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Organizations Goals and Objectives
The primary goal of Accurate Camera is to provide quality and value to our customers while meeting their needs. Additionally, to ensure through daily management practices, the values of Accurate Cameras mission are followed so that it creates a successful and growth oriented business. Additionally specific goals are based on the following factors:
Accurate Camera will generate total revenue of $21,000.00 while maintaining an operating expenses equal or less than projected; produce a new multi-level camera increasing net profit by 3%; enhance the overall revenue in Asia and Latin America; maintain Credit Rating and increase Image Rating to 90. During Year 8, focus on a marketing plan in North America and Europe and increase retailers and online stores in Asia and Latin America. Increase promotions so customers are retained to generate repeat purchases and make referrals; increase product design for both camera lines; increase employees to reduce outsourcing and repurchase 500 shares. In Year 9, target online customer base and provide direct shipping to web customers; increase revenue in Asia and Latin America; provide in-house workshop for additional training to PATs; communicate with customer base through printed advertisement i.e. magazine ads, postcard mailings and website ads and obtain a four star quality rating for multi-level camera. In Year 10, increase growth with development of ecommerce and establish a visible and accessible storefront and website to position ourselves as a premier choice for our products.
Strategic Objectives
- Maintain an A credit rating. Achieve an A+ credit rating by Year 10.
- Maintain a minimum image rating of 75 in first two years. Achieve and 80 rating in Year 8, an 85 in Year 9 and a 90 by Year 10.
- Achieve a 4 star rating for our multi-feature camera by Year 9.
- Achieve and maintain a 3 star rating for the entry level camera.
- Maintain a 20% market share in the North America and Europe/Africa regions while increasing market share in Latin America by 10% and the Asia/Pacific region by 20%.
Financial Objectives
- To maintain an annual gross profit margin of at least 30%.
- To increase our operating profit margin to 20% and maintain an increase that level annually.
- To increase our net profit margin to 14% by year 10.
- To increase our return on total assets by 10% annually.
- To increase our return on stockholders equity by 10% annually.
- To increase our earnings per share by 20% annually.
- To increase our current ratio by 6% annually.
- To increase our working capital by 30% annually.
- To reduce our debts to assets by 8% annually.
- To reduce our debt to equity by 15% annually.
- To reduce our long term debt to capital by 30% annually.
- To reduce our long term debt to equity by 20% annually.
- To increase our timed earned interest by 30% annually.
- To bring our dividend yield back to a minimum 1% by year 10.
- To raise our price to earnings to 20 by year 10.
- To increase our internal cash flow by 20% annually.
Financial state and position
Financial position of the firm mainly depends upon the financial ratios.
Below table shows and overview of the financial position of Accurate camera and the current ratio during the year 6 to 10:
From the table it is clear that, the company has maintained the optimum current ratio of 2:1 in all years except in year 8. But the financial objective of increasing the current ratio by 6% annually was not able to meet by the company. From analyzing the debt equity percentage, the company has succeeded in achieving the objective of reducing the debt equity ratio in a minimum extends till year 9. But in the year 10, we can see an increase of debt equity percentage to 20:80 from 0:10%. In the year 10, a comparatively low total equity as that of previous year is available with the company. Liabilities are increasing per year which may cause a reduction in the total equity of the Accurate camera.
Product position in the market
Product positioning is a very important aspect of the marketing function. It can be defined as marketing strategy that aims to make a brand occupy a distinct position, relative to the competing brands, in the mind of the customer. Positioning, 2009).
Previous years competition decides the unit sales, revenue and market share of the company in the future. As a multi featured segment camera, the company currently has a market share of 23.9%. From the market share analysis of the entry level segment and multi featured segment, it is clear that, entry level segment has higher market share than multi featured segment i.e. 31.3%.
The average price of multi featured camera is higher than entry level cameras. In North America, a customer can buy an entry level camera at $163, where as a multi featured camera requires $490. Also comparing the price at four regions, it is seen that in Latin America, prices for both segments are high. The company can concentrate on low price strategy in the future to capture the market in all the four regions as the total production cost is seen in a declining trend. In year 9, the production cost was 355 and by year 10, the cost has reduced to 331. So the company will be able to reduce the product cost.
Competition in the global camera market and competitor analysis
From the analysis of the global camera market, it is estimated that the future sales can be either increasing or decreasing in each geographic quarter in the coming two years i.e. +/-2% in the first year and +/-4% in the second year. The following table shows the industry scoreboard explaining the Investor Expectation score and Best in Industry score.
From the above table, we can see that Accurate camera holds the second position both in the Investor expectation and best in industry. The overall score of Accurate camera is 104, where the top ranking is 107 in the industry. A +5 change can be seen in the overall score of Accurate camera from the previous year. The Best in industry score shows that the company has an image in the market and the company can meet the expectation of the investors. From this it may be noted that the dividend payout ratio is acceptable to the investors.
From the projected data of the available local camera shops in the year 11, in the four regions shows that, the company has an opportunity to expand in the future. Among the four regions Latin America has a higher chance as only 3000 local camera shops is now located. 5225 local shops again can be established in this area. The projected camera market demand for the year 11 in Latin America is comparatively high with projected retail demand of 134. It is estimated that North America has the highest projected demand of 614 in the coming year.
Quantitative analysis of the firm
The following table shows the financial position of the company from the year 6 to 10.
Summary of Organizations Financial Results from the Year 6 to 10
* Represents the total Year sales revenues.
** Represent the total Year earnings per share.
*** Represents the overall ROE for a Year.
We can see an increasing trend in the total sales revenue. Astonishing increase could be seen in the return on equity in the 10th year as the company expects only 10% increase in the year on return on assets. The company objective to increase its earnings per share by 20% annually has been a success, due to 57% increase in the EPS from the 9th year to 10th year i.e. from 3.91 it has increased to 6.81.
Even though the companys performance could be seen increasing, with respect to the financial goals and strategic objectives of the company, the companys financial results show dissimilarity with set objectives during the 10th year. The company was able to achieve credit rating A to +A. But in the 10th year, the company could not maintain this credit rating and was worn-down to A. Declining to A in the year 10 shows that the company is facing difficulty to meet its liability.
One strategic objective of attaining and maintaining a minimum image rating of 75 in the first two years was possible. But to achieve rating of 80 in Year 8 was not possible and the company got only 73 which were even drop off from the previous years. An image rating of 85 in year 9 was expected and the company was able achieve the rating of 86. But in year 10 the company could attain only 84 from an expectation of 90. So the area which the company requires more focus is on the image rating. There is a wide gap between the expectation and the actual result.
Recommendations
From analyzing the overall position of the company Accurate camera, it may be considered the following recommendations: The company should plan to achieve the above set strategic and financial objectives as many of the strategic and financial objectives could not be attained. The company should concentrate more on reducing the debt and liabilities of the firm to achieve the image rating of the firm. Cost reduction policy could be encouraged to reduce the price of the product. So if the company takes a strict strategic plan, the Accurate Camera can become first best in the industry as it is second at present (Corporate lobby: Accurate camera, 2009).
References
- Corporate lobby: Accurate camera. (2009). Glo- bus: Developing winning competitive strategies. Web.
- Positioning: Definition. (2009). Business Dictionary.com.
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