OL 421-J1358 Final Project Company Performance Summary PDF

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Running head: FINAL PROJECT: COMPANY PERFORMANCE SUMMARY

Lise Bougie OL 421 SNHU Final Project: Final Company Performance Summary October 18, 2020

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FINAL PROJECT: COMPANY PERFORMANCE SUMMARY

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CAPSTONE COMPONENT: EXECUTIVE SUMMARY I.

Progress of Company

In 2020, Andrews-Bougie Company entered the market with Able, a low-tech product, but having a presence in the low-tech and high-tech segments. In January 2021, the company began using a strategy where they would maintain a presence in the low-tech segment and high-tech segment. The company will keep costs low to allow us to compete based on the price of our products. The company will raise automation levels to increase margins and to even out second shift/overtime costs. For 2021, Able was repositioned at the ideal spot in the low-tech segment. Product Ava was created and positioned at the ideal spot in the high-tech segment. Able was priced at $34.00 and forecast & production were set to 926 and 1024. The promo budget remained at $1,000, while the sales budget was increased to $1,500. Capacity of 300 and automation of 1.0 was ordered for Ava’s release in 2022. In 2021, sales decreased by 8% to $37.4 million and profits dropped by 20% to $2 million. Contribution margin increased to 26.5%. Able stocked out. Awareness and accessibility increased to 58% and 42%. Market share was 14.3% with a survey score of 21. No overtime was issued, and turnover rate was 10.0%. For 2022, Able was repositioned in the low-tech segment ideal spot. Able’s price stayed at $34.00, while Ava was priced at $42.00. Able’s forecast & production were set to 1200 for both and we increased automation to 5.8. Ava was repositioned in the high-tech segment to remain in the ideal spot. The promo and sales budget increased to $1,500 and $1,600 for Able, while Ava’s began at $1,000 and $1,500. Ava was priced at $42.00; forecast &

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production were set to 274 and 278, and automation was increased to 2.0. We invested in 80 hours of training and $5,000 in recruiting spend. In 2022, sales increased by 28% to $52.2 million and profits increased by 54% to $4.3 million. Contribution margin increased to 33.3% and stocks rose to $18.03. Product Ava was released in July 2022. Stock outs occurred for both Able and Ava. Able owned 16.8% of the market with a score of 22. Ava owned 8.9% of the market and a score of 30. Awareness and accessibility increased to 75% and 45% for Able. Awareness and accessibility increased to 46% and 61% for Ava. We had 10.9% of overtime issued with a turnover rate of 8.1%. For 2023, Able and Ava were both repositioned in their segment’s ideal spot. The price for Able was reduced to $33.33 and Ava’s to $41.99. Forecast & production were set to 1550 and 1600 for Able and increased automation to 6.0. Ava’s forecast & production were set to 700 and 600. The promo and sales budget increased to 2000 and 2700 for Able, as well as Ava’s to 2000 and 2500. We invested in 80 hours of training and $5,000 in recruiting spend. In 2023, Andrews-Bougie received an emergency loan of $1,112,858 from Big Al. We believe this happened because the company over forecasted and produced too many units for Able. Able had 184 units left over in stock. There is a carrying cost when units are left over from not selling them during the year. Sales increased by 28% to $72 million and profits increased by 49% to $8.4 million. Contribution margin increased to 40.1% and stocks rose to $27.29. Ava, though, stocked out. We should have increased capacity for Ava the previous year. Able had a market share of 20.2% with a score of 22. Ava had a market share of 16.0% with a score of 38. Awareness and accessibility increased to 95% and 60% for Able.

