurship refers to the devising of new methods of doing business. Zacharakis et al (65) conjecture that the stages of entrepreneurial growth constitute of creativity growth stage, directional growth delegation stage, co-ordination stage and collaboration stage. The first stage is the maiden stage of the entrepreneur business. The direction stage is the stage at which the business carries out public awareness in order to familiarize the business in the new environment. The delegation stage refers to the stage at which delegation of responsibilities can be done. Co-ordination stage is the stage at which the business has many stakeholders hence the need for coordination in running the business. The collaboration stage is when the business can partner with any related business in order to realize the gains of large-scale business operation. Marketing Plan and Sales Tactics Falcon Computers Company needs to choose suitable fundamental parameters in order to reposition their strategies. This will help in bringing out product brand uniqueness, which includes its comfort, stylish nature and unique design. This will help create attractiveness and capture the attention of the customers who considerably like unique modern designed products. A firm also must reengineer its products. Reengineering will help reduce the cost of manufacturing and improvement of quality. A firm will also have to reconsider several designs of their fierce competitors to find out why their design is unique and what they can add to come up with a completely unique product that will be cost effective to manufacture. Furthermore, the plan must entail reconsidering a firm’s pricing strategies. Perceptual mapping will also be considered in the plan given that this technique creates and displays visual perceptions of current customers and potential customers. The business enterprise should have a clear guideline in so far as the computers are concerned. In the event that there is a clear separation in the computers, revenue for Falcon Company can be raised to significant levels. Consequently, when a new design is affected, Falcon computers will have a significant competitive advantage over the rest of the players in the market. For design to be effectively impressive there should be a need to consider branding as an effective means of achieving an end. Branding can change the manner in which customers perceive the products. Pricing helps determine a customer’s buying decision and believe in the computers for children. The pricing strategy is a major consideration in the buying decision making. When considering a marketing strategy, there should be considerations about the prevailing prices in the market. The market is flooded with computers. Before instituting a price, a proper market survey is necessary to ensure compliance. While setting prices of the computers prices, relative competitiveness should be considered. In the event that a company is not able to get right in terms of pricing, two scenarios can be experienced. One is that the company can lose on sales and secondly irrelevance can company to run out of business. Pricing should be a key consideration for Falcon computers. The new venture design refers to the product differentiation version, which incorporates many design aspects in order to improve the perceived quality of a product. The principle is as a result of innovative ideas on differentiation of products. In this regard, business is ideas are subjected to constructive and critical evaluation in order to come up with reliable venture designs for products. According to Windham, Trevas, and Reiff (2010), the main aim of establishment of venture design is to capture the attention of many customers. The concept is relevant especially when some products are rejected in the market place because of being obsolete or poor quality. Research on customers is done in order to establish the effect of the new approach on the customer base. In case there is a market, which can serve as an expanded market, the implementation of the concept will be easy. There a need to carry out a cost-profit analysis during the production of the product (Windham, Trevas, and Reiff 2010). The move will help in cushioning the business against making loss. The market with the product, which has been subjected to designing is sold, ought to be large. Large markets have many customers from diverse walks of life. In this respect, many people will buy the products. The product designer also ought to be sure of the business idea. The customer should be the major focus of the whole exercise. The product designer should focus on customer satisfaction before commencing on the activity. The entrepreneur should focus on the emotional, social, and financial needs of the customer. The new venture design is boost by the uniqueness of the venture. Anew product design is bound to interest many people in the business realm. Consequently, many people will be fond of the product designing because of the revenue motivation involved in the business. Market leadership is usually associated with monopolistic powers. In this respect, an evaluation of the market is crucial. The product designer should also focus on the market opportunity. This will enhance the creation of novel designs of products, which will influence the market. The cognitive aspect of the customers should also be considered in order to determine the absorption rate of the design product into the market. The creation of barriers of entry for other companies is essential because this helps in relaxing the competition in the market. According to Windham, Trevas, and Reiff (2010), the emotional need of the customers should be considered because the buying decisions of the customers are linked to the buying decisions. Networking helps in the interlinking of the business with other similar businesses in order to gauge the performance of the business. This aspect paves way for acquisition of new novel ideas on how to improve on the operation of business. Santarelli (Windham, Trevas, and Reiff, 2010) asserts that networking helps in benchmarking and business restructuring in order to meet the desired standards. In this regard, the business improves and revenue increases. Entrepreneurial orientation is a crucial section in the entrepreneurial process. This familiarizes the entrepreneur with the know-how and skill pertaining to the running of the business. This also provides insight with regard to the expectation of the business environment hence enhancing creativity in the running of the entrepreneurship business. Stokes, Nicholas and Martha (44) posit that opportunity recognition is the ability to recognize the viability of a business at a particular place. This entails the recognition of resources available, the potential market, the potential risks and infrastructure. All these factors coupled together provide a lucrative business opportunity. Falcon Computers financial plan The firm employs a comprehensive financial planning process, which incorporates corporate planning, supply chain management and market planning. This notwithstanding, the planning is akin to projections, which a firm may not be certain about. This calls for response management within the organization. Currency in Millions of Dollars Dec 31 2015 Restated TWD Dec 31 2016 Restated TWD Dec 31 2017 Restated TWD Dec 31 2018 TWD Dec 31 2019 Revenues 429,721.2 384,112.3 448,684.6 463,286.5 TOTAL REVENUES 429,721.2 384,112.3 448,684.6 463,286.5 Cost Of Goods Sold 377,858.8 331,757.5 387,566.9 403,316.4 GROSS PROFIT 51,862.5 52,354.8 61,117.7 59,970.1 Selling General & Admin Expenses, Total 24,517.0 26,433.0 30,740.4 29,167.7 R&D Expenses 8,370.2 7,692.3 8,545.5 10,966.3 OTHER OPERATING EXPENSES, TOTAL 32,887.2 34,125.3 39,285.8 40,134.1 OPERATING INCOME 18,975.3 18,229.5 21,831.9 19,836.0 Interest Expense -207.6 -129.0 -87.6 -352.3 Interest And Investment Income 607.4 690.1 944.4 1,713.7 NET INTEREST EXPENSE 399.8 561.1 856.8 1,361.5 Income (Loss) On Equity Investments 1,110.2 24.8 1,534.0 572.0 Currency Exchange Gains (Loss) -820.9 601.5 891.8 749.6 Other Non-Operating Income (Expenses) -152.1 30.9 1,926.2 2,923.5 EBT, EXCLUDING UNUSUAL ITEMS 19,512.2 19,447.8 27,040.8 25,442.6 Gain (Loss) On Sale Of Investments 1,913.6 686.4 22.5 1,583.5 EBT, INCLUDING UNUSUAL ITEMS 21,425.7 20,134.2 27,063.2 27,026.1 Income Tax Expense 3,386.1 3,286.8 4,526.0 5,494.4 Minority Interest In Earnings -1,551.2 -269.2 -73.6 -81.8 Earnings From Continuing Operations 18,039.6 16,847.4 22,537.2 21,531.7 NET INCOME 16,488.4 16,578.2 22,463.6 21,449.9 NET INCOME TO COMMON INCLUDING EXTRA ITEMS 16,488.4 16,578.2 22,463.6 21,449.9 NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 16,488.4 16,578.2 22,463.6 21,449.9 References Windham, R., Trevas, C., & Reiff, C. (2010). Star wars: Millenium Falcon YT-1300 : a 3-D owner's guide. New York: Scholastic. Read More