Business Performance Review and Strategy Audit : Through Case study | Balachandran Subramaniam | Skillshare

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Business Performance Review and Strategy Audit : Through Case study

teacher avatar Balachandran Subramaniam, Management Consultant & Visiting Faculty

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

20 Lessons (1h 39m)
    • 1. Introduction: Course Overview

      3:35
    • 2. Essence of the framework

      2:24
    • 3. Case: Fancy Foods (A) - 1. Market & Distribution

      5:04
    • 4. Case: Fancy Foods (A) - 2. Sales & Operations

      5:57
    • 5. Case: Fancy Foods (A) - 3. Financials

      3:26
    • 6. Case: Fancy Foods (A) - 4. Performance Review & Forward Planning Process

      4:53
    • 7. Case: Fancy Foods (A) - Assignment - Questions

      1:37
    • 8. Case: Fancy Foods (B) - Answers to Assignment - 1: Data for Market & Operational Performance

      6:00
    • 9. Case: Fancy Foods (B) - Answers to Assignment - 2 : Data for Financial Performance

      4:25
    • 10. Case: Fancy Foods (B) - Answers to Assignment - 3 : Data for Strategy Audit - CSFs

      6:16
    • 11. Case: Fancy Foods (B) - Answers to Assignment - 4 : Strategy Audit: GE-McKenzie Matrix4

      6:13
    • 12. Case: Fancy Foods (C) - Analysis - 1 : Analysis of Market Performance

      7:20
    • 13. Case: Fancy Foods (C) - Analysis - 2 : Analysis of Operatrional Performance

      6:01
    • 14. Case: Fancy Foods (C) - Analysis - 3 : Analysis of Financial Performance

      8:11
    • 15. Case: Fancy Foods (C) - Analysis - 4 : Plan for Improving Performance

      4:25
    • 16. Case: Fancy Foods (C) - Analysis - 5 : Strategy Audit: Ability to Compete

      6:32
    • 17. Case: Fancy Foods (C) - Analysis - 6 : Strategy Audit: Market Attractiveness

      3:28
    • 18. Fancy Foods (C) - 7 : Project Details

      2:36
    • 19. Case: Fancy Foods (C) - 8 : Project Solution

      9:40
    • 20. BPRSA 20 Course Recap & Wrap-up

      1:17
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About This Class

Overview

This is a short (99 mts), hands-on, practice-oriented, case-based course. After completing it, you will acquire essential skills to use tools, techniques and ideas for doing a thorough and professional Performance Review and Strategy Audit of any business.

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1. Acquire skills, knowledge, tools and techniques, required to do thorough and professional Performance Review & Strategy Audit of any business.
2. Master skills and knowledge to handle and analyze different kinds of Data - Market, Operational & Financial - to derive rare insights and meaningful conclusions.
3. Know how to use the GE-McKinsey Portfolio Matrix, to compare the Strategic position of a business with Competitors and with Company's other businesses.
4. Acquire skills to present your conclusions to your seniors or clients, in a visually interesting way.

For Whom

It will benefit Managers (both present & aspiring) in any functional area, Owners of Businesses & Startups, Business Analysts and Management Consultants – because all of them need to review the performance of their own or their client's company, business unit, product line or function and assess how effective their business strategy is, on a monthly, quarterly or annual basis. And of course, also students in business schools.

Unique Learning Method

The Learning Method in this course will be uniquely different. Unlike conventional learning, where you start with theory & concepts, and then go to examples and applications, this course reverses the approach: it derives all the concepts and demonstrates skills, tools and techniques of Performance Review and Strategy Audit , through the characters, events and actions of a case study, that I have written for this course, based on my experiences in analyzing and solving different kinds of business problems, in different industries. Your learning will be deep and memorable because you will identify with the characters, events and actions in the case.

The Framework

This course is built around critical analysis and interpretation of Market, Operational and Financial performance parameters. It also will give you the essence of Strategic Audit based on sound concepts like Critical (Key) Success Factors, Ability to Compete, Market Attractiveness etc. and techniques to quantify these for using the GE-McKenzie Portfolio Matrix.

Course Structure

It has 20 lectures, 1 Practice Assignments,1 Quiz and 1 Project. The case is divided into 3 parts, with a Narration, Assignment and my Analysis and Answers for the Assignment, both in Video and downloadable PDF document forms. The Project also has my Solution attached to it, again in Video and PDF formats. You can ask questions or seek clarifications any time, on any lecture, assignment or the project. I will answer within 48 hrs.

Meet Your Teacher

Teacher Profile Image

Balachandran Subramaniam

Management Consultant & Visiting Faculty

Teacher

Prof. BALA (Balachandran Subramaniam) is a Management Consultant, Trainer and Mentor and teaches in Business Schools, both online and in person (pre-Covid).

Has degrees in Mechanical Engineering and Business Administrations from two of the most prestigious institutions, namely, Indian Institute of Technology, Madras and Indian Institute of Management, Ahmedabad.

Possesses over 48 years of work experience in Business Management field:

- 27 years of corporate career including positions of:

   * Country CEO of a very large trans-national business group, headquartered in USA, and