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Awareness and accessibility increased to 46% and 61% for Ava. No overtime was issued, and turnover rate decreased to 6.9%. For 2024, Able and Ava were repositioned in their segment’s ideal spot. Product Alice was created and positioned at the ideal spot in the high-tech segment. Able’s price was decreased to $31.99 and Ava’s was increased to 43.99. The promo and sales budget remained at 2000 and 2700 for Able. Forecast and production were both set to 1750. Ava’s promo and sales budget remained at 2000 and 2500. Forecast and production were both set to 800. Capacity of 100 and automation of 6.5 was ordered for Able. Capacity of 200 and automation of 5.0 was ordered for Ava. Capacity of 300 and automation of 1.0 was ordered for Alice’s release in 2025. We invested in 80 training hours and $5,000 in recruiting spend. We invested in TQM Sustainability Initiatives as well in 2024. We wanted to save money, increase sales, and increase profits. We invested $750,000 in each initiative except for two, Channel Support Systems and Quality Function Deployment Effort. The cumulative impacts were as follows: (1) Material Cost Reduction 5.03%, (2) Labor Cost Reduction 6.21%, (3) Reduction R&D Cycle Time 13.54%, (4) Reduction Admin. Costs 43.11%, and (5) Demand Increase 0.62%. In 2024, sales increased by 23% to $93 million and profits increased by 21% to $10.7%. Contribution margin increased to 42.1% and stocks rose to $41.14. Able had 16 units and Ava had 70 units left in stock. Able had a market share of 23.4% with a score of 38. Ava had a market share of 16.2% with a score of 37. Awareness reached 100% and accessibility increased to 69% for Able. Awareness and accessibility increased to 96% and 77% for Ava. No overtime was issued, and turnover rate decreased to 6.2%.

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For 2025, Able, Ava, and Alice were repositioned in their segment’s ideal spot. Able’s price was decreased to $31.49, Ava’s was decreased to $43.99, and a price of $44.49 was set for Alice. The promo budget decreased to 1400 and sales budget increased to 3000 for Able. Forecast and production were both set to 2000. The promo budget decreased to 1600 and sales budget increased to 2900 for Ava. Forecast and production were both set to 975. The promo and sales budget were set to 2000 and 2500 for Alice. Forecast and production were both set at 600. Capacity of 100 was ordered for Able. Capacity of 100 was ordered for Ava. Capacity of 200 and automation of 2.0 were ordered for Alice. We invested in 80 training hours and $5,000 in recruiting spend. We invested in TQM Sustainability Initiatives again in 2025. We invested $750,000 in each except for one, Channel Support Systems. The cumulative impacts were as follows: (1) Material Cost Reduction 11.35%, (2) Labor Cost Reduction 13.57%, (3) Reduction R&D Cycle Time 39.58%, (4) Reduction Admin. Costs 60.02% and (5) Demand Increase 5.59%. In 2025, sales increased by 25% to $124 million and profits increased by 55% to $20.3 million. Contribution margin increased to 47.7% and stocks rose to $61.20. Product Alice was released in March 2025. Able had 43 units and Ava had 78 units left in stock. Alice stocked out. Able had a market share of 22.1% with a score of 41. Ava had a market share of 17.9% with a score of 41. Alice had a market share of 8.4% with a score of 40. Awareness remained at 100% and accessibility increased to 78% for Able. Awareness reached 100% and accessibility increased to 87% for Ava. Awareness and accessibility were at 70% and 87% for Alice. A small amount, 0.3%, of overtime was issued and turnover rate remained at 6.2%. For 2026, Able, Ava, and Alice were repositioned in their segment’s ideal spot. Able’s price decreased to $31.39, Ava’s decreased to $43.39, and Alice’s decreased to $44.39. The promo

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and sales budget remained at 1400 and 3000 for Able. Forecast and production were both set to 2200. The promo budget decreased to 1400 and sales budget increased to 3500 for Ava. Forecast and production were both set at 1225. The promo and sales budget remained at 2000 and 2500 for Alice. Forecast and production were both set at 750. Capacity of 200 and automation of 8.0 was ordered for Able. Capacity of 150 and automation of 7.0 was ordered for Ava. Capacity of 150 and automation of 4.0 was ordered for Alice. We invested in 80 training hours and $5,000 in recruiting spend. We invested $750,000 in each of the TQM Sustainability Initiatives. The cumulative impacts were as follows: (1) Material Cost Reduction 11.80%, (2) Labor Cost Reduction 14.0%, (3) Reduction R&D Cycle Time 40.01%, (4) Reduction Admin. Costs 60.02%, and (5) Demand Increase 13.84%. In 2026, Andrews-Bougie received another emergency loan from Big Al. We feel this occurred because we over forecasted and produced too many units for Able. Able had 276 units left in stock that did not sell during the year. There were carrying costs for the leftover inventory. Sales increased by 11% to $139.2 million and profits increased by 3% to $21 million. Contribution margin decreased to 47.1% and stocks rose to $70.21. Ava had 266 units left in stock. Alice stocked out again. Able had a market share of 19.8% with a score of 42. Ava had a market share of 16.0% with a score of 45. Alice had a market share of 11.6% with a score of 46. Awareness remained at 100% and accessibility increased to 84% for Able. Awareness remained at 100% and accessibility increased to 93% for Ava. Awareness increased to 97% and accessibility increased to 93%. No overtime was issued, and turnover rate decreased to 6.1%. For 2027, Able, Ava, and Alice were repositioned in their segment’s ideal spot. Able’s price increased to $31.99, Ava’s increased to $43.99, and Alice’s remained at $44.39. The promo

