This report provides the Chairman of the board an analysis of the decisions and the results of the Company 1 in Period 2. The focus is given on how our company organized the process of planning in the Period 2 and I tried to critically analyze the results compared to our plans. In period 2 our company was seemed to do better than the previous period (period 1), but in my opinion period 2 was the beginning of our company’s crisis. We didn’t adhere to our differentiation strategy and we ignored our objectives. I strongly believe that if we have acted much differently and have the chance to redo the planning of the decision making of period 2 we would perform much better in all next periods.
1) Introduction…………………………………………pg 4 2) Body…………………………………………………….pg 5 2.1) Planning of the Period 2………….…….pg 5
2.2) Critically analyze the results………....pg 6
3) Conclusion……………………………………………pg 9
This report is an attempt of informing the chairman of the board of the Company’s 1 plans, actions and mistakes during the period 2. It starts with the analysis of the process of planning and continues with the analysis of the results compared to our company’s plans. 2) Body
2.1) Planning of the Period 2.
To begin with the Price, we planned to have the same price as Period 1 ( 3,090 eur), because we knew that customers dislike changes in the price and we didn’t want to have dissatisfied customers especially when we hadn’t yet persuaded them that our product was the best in quality so we couldn’t risk losing many of them. As for our investment in Advertisement we thought that if we kept investing the same amount (7.0mEur ) as Period 1 we would own the same or bigger market share. Then about Sales force we were thinking of having 110 in that period because as the “Topsim” mentions a sales force of 110 could increase sales up to 45000 units. We decided to set the price of 2,640 for the bid that was higher than our CGM in the period 1 (; 2,270eur).
We were thinking of purchasing 46,000 units of input materials and producing 50,000 units of Copy I as we were thinking that we have to be able to respond to the increase of market 1 demand (8%-10%) and to serve the bids in case we won that. After that we started thinking of cutting down the cost of the rest investments we had to do. So we thought that investing few or no money to the rest of our potential investments would be enough. So here are our thoughts of investments:
1,0mEur in CI, putting 10 people at the Copy I-old technology, 0,50mEur in Ecology of Copy I-old and 0,1mEur in Value Analysis of Copy I-old, 0 people in technology and 0,0 mEur in ecology and 0,0 in value analysis of Copy I-new, 1,0mEur in Maintenance of our Type A production lines and 0,0mEur in Rationalization of them, no new investment or disinvestment of the production lines and no new types of lines, 0,0 mEur process optimization, 0,0 mEur in training production workers, 0,0 mEur in investment in environmental plants, 0 number of recruiting or dismissal of production workers, non-salary staff costs 37%, short-term loan 15,0 mEur, long-term loans 0,0 mEur, dividends 40%, purchase of securities 0,0 mEur.
2.2) Critically analyze the results compared to our plans.
I have to mention that generally, in the most periods, as we were planning our steps we were trying to focus on the company’s objectives (; increase our employees productivity; decrease the negative ecological footprint; retain the market share>17% ) and how we would achieve those through our actions. However, in period 2 we didn’t act like our decisions and results would have a long term effect on the potential achievement of our goals, we tried a different tactic, which was cutting all investments costs extremely and maybe as we see from the results of that period and the next that was a...