   * Head of Corporate and Strategic Planning in a large diversified business group

   * Prior functional experience in Marketing, D... See full profile

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Transcripts

1. Introduction: Course Overview: Hi friends, welcome to this short ghost business performance review and strategy. Or if this is a case-based hands-on, practice oriented course, it'll benefit managers both at the same time as padding in any functional area. One of the businesses and startups, as well as management consultants and business analysts. Because all of them need to constantly review the performance of their own auto plants, company out of business unit or product line, odd function. And I see how effective their business Japanese on a monthly or quarterly basis. And of course, it will also be helpful to students of Business School. My name is Bala short footballer, children with a degree in mechanical engineering and business administration from two of the most prestigious institutions, namely the Indian Institute of Technology and the Indian Institute of Management. I have all 48 years of work experience of this has spent about 27 years in corporate career, including the positions of the country CEO of a very large transnational group headquartered in USA, and as head of corporate and strategic planning of a large diversified group with different business interests. I have lived in Australia for awhile. I've traveled in the USA, Europe, and Southeast Asia suddenly widely on business. And I have spent 21 years in management consulting, mentoring and training, and of course in teaching in business schools, both in person as well as online. The learning method in this course will be uniquely different, unlike conventional learning, where you start with principles and concepts and then go on to examples and applications. In this course, we'll start with a case study and then we will get all the concepts and principles from the characters, events, and actions of the case study. This gets really has been prepared by me exclusively for this course based on my own experiences of solving different kinds of problems in different industries, both in my work area and in management consulting you are learning in this course will be memorable and deep because you will identify with the characters, evens, and actions of the case. After completing this course, you will have mastered the skills, tools, and techniques. The quarter do a thorough and professional performance review and strategy audit of a business. Acquired the skills to handle and analyze different kinds of data, namely, market, operational and financial data per day, red insects, and meaningful conclusions. And you would have learned to use the GE McKinsey portfolio matrix to compare the strategic position of a business with competitors and with the company's other businesses. And also how to present your conclusions to your seniors are blanks in a visually interesting manner. This course is built around yesterday, which is divided into three parts. Party is addition of facts and figures. At the end of this practice assignment, part B and C are my analysis and answers to the questions in the assignment. At the end, there is also a quiz under project, both have my solutions. Come. Join me in this exciting learning journey. Enroll today. Here I will meet you inside the course. 2. Essence of the framework: As I already explained in the introduction to the course, the details of the framework of doing business performance review and strategy audit will be explained conceptually in more detail through the case study. Right now, what we're going to do is to just give you a sense of what to expect in terms of these concepts and principles. We are just going to give you the essence. Let's first take up the performance review. We have three kinds of performance review. Market, the operational performance and the financial performance. Under market performance will be examining the market share, the growth trend, and the price realization, which is actually a measure of the kind of control that a company or a business has over the market. And the operational performance will be looking at two factors, the capacity, utilization and the product cost. The product cost is actually a measure of the competitiveness of a business. There could be other operational performance measures which are important in other businesses. But in this case, these two are important. The financial performance. We are looking at the return on capital employed, which is actually a derived measure of how well that business has been managed, both in the market and operationally and the management of networking capital. The strategic audit is built mainly around the critical or key success factors. These are a set of factors which are necessary for a business to succeed in its environment. In this case study, we have chosen for such factors, but there could be other factors which are more important in other businesses. We shall be using these to examine under the GE McKinsey portfolio matrix. And the conclusions of this audit will be compiled with the trend of investments off the business in capital expenditure as far less product and market development expenses. 3. Case: Fancy Foods (A) - 1. Market & Distribution: Hence, if we say speed, somewhere in the middle of the market. The big customers and experts sector of the food processing industry. The manufacturer and dance, which is primarily made out of fruits, which are mainly monolayers Angeles made again a lot of fruits. And the third segment, they're operating any savory scripts we just made mainly out of which doubles. And spices. Or the fancy foods has built up a very efficient sourcing. Getting the fruits and vegetables, fresh produce directly from farms. They get it at a pretty good places because of the relationship. At the same time, they are very fat to the farm in terms of the prices. They also have constituted facilities as part of that manufacturing operations. And this helps them in preserving the fruits and vegetables procured during seasons of various types. They have all the matter, good name for hi, quality of their products, bought the customers, as well as the industries. That are two primary reasons are good quality of products. One is the quality of the produce of fruits and vegetables. Professional. And secondly, the sophistication of manufacturing and quality control processes. On both counts, fancy foods Limited has made a good name for itself with the technical experts in the industry. Very well. Let's now look at the market. It consists of four segments, the Japs, the switch, strict, necessity scripts and other scripts. Thanks. Heat flux is not participating in the fourth segment, which is the other spirits, which are mainly made out of Chaco maps, etc. 2017. The market was estimated to be around 230 million US dollars. If you look at the breakup of the four segments, the jams segment contributes the maximum that 95 million dollars plus 2.2% of the market. Closely followed by the switch. Mama limbs and contributing about $2 million are critically percent of the market. The 70 scripts and other scripts are about equal in size, or 31 to 42 million dollars, each contributing 18 percent. Now let's look at the trends of recent growth in the market. Based on the years of 20151617. The CAGR, that is the compounded annual growth rate, is what you see for the four segments. The dams growth rate is of course, the highest step, 12 percent, followed by 8%, 7, 75% percent, based on the prediction has been made. For the next 18, 19, and 20. In 2020, the market size is supposed to be around a $198 million. It was $200 million. The backup of that as again, jumps leading with a 173 million lives, that 66 million and forty eight to 51 million for the other segments. Now, let us look at the distribution channels through which these products are taken to the market. The sweets and other spreads are sold primarily through and department stores, which are found mainly in addition to these two channels. But also distributed. Unorganized grocery stores in both urban, semi-urban and 70s plates apart from these centers, also used as a force, which is the grocery stores. Because labeling disconnected and effort, water, distribution. 4. Case: Fancy Foods (A) - 2. Sales & Operations: Now let us look at fancy for limited sales trends in the recent past three years of 20151617. So the corporate sales in 2015 was $22.2 million. Now it has increased to 25, $0.7 million. Not a very big growth in individual segments has been doing. Rather than a very marginal growth or stagnation. Let us express pleasing quite rapidly from $7.7 million in 2015, about $10.6 million in 2017. As far as 70 split second, that very marginal in sales. And they have increased slightly from three to $3.5 million. Let us now compare the fancy foods limited performance in relation to the market leader in marketing. Dance has a company called pestis spreads. Dance. They're sitting with a sale of 26 million dollars in 2017. Compact too, fancy foods, $11.60 million. If you take the ratio of fancy and let the market share, that is the market share. Then you compute the sales of a company and divided by the sales of the market either in the same period. It's 45th percent snarky back, but it's also very good. Let us and sweet. And $0.6 million compared to the market either 17, $0.1 million. Healthy foods as decent lighting market share of 62 percent. They had a significant player in this particular sigma 70. Then a very marginal player with electric market share of 20 percent only because the sales is fairly low at the end of million dollars compared to the market leader, 7.8, $17 million. Other spreads, spreads is accompanying, which is leading, but fancy for not participating in the segment as I already told you. Let's now look at the retail price as well as what fancy food gets. Realized sprays in each of these three business. So the Canvas