Scbus 122 W2021 Assignment notes Company analysis PDF

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SCBUS 122 Winter 2021 COMPANY ANALYSIS NOTES Assignment Notes and Assignment Cover Sheet Submit your written project on LEARN on the date indicated in the course syllabus. Total number of pages: 7. Please read all the pages before you begin. Note: Late projects will not be accepted and a ZERO will be given to the entire team.

INSTRUCTOR: DR. OKEY IGBOELI Student Name [s] Student ID [S]

Title: PROJECT GROUP BASED Written report Weight 20%

The written report should be 1.5 spaced. Please use font size 12 Times New Roman. Right and left margins to be 1 inch. Maximum length of report 15 pages, excluding title page, executive summary, appendices and references. Extra pages will get a ZERO and will not be marked Program

The Task As a group, analyze a company's Annual and CSR Reports (if they have both) and present your analysis in written and oral formats.

Note: Please do not repeat or copy paste the information from the annual report as that will entail academic penalty as well as loss of marks for the group). This is to be your analysis, not theirs.

Assignment dates Project assigned: First week of class Selection of company: Email TA before 11:59PM on Thursday 21 January 2021 Written report due: Tuesday 13 April 2021 SCIENCE AND BUSINESS, UNIVERSITY OF WATERLOO

Procedure( 1.#Claim#a#company## Each team will choose ONE publicly owned company (i.e. listed on a stock exchange) from any industry (possible choices are listed below). While you are not limited to this list, your chosen company MUST have revenues of over $300 million dollars. After choosing a company, email the TA who will review it and confirm that it is approved. You must email to inform the TA of your selected company by the deadline indicated on the first page of this Assignment Note. Once chosen companies are approved, the company cannot be changed or taken by another group. Hence choice is strictly on a first-come first-served basis. Decide early and get the company you want. Some suggested sectors and companies are posted below as a guide. These companies are public companies, listed on international stock exchanges. They generate Annual Reports (and sometimes CSR reports) for their shareholders and stakeholders. These are uploaded on their corporate websites. Download the most recent version for this assignment. Some good targets could be companies you examined in other SCBUS courses. Bigger is better for this exercise (so that there is enough material to analyze). Some ideas: If you have specific interests, find a large firm that is similar. For instance, if you are interested in family businesses, look for companies that were originally family owned. If you are interested in start-ups, look at Shopify. Search online for ‘public “xxx” companies’ and substitute construction or retail or whatever for xxx. • A company from a work term or one you might like to work for when you graduate • A company that employs lots of SCBUS students • A company active in your technical field (i.e. the SC part of your SCBUS degree) Some suggested companies: •

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Retail Industry: The Home Depot, Inc. Lowe's Companies, Inc., Canadian Tire, Wal-Mart Stores, Inc. Marks & Spencer (M&S)

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Cosmetics: Shiseido, Avon, L’Oreal Aerospace Industry: Boeing, Airbus Auto Industry: VW, Toyota Motor Company, Ford Motor Company, General Motors Corporation, Nissan, Mazda Entertainment/News Industry: Netflix, The Walt Disney Company, Shaw Media, Corus Entertainment, Time Warner Airlines Industry: Emirates Airlines, Air Canada, British Airways, Singapore Airlines Biotechnology Industry: Amgen USA, Genentech USA, Genzyme, UCB Belgium, Gilead Sciences USA, Emergent BioSolutions Pharmaceuticals Industry: Johnson & Johnson USA, Pfizer USA, GlaxoSmithKline United Kingdom Novartis Switzerland, Sanofi-Aventis France, Allergan PLC Ireland

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Banking and Financial Services Industry: TD Canada, Scotiabank, Citigroup, BMO, Barclays Food and Beverage: The Coca-Cola Company, PepsiCo, McDonalds, Burger King, KFC, AnheuserBusch, Heineken, Sapporo. Energy, lubricants, oil Industry: Petro Canada, Royal Dutch Shell, Total

# 2.#Obtain#a#copy#of#the#most#recent#Annual#Report#(and#CSR#or#Sustainability# Report#if#they#are#separate#documents).## The Annual Report is a document released by companies at the end of their fiscal year which summarizes the reporting year – planning, performance and people. They contain a letter from the Chairman of the Board and the Chief Executive Officer and other senior executives which discusses the past performance and plans for the upcoming year. The mission, vision and values are typically included (if not they are on the website) as is corporate performance – assets, people and financial. The CSR report centralizes this information for the CSR area. These reports are on the corporate website as pdfs, in the Investors section. One can also order a hard copy and they will send it to you by snail mail. Some companies have a separate CSR or sustainability report that is also compiled yearly. This is an annex to the Annual Report.

