Boston Scientific is currently working several strategies horizontal integration market penetration, market development, and product development based on their statements in their core values (About, 2015). While these strategies could be beneficial to the company, I do not think that the timing is right. Due to the poor economy and new changes, with effects unknown yet, choosing to grow could hurt them while the economy is not in the best stable condition. This is why I have suggested Boston Scientific to utilize the retrenching strategy in order to down size and rebuild.
Most of the goals that Boston Scientific will strive for through the retrenching process are obvious.
-Downsizing and regrouping - This will strengthen the trust of the
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For example even though there was a decrease in revenue from 2012 to 2013 there was still an increase in selling and general administrative expense (Boston Scientific, 2014). While at the same point you see a decrease year to year in research and development expenses (Boston Scientific, 2014). In my opinion this does not stand by what the companies mission statement suggest. If a company is truly trying to be innovative, would it not make more sense for them to keep their administrative budget the same so that it adjusted based on revenue. Rather than decreasing the very cost that should be helping the company continue to stay “on top” of the market to keep them …show more content…
So at first there may not be a huge difference. But this will free the company to focus on products that they know do well in the current market, and allow them to focus on getting that product out to market that are not currently held by them. Also the downsizing and regrouping will change the structure of executive staff, allowing for changes in compensation to be made. Though it is very important for current staff to feel important so they do not leave, the shareholders are important as well. By downsizing we can create a better budget around compensation so that it’s reflective around revenue. This will allow for a more fixed cost, when a company is able to control its compensation around the revenue they could be viewed as a better managed company, which should attract investors in the long run.
Currently the structure of Boston Scientific works down from the president, to the executive level then to a senior level (Boston Scientific, 2014). As far as the product division goes there is an executive for all three main product lines, then a senior for each sub division (Boston Scientific, 2014). This means that there are 7 seniors, three executives and one president who see over everything (Boston Scientific, 2014). Below I have listed some the salaries of these people within the executive
This is also good for employees especially concerning performance relate pay because a higher dividend is given. It will help save cost as there will be less waste due to fewer mistakes made also the corporate image will be enhanced because the work force are better skilled and motivated. Training and Development can increase customer satisfaction and loyalty indirectly as work will be done more efficiently and they will be more motivation to keep customers happy also it can make William Hill more competitive as they will be performing better at work.
The 3 percent decline in sales causing a 21 percent decline in profits can be attributed to the identification of the accounting concept of operating leverage. Operating leverage is what business managers