indicate to you the retail price because 3000 357 us 4476946313417. The circles indicate the average discount. And it is because each product is sold to multiple channels. Each channel has got its own constructor. So if you take dance, they are primarily sold through department stores, astronauts grocery store with a slightly anonymous. So that is an average of 30 percent sold through mounds and department stores, which have a slightly higher bargaining power with respect to fancy foods. So they take a higher discount of 25 percent. Seventies Chris, since they are sold primarily through the disorganised sector of grocery stores, you know, marginally also through margin. Supermarkets. Fancy forces able to get an editor, smaller discounter, 20% on an average. So if you take a $1007 amount, if you take it off the retail price, what fancy foods gets an exam by way of realization per ton is 2000. The case of Switzerland, it is taken as $100. And in the case of 70 scripts, and it's likely one hundred, eight hundred. And now let us look at the capacity, utilization of manufacturing capacities of the product categories. The blue bars indicate the capacity which is 1500 tons. And tons. And tons for salaries. The purple bars indicate the production of sale. In this case, for this particular type, we have equated the two. For example, it is 49, four hundred four thousand, four hundred thirteen thousand, eight hundred seventy six times. So if you take the utilization of capacity in the case of sweet spreads, because already exceeded the installed capacity, like a 114% capacity. In the case of dancing is a family poor 66 percent. And in the case of savory spreads also, the production has been approaching installed capacity at 94% 5. Case: Fancy Foods (A) - 3. Financials: Let us now look at the financials for 2017 of fanciful. All figures are in million dollars. Plus we take the sales at a 100 percent, which is 25, $0.68 million. If I take off the variable costs of manufacturing, which is 46.4% or $11.9 million. And also the manufacturing overhead, which is $6.46 million. Our 0.2%. If I add up the variable cost of manufacturing overhead and remote from sales, what I get as a balance is the gross profit, which is $7.1 million in 2075% of the sales. From this again, I take off the selling and administrative overhead. Selling overheads constitute things like advertising, promotion and other promotional expenses. Let us the administrate. We will cover salaries, administrative staff, etc. It's at $4.37 million at 17% of the sales. So if I take off 17% from 28.5%, I get what is called the operating profit, which is 11.4%. But to 9 $4 million, it's called operating profit because it is before paying out. Dividends are on shareholders. So the operating profit is only out of the operations before and before. Now, if you look at the balance sheet highlights, you see two kinds of current assets. Current liabilities. The fixed assets, which is the Netflix sentences. Under current assets, we have mainly the constant syllable, which are what is to be collected out of the cell. And the monkeys, which consists of three parts. The materials, the work in progress in manufacturing as elastic finished goods. The company's grounds, as well as various distribution centers. So the total current assets then average between the first day of the year. And lastly, is $6.5 million currently, which consists mainly of creditors. What the company was because of his blastocyst is about $1.22 billion. The net fixed assets, which is actually the fixed assets, plant, machinery, buildings, et cetera, less the accumulated depreciation. That is about $8.2 million. You might notice that it has increased from January 31st, December. That is because something has been also added during the year. 6. Case: Fancy Foods (A) - 4. Performance Review & Forward Planning Process : Now let us look at how the company has been doing a performance review and forward planning during the past. In the past, this has been done through an informal meeting in the second week of January of the new year. Apart from a performance review which is mainly for the company, not for the individual three divisions of them, but for the entire company. It also conducted budgeting exercise for capital expenditure for the company as a whole. But in middle of 2017, when the new giant accompany, he brought certain changes, organizational centers as well as system changes. He reorganized the company into three profit centers or business divisions based on the three product categories, namely jumps. You also introduce activity-based costing. And remember to explain what this is in great detail. Suffice it to say that it captures the cost of each activity in each business area. And therefore, we are able to say at the end of a period, either a day or a month or a year, how much was spent underwater activity, for which business? Because of this, they are now able to segregate the revenue, expenses as well as assets and liabilities of the three profits separately. He also introduced the idea of a performance review and strategic audit. What is the strategic audit? It is looking at the direction of strategies of each business, the direction which accompany has been taken in the recent past. And therefore, based on this review as realistic, a forward rolling plan for the current year plus three for this to be reviewed again next year. The plan consisted of lookup strategies, the activities in each business area, the revenue and expenses, and capital expenditures as elastic product and market development plans and the technology of the greatest, the modernization for each of the three businesses. For the purpose of anchoring this kind of an activity or a review on Saturday, got it. Created a small group of business analyst. This group was headed by a very bright with the considerable experience. Let us now look at the functions of the group which they have worked closely with the business divisions and the teams that in a functional experts in marketing, operations and finance. Also with some of the stakeholders who are external to the company, like customers. Channel partners. Like that job was to examine all aspects of each division's performance and detailed review of the recent past. Also conduct this strategy. Got it. Which I'll explain. And based on this, they were to prepare a strategy and operational plan for the next. This is something which case, we're not really dealing with. The exercise of performance review. And Saturday got it. In the first week of January 2018 by the steam. And based on that report, detailed review and planning meeting was to be held in the second week of January 2018. So we are at the end of December 2017 and was getting ready for this exercise. So he gathered his entire team in the conference room to discuss two things. How does exercise needs to be, and what kind of data needs to be gathered? What did available needs to be freshly? What are the sources of data to be looked at? And what kind of tools and techniques to be used for analyzing. 7. Case: Fancy Foods (A) - Assignment - Questions: So before we go onto the next case, that is case B, giving you a small assignment, you have to help him and his team to define what kind of data is collected. How is it to be analyzed for carrying both performance as well as the strategic audit of the entire company, but each of the business division. Therefore, you need to ask the following question. What factors and aspects do I need to consider for this exercise? Question number 2. In addition to the data already, you can download the PDF, which is how is it to be gathered? What are the sources of data? And question about what frameworks and techniques of analysis do you recommend to anyone? So please go ahead, take a sheet of paper and less than two pages of PDF. On a physical piece of paper. You can answer these questions before you proceed. To be. Good luck with this. Thank you. 8. Case: Fancy Foods (B) - Answers to Assignment - 1: Data for Market & Operational Performance : This is case B or fancy foods limited. And in this case, there'll be telling you what an eland is team decider on the additional data. That data should be collected, how they went about collecting it, dumps of the sources of information. This is an addition to the data already available in an anxious 12, six given at the end of Casey, I hope you could do the assignment trying to figure out what kinds of information may be required. And it gives you have done that assignment, you can check with the water is now going to be presented by me. Now, the status assessment consists, as we already saw, two parts, the performance review and strategy guarded. We are now going to look at the performance review, which again consists of three parts, the market performance, the operational performance, and the financial performance. Let's take market performance first. There are three parts again, to the market performance, the sales and market share growth. And then for the last three years, namely 2015, 2016, and 2017. Now the importance of this is to figure out whether fancy foods has been gaining or losing share. Whether they are ahead of the market, are behind the market. The data for this is available in sections 1 and 2 given at the end of Casey using the data and in and his team computer D, compounded annual growth rate, CAGR. Then they compared it to the industry average, which they got from published information. The second aspect of the market performance is the relative market share. And this is important to figure out how fancy foods is doing in relation to its competition. How it's able to control the market, especially the channels of distribution. And this is calculated as fancy food sales in 2017. As an issue to the largest competitors bids in each category. So the data required is for the largest competitor. And the sales in 2017. What each of the three segments. So for the two segments, namely the jams and the sweet spreads, the largest