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Summarize the generic strategy employed byProctor & Gamble and how it helps the company achieve sustained competitive advantage. • Which of the generic competitive strategy options is P&G pursuing? • Explain how P&G is pursuing this generic strategy. How does it fit value chain activities specifically to support its generic strategy? • How does pursuit of this strategy help P&G achieve sustained competitive advantage? • What are your recommendations in regard to the company's pursuit of a generic strategy or how it uses its value chain in this pursuit?

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Collen Von
Collen VonLv2
14 Sep 2018

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Prepare a Project Proposal that includes the nature of the project, the sources of information you plan to use, and the most important concepts and techniques to be applied.

The outline topics should include the following:

A brief summary of the company you have chosen, such as business lines, and its industry;
Information sources (e.g. industry studies, market share reports, financial statements, etc.);

The analyses you will include in your study. This will likely require a summary review of the material in later sections of the course, such as competitor analysis;

If you have access to, and permission to use, internal company documents, please discuss so in the outline.

You are required to complete a course project that reveals mastery in application of the strategic managerial accounting and performance management concepts emphasised in the course. This involves reporting on a specific organisation within an industry, analysing the firm’s competitive position (e.g., market position, cost competitiveness, market power, innovation, SWOT, etc.), its managerial accounting approach, and the non-financial performance metrics should be used in monitoring firm performance, all aligned with value creation for the chosen firm.

This project should be a formal business report that covers all elements of the strategic management process: mission statement, strategic goals, strategic objectives, actionable plans (if available, analyse the specific budget planning process used by the Firm; if not, search for relevant articles for the subject company and recommend a process that you believe is appropriate for the company), and performance monitoring processes employed by the Firm, including its board of directors. These processes and strategies are to be supported with managerial accounting and performance management concepts.

In selecting a company to analyze, first focus on information availability. If you work for the company, ensure that you can obtain the information required to do a proper job on this assignment. If you choose a company you do not work for, begin your search among larger public companies with ample information available. Company websites are often the best place to begin, in particular the investor relations site. Look for annual reports, quarterly reports, press releases, white papers, and other sources of information (e.g., public filings, such as for the U.S. Securities & Exchange Commission at http://www.sec.gov./

Your tasks are to:

· Briefly describe the business of the Firm (i.e. industry segments, geographic service area, market position, and size as measured by revenues, employees, and market capitalisation). Describe the mission statement and strategic objectives of the Firm.
· Analyse the behaviour of expenses of the business, distinguishing between variable costs and fixed costs (or estimates thereof), describe the relationships between sales volume, costs, and profit. Estimate a break-even point for the Firm and support with relevant calculations and discussion.

· Discuss the level of the Firm’s operating leverage.

· Assess the budgeting process and procedures for the Firm, bearing in mind the context of the business and its characteristics. Identify methods employed for budgeting, managerial reporting, and control, and make recommendations for improvement. Justify your recommendations.

· Summarise the Firm’s performance over the past five years in terms of sales and earnings growth, return on equity, return for shareholders, and non-financial performance measures (e.g. market share, recognition, customer satisfaction).

· Analyse the fixed capital needs (i.e. capital expenditures) of the company, and discuss significant capital projects, how they fit with the strategic goals of the Firm. Evaluate risks associated with major capital projects and suggest risk mitigation strategies. Justify your suggestions.

· Briefly profile two or three key competitors and analyse the basis for competition (e.g., is it cost? Innovation? Capital intensity? Branding?). Compare the Firm with these key competitors on key performance metrics (e.g., revenue growth, profit margins, return on equity, financial leverage, receivables turnover, payables turnover, asset turnover, operating costs, market share, market share growth, etc.). Identify areas where the Firm may outperform or underperform the peer group, and suggest improvements for weaknesses.

· Design a Balanced Scorecard for the Firm.

This project should follow a structured approach and should be prepared and presented as a professional business report.