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and sales budget remained at 1400 and 3000 for Able. Forecast and production were set to 1980 and 2010. Promo and sales budget remained at 1400 and 3500 for Ava. Forecast and production decreased to 1050 and 1100. Promo and sales budget were both set to 3000 for Alice. Forecast and production were both set to 850. Automation of 9.0, 8.0, and 6.0 were ordered for Able, Ava, and Alice. We invested in 80 training hours and $5,000 recruiting spend. We invested $500,000 in each of the TQM Sustainability Initiatives. The cumulative impacts were as follows: (1) Material Cost Reduction 11.80%, (2) Labor Cost Reduction 14.0%, (3) Reduction R&D Cycle Time 40.01%, (4) Reduction Admin. Costs60.02%, and (5) Demand Increase 14.40%. In 2027, sales increased by 3% to $143,2 million and profits increased by 21% to $26.6 million. Contribution margin increased to 52.6% and stocks rose to $95.76. Able had 534 units and Ava had 225 units left in stock, Alice stocked out again. Able had a market share of 15.8% with a score of 38. Ava had a market share of 14.7% with a score of 45. Alice had a market share of 10.9% with a score of 44. Awareness remained at 100% and accessibility increased to 87% for Able. Awareness remained at 100% and accessibility increased to 97% for Ava. Awareness reached 100% and accessibility increased to 97% for Alice. A small amount, 0.2%, of overtime was issued and turnover rate decreased to 6.0%. For 2028, Able, Ava, and Alice were repositioned in their segment’s ideal spot. Prices for Able, Ava, and Alice remained at $31.99, $43.99, and $44.39. The promo budget remained at 1400 and sales budget increased to 3500 for Able. Forecast and production were both set to 1955. The promo and sales budget remained at 1400and 3500 for Ava. Forecast and production were both set to 1235. Promo budget remained at 3000 and sales budget increased to 3500 for Alice. Forecast and production were both set to 965. Automation of

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10., 9.0, and 8.0 were ordered for Able, Ava, and Alice. We invested in 80 training hours and $5,000 in recruiting spend. We invested $500,000 in each of the TQM Sustainability Initiatives. The cumulative impacts were as follows: (1) Material Cost Reduction 11.80%, (2) Labor Cost Reduction 14.00%, (3) Reduction R&D Cycle Time 40.01%, (4) Reduction Admin. Costs 60.02%, and (5) Demand Increase 14.40%. In 2028, sales increased by 0.7% to 154.2 million and profits increased by 21% to 33.5 million. Contribution margin increased to 56.4% and stocks rose to $121.76. Able had 749 units and Ava had 177 units left in stock. Alice stocked out again. Able had a market share of 15.5% with a score of 37. Ava had a market share of 13.8% with a score of 47. Alice had a market share of 10.3% with a score of 44. Awareness remained at 100% and accessibility increased to 92% for Able. Awareness remained at 100% and accessibility reached 100% for Ava. Awareness remained at 100% and accessibility reached 100% for Alice. No overtime was issued, and turnover rate decreased to 5.9%. II.

Current Situation: SWOT Analysis a) Strengths 

The decisions we made kept us ahead of the competition

In years 2021-2028, contribution margin increased making Andrews-Bougie stay ahead of its competitors. By 2028 our contribution margin was 56.4%. Years 20242028 Andrews had the highest sales and years 2023-2028 had the highest profits. The company was able to keep price, age, reliability, and position in range with the segment’s customer buying criteria. We were able to score the highest customer survey score each year. We invested the right amount into our promo budget to arrive at 100% awareness for Able, Ava, and Alice. We also invested the right amount into