competitor's name is tasty spreads. And that for these 70 spirit segment is Sarah Amar. So I, Neil and his team were able to obtain this information to publish reports as well as make talking to their own sales force and the distribution network. The third factor in their market performance is the price recovery. Which means how much price is fancy foods getting in its hands after allowing all the discounts to the various distribution channels. Now, this is important because bargaining power of fancy foods with respect to its distribution network. High in comparison to competitors, can be assessed by this price recovery when compared with the price of glory of comparators are the industry average is computed as but then the gravity. As I said, from the retail price, you have to take off all the discounts. The data for this is partly available in an extra three. And further data is required on the average price recovery of competition our industry as an average. And this sunny lender, steam could collect RAM published information, as well as talking to the sales force and the distribution network. Now we go to the second aspect of performance review, that is the operational performance. This has got two factors. One is the capacity utilization. The importance of this is that if the capacity utilization is very high, very near a 100 or exceeded a 100, then there may be a guess for increasing the installed capacity. So this is computed as the sales or production and 2017. For this purpose, I've taken both the same divided by the installed capacity for each product category. The getter for this is readily available in an abstract way. The second factor under operational performance is the product bust. It is important to know as a measure of seafoods competitiveness, cost competitiveness vis-a-vis the other players in the industry. So this product cost consists of the cost of materials and cost of manufacturing, which is the variable cost, as well as the fixed overheads of manufacturing for each product category. So that is available from internal customer cards of each division. By talking to the cost of contents. And Neil and his team are able to get this. Then the product costs by category for industry as an average, our major competitor. They could get from published information and talking to the sales force and distribution network. Liquid estimator. 9. Case: Fancy Foods (B) - Answers to Assignment - 2 : Data for Financial Performance: Then we move on to the financial performance, which is the third aspect of that but violence review. Again, there are two factors. The first one is ROCE, a rose, that instead are done on capital employed. The importance of this is to judge the managerial effectiveness as well as the competitiveness of fancy ports in relation to other players in the industry. And this is computed as operating profit, which is the profit before interest and before tax, divided by the average capital employed. Average spectral implied, meaning the capital employed at the beginning of the year and the end of the year as an average. The operating income, as we have already seen, is sales minus the variable manufacturing and fixed overheads minus the sales and administration overheads, which are primarily advertising and promotional expenses. The capital employed consists of two components, namely the networking capital and the net fixed assets. Will see what are the parts of these two. In net working capital consists of three parts. The accounts receivable, which arises out of the collectibles from sales outstanding at any point of time, as well as the inventories, which is basically materials bought, raw materials as well as material is used for manufacturing and backing. The second component of the inventories is work in progress, and the third one is the finished goods. The net fixed assets is computed as the graphics datasets. That is the total investments made in capital expenditure So far, less the accumulated depreciation over the years. If the data set is common to all the three divisions, then we need to divide them up and allocate them to each of the three divisions. The data required as to be separate for each division. And the source of this as the internal cost records, costing department of each division, as well as the divisional accountants. The second part of financial performance is the components of networking capital. Three parts. One is collection efficiency, the second is inventory management, and the third is management of creditors. This has to be done for each of the three business divisions. Let's take collection if Xunzi first, this is measured by the actual number of days of receivable outstanding as an average during the year. Compared to the credit. Downside is you credit terms that is extended by fancy foods to various segments of customers and distribution channels. The second one is the inventory management measured S, stock duns, that is, the cost of goods sold in each product category divided by the average inventory. This is to be compared with the norms established for each business division. The third part is the management of creditors. That is what? Fancy foods was two sublayers and renders in terms of the number of days of accounts payable outstanding as an average compared with the nonce established for each business division. Now the data required, what this it'll be available in the divisional balance sheets. The year start an year end figures need to be taken and an average has to be arrived at. The source of data is of course, internal records, the costing, the Batman's regards, as well as chocolate divisional or contents. 10. Case: Fancy Foods (B) - Answers to Assignment - 3 : Data for Strategy Audit - CSFs : So far we had considered the data requirements that anneal and his team took into account bar the performance review. The second part of this, the us assessment is of course the strategy. Got it. Let us look at it now. It consists of three parts. The critical, our key success factors. The second part is a portfolio matrix assessment, which is called the GE McKinsey matrix. And the third analysis is the trend of investments made by fancy foods in recent past 2015 to 2017. Boating done for the capital expenditure as well as the product and market development expenditure. Let us take the critical success factors first, critical success factors are key success factors. So there are three things to be determined here. Number one is which factors are important for each of the businesses could be different for each of the business divisions, namely jam, sweet breads, and savory spirits. Here the opinions of senior executives in each business division where taken into account any Linda's team to arrive at a set of factors. The second part of the exercises, what weightage should be given to each of the factors? What relative importance? Again, this could be different in each business. Therefore, the opinions of both senior executives as a less channel partners that are taken into account by any steam. And the third part of the exercises, how to assess each of these factors. How do rate? So that you can gauge how fancy foods is placed vis-a-vis embezzled competitor in each of the business segments, on each of the critical success factors are key success factors. So finally, an ill, and it's been selected three critical success factors as being important. And there was a consensus that these are uniformly important in all the three business divisions, even though the weight edges may be different. The first one is the customer value perception. That is what the customers think of fancy foods in dance of its offerings. In terms of the product quality, the value as, as money, the product range, the availability, the service in the outlets, etc. This could be gathered from a recent surgery that fancy foods at conductor of a sampling of customers, various segments to an external market research agency that was the source of information. The second major critical success factor that was identified as channel control. Which means what is the level of penetration of each type of channel we have seen in case you see that there are different types of channels like Miles and department stores and grocery stores, both rural and urban. In each type of channel, what is the level of penetration by fancy foods products compared to a major competitors? The source of this information was there on Salesforce, as well as the channel partners, that is their distributors and dealers. The third important CSF is the cost position. That is, what is the cost competitiveness of fancy words vis-a-vis competitors? The source of this information is based on intelligence of competitive cost structure. First way, the senior executives that assessment and also some industry experts are consulted. And the opinions of distributors and dealers that is a channel partners also taken these three critical success factors, or CSS, other measure of the ability of the company to compete in the market. And what is the position of that competitive advantage? Even though the senior executives in each of the product divisions of fancy foods that are quite happy with the three critical success factors selected by anneal and his team in consultation with them. And it felt that he should consider one more, the fourth one, as suggested by the channel partners that came out in discussions with them. And that is new product introduction. The channel partners felt that this is a very important factor, bar increasing market share. And based on discussions with them, and he came to the conclusion that can be rated on the basis of three aspects or factors. One, the total number of new products introduced in each category, to the kind of promotional support and budget extended to the channel partners for promoting these new products. And third, how far these products have been successful in the market are the success rate of new products introduced in each category. The source of this information would be, of course, the product development teams regard and discussions with them taking the views as well as the channel partners views and that regards of new product introduction. 