Please browse the following case, case-related concerns, financial statements (Attachment 1), and store position map (Attachment 2). Harrison Company is definitely in the retail sector. You will have to make and explicitly file different general and question-specific assumptions. These assumptions are needed, since you will have incomplete information, as is often true available world. For instance, your assumptions about how deep the effects of the current/previous recession will be and when it will end will be extremely important to document and should be offered in the executive summary. It will impact the credibility of your proposed technique. (Technically, the recession seems to have ended although many effects remain.)
You have everything that there surely is and you need to make specific decisions. Do not use in any answer the assertion that your organization will conduct additional exploration to make an informed decision.
You should first browse the case and every one of the questions. Each of the questions pertains to an MBA learning aim. Because learning goal # 1# 1 can be integrative and deals with strategy, it is placed as the last question. So, you should prepare written answers for learning target questions #2 through #5 before answering question #1. Once you have completed all the questions, you should write an executive summary and place it at the start of your report.
Each learning goal relates to a rubric with the same amount. Include a heading for every of your answers to make it easier for assessment. For example type: "Rubric question 2" and your answer for question #2. Although the case queries address many different separate business ideas, your essay ought to be written in an integrative design. This integration should support your strategy, based after your analysis.
You are the latest president of Harrison Firm, overtaking in the late spring of the current year and tasked with improving the performance of the business. Several actions that should not participate your strategy include: your resignation, the sale of the business, mergers/acquisitions, filing for personal bankruptcy, or any other action that could prevent you from working the company, as is, over another five-year strategic setting up period.
Your report should be only ten pages typed, Situations New Roman 12 font, and single spaced. No identifying name is needed on page 1, but do subject the executive overview. Include page figures in the footer on the right side. Include "Harrison Case MM/YYYY" and your name in the header of each page. You may also provide you with up to three additional appendices (internet pages) of charts, graphs, or other supporting elements. Any references should be footnoted in your body of the written text, if needed. This will require an extremely concise write-up, since draft records often exceed ten pages. Carefully address the main points and yet show relevant supporting documentation.
The questions could be assessed across scholar papers. That is, question #2 may be assessed for all learners without the assessor examining the other areas of the case report. Thus, you should avoid referencing other areas of your report, wherever possible. Repeating a "few" pieces of information in different sections is preferred.
Grading Requirements for the Harrison Provider Case – Each one of the follow items will have the same grading weight:
Rubric Question 1 – Implications of Integrated Business Processes (Located at the end of the case statement)
Rubric Concern 2 – Ethically and Socially Responsible Decisions
Rubric Query 3 – Synthesizing/Analyzing Advertising Information
Rubric Dilemma 3 – Synthesizing/Analyzing Finance Information
Rubric Query 3 – Synthesizing/Analyzing Logistics and Operations Information
Rubric Dilemma 4 – Identifying Sector and Global Trends
Rubric Question 5 – Leadership
Rubric Query 5 – Group Dynamics
A clear information and justification of your technique should build upon all your analyses
Grammar, spelling, writing style, and the clarity of the record will be assessed
learning goals are recognized (by number) in the end of every testmyprep.com case question. Beneath is a set of the learning goals for your information. You will not need them directly for this assignment.
Learning Target #1: Each scholar will be experienced in recognizing (coping with) the implications of integrated business processes in managing the enterprise.
Learning Aim #2: Each pupil will get ethical, socially dependable, and just when coming up with business decisions.
Learning Goal #3: Each student will manage to synthesizing/analyzing information to make sound business decisions.
Learning Aim #4: Each student is a gatekeeper, trained to scan the global environment of organization, identify current trends in the market, and disseminate information throughout the firm.
Learning Aim #5: Each student will be a leader and/or supervisor who understands group dynamics and is certainly with the capacity of influencing others to attain organizational goals.
The Harrison Company Case
The Harrison Organization, a public organization headquartered in State College or university, PA is facing a period of crisis. (Look at Attachment 1 for monetary statements.) The business is a mid-sized regional merchant. It has 80 shops in seven states, mostly in the Northeast. In addition, it owns two equally-sized distribution centers, one in Pennsylvania and one in Massachusetts. All of its stores are in rural areas and make specifically $600,000 per retail outlet in sales per year (to simplify the circumstance). As shown in the attached economical statements, profits have been dropping during the last three-year period. You have already been earned as president to go the company in a new and better direction. The previous president has simply retired at age 70, is no more on the board of directors, and offers shattered all contacts within the business.