3.##Read#the#reports#and#analyse#(not#describe)#the#management#of#the# company# Purpose# The intent of your report is to analyse the company from a management point of view – i.e., how do they use the various elements of management (planning, organizing, leading and controlling) to achieve efficiencies and effectiveness and do they do it well? It is not a description. Scope* Certainly, companies do not highlight every aspect of their management every year in their Annual Report. Some years they will focus on certain things and some things are too small to overtly include. For instance, if big picture strategic management planning occurs every four years, that will be the highlight the year after the plan is created (leadership planning and organizing), subsequent years will be about plan delivery (organization, control) and the final year will be celebrate (or explain), wrap up and start again. With respect to the vision, mission and values, these are important corporate management pieces that might or might not be in the Annual Report. If they exist, they will be on the website. Wherever they are, get them, use them and include them as an appendix in your report. They are the bedrock of management and should reflect the company’s overall direction, ethics and positioning. Some management aspects are covered every year (i.e., organization structure, management structure, CSR, globalism/diversity, measure of actual performance vs budget). Tease out what your company does in these areas (how has it chosen to operate) and categorize these according to principles, models and theories you have learned. Does it appear to be successful or is it onerous? How is it measured (controlled)? Does the financial and growth profile support this? * Your*Approach* Use the extended Table of Contents in your textbook and the lecture notes to target the important elements of management and compare the observed practices in your company to these. This is a seven-part exercise: •

Figure out the management strategies by piecing together clues in the Annual Report.

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Find the stated goals - always financial – i.e., staying within budget and making a profit - but can be in other important areas including strategy, operations and geography.

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What is/are the management principles/theories used to deliver the goals and strategies?

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Does it appear that the stated goals are the same as the real goals?

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How successful are the management activities –are they working? Is the company meeting their goals? You fish out this information from the annual report and especially in the financial performance section.

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What do you recommend to the company?

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What would you recommend to investors? Should they (you) buy their shares?

Bear in mind companies will RARELY release bad news in a clear manner – there is always spin and you must see through it. Big*picture*considerations* Is the company well managed? You should spend more time thinking “why?” not “what”. For instance: • • • • • • •

Are their stated plans the same as their real goals? How can you tell? What impact will this have? What can you tell of the corporate culture? Is it strong or weak? How can you tell and why is it so? Does that help or hurt? Are there subcultures? Do they use groups or teams? What types and does it work for them? Do they discuss or monitor efficiency? How? Results? How do they measure effectiveness? Results? What is their competitive advantage? Are they a merger and acquisition target? Why? Who could they merge or acquire? What would the fit be and why?

Good*places*to*get*information*and*things*that*will*help*you*assess*those*sections:** Analyze and consolidate the information in the company's report. Your group is encouraged to add any data and charts/figures (in appendices) to support your write up. There is no set table of contents for an Annual Report and few requirements beyond the list of key executive positions and “Good Accounting Practice” financial reporting – so you need to review the whole document. Various sections to examine and points to reflect on (clues as to where to look):

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Chairman’s and/or CEO’s Letter – Normally covers growth, performance – was it achieved or missed, actions taken or not to be taken, key progress on issues important to the firm, awards. What kind of impact do you see arising out of the letter? What is the format? Letter, interview? Imagery? Does the company feel accessible? Wordy? Hidden? Open? Exciting? Stuck?

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Key performance indicators and overview of corporate structure - Usually in simple graphic form.

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List of Directors and Officers – How many outside vs. inside directors and what message do you get from this team? Are they management, finance, operations oriented? What are their qualifications (if given)? Do you see any synergies or conflicts? Do they have good experience to be involved in this industry/company? What are the unstated reasons they are there? What do you think they do to help the company? Why are they on the Board?

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List of Management – How many? Roles? Depth of experience and education? Do they match the positions? Diversity? Do they look structured or unstructured? Do they seem to be a team?

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Ownership of the company Who are the major shareholders and how much do they own? What does this tell you about their requirements and risk profiles. How does this translate into the company?

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Sales and Marketing - Covers what the company markets and sells. Are the 5 W’s (what, where, when, why and who) and H (how) answered? Are its various services and products explained and set in their marketplaces? Do they examine market trends and market position? Do they give any indication of how they plan to use their corporate platform and competitive advantages to address future changes?

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Geography, infrastructure, headquarters and regional/Global spread: Where is the company headquarters? Where are its branches and subsidiaries and what kind of global/regional network or structure exists? Is it based on product/service requirements or other factors? Is there a disconnect?

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Management Discussion –This expresses the second highest discussion of the performance of the company and is often where strategy and operations meet. Can you determine the corporate strategy? Evidence of corporate planning? Strategic management of operations? Thoughts of contingencies or risk management? Geopolitical awareness? Often this is by strategic business unit, “department” or business line.

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Stock Price History - Which exchange(s) are company stock traded/listed? If more than one, why do you think they decided to pay the significant costs to dual list? Stock symbol? General trend of its stock price over time? Compare it to several of its competitors. Does it reflect industry standards? What is the dividend history?