Over the past few years, the number of start-up companies attracted to either doing business themselves in the cloud, or specifically creating applications for others to use in the cloud, has grown significantly. A few but very promising enterprises have launched applications in “container” technology, which enables companies, programmers, or other enterprises to both launch and run applications solely in the cloud. There is still a lot of room in this emerging marketplace, and you are diving in. The product you’ve developed has a unique angle to tap into the local-grown/local-made/local-paid movement that’s also growing larger every day. Your initial market is your own small city, which operates independently but which is linked economically and via public safety provision to another small city sitting directly across a river separating the two. Once you’ve been able to launch your company in your city, you plan to approach the “sister city” leaders, then the county, state, and eventually go national. It’s too soon now, but your future plans entail an IPO offering to accomplish all this. Eventually, you hope to be able to re-imagine your product to go global. You have big plans, are close to being tapped out financially and you now need to plan for additional investors. Address the following considerations as they apply to your product launch. 1.Describe an agency relationship and how it may/will take shape for your small company. As the sole employee and investor in your startup, what agency conflicts might arise? 2.Six months have transpired, and you’ve been able to add two employees. In this new arrangement, what agency disputes might now develop that need to be addressed, and how might you address them? What resources do you need to use or consider? 3.Another three months have passed. You are now ready to expand to your sister city and you need more capital. You decide the wisest path is to sell some stock to outside investors, but you will maintain control over your company by holding onto the majority of the stock. In this new scenario, what type of agency conflict might occur? How can you address this in advance? 4.The IPO was a success, and you have a robust number of shareholders. With board support, you determine it is time to hire a financial manager to help your firm achieve current goals and set new ones appropriate to the firm’s growth strategy. What professional strengths and skills will an individual seeking this position need to possess? 5.Another consideration you feel you need to address at this point, now that your firm’s stock is publicly traded, is how to sustain the high ethical standards you’ve fostered thus far as you move into the firm’s future. What strategies can your management team implement to conduct your business with both personal and professional integrity? What steps can you take to ensure that ethical considerations for financial and other management decisions are embedded into the firm’s culture? 6.Congratulations - you are now at Year One, and everything is moving along faster than you anticipated. While this is great, you are at the point where you need to raise additional capital from outside lenders. With this decision, what type of agency costs might the company incur? How might a lender mitigate any agency costs? 7.Year Two rolls around. Your company has been able to expand beyond your local communities and into to localities and governments in half the counties of the state. The stakes are getting bigger and you welcome the idea of high-level input to ensure the company keeps growing and expanding. You cash out the majority of your stock and turn the company over to an elected board of directors. Neither you nor any other stockholders own a controlling interest (which is also the situation at most public companies). List six potential managerial behaviors the new board might take that could harm your company’s value, and what steps overall can put into place to avoid or mitigate these. 8.You are also aware from your prior career and from your research, that corporate governance can affect shareholder value. This greatly concerns you, as you still have lofty plans for your company’s growth and eventual global trajectory. Questions you’ve identified that need to be addressed at this stage include: a) What is corporate governance?; b) What five corporate governance provisions are internal to a firm and are under its control?; c) What characteristics of the board of directors usually lead to effective corporate governance?; d) What characteristics of the board of directors signal ineffective or problematic governance practices?; e) How can regulatory agencies and legal systems affect corporate governance? If there are differences in local versus national levels, expand upon these. 9.Lastly, one of your new board members is very concerned with “blockholders.” What is block ownership? How does it affect corporate governance? Explain the pros and cons.

Explain how the value chain paradigm helps stakeholders to improve the operational efficiency and effectiveness of the organisation. Draw a daigram input-output framework and describe how the case study illustrates its value chain paradigm based on the input output framework.

“I think the waiter wrote in an extra $25 tip on my Sunshine Café bill after I received and signed my credit card receipt,” Mr. Mark Otter said to the restaurant manager, Brad Gladiolus. “Mr. Otter, mail me a copy of the restaurant receipt and I’ll investigate,” responded Mr. Gladiolus. “I don’t have the receipt—I lost it—but I have my monthly credit card statement,” replied Mr. Otter. Mr. Gladiolus hesitated, then said, “Mr. Otter, I don’t see any way to investigate your claim, so there’s nothing I can do.”

Mr. Gladiolus sat down at his desk and sketched out possible causes of this service upset as follows:

The customer is responsible for adding the bill and tipping properly, writing legibly, retaining the second receipt, and drinking alcohol responsibly.

The employee is responsible for typing the bill in the register/computer correctly, going back to the customer if the tip is unreadable and verifying the correct amount, and being honest.

The restaurant manager is responsible for investigating the store’s receipt history and finding this transaction; auditing the source of the error if possible, such as a mistyped decimal or extra zero; and contacting the credit card company and customer to resolve the issue.

The credit card company, a third-party provider in this value chain, is responsible for providing records of the electronic transaction, helping resolve the issue, and issuing a debit or credit to the customer and/or restaurant if needed.