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our sales budget to arrive at 92% for Able and 100% accessibility for Ava and Alice. Our strategic investments in TQM assisted the company in reducing material, labor, and admin costs and increased our profits/margin. b) Weaknesses 

Forecast & Production Schedule

In years 2023-2028 Andrews-Bougie was off on forecast and production schedule. We see that we did not fully understand the difference between the two and thought having the same number of units in each was the right way. We believe that for this reason is why we received two emergency loans. c) Opportunities 

Product Changes

Andrews-Bougie produces three products currently. We see more products in our future. Our strategy calls for products in both segments, high and low. Currently we have one low-tech product and two high-tech products. d) Threats 

Competition

Competition will always be our biggest threat. At any time, consumers could lose interest in our products and go buy from our competitors. We have run out of stock a few times in the past 8 years. When this happened, our customers bought from our competitors which means we lost out on sales. Currently we are ahead of the competition. If we fall behind, we could lose our market share, be forced to retire products, or take out emergency loans to cover our expenses.

FINAL PROJECT: COMPANY PERFORMANCE SUMMARY

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Future of the Company Eventually product Able will need to be phased out. If the company stays ahead of the phase out, by keeping on top of the new products being produced, we can phase one out and bring one in at the same time. We want to see a few more products in each segment. I will be beneficial to the company to have new products on the market from each segment to meet customer buying criteria. We will continue to invest in employee training and recruiting spend, TQM Sustainability Initiatives, and promo and sales budgets. I see expansion in our future.

IV.

Ethical, Legal, and Social Challenges During the past eight years no ethical, legal, or social challenges occurred. That does not mean that challenges will not ever pop up. For this reason, we need to be prepared for anything that may come our way. For the company to be prepared for ethical challenges we need to establish a code of ethics and business conduct. These guidelines will help manage and protect our company, our employees, and our shareholders.

What are potential ethical challenges our company could face? 

Unethical Accounting Practices

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Social Media

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Harassment and Discrimination

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Health and Safety

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Technology/Privacy

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We need to establish a code of ethics and business conduct to help manage and protect our company, our employees, and our shareholders. What could we include in our company’s ethics guidelines to avoid challenges? 

Our company’s vision, values, and mission statements

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Make statements pertaining to:  Build Trust and Credibility:  Respect for the Individual  Create an environment of open and honest communication  Setting a Tone at the Top (Management showing a good example)  Uphold the Law  Ethical, Fair, and Energetic Competition  Respect Property Rights of Others  Selective Disclosure  Avoid Conflicts of Interest  Set Metrics and Report Results Accurately  Promote Substance Over Form  Be Loyal  Do the Right Thing  Information and Resources (SHRM, 2020)

What are potential legal challenges our company could face? (And how can we avoid them?) 

Undefined Business Structure (register our company)

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Employee Classification (define the status of our employees when they are hired)

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Termination of Employment (an employee agreement is needed with thorough terms of employment, a Notice of Termination and adequate notice period)

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Discrimination (draft an Equal Opportunities and Anti-harassment Policy)

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Information Sharing (have prospective business partners, contractors, or employees that we may share our confidential information about how we conduct our business, sign a Confidentiality Agreement)

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Use of Electronic Devices (if any of our employees use their own electronic devices at work, having them sign a BYOD (bring your own device) Policy will ensure our company’s network security)

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Health & Safety (draft a Health & Safety Policy that clearly states our company’s responsibilities and procedures that are followed to prevent injuries and illnesses)

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Immigration Audits (get help from a corporate legal professional to define whether a particular candidate is eligible for the position or not)

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Foreign Work Policies (find a legal professional who will help you familiarize and understand the contracts, policies, and procedures in place in that foreign jurisdiction entity)

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Protection of Intellectual Property (we must complete a thorough market analysis and file for registration of patent or trademark, or we could be sued for infringement)

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Late Payments (draft official documentation of what is expected for proof if a client breaches a contract)

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Inadequate Data Collection (hire a legal advisor who will go through all the points and clarify the changes our company needs to implement to comply with all listed rules and regulations) (Polydor, S., 2019)

What social issues could affect our company? 

Human Rights

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Working Conditions

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The Environment

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Combating Corruption

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Disclosing Information

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Corporate Governance

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Consumer Interests

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Gender Equality

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Occupational Integration (SECO, 2019)

Recognizing the social issues is the first step. We will adopt Corporate Soc...