11. Case: Fancy Foods (B) - Answers to Assignment - 4 : Strategy Audit: GE-McKenzie Matrix4: Let us now look at the second exercise we just did, G Mackenzie portfolio matrix. This is a very useful tool to find out the priorities for investments of various businesses in comparison to each other. Which is more important than how much should be invested. But for capacity expansion, as well as modernization and the product development and market expansion expenditure. Allocate resources. And the exercise consists of positioning each of the businesses in terms of two-dimensions, namely, the ability to compete and the attractiveness of the market segment in which the business is operating. The ability to compete consists of two parts. The critical success factors which you have already seen, and the relative market share which you have seen earlier. What we're given equal weightage. The attractiveness of the market segment in which that particular business is operating, can be determined by three factors. The size of the market, the growth prospects for the market, and the industry profitability, as well as the profitability registered by fancy foods itself. So some relativity, these are to be given to these three factors. The data available for constructing the Jima can see portfolio matrix. The market size and growth are available in an actual one given at the end of the relative market share. Data is also available. And the data on critical success factors we have already discussed how it was. What are the data required? In two areas. One is the industry profitability. What the other competitors are able to achieve by way of profits. In each of the product categories. This will be based on certain published profit and loss account statements and balance sheets of competitors. As far less industry reports that are available on the industry's performance. The details of this are available in an actual sovereignty. The second aspect is the click rates for the various CS, critical success factors. Meaning, what kind of percentage of weightage should be a dice to each of the four CSS. We already discussed what this amine and this team took the opinion survey among the senior executives of each product category. And the details of this are tablet ghrelin and accept 15. With the help of this, they constructed the matrix. The third factor of the strategic Arctic was how have the investments being in the recent past, the last three years? The data required for this was three years investments in CapEx, that is the capacity expansion, balancing, and modernization in each business separately, as well as the product and market development and expansion expenses. The source of this was being done Hildegard's maintain by each of the accounting and gusting departments in meat of the three business divisions. The importance of this particular data is that it helps you to find out what kind of a strategic direction each business has been pursuing in the recent past. And then compare it with the g Mackenzie portfolio matrix exercise we just discussed. Are these priorities of the past investments in line with the priorities indicated by the portfolio matrix exercise, are these data mismatch? If there is a mismatch, is that a necessity for a review? That is the purpose. So the results of all these extra data, as well as analysis conducted by anneal and his team, are tabulated in an extra seven to 19 at the end of this case, that is case B. I'm not going to show you all these annexes to do would be a waste of time. But these actions are available as a downloadable PDF document. The study them. And before you go on to case C, please again do as short assignment, construct a report and dumps of two to three pages, either on a piece of paper or in a Word or PDF document. The exercise I want you to do is, can you, based on the information given from an anxious one to six in a cache. And now the annexin 17 and 18 in case B. On the basis of this, can you now make out a report and analytical report on both a performance review and a strategy guarded of fancy foods limited. Please do this exercise before going on to case C, that I'll be explaining the analysis with the help of these and anxious. And what are the findings of anneal and esteem which are presented to the CEO of fancy for its limited. Thank you. I'll see you at the other end with Casey. 12. Case: Fancy Foods (C) - Analysis - 1 : Analysis of Market Performance : In part a of this case, fancy food slim attack. We saw the basic facts and figures about the company and its performance. In part B of the case, we saw what kind of data was required. In addition to the exhibits are an axis number, one to six given at the end of Casey. So what extra data was required? A 100. What is the source of its collection? Daniel and his team went about collecting in part C, which is what we are going to see now. We are going to see how that data is being used for analysis and reporting. You might remember that even in case B, we have given you an extra seven to 19. And here in Casey the leaf, more and anxious. Let's now go ahead and take a look at the analysis and the report that anneal and his team submitted. So fast, we are going to look at the market performance, which is one of the three factor that's you remember, market performance, operational performance, and financial performance. First, we take a look at the trend of both the fancy foods limited company as well as the spreads industry. The data is available in an actual seven. So now what do you see is a bar chart with the blue bars representing fancy foods and the orange bars represent the industry average. Now, in jams, the growth has been really poor compared to the industry growth of about 12 percent, whereas in three splits, it has outstripped the industry's growth. The industry growth is only 8% to address. Fancy foods has grown at about 17.4%. In 70 spreads. It is marginally better than the industry growth. Others, of course, the company is not participating. And therefore, as a consolidated the growth in all segments of the market. Fancy foods has actually grown slightly slower at seven-and-a-half percent compared to the average industry growth of 9.4%. This is mainly because of the jams pulling it down. Let's move on. Now we take a look at the market share again in an actual 7. So those lengths represent that train for three years. The pink line represents jams, the yellow line represents the sweet spreads, and the Greenland represents 70 spreads. As you can see, the sweet spreads, then there has been increasing. Let us chance that it's a record amount of declined. And in 70 spreads is more or less steady, Are there is a very, very marginal increase in drain. So if you look at all the segments, that has been a slight decline from Lebanon half to 11.2% over a period of three years. Next, we take a look at the relative market share through an extra eight in the year 2017. Now what that means is the market share of a company compared to the strongest competitor. In this case. We are looking at the three segments. In sweet spreads. The company has a very significant presents in terms of the legal market share of 62 percent. What it means is, as I said, there's got 62% of the sales of the largest competitor, which is tasty spreads. So in sweet spread segment, fancy foods is a very significant player. In dance. It is 45 percent, which means it's said reasonably significant player. Whereas in theories pharynx, it's a very, very marginal player with relative market share of only 20 percent. All the data is available in an actual 8. Next, we'll look at the price realization of fancy foods. Dollars per ton of each of the product categories in 2017 throw an extra nine. This is done by taking off the discounts. That is an average discount. By computing the average discount of the various segments in different segments, different discounts are given. As you know, we have seen that there are different kinds of channels like the models, the grocery stores, both urban and rural, as well as the department stores. So different tenants get different discounts. So we take the average discounting each product category and take it up the retail price. So the patent bar would be the industry's average, but as the blue bar would be the realised price of fancy ports. So if you now look at the price index in sweet spreads, it's really good at 107. What this means is, while the industry is getting an average of only $3 thousand per ton, the fancy ports limited is managing to get 3100, which is above the industry average. That is way the index is a 107. In the case of jams and 70 spreads, the price realization is bought six to 7% below the industry average. So overall in all the three segments, it is quite close at 99 percent to industry average. So this relates price per ton in dollars per ton is a measure of the kind of control Our power that fancy foods may have vis-a-vis the channel partners we got that depends on the discounts demanded by the channels. So now let us take a look at the overall assessment of all these factors we have considered so far in the market performance. But the three segments of jams, sweet breads, and David, it spreads. We do it in terms of two parameters, the position in 2017 and the trend over the three years. So in damps, the position, market position is very, very average, nothing to write home about. And the trend is declining, which is disturbing. Let us in sweet spreads, the market position is quite strong and it is increasing. It is growing. In 70 spreads. The market position is fairly weak, as we have seen. Fancy foods is only a very marginal player in the segment. But the position is slightly strengthening. 