Company Background

Abby Martin’s parents came to Florida from Chicago in the 1960s. Her parents bought land in the Cape Coral area. Later they opened a hotel on Fort Myers Beach, and Abby was part of the housekeeping staff, her first job. By 17, she was running the hotel on her own. Today, she owns and operates six restaurants and a by-the-sea hotel. The restaurants are located in shopping centers next to high-traffic facilities such as movie theaters, groups of retail stores, and other clusters of restaurants. Abby uses four different restaurant concepts (i.e., facility décor, size, and layout; prices, menus; music and bands; wine list, lounge areas, etc.) for these six restaurants, depending on the location and local market demographics.

Abby has other investments but loves the challenge of managing restaurants. “I have a great passion for finding a need and meeting it,” she said. “The secret to our restaurant success is customizing the business to local needs and being very consistent. Offer good food and service at the most reasonable price you can afford. And know that even if you offer all those things you can still fail. The hospitality business is the hardest business, period. You can never sit back and coast.”

In her spare time, she is a prominent community figure involved in activities such as helping build the Ronald McDonald House, fund-raising for the hospital cancer foundation, and serving as chairperson of the local board for the Salvation Army. She likes the Salvation Army because it runs a lean operation, with only six cents spent on management for every one dollar in donations.

Day-to-Day Service Management

Sunshine restaurants are normally open seven days a week from 11 a.m. to 10 p.m. Lunch prices are in the $10 to $20 range and include such entrees as a wood-grilled hamburger, seafood salad croissant, and sesame-crusted yellow fin tuna. Dinner prices range from $20 to $30 per person and include dishes such as shrimp and scallop scampi, red snapper picatta, and wood-grilled filet mignon. Each restaurant keeps about 20 to 30 popular wines in stock, such as a Cakebread Chardonnay. Wine, liquor, and some food items are ordered in bulk to take advantage of volume-price discounts and shipped directly from the suppliers to individual restaurants. All other items are ordered by the restaurant chef and general manager for each unique restaurant.

Abby, like most entrepreneurs, has her own approach to quality control. She notes that “I visit my restaurants every few days, and as I walk in I immediately begin to watch customer faces and behaviors. I try to see if they are happy, talking, smiling, and enjoying the food and surroundings. I look at their posture and facial expressions. I often talk with customers and ask if everything was to their liking. I ask my employees—waiters, bartenders, kitchen help, managers, and chef—if they have encountered any problems or service breakdowns. I look for untidy floors, tables, and restrooms. I try to learn from negative customer comments or complaints. My employees know that I will try to help them solve any problem—they trust me. I take the pulse of the restaurant in a short visit. I meet weekly with the restaurant chefs. I manage quality by observation and close contact with all of the people in the restaurant. At night I go over the financials and sales data.”

A typical Sunshine restaurant has a core staff of about 12 employees, consisting of a manager, an assistant manager, chef, assistant chef, four waiters, two bartenders, and two helpers in the kitchen. During peak season each restaurant hires about six to eight additional employees. Peak demand is when the “snow-birds” arrive in southwest Florida from November to April. During peak demand, the populations of Lee and Collier counties double to almost 2 million people.

Abby’s entrepreneurial approach to managing the business results in about one negative customer complaint per 100 customer comments. The complaints are nearly equal in focusing on food or service quality. Contribution to profit and overhead per restaurant is 35 percent. The typical customer averages one visit every two months, and the customer defection rate is in the 5 to 10 percent range, but is difficult to estimate given the seasonal nature of the business.

Long-Term Strategic Issues

Abby Martin has established a reputation in southwest Florida for superior service and food quality in her restaurants. She was considering expanding her restaurants to the Tampa and Orlando areas to leverage her expertise and grow the business for the family. She wondered whether she could maintain the proper financial and quality controls with more restaurants and whether to franchise or not. Due to the 2007–2009 credit crunch and high foreclosure rates, there were plenty of commercial properties in good locations for restaurants, and prices were at all-time lows. Abby thought it was now or never in terms of expanding up and down the west coast of Florida. She envisioned as many as 20 Sunshine restaurants in the next five years.

Decisions

Abby wondered when she would ever get the time to analyze these issues. It was not easy keeping up with her businesses. She knew that superior day-to-day food and service quality determines repeat business, so she had to successfully resolve this customer complaint about the waiter adding a $25 tip, while trying to plan for the future. She happened to be at her hotel, so she sat down in a beach chair and watched the brilliant colors of a sunset over the Gulf of Mexico. She began to write down a number of questions she had to answer soon.

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