Although your predecessor did not see the have to employ an explicit technique for running the business enterprise, competition from retail chains, such as Wal-Mart and Dollar General, is becoming more intense. Before, your organization has been somewhat shielded from competition by its stores’ rural locations. Now there is a Wal-Mart retail outlet within 10 miles, normally, of every of your stores. Your eight office at home employees have not really developed advanced business expertise. For instance, your marketing manager will not prepare either retail store or company-level sales forecasts.
As you look at the company situation, there will not look like an obvious decision between a low-cost approach (such as that accompanied by Wal-Mart) and a differentiation approach (such as for example that followed by Nordstrom). Next year’s ideas, that you can alter, call for the purchase or development of eight new stores, along with the renovation of the Pennsylvania distribution center. Planned new store locations include three stores in West Virginia, two stores in Rhode Island, two in Vermont, and one in New York. The board really wants to know in the event that you agree with this specific action plan. There were no shop openings, closings, or adjustments to the distribution centers last year or this season.
There are several instant concerns that deal with you upon overtaking as president. One of your retail store managers, who has recently been fired, has gone to the press with accusations that your organization has been buying very inexpensive clothing from a Honduran enterprise whose workers face slave-like conditions. He claims that the main reason for his being fired was that he insisted on raising this problem with top administration. There seems to become no documentation within the company related to this issue.
As with many of your competition, you find that the business is usually actively discouraging the access of unions into your business. Although this appears to be occurring mostly by store managers, it could seem reasonable that company headquarter staff are directing this work. This level of resistance, bordering on being unlawful, seems to be influenced by the business’s culture.
Harrison Company has traditionally supported a local charity nearby the company headquarters, which is the favorite charity of the previous president. In the last many years, substantial contributions have already been approximately $1,000,000 a year. The business has also supported a multitude of other network endeavors in the overall locale of a few of the stores, such as sponsoring little league baseball teams. The total support for these additional organizations has been roughly $25,000 each year in total. You ask yourself if these donations can be maintained, given the company’s current financial condition. If cutbacks are essential, how much as long as they be and how as long as they be phased in?
Locations and Logistics
Locations and Logistics
When you examine the company’s store locations and distribution network, you find that there are 16 retailers in Massachusetts, 12 in Connecticut, 10 in Maine, 10 in Vermont, 10 in New York (four of those in Western NY), eight in Pennsylvania (six of those in Western Pennsylvania), four in New Hampshire, four in Rhode Island, three in West Virginia, two in western Maryland, and one in New Brunswick, Canada. (See Attachment 2 for a map of distribution centers and retailer locations.) All stores are the same size and carry the same merchandise. Your company owns most of its own trucks (nine) and creates all deliveries straight from the distribution centers to the shops. Distribution (including trucking) expenditures have been steady at 8% of cost of goods sold, except for the last 10 a few months. Of these months, distribution expenses have been approximately 9% of the price tag on goods sold, due generally to a spike in fuel prices.
Fifteen percent of the stores take into account 20% of annual profits. The Pennsylvania distribution center serves the 10 shops in New York, the eight retailers in Pennsylvania, the three in West Virginia and the
two in western Maryland. Depending upon specific demands, the Pennsylvania distribution as well serves the 10 retailers in Vermont and/or seven retailers in western Massachusetts. As is seen from the map, both distribution centers provide some retailers that are more than 250 miles aside. A constraint of this case is definitely that no drop-shipments right to the retailers are allowed.
Merchandise orders from the retailers are received on a regular basis and trucks help to make deliveries to the retailers once a week. That is done weekly to be able to fill each truck (partially-full trucks are discouraged). Due to different store merchandise demands, trucks are not completely assigned to selected stores. Distribution centers receive merchandise from suppliers using one side of the guts, place them in inventory, and ship from the various other side of the guts. Inventory is stored with the large size products closest to the bays for shipping to the shops. Shipments from specific suppliers are received once every two to four weeks. You accept no partial contract deliveries from suppliers. Crisis quick-delivery contracts are generally made when multiple shops report stock-outs. No inter-store transfers are created. Forty percent of your suppliers are situated in eastern Canada, 40% from developing countries, and the total amount from america, east of the Mississippi River. You have around 500 suppliers.
Marketing and Store Characteristics
Your marketing people have described their strategy as a push approach with heavy advertising to create buyer demand. Seventy-five percent of your revenue occur through the summer vacation a few months (June through August) and the Holiday holiday season (overdue November and December). Marketing contains 50% local television places and 25% sponsorship of local events, such as for example concerts, which attract a substantial number of tourists. The rest of the 25% of marketing cost pertains to discount coupons put in motels, eating places, and other spots such as nearby ski resorts. Due to deteriorating financial conditions, usual store protection has been significantly reduced. The company has recently developed an on-line retail outlet which makes up about 0.05% of sales.
