capstone project evaluation

Andrews Company Performance Analysis

Andrews has remained limited in scale over the years, according to the evidence presented in the Fasttrack papers. The firm had a ROS of -50.7 percent, an inventory turnover of 0.28 percent, a ROA of -14.3 percent, a leverage value of 12.0 percent, a ROE of -171.3 percent, and a market share of 5.88 percent, which fell further to 1.55 percent in the current year. The results show that the group has lost market share and that profits will continue to fall, affecting profitability. The company also maintained its decline in market capitalization value of $4 million that it has held for the past four years. The management has been in a position to curb the decline in market capitalization but has failed to factor in an increase. Andrews produced less compared to its capacity in the previous year generating 2100 in production compared to its actual capacity of 4200. The same results were obtained for last year which indicates that the company is producing below its capacity posing a danger of it incurring more costs compared to when producing at full capacity. These would have an impact on the profitability of the company as further revealed by the changes in sales.

Inadequate Implementation of Total Quality Management

In managing costs, the company registered lower expenses in the running over time in production with no cost allocated to total quality management. These pose a threat to product quality and could affect the ability of Andrews to maintain its quality. The company has failed to implement Total Quality Management approaches that take the production process as one made up of other processes which need management to ensure the resulting product has the quality needed by the consumers. TQM plays a significant role in the administration of the processes involved in the production of goods and the services delivered (Goetsch & Davis, 2006). It is evident that Andrews does not implement these and may face challenges in maintaining the quality of its products. It is clear that the company also registered a decline in the retained earnings that it had which signifies to the poor performance or the depletion of the reserves held. The current debt of the company also registered an increase which indicates to worsening debt to equity ratio. These affect the company’s ability to obtain debt financing. The cash flow from operating activities declined further while the cash flow from financing activities increased signalled by the debt that the company acquired to fund its operations. It is based on the above that the firm is said to decline in performance and may fall deeper in debt in a bid to obtain financing for its operations.

Current Situation

In examining the environment within which the company works and revealing its current situation, a SWOT analysis is imminent. Conducting the SWOT analysis provides a revelation on the internal and external environment of the company with the strength and weaknesses covering the former and the opportunities and threats the later (Bohm, 2009). The examination of the SWOT analysis of Fasttrack Foundation with the focus on Andrews reveals the current situation within which it operates hence aids in making decisions concerning the future and considering its global expansion abilities.

Strengths:

The ability of Andrews to meet the growing demand of its consumers has influenced positive market development. Commanding a vast market share compared to that of competitors has provided Andrews with an opportunity to remain stable and continue its positive performance which provides confidence for the future.

The low turnover rate calculated at less than 10% indicates to the efficient employee management systems in place. The ability of the company to maintain highly qualified employees provides it with possibilities of growth. A low turnover also ensures stability in the human resource which adds to the business advantage.

The nature of business environment developed focused on promoting ethics has a positive contribution to the success of Andrews. In an ethical business environment, the customers and employees both practice values that lead to positive results in the organization.

Weaknesses:

The absence of a quality management budget for the years indicates to the less attention that the company pays to the total quality of its products. The lack of Total Quality Management approaches indicates to the ineffective quality management strategies that Andrews needs to address.

Taking into consideration the results discussed in the first part of the study, the company is declining annually signaling to poor administration and utilization of resources internally which has contributed to reduced chances of survival for the enterprise.

Opportunity:

Delivering most of its finances towards investments as depicted by the cash flows of the company guarantees continued revenue streams that would promote the growth of the business.

Widening market for its products also provides an opportunity for expansion that will further lead to improvements in the business abilities of the company.

The presence of retained earnings in the company provides room for future investments. Andrews has developed retained earnings that may allow the company to make investments that may add to the revenue streams of the company in the long run.

Threats:

The high level of competition that Andrews faces may affect its ability to remain profitable in the future. High competition levels affect sales considering the greater the number of competitors in the market the higher the chances of consumers buying from the competitors and not Andrews.

Rapid changes in technology also affect the ability of a business to survive for long. The changes in technology impose costs on the company with increasing need for Andrews to fund innovation for the development of new products that can meet the changing requirements of the consumers.

The debt liabilities of the company need to remain under check to reduce the possibilities of the company facing difficulties in obtaining financing in the future. Challenges in funding may affect the ability of the company to fund its investment needs and operations.

Future of the Company

Based on the SWOT analysis presented above, the company is facing significant internal challenges that are reflected on its balance sheet and other financials like cash flows. It is evident that the firm faces financing challenges with the decline in their retained earnings and the increasing debt financing. These indicate the company to be having management inefficiencies which require addressing. The company will require changes in management over the period with the introduction of a balanced scorecard to improve the administration of the strategic planning abilities of the enterprise. The implementation of a balanced scorecard enhances the management of the organization regarding the financial perspective, the customer perspective, improvement of the internal business processes and the development of innovative abilities and knowledge (Henschel, 2008). The implementation of a balanced scorecard will ensure that all operations of the organization are centered towards a developed work culture that is essential to attaining the objectives of the company. The implementation of this will affect the functioning of the organization. It will ensure that improved employee coordination will be implemented which will increase the ability of Andrews to meet its mission and vision.

