You are the manager of the apparel division of On Your Mark, a manufacturer of athletic equipment and apparel, which has recently gone through the initial public offering (IPO) process and has become a public company. On Your Mark has annual sales revenue of approximately $50 million and makes seven unique and distinct products (which serve seven different markets). Each product is represented by its own division within the company and has its own group of sales, marketing, and manufacturing personnel. Some departments, including human resources and the finance division, support the entire organization. Operations consist of a single headquarters and production (manufacturing) center.
In your role as division manager, you are responsible for compiling and reporting on budget / forecast data, and for assessing and valuing new business opportunities (which will ultimately be presented to upper management). You report directly to the Plant Manager; however, you work closely with the Chief Financial Officer (CFO), and the accounting department's staff accountants assist you with your budget / forecast responsibilities.
You have been informed by the CFO that On Your Mark will be aggressively pursuing new business opportunities, which may include expansion through acquisition and the development and implementation of new products. As a publicly traded company, On Your Mark is scrutinized by bankers and investors as never before. In fulfilling your responsibilities you must keep this in mind, and you must instill a new sense of financial discipline in the organization
On Your Mark is preparing to release its first Annual Stockholder Report since the company's recent initial public offering (IPO). The accounting department has already prepared and provided the financial statements and ratios (see below) for the most recent year. Now all the division managers are meeting to help create the written analysis portions for the annual report keeping in mind all the stakeholders who will be reading this information. ( i.e.,shareholders, regulators, investors, security analysts, credit rating agencies, etc.) Using what you know about On Your Mark from the scenario above, the financial documents, and details from your previous tasks, create On Your Mark's first Annual Stockholder Report for its' stakeholders. Provide as much detailed analysis as possible to your shareholders for each of the following areas, keeping in mind how the users of this information are likely to use it:
1. Summarize the nature of the firm's business and its business strategy
2. Assess the internal and external risk factors for the firm
3. Provide an analysis of the financial condition for the firm
4. Evaluate the firm's credit worthiness
5. Discuss the competitive position of the firm
6. Summarize the financial and accounting control procedures in place to ensure compliance with applicable regulatory agencies
You are to write their own draft of the written analysis to shareholders and submit it to the small group files area under your name and labeled 'draft'.
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//In the present times, every company has to face tough competition. In this situation; by making appropriate strategies, a firm can get an advantage over its competitors. Under this paragraph, we will discuss the business nature of the On Your Mark Company.//
Nature and Business Strategies
On Your Mark is a leading company in the sports and the apparel market. The company works on the basis of ethics and moral values. The mission of the company is to serve the customers in a better manner. Thus, the business insists on customer satisfaction. It is a sound policy for the future growth of the firm. Moreover, the corporation is looking forward for the new business opportunities. It is launching new product ranges in the market. The company produces seven distinct products and they are performing well in the market.
The company is thinking over the business expansion program. It has also raised funds through Initial Public Offer and has become a public company. The firm incorporates the departmentalization structure. The Human and Finance departments provide support to the other organizational departments. The revenue of the organization is 4500 million. It believes in the product differentiation strategy. The firm wants to introduce its products at the global level because the local markets are saturated.
Business strategy is one of the significant concepts that emerge as the critical input to organizational success. It is the tool to deal with the uncertain conditions of the future that an organization confronts. Business strategy helps to eliminate ambiguity and render the strong foundation as a theory to lead business functions or operating activities (Wheeler, & Hunger, 2004, pg. 13). With the effective business strategy, 'On Your Mark' easily serves the entirely different products that make the life superior and capture a large market share in the athletic footwear and apparel industry. The plan assists in making the most of the competitive advantage of an organization. The company's business strategy is mainly related to the fact as how to build its competitive position and maximize its net revenues.
// It is true that there are many risks in a business; hence the trade activities are not risk- free. Therefore, an organization should conduct business after analyzing the entire internal and external factors. If the company conducts the business after analyzing all the situations, the investment of company will be safe. //
Internal and External Risk Factors
Both the risk factors, i.e., internal and external factors negatively impact the company's performance, profitability, and its image in the customers' mind. Risk factors create hindrances in the way of the company's success. Thus, risk factors must be evaluated in accordance with organizational targets. 'On Your Mark' internal risk factors cover the following obstacles that reduce the organization's efficiency.
Ø Lack of Appropriate Funds: The Shortage of funds is one of the critical internal risk factor that not only impacts the ...
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