Course: MGT 101
Semester: FALL 2012
Instructor: Dr Chourides
Student’s names: Daghan Ozbilenler & Zhneya Mahmutov
“STRATEGIC PLANNING OF AMERICAN MANAGEMENT TECHNOLOGY COMPUTERS”
In this assignment we will show you Strategic Planning at the example of one company. The company name is AMT computers. Executive Summary
By focusing on its strengths, its key customers, and the underlying values they need, American Management Technology will increase sales to more than $9 million in three years, while improving the gross margin on sales and cash management and working capital. This business plan leads the way. It renews our vision and strategic focus: adding value to our target market segments, the small business and high-end home office users, in our local market. It also provides the step-by-step plan for improving our sales, gross margin, and profitability. In order to implement these changes and improve profitability, we plan to borrow another $100,000 long-term this year. The amount seems in-line with the balance sheet capabilities. AMT is built on the assumption that the management of information technology for business is like legal advice, accounting, graphic arts, and other bodies of knowledge, in that it is not inherently a do-it-yourself prospect. Smart business people who aren't computer hobbyists need to find quality vendors of reliable hardware, software, service, and support. They need to use these quality vendors as they use their other professional service suppliers, as trusted allies. AMT seeks to fulfill these needs and become the leader in business information technology for its region. The Yearly Total Sales chart summarizes our ambitious sales forecast. We expect sales to increase from $5.3 million last year to more than $6 million next year and to more than $9 million in the last year of this plan. 1.1 Objectives
Sales increasing to more than $9 million by the third year. *
Bring gross margin back up to above 30%, and maintain that level. *
Sell $1.5 million of service, support, and training by 1998. *
Improve inventory turnover to 6 turns by 1998.
1.2 Keys to Success
Differentiate from box-pushing, price-oriented businesses by offering and delivering service and support -- and charging for it. 2.
Increase gross margin to more than 30%.
Increase our non-hardware sales to 20% of the total sales by the third year. Company Summary
AMT is a computer reseller based in the Uptown area. It was founded as a consulting-oriented VAR, became a reseller to fill the market need for personal computers, and is emphasizing service and support to differentiate itself from more price oriented national chains. 2.1 Company History
AMT has been caught in the vise grip of margin squeezes that have affected computer resellers worldwide. Although the chart titled Past Financial Performance shows that we have had healthy growth in sales, it also shows declining gross margin and declining profits. The more detailed numbers in the Past Performance table include other indicators of some concern: The gross margin % has been declining steadily, as we see in the chart. Both collection days and inventory turnover are getting steadily worse.
All of these concerns are part of the general trend affecting computer resellers. The margin squeeze is happening through 2.2 Company Ownership
AMT is a privately held C corporation owned in majority by its founder and president, Ralph Jones. There are six part owners, including four investors and two past employees. The largest of these (in percent of ownership) are Frank Dudley, our attorney, and Paul Karots, our public relations consultant. Neither owns more than 15%, but both are active participants in management decisions. 2.3 Company Locations and Facilities
We have one location--a 7,000 square foot store in a suburban shopping...
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