Store models are quaint and so are modeled on a rural localized corner store motif. Each store is 2,800 square feet altogether area. The industry common is $400 revenue/per square foot per year. Approximately 20% of each store’s total floor space is devoted to a back-room spot for inventory storage and an employee break area. Harrison calculates its sales per square feet using front side end space only (not really the inventory area). 50 percent of the merchandise could be categorized as a blend of country style and modern high-end products. Employees dress "country-style" or "hippie-style" to support this atmosphere. This one half of the store’s merchandise includes specific things like candles, paintings, incense, jewelry, music CDs, and country-style home furniture (e.g., oak rocking seats, bed headboards, and cabinets). Premium pricing for this merchandise is the norm. The other 50% of store merchandise consists of consumer non-durables (convenience items), targeted generally to the neighborhood community. These things are moderately priced and include an array of products from soap to cookies to laundry detergent to clothes. These items must be sold at competitive prices. All products are marketed as high-quality items. Country/different age things are claimed to become made by small "home" or localized producers even though they are stated in moderate volumes by little producers from various places and shipped exclusively from both distribution centers. Merchandise creation identifiers, such as for example "manufactured in China" are covered over where possible. Most of the stores are found in the downtown section of the small rural towns.
Each store currently operates from 9:00 AM to 7:00 PM, Monday through Saturday. Stores are closed on Thanksgiving, Christmas moment, and New Year’s Day time.
Finance and Store Operations
Your finance persons have offered you with just basic financial details as shown as Attachment 1. You are on a calendar year and the previous year’s financial statements, the newest, have been issued in April of the year. The financial needs to assist your company’s current procedures and the implementation of your brand-new strategy must be assessed. Unfortunately your financial people do not have the skills to get ready these and other essential analyses. For example, you would like to see an evaluation of the profitability and effectiveness of company operations. There will likely be other financial facts that you will need to effectively manage the company. Inventory turns might be one among many pieces of useful information. There is much to do.
Currently the company is paying suppliers on greater than a sixty-day average, despite the fact that suppliers possess contracted for a thirty-day payment. Even on late obligations your company is still taking supplier prompt repayment special discounts. Your suppliers have little control over this example because they are relatively small compared with your company. In fact, the delay in payments has caused one really small supplier to go out of business. The business continues to put prices pressure on suppliers. None of your long-term credit debt repayments were due within the last 3 years or are due within the next two years.
Attachment 1 reveals a series item called "Operating Bills." They are expenses linked to operating the stores, such as for example payroll or electric power. The separate series item known as "General and Administrative" displays similar expenses, but limited to the company headquarters. Notice that this detail is obtainable limited to Harrison Company. Info for the largest competitor and the market average capture these details only at a summary level called "Operating, Basic, Selling, & Administration" (as shown in Attachment 1).
Store managers obtain salaries of $35,000 including benefits. Your eight office at home employees average $70,000 each year including benefits. Your salary is $150,000 each year including benefits. The prior president made $200,000. Annual salaries are for a foundation of 2,000 hours worked. The warehouses function less than five days weekly. Each store is staffed at 6,500 hours annually including store managers’ bottom work-load. No overtime can be paid to salaried employees. Part-time workers are greatly relied upon, most making the bare minimum wage.
Industry and General Conditions
The recession has significantly affected your industry in the last eight months. A few of the low-cost companies, such as Wal-Mart, have in fact seen revenues increase an average of 7% monthly over the prior year’s same monthly revenue. Boutique and high-end shops have held stable. The industry as a whole (USA) is down 4% from the last year’s comparable monthly revenue. Consumers have become more price-sensitive, even though some retailers have maintained customer loyalty.
You have received an industry and general financial forecast from a trusted consulting firm. The following information has been included in their report:
Consultant’s Report – Current Industry Position
The industry is enduring significant consolidation and many companies are facing economical pressures. This current craze may be particularly significant since consolidation began to increase before the recession. Normal consolidation outcomes in very leveraged positions, since debt is a major way to obtain acquisitions. Consolidation has taken place as companies make an effort to achieve economies of level and expand geographic insurance coverage. Several of the larger companies are along the way of creating a global presence in their placement of stores. The large majority of companies in the market rely on products from developing countries, due to price benefits from low labor costs. The union activity in the USA is strengthening, but only slightly.