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10 Year Summary of Financial Figures - Is this included? What is the rough idea or trend that your group gets when looking at the financial figures (your group is not expected to do any detailed financial analysis but you should look for sales, profits, Research & Development spending, inventory and debt levels)? Is there a clear discussion of financials?

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Imagery and highlight words – Companies control their image and express who they are and what is important (to them) with their choice of imagery and highlight words. Thus, the Annual Report is often a window into the real goals and philosophy of the company as opposed to the stated goals (if these are, in fact, different). All imagery in an annual report is approved at the highest corporate level so it is a glimpse of those things the executive team thinks are really important – or how they plan to execute. So ….What corporate themes are in the report? Are these borne out in the imagery? What do the images show – a representation of operations? Of Strategy? Of Competitive advantage? Something else? Do they reflect abstract concepts like the value of the people in the company? The customers? The products or services? The graphic design/concept changes each year – again with the approval of the executive level. Look back through Annual Reports of past years and see if there are similarities or differences? How is your company evolving? To quantify your perceptions and comments, use percent image counts (i.e., of the total number of images in the Annual Report “total”, how many show “your topic”, expressed as a percentage – topic/total*100).

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Miscellaneous Things to watch for throughout the Annual Report o What is the corporate advantage? o Who are the stakeholders and are they addressed? o What is the impact of globalism and cultural diversity? o What is the corporate culture and does it appear to be healthy?

4.#Your#WRITTEN#report## The following is the suggested format for your report: •

Title Page (corporate logo included) Identify your company, the authors of the report, student numbers, group number and the date.

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Contribution Sheet: each member has to sign and acknowledge their contribution towards the project on the second page after the title page and before the executive summary. Any individual whose signature is not there or is referred by the group as not being a contributor will get a ZERO.

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Executive Summary [1 page maximum]: Note, this is a summary of the whole report, including recommendations. It is usually best to write this AFTER the whole report is completed. When you consider roles for this project, I suggest that you assign one person the task of writing the Executive Summary and they should NOT be the person/people that wrote the majority of the report.

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Table of Contents/outline

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Introduction and scope (1/2 page maximum)

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Definitions (do not repeat any that are in the book) e.g., do not define efficiency

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Body of your report –discussion of the various aspects (e.g. philosophy, approach, style, tools, culture etc.) of management that you can glean from the Annual Report. What do they value? Not value? How do they plan, organize, lead and control? Is it working? o Subsection A (this is an example of the formatting that you are expected to use in the body of your report) § Part 1 § Part 2 o Subsection B Recommendations

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Closing

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References (must be APA format) and acknowledgements

• Appendices 1. MUST HAVE: Company description – this is the snapshot - elevator pitch description - maximum 1 page – industry, product/service, type of organizational structure (flat, matrix etc.) number of people, country of head office, countries of operation, revenues, market cap, business strategy, founding date, acquisition/merger history, any other high level key aspects. 2. MUST HAVE: Mission, vision, values, overall corporate goals - transcribe these directly from the website or Annual Report and reference them. 3. DISCRETIONARY: Other corporate material created by others that you feel is relevant (e.g., map of locations, graphics, and figures from the company or others. Make sure to reference these.

4. DISCRETIONARY: Graphics, figures, tables that you create to support your discussions or recommendations. *Basis*of*Assessment* (Written*Report)**

Basis for Assessment (Item)

Weighting

Presentation (look, referencing, binding etc.) Title page, Table of Contents, Mandatory Appendices, Introduction Executive summary Issues (the Body of the Report) Conclusions and Recommendations Supporting information and graphs, charts etc. that your group creates (in the 50% and 5%)

5 15 10 50 15 5 100

NOTES: 1. The written project is worth 20% of the course mark. The Basis of Assessment Mark will be prorated to this 20%. 2. Presentation and Outlook of your Report. This is a management report and therefore has to be presentable. 3. Proper referencing is expected. Use APA referencing style available at: https://uwaterloo.ca/writing-and-communication-centre/resources-apa-style-citation https://library.osu.edu/documents/research-services/OSUL_APA2012.pdf This is a very clear guide that has examples of many different types of source materials. 4. If you need support with writing, “The Academic Phrasebank is a general resource for academic writers. It aims to provide you with examples of some of the phraseological ‘nuts and bolts’ of writing organised according to the main sections of a research paper. Other phrases are listed under the more general communicative functions of academic writing. The resource should be particularly useful for writers who need to report their research work. The phrases, and the headings under which they are listed, can be used simply to assist you in thinking about the content and organisation of your own writing, or the phrases can be incorporated into your writing where this is appropriate. In most cases, a certain amount of creativity and adaptation will be necessary when a phrase is used. The items in the Academic Phrasebank are mostly content neutral and generic in nature; in using them, therefore, you are not stealing other people’s ideas and this does not constitute plagiarism.” http://www.phrasebank.manchester.ac.uk/ Team Assessment 1. Group members are encouraged to divide the responsibilities for particular parts of the report and assign a part or parts to individual group members. This is to be indicated on the Contribution Sheet.

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