In addition to the above, the implementation of a Total Quality Management strategy will aid in ensuring customer satisfaction in line with the balanced scorecard needs. Total Performance Scorecard concept as applied in the balanced scorecard also contributes to the management performance of the employees including the quality needs to be embraced (Rampersad, 2006). The implementation of TQM and the balanced scorecard will ensure routine management of improvements in the production processes and the skills of employees to ensure they meet the changing needs of the consumers. The implementation of a balanced scorecard and the TQM approaches will improve the sustainability of the strategies the company employs in meeting its demand needs. It will ensure the development of effective communication and reporting of activities to manage the growth of the business and its ability to sustain the increase in market demands. These will also enable Andrews to deal with competition considering it will be in a position to meet its set objectives. In addition to the above, implementation of continued research in the products of the organization and continuous improvements will guarantee meeting the changing needs of the consumers.

Ethical, Legal, and Social Challenges

The future of the company is in its ability to identify and adhere to the changes in tastes and preferences of the consumers of its products. The social change may provide the company with decreased sales and profitability which could result in its failure. Paying attention to the changing needs of the consumers and providing constant technology updates to avoid the products of the company becoming obsolete will aid in keeping the company relevant in the market and maintaining a competitive advantage that results in positive sales.

Employing sufficient resources in continuous research for product improvements will aid in ensuring the company keeps up with the changes in the demand. Proper allocation of resources focused on providing sufficient control over the changes in consumer needs and technology employed to reduce costs will ensure the company is in a position to maintain and improve its operations. The combination of the above with a tech-friendly approach in keeping in contact with consumers of the company products will increase product loyalty. Using social media to communicate changes and interact with customers on their product needs or feedback on their experiences will enable Andrews to deal with its social challenges.

Global Considerations

Expansion of Andrews into the world market comes with increased capital needs and efficiency in managing the processes of the organization. The ability of a company to have sufficient savings or retained earnings for such investments is essential in making it possible. Global expansion requires that the corporation considers all the possible advantages it will enjoy and the disadvantages it will face to increase chances of success (Parnell, 2013). Pursuing expansion into the global markets requires that the company evaluates the risks it stands. These risks may include straining the current business’s cash flows which may result in collapse. The expansion into the global markets creates more opportunities for the company but will add liquidity pressures to its already strained cash flows based on its latest financials.

One of the opportunities examined in the SWOT analysis is the widening market that the company may provide its products to in the long run. The widening market presents an opportunity for Andrews to gain more revenues and increase its profits. Conducting sufficient research in the different markets the company intends to venture into enhances the possibility of understanding the market better and making better decisions with regards to expansion. On the other hand, the high level of competition that the company faces on the global scale threatens its survival in this market. The rapid changes in technology on the global scale will affect the ability of the company to meet the needs of its consumers. The cost of implementing changes in technology at a global level is higher than those incurred at the domestic level at which Andrews currently operates. It is, therefore, challenging for Andrews to expand now with the challenges it faces in its operations and cash flows.

Capstone Component Two: Professional Reflection

Conducting this project has provided a basis for growth for my experience in examining companies and their performance. It has enabled my skills in learning the ability of the company, evaluating its current state, and exploring the possibilities of the company for the future. Examining the business as a whole provided me with insights on understanding further the operations of a company based on its internal strength and its future abilities based on the threats and opportunities. I learnt the inner strengths of the business to cover elements that ensure the company is better placed to match its competition while the external environment includes the opportunities present for the firm and its ability to take advantage of them for a better future. The Capsim simulation has, therefore, contributed to my understanding of the course more and improved my abilities to perform better when in the field. It has enabled me to put my knowledge to the test and create a further understanding of the practical part of it.

In my future academic and professional life, the skills gained through the Capsim simulation will come in handy in evaluating companies and providing accurate and applicable recommendations. Advancing my career in the future will also prove simpler through the experience gained by the Capsim simulation. My approach to the capstone course and the business core program involved both verbal and written forms of communication for effectiveness. Developing excellent report writing skills was part of building my communication skills. The project enabled me to strengthen these skills and become more active in communication with ideas on presenting my data or thoughts. The communication skills gained through the learning process will be instrumental in future communication as I continue with my course and in the future working environment. The ability to communicate better will ensure I relate well to other employees in the future as I relate to other students. I will utilize these skills in the future by delivering well-written reports on my work.

Through the program, I have also learned the utilization of peer-to-peer and peer-to-leader collaboration as essential components of effective communication and efficient work relationships. Peer-to-peer collaboration has enabled me to learn the essence of real collaboration with my peers at work and school while peer-to-leader collaboration has allowed me to get to interact with my leaders in the different sectors. My experiences with the two approaches have educated me on the essence of a healthy working environment whose possibility originates from positive relationships between peers and the leaders of the organization. The support from peers was instrumental in my success while that provided by leaders availed the guidance necessary for me to succeed in attaining my objectives. The practice of brainstorming with peers has also facilitated my decision-making process backed by leaders’ influence on the decision process.

Lastly, despite having faced challenges, especially with gathering information on the project, the project objective was still met. The Capsim simulation program also provided me with guidance on establishing and maintaining professional business etiquette in both the course and the entire business agenda. It is the etiquette that I was able to keep ethics in gathering data. Etiquette is also essential in the world of employment. Learning the etiquette required of me in the course program and ensuring conduct that maintains it has proven essential to my ability to employ the same in the future. The program was a success and has contributed positively to my learning abilities.

References

Bohm, A. (2009). The SWOT Analysis. GRIN Verlag.

Goetsch, D. L., & Davis, S. (2006). Quality Management: Introduction to Quality Management for Production, Processing, and Services. Pearson Prentice Hall.

Henschel, T. (2008). Risk Management Practices of SMEs. Erich Schmidt Verlag GmbH & Co KG.

Parnell, J. A. (2013). Strategic Management. SAGE.

Rampersad, H. K. (2006). Personal Balanced Scorecard. IAP.