13. Case: Fancy Foods (C) - Analysis - 2 : Analysis of Operatrional Performance: Let's now move on to the operational performance. There are a few factors. The first one is the capacity utilization and the capital expenditure. Capital expenditure in terms of capacity, improvements, modernization, etc. The data for this is given in an Access file and 19. Please look at the bar chart. The pink represents jams, they allow the switch grades and does every spirits are represented by the green bar. But as all the three segments together is represented by the blue bar, you can see that in sweet spreads, the capacity utilization has already reached a 100 percent. It is at a 114%. What that means is that that particular plant is producing about the installed capacity. We'll see the implications of this later. In jams. Because of the poor sales, perhaps the capacity utilization is fairly small. 66 percent, very low. In 70 spreadsheet is nearing a 100 percent. Again, we'll see the implications. So what I'm for all the three product categories, the capacity utilization of the plants is about 82 percent of installed capacity. Now if you look at the capital expenditure CapEx, for all the three segments as $1.57 million worth of which more than 60.9% million dollars has been spent on jazz. And we let the C way, this is so when the capacity utilization is very low, waste, such a high level of capital expenditure is required. Similarly, we'll have to see whether the capital expenditure for sweet breads and CEO disburse is good enough. Therefore, the areas requiring further study according to that report, is that for jams, the age of the specific equipment, the level of maintenance required to keep it going, and the capacities of specific bottleneck operations need to be looked at in very great detail because dances absorbing a vast amount of capital expenditure despite the very low capacity utilization. Similarly in sweet spreads because it is operating at much higher than the installed capacity. That may be. Then see for frequent breakdowns in critical operations which may be happening very soon. This needs to be guarded against that for a company needs to look very critically at whether any further capital expenditure is required for balancing equipment and critical operations are for capacity enhancement. And sweet spreads is doing very well. In 70 spreads. Again, the reduction is nearing the full capacity. Again, some of the problems that we discussed under a switch bridge may start happening. But this is restricting the sales are not as something which is not clear in the case that these are additional capacity required or not, depends on what the management thinks about the opportunities in 70 spreads. Thirdly, we look at the product costs, but done dollars per ton comparator, the fancy foods figure with the industry average, the data is available in an extra 10. Again, the blue bars represent the fancy foods figure and the industry average is represented by the orange fingers. We are computed something called the competitiveness index, meaning that if the cost of product is more fancy foods vis-a-vis industry, then it is less competitive. If the cost of fancy foods is less than it is more competitive, I hope you get the idea. So we take the ratio of the costs, the cost of industry average to the product cost of fencing foods. So we see that in sweet spreads, the company is really competitive. The cost is below the industry average, or the cost competitiveness is at a 107%. The indexes 107%. Whereas in the other cases, especially in damps, the competitive, unnecessarily poor and 70s, but it's also, it is somewhat poor. So on for all the three segments, it is the competitiveness is below the industry average. My board nine points. So the possible areas of cost reduction in dams and 70 spreads according to anneal and his team in their report, is looking at material wastage and the yield. But then as raw materials, manufacturing efficiencies on which they are able to make out of the plant in a shift, but are and what are the power and other consumables consumed but done of production? Let us in sweet spread. That is because it's doing well in terms of product costs, it is better than the industry average. That is Coke for a cost competitiveness. Mars core part pricing responses to competition. So there is an elbow room available in sweet spreads. Let's now look at the financial performance. 14. Case: Fancy Foods (C) - Analysis - 3 : Analysis of Financial Performance: In financial performance, we shall be looking at two things. Mainly, Number one, the return on capital employed or ROCE, and to the management of networking capital, which consists of three components as the alleles seen, a constancy. But in run this and we will also be looking at certain suggestions or recommendations made by anneal and his team to improve the profitability are the capital employed? Let's take a look at the ROC or return on capital employed. At the end of year 2017 for all the three businesses. Details are contained in an access 11. The blue bus, as you shall represent the fancy for this data and the island bus, the industry average. So what do you see here is a comparison of the return on capital employed of the three businesses compared with their counterparts in the industry as an average. So in dance, you will see that the ROC is less than half of the industry average at the 8.2%. And sweet spreads, they are better than the industry average by about 4.7%. But as intensity sprints, they are on par with industry. So putting all the three business divisions together, the chocolate ROC is 21.6%, which is nearly 10 percent below the industry average of 32 percent. So fair amount of work has to be done to improve the profitability. Later on, we'll see what actions can be taken to improve the outro. See. Now, four main reasons are there. For the poorer ROC, our profitability in jams. The first one is on the revenue side due to a low price equity compared to the industry average. The second one is on the cost side, they have a higher product costs compared to industry average. The third, fourth reasons are on the capital side, in cutting a higher CapEx or capital expenditure to maintain the equipment. They are also incurring higher networking capital by way of accounts receivable and inventories. Next, we look at the three components of net working capital. To start with the collection efficiency, it is basically what are the efficiency of collection of receivables? Analyzing some sales dataset contained in an extra 12. So what do you see in the graph is average accounts receivable days calculated as evidence that conceivable during the year divided by the sales multiplied by 365 days. So in the case of dams, they are variable. The land and arms, the orange bars represent the internal norms or gland that as the blue bars represent the actual. So the available at 92 days, 60 days, which is the black. Let us in switched threads, they're slightly better, but still worse than the plan. So PFA days instead of 45 days in 70 spreads again, the difference is quite a bit, 78 days instead of 60 days. So for all the three businesses put together, the average a constancy will days is 76 days compared to 54 days, which is the black, are the internal norms established by the business divisions themselves. So there are 22 days ago. So a fat amount of donning up has to be done in collecting the accounts receivable on Dan. So the collection efficiency is 65 percent. It is measured as 60 by 92. In the case of gems, that is the internal norms developed by the actual number of days of a constancy. So it's 65 percent for dance. Slightly better for sweet scripts at 82 percent. Facility spreadsheet is 77 percent and all that business has put together, it is 71%. Next, we go to the second aspect of networking capital management, that is inventories, which are basically raw materials, work in progress and finished goods. Details of workings are contained in annex 13. Here, the metric we use is the stock does, and that's the cost of goods sold during the year. Divided by the average inventory. For dance, that is, for the stock dances for what times the stock that turned over into cities For was a six. Quite bad in suites Brexit, likely better but still bad at six 57 verse 8, which is the now. And in the case of 70 sprints, again, it is 4.7, quite bad compared to six. So for all the three businesses, for two, that the average stock dance is 4.8 versus the tunnel norms or plan of 6.7. So here again, in inventory management, a considerable amount of work has to be done to reduce the level of inventories by predicting the demand pattern. So they indirectly management efficiency calculated as the actual stock dense divided by the planned or internal norms. Stock dance is 66 percent for jams, not bad, 88%, but still for switched threads. For sale, the spreadsheet is 73 percent for all the three businesses, it is 72 percent. Next week come to the creditors management. That is what the company has to pay. The creditors are the suppliers and vendors. The details are contained in an actual 14. Yeah. The metric we use is the average accounts payable days. How many days on average each business division is taking to pay off its creditors. In dance, their parents 52 days on an angle is 30. This quake back in. So they are paying ahead of time. They are paid in an average of six days. But as the nonces, 15 days, perhaps they're doing this to take advantage of the better cash position that they have. Maybe the cash discount for early payment. And this can be useful in improving profitability. They can afford to do this because they are in a better position compared to the other divisions. In 17 spreads. They are picking an average of 64 days, which is really, really bad compared to 45 days, which is the NASW for paying off creditors. So for all the three business has put together proportion into that pastor says the number of days of creditors is that the seven days compared to the norms of 27 days? This is again an area which the company needs to give some attention to. Because paying suppliers and renders in a delayed fashion may actually spoil the reputation. And the suppliers and vendors may react in several other ways so as not to give any priority too. Fancy foods compared to the competitors. 