Consultant’s Forecast – Three Year Projection
Diesel fuel costs will increase steadily to about $4.80 per gallon in 3 years, and then drop by about 10%. Heating and electric costs will continue steadily to rise steadily at about 15% each year. Inflation, which had been fairly insignificant for several years, increase to about 9% within three years. Unemployment will peak at 11% in 2 yrs and decrease very slowly and gradually from then on. Despite inflationary pressures, the Fed will maintain a relatively low Fed Fund Charge of 2-4% starting this year. This will be an effort to support the economy and also to help it to expand. This may also most likely affect exchange prices. The recession will continue to be more severe and the federal government more proactive in the United States than in other countries. Many economists are uncertain about inflation and unemployment relationships because of the massive sum of money that has been spent by the government on stimulus packages.
Your a reaction to the report
As with many consultant reports, this record provides only a starting point for strategic advancement. You happen to be struggling to determine what to trust and how it would affect not merely operations, but moreover the strategy that you are developing. One of your biggest challenges is to determine what aspects of the report to communicate and to whom. On the one hand, many people don’t have the expertise to make much use of this information. Yet, withholding information may have a negative influence on morale.
Company Tradition and Internal Considerations
During your interview with the seven member panel of directors, you received the impression that there is still a lot of loyalty to the prior president and his earlier decisions. The board were quite conservative. Three directors had been focused only upon company performance. It is no coincidence that these three directors own 65% of the company stock. Although sales and profitability tend to be correlated, you had the impression from the panel that profitability is a solid priority, both in the brief and long haul. Presently, the company has only one
class of common stock (voting). Three of the various other directors will be CEOs from firms in other industries.
Having met with your home office employees, both collectively and individually, you have become somewhat worried. None of the associates demonstrate leadership capability. They appear to be "yes" people. When asked direct concerns about their areas of expertise, none have the ability to provide a coherent or concise remedy. They do not seem to have an understanding of either the big picture or specific details within their area. There is commonly a lot of silence when you ask questions during meetings.
A different consulting provider had been hired the previous year to evaluate the morale of people at the business headquarters. This consultant’s report had been based upon anonymous individual meetings and the results seem to have been quite direct and blunt. Conclusions included:
There was significant infighting between persons.
There was no accountability for decisions and, in fact, actual apparent decisions were rare.
There were many types of passive-aggressive behavior.
Six of the eight persons said that they would not recommend the company as a destination to work.
Employees felt that the business was in financial difficulty and moving in the incorrect direction. Just about all felt insecure about their jobs.
You have no info on the morale of the stores’ workforce or store managers. You’ve decided that you must tour several stores so as to assess morale and see the overall circumstances of the stores. Until you have period to do this, you must make assumptions about store morale.
The Harrison Company Circumstance Questions and Tasks
Prepare an executive summary that starts off the paper. This overview should outline the basic conclusions of your evaluation, your fifth year product sales and profit goals (compared with last year’s overall performance), and the major aspects of your strategy. List any "major" constraints or assumptions you built related to the case. Finally, hyperlink operating circumstances and proposed improvements to your strategy. (Learning Goal #1)
Rubric Question #2# 2 – Ethical and Socially Accountable Decisions: Briefly identify each of the various interpersonal and ethical problems facing Harrison Company. Give this list in a table, stating each issue in a few terms. Make each issue distinct. Identify one issue from the list that relates to environmental sustainability and discuss it in a few sentences. Then, select one several ethical dilemma from your list. You will use this one ethical dilemma for the total amount of your response to this question. Identify the various major stakeholders that could be affected by this dilemma and the types who could influence your choice. Identify three practical responses to this dilemma and advise possible consequences (for the significant stakeholders) for every single of the three responses. Provide a specific action plan for dealing with this type of concern. Discuss why (or you will want to) your plan is ethical, socially in charge, and just. How does this step plan affect your organization strategy or vice-versa? (Learning Goal #2)
Rubric Dilemma #3 – Synthesizing/Analyzing: None of your practical managers have enough expertise and you must develop the analyses that you should make both useful and strategic decisions. Give a detailed evaluation of the three practical areas listed below. Provide a brief conclusion for each. (Learning Goals #1 and #3)
Marketing: Make a five-year revenue forecast for the business. List and clarify/quantify each aspect that gone into your forecast (e.g., past three year company product sales trends). Usually do not rely solely upon past sales trends. Get this to a high level forecast you need to include broad items which would affect strategy. Demonstrate your calculations in a table and, if needed, explain your calculations so they are clear. Analyze your marketing work with regards to product, price, place, and promotion. Be specific for each and every of the four items and pay particular focus on the strategic implications of your pricing plan and product mix. What might be a number of the economic, logistical, and strategic implications of your marketing program?
Finance: Prepare economic analyses using data from the financial statements (Attachment 1). Work with specific ratios or different measures to determine the monetary strengths and weaknesses of your provider using suitable baseline comparisons. Provide this in table form. Provide the formula for every item applied. Address any additional issues in the event that might affect the existing financial position. Make sure to address Liquidity, Protection (e. g., leverage), Profitability, and Efficiency ratios. What is your overall financial position and how should it end up being handled? If needed, what is an appropriate approach to finance your technique and what financing constraints might affect your approach? Explain. Describe the specific financial linkages and effects on advertising, logistics, and strategic initiatives.
Logistics and Operations: Discuss supply chain concerns and possible areas for improvement. Wanted improvements should be stated specifically. The logistics areas should address all elements of the supply chain which might or may well not be limited to the next six items:
Supplier transport to Harrison’s distribution centers
Storage (inventory) at the distribution centers
Transportation from the distribution centers to the stores
Storage (inventory) in the stores
Information needs, covering all the above items including products purchasing and store re-ordering
Item iii is among the most important, strategically. Given your technique, you will improve the number of stores (expansion technique), decrease them (retrenchment approach), or hold them the same (holding strategy). Although you do not need to attract a map (see Attachment 2), you should identify the amount of stores affected by site in a table. Adjustments in distribution centers, if any, also needs to be outlined in this desk. You will address these concerns further when you talk about your technique (Rubric #1).
In terms of store operating expenses, there are various things to consider. Are the stores the proper size? Constraints of the case are that you possess all of your shops and you cannot lease (you might only purchase) new retailers. You cannot relocate to a new retail store in the same village.
Prepare an additional operating analysis which outlines the prepared employee load routine for a shop. Provide this in table form and evidently explain your calculations. For instance, you might declare that all Saturdays over summer and winter ought to be staffed by two staff members. Your examination should reflect the number of hours available per retailer. How might sale forecasts be important to make these logistical and operating decisions? What might be some financial implications for the company?
Rubric Question # 4# 4 – Identifying sector and global styles: What specific market and global trends may have the best potential to have an impact on your company and its own business strategy? What would be the specific results or constraints on your own strategy? What other industry and global trends are well worth watching? Why? (Learning Target #4) List the market and global trends separately.
Rubric Concern #5 – Leadership and Group Dynamics:
What specific leadership actions and behaviors should you take to stabilize the company and let you achieve success for one of your specific key aspects of technique (as referred to in your answer to Learning Goal 1 below)? How will you interact with and demonstrate leadership expertise in working with the table of directors? Make sure you link your leadership actions right to your strategic initiative. In answering this, you should address particular leadership theories. For instance, what are the commonly discovered types of power and which types will you use as part of your leadership style?
You believe the consultant’s report about home office morale. Discuss how you would address infighting, unneeded arguments, and the silent resistance between home office personnel. Specifically determine the organizational behavioral areas of this problem using existing theories. For instance, list generally accepted concepts for coping with conflict and recognize which ones you use. Another example is that if you suggest "better communication" as a tendencies to be developed, therefore become more specific. How, specifically, would you work to change individual and group behaviors? How long will it try facilitate these changes in behavior? What will you do if the determined actions that you just described will be resisted by one person? (Learning Goal #5)
Rubric Concern #1 – Implications of Integrated Business Processes: Do you want to develop an offensive strategy or defensive strategy and why? What will be the precise key areas of your strategy? Describe how each one of the functional areas will be part of your strategic plan. How do these functional programs fit mutually and influence the other person to get your business technique? What generic strategy (i.e., low cost or differentiation) do you want to adopt as the new head of Harrison Organization? Explain. Provide an overview of the aspects of your business strategy which will support your generic approach. Will your retail store testmyprep.com decisions reflect a retrenchment approach, a hold technique, or an expansion technique? How long also to what level can your generic strategy be implemented over the future five-year period? Because this is an outline of your strategy, it should restate specific conclusions from your previous analysis. Usually do not downplay the importance of the section. (Learning Goal #1)
ATTACHMENT 1 – HARRISON Enterprise CASE FINANCIAL
AND COMPETITOR/INDUSTRY INFORMATION
Percent of Sales
2 Years Ago
Percent of Sales
Percent of Sales
Global Market Leader
Cost of Goods Sold
General & Administrative
Operating, Gen., Put up for sale, & Admin.
COGS and Total Expenses
Net Income Before Taxes
Net Income After Taxes
% Total Assets
% Total Assets
% Total Assets
% Total Assets
Cash & Equivalents
Total Current Assets
Land, Stores, Gear, Distribution Centers, & Trucks
Other Current Liabilities
Total Current Liabilities
Long Term Debt
Total Liabilities & Stockholder Equity
*Collateral withdrawal in "24 months ago"