15. Case: Fancy Foods (C) - Analysis - 4 : Plan for Improving Performance: Now I'm going to tell you about some of the suggestions or recommendations of anneal and his team to improve the return on capital employed by certain actions. Let us take up jams first, the details for this are contained in an Access 22. D6. Currently dances having an auto CE or return on capital employed of 8.2%. And Neil and his team have recommended that by reducing the product cost to industry standard levels, they can actually boost up the ROC by another 8.9% to 17.1%. This is the first set of actions. The second action is to increase the price recovery to be in line with the industry's standard. That can boost our OCI by a further curl and a 0.5% to 29.6 plus. The third action is to decrease the networking capital mainly in accounts receivable and inventories that can boost up the hardwood see by another 5.3%. So totally they can hop to go from the present level of 8.2% to as high as 34.9%. Take an ITU and increase of 26, 57 percent improvement in our OCI by taking all these three actions together. This is the recommendation of final and it's t. Next we'll look at salary scripts where the current ROC itself is quite good, potty 0.1%. By reducing the product costs, they can improve it by 7.4%. It can go up to 47.5%. And by increasing the price security to be in line with industry standards, it can further increase it by 16.4% to 63.9%, almost 64%. And finally, by reducing the networking capital, they can have further improvement of 4.9% who nearly 70 percent Art 69.8%. So they can hope to achieve an improvement of 99.7% or nearly 30 percent in ROC. This is a fairly high level of ROC. So the scope for improving profitability in seven sprints instead. Next we go to switch spreads where the potential for improvement in profitability is not that much because they are already doing extremely well in terms of revenue management. And so let's Cost Management. The only improvement can perhaps come through improved networking capital management. Right now, they are at a ROC level of continent by 7%. By better management of networking capital, or by decreasing networking capital, they can marginally increase the Odyssey by 1.9%. So about 31.6%, but I really begin proven, but nevertheless, that can be a marginal improvement. These are the recommendations of an a. Now let us summarize them in operating profits. Anneal and his team, I've recommended that by taking these three actions, the operating profit can be improved from $2.94 million for all the three businesses. For $4.62 million, an increase of $1.68 million or fits the major improvement can come dance dances right now, having a very low operating profit of 0.49 million only. In the case of net working capital, management can be brought down from the present level of $5.36 million. That's what Daniel and his team are recommending to. A level of $3.93 million at drop off 1 for $3 million. Again, a bulk of this improvement has to come through jazz, which is having a very high networking capital of $2.91 million right now, can be brought down to and find 99. So these are the recommendations. 16. Case: Fancy Foods (C) - Analysis - 5 : Strategy Audit: Ability to Compete: We have so far seen the performance review of fancy foods limited in terms of its performance in three aspects, the market, operations and financials. Now it is time to consider the strategic side of things. As we have already discussed, anneal and his team carried out a strategic audit. The first part of this audit was to assess the ability of the company to compete in the market in each product category. This ability to compete consists of two parts. One is the competitive advantage arising out of what is called a critical success factor. We have already seen what it is. And the second part is that a labor market share, each of these two components is given equal weightage to arrive at The companies the ability to compete in any of the three product categories, market segments. Let's see how it is done. So as we have already seen, an eland is Team 0 to nine for critical success factors. The customer value per subsidy, the channel control, and the cost position as they suggested and as approved by the senior executives of the business divisions. And the particular success factor of new product introduction as lysed by the channel partners. So these four CSS taken into account, an extra 15, gets the data on how the ratings on each of these critical success factors in the end of 2017 for Italy, product categories are market segments of fancy foods has been arrived at. The competitive advantage index. We have the pink bars representing dams, the yellow bar representing the sweet spots than the green bars representing the savory streets. Now let us look at the overall weighted CSF are critical success factor. The weightage for all the four factors being taken into account. What kind of weightages for given is also shown in that NHS. Now you'll see that the sweet spreads is having a weighted CSF, are competent to adorn date index of more than one. That means it is more competitive than the largest competitor in the industry. This is really creditable. Dances not too bad. It is much above average at pined 83 and even 70 spreads the ability to compete. One part of it that is a competitive advantage index is 0.71. Now let us look at the individual CSS. If you look at customer value perception, which is how the customers look at your products, the rains, and the value for money at that register, we consider those factors in a previous section. So as far as customer value but suction is concerned, the sweet spreads is again about one which is very, very predictable. And Jan's is also very good at binding for, whereas 70 spreads is above average, not bad at Pine 71, you look at Channel control. I think all that product categories are behind that best competitor. This is an area where perhaps they should improve themselves. The tunnel penetration is not good enough. Especially in jams and definitely in 70 spreads, the tunnel penetration is not good enough to command a high market share. In terms of costs, physician, again, three-fifths is much better than the largest competitor. Doing much better. Dances not too bad, then placenta behind. Let us say that it spreads is again 6% behind. If you look at the new product introduction, I think that is one area where uniformly all the three are categories of the company are not doing vary greatly in relation to competition. Again, so you suppress a slightly better but 0.88 is not good enough. 560 and buying 500 for jams and 70 splits, it's definitely not okay. So new product development and marketing are areas which the perhaps the company should concentrate on. Next we go to the other part of ability to compete, which we have already seen, that is the relative market share. So this is just a recap of what we have already seen. So you have the competitive advantage arising from CSF. The first set of critical success factors that sweet spreads is doing well at 1.01, jumps above average, find 80 and 70 spreads as 0.71. The relative market share is not that good, especially for jams and definitely not for 70 spirit. Or sweet spreads its spine 62, again, above average, but not very good. So if you combine the two, they have been given equal weight, age, and ability to compete the index with the normal of one, which is equated to the best convert into the ability to compete off treat spreads. Division of fancy foods. This rhetoric, 82% of the best competitor, 64 percent for damps, 46 percent, quite poor. Bar 70 spritz. This is the ability to compete. The data is given in an extra 16. 17. Case: Fancy Foods (C) - Analysis - 6 : Strategy Audit: Market Attractiveness: Then we look at the other aspect of the strategic audit. That is the industry and market attractiveness. How attract to this product category our market is. There are three factors. The market size, the industry growth rate in terms of CAGR, compounded annual growth rate, the profitability, the profitability of the industry, average, and fancy foods company. The average is taken into account. So the market attractiveness index data is given in an extra 17. Once again, we have these bots the same. The other spreads category is also included because that is a market potential even though fancy foods may not be participating. So the other spreads bars are represented by the brown bars, the segment. Now, if you look at the market size, obviously the jam system most potential in terms of the market says is the biggest. Even sweet spread is slightly above half of that size of the market of jams. Pajamas has got a lot of potential. Then you come to the group rate in terms of the CAGR, the growth trend. Then again, the market growth trend is very high for jams. Only two-thirds of that potential is there for Pittsburgh, less than half. Power. 70 spreads slightly more than half or other spirits. If you look at the profitability, this picture is completely reversed. The potential for profits is greatest for others, fetch, followed by 70 scripts, followed then by suite spreads. And in jam sits really low, especially the Odyssey we saw of jams division of fancy boots is really low. Right? So now the weighted index of market attractiveness and equal-weighted for all the three factors that the market size, the growth, and the profitability. We take that into account. Damps gets an index of pine 76 or 76 percent of the best. What is possible? Point 65, that is index of market attractiveness. How attractive the market is. 60 percent is for sweet spread, 62 percent for 70 threats, which is close to the sweet scripts. And for others threads, 71 percent. So we see that when it comes to market attractiveness, taking the size, the globe, the trend, as well as the profitability in Dakar. All the four are more or less the same, ranging from 62 percent to 76% odd 0.6 to 2.76 on a normal of 11 is supposed to be a perfect score. 18. Fancy Foods (C) - 7 : Project Details: Based on the following information. That is first the videos. In video number 11, I have explained to you the basic purpose and broad construction of the GE McKinsey portfolio matrix. And in video number 16 and 17, I've given you the details of the components of what goes to make that matrix. And in video number 12, there are details of the market performance. Please pay specific attention to the trend of market share for each of the businesses. These videos plus the Annexin-V or 19, provides data on trend of CapEx. It is capital expenditure, as well as market and product development expenses in each of the businesses of fancy foods limited. So please take these inputs of information and whatever knowledge your gathered till now in this course to do a small project, the details of which are like this. Fast, try to construct a GE McKinsey portfolio matrix for the for breakfast spreads businesses based on the information and the methodology that has been described so far. Secondly, take the market share ten data of each business and superimpose it on this matrix. Next, interpret this matrix in relation to the capital expenditure and the market and product development expenses incurred in each of the fancy foods businesses. And try to give your interpretation of whether the direction in which each business strategy has been going is in landing with the capital expenditure and the market and product development expenses. Next, please comment on the strategic direction pursued by fancy foods for each business. And lastly, highlight the strategic issues for each business which the management of fancy foods needs to address. The answers to this project questions can be found in the next video. Good luck with the project. 19. Case: Fancy Foods (C) - 8 : Project Solution: Now taking this data and England is team project, what we discussed earlier as a GE McKinsey matrix of portfolio analysis, which decides the relative priorities for the three or four product categories are market segments. The data has given an accelerating. So we have the four market segments are product categories. But other spreads of course, there have been tabulated, market attractiveness course have been tabulated. The ability to compete as you see for others, for instance, 0 because the company is not participating. If you take dance, it is 0.76 of market attractiveness. The ability to computers, 64 percent of the normal or 0.6 for the size of dance. That is, the sales in 2017 is 11.60 million. Why is this required? This is a correct to plot the, the McKinsey Matrix, the size of the sphere that we are going to block for each of the product categories. The diameter of this sphere represents the sales of thought sweet spreads. We have market attractiveness index of 65 percent, ability to compete very high at 82 percent, and a sales of $10.6 million. In seventies flex, the market attractiveness indexes 0.62 or 62% of the perfect score of one. But very poor ability to compete. A 46 percent, it put all the company has to improve here. You'd have to look at the various critical success factors and improve them. And they had a marginal player with the sales of $3.47 million as we have already seen, other spreads. Quite attractive. Market is quite attractive. The attractiveness indexes points aren't Bu, but the ability to compete as nothing because they have not yet started participating in this market. There is something we'll see later. The seals is of course 0 retinal. So we come to the actual AD where all this data is plotted together. So on the x-axis of this plot, we have the ability to compete with the index values ranging from 0 to one. And on the y-axis we have the market attractiveness index, again, varying from 0 to one. We divide the ability to compete into three zones. 0, 2 point 3. 3 is low. 0.32.600, that is 1 third to two-thirds. That is represented by the yellow zone. The low zone was represented by the red dot strip. This is our yellow zone represents the median or the middle values. And then the green zone represents the higher, the high values. Similarly, we divide the market attractiveness index from 0 to one into three zones. So we create nine cross zones. And if you look at the leftmost bottom-most zone, that is the low-low, that it lowering your ability to compete and low in market attractiveness. The top rate. The zone would be heads. Heads are high, high in both. The ability to compete as well as high market attractiveness. That is the way it is represented as head, head. It stands for high, medium, and low. And the middle zone is really middling both. It's in the middle zone of both the ability to compete as a less, it is in the range of 0.332.67 index of both ability to compete and market attractiveness. Now, let us place the fancy ports limited business divisions in terms of their scores of ability to compete and market attractiveness. What we I arrived at previously, let us clear stem and see which zones they are falling. So these are the other zones. Now, let me dim the zones. And then bringing one by one, the product category plus the jams. So the jams, as you saw, I had an ability to compete score of 64% and the market attractiveness index of 0.7676%. So it is really in the middle high zone, that is its ability to compete as medium. But it's market potential or attractiveness is very high. At some point 76. Next, we place the sweet spreads product category, which has got a very high ability to compete. Its competitiveness is very high. You can grow really fast. But its potential in terms of market attractiveness is likely loyal competitor jumps, but quite above average. And finally, if you look at 70 spreads, the ability to compute this poorer below average. Even though it is slightly above 0, 33, it is still below 0.5. I would call it low to medium. And the market attractiveness is also not as high as the other two, but not bad. Now if you look at the third segment in which fancy foot is not participating, that is the other spreads. You'll find it on the y-axis way because the ability to compete for fancy foods right now is 0 because they are not participating that market. But that is a market attractiveness of 0.7 to negative eight is plotted on the y-axis. But this gives you an idea. Now, let us also super impose the trends. In dance. If you have seen previous analysis, they are losing market share. That way you have an arrow going towards the left of the ability to compete, which is, you have seen, it is a complex core of two factors. One is the relative market share. So they are losing market share, unrelated market share. That way. That arrow to the left, the red arrow. Whereas the sweet spread is really gaining market share away fast. So it has black or dark green arrow moving to the right. And the 70 spread is also gaining in a small way. So it has got the light green arrow to the right. So together, both in terms of the positions and the trends, this represents the strategic directions in which the businesses are moving. It gives the management of both the company at the corporate level as well as the individual business divisions management, some kind of insights into what could be done with these three businesses. With that, we come to an end of the analysis except one more factor. That is the CapEx and product and market development expenses of fancy foods limited for the last three years. That is 2015 to 2017 in million dollars. The plane bus that is jams is pink, As we should respect the low 70s crypsis, green and all the three together are represented by the blue. So the plane bus that represent the CapEx of the capital expenditure for capacity expansion, modernization, as well as balancing. Whereas the cross hatched bars represent the expenditure by veils, product and market development. Now, the total expenditure of capital expenditure is $1.57 million. A bulk of it, 60 percent nearly has been spent on jams. Right? And the expenditure of CapEx thin switch breaks and 70 splits a really small. You have already seen that in relation to the poor capacity utilization, this is a little perplexing way damps is absorbing so much of CapEx the company should look at it. If you look at the other aspect of expenditure on market development, as well as product development. Perhaps not enough, please, being spent on dance where the potential is very high. But that's quite a bit has been spent on switch spreads rightly. So because it has got to a very strong position because of these expenditure seventies perhaps where there is a marginal presents only the expenditure is really poor. And is there a case for stepping this up if you want to develop that market? These are the questions which the divisional management as well as the corporate management should address. With that, we come to the end of our analysis as done by annealing this team. 20. BPRSA 20 Course Recap & Wrap-up: So in this case, what we have seen, in case, we have seen the facts of the company, how it is competing against others in three products segments. What are the facts of its performance? In case B, we have seen what additional data anneal and his team gathered for the analysis on K. C. We have seen what kind of analysis was done and what kind of report was presented, bought in terms of performance review, as well as strategy. Got it. So this case has demonstrated to you how to do a status assessment in terms of these two components, namely performance review and strategy guarded, it has given you an idea of how to handle data, different kinds of data, market data, operational data, and financial data. That also shown you how to do a number of data manipulations, especially quantitative manipulations, hope to present them visually. They hope you enjoyed this case and learned quite a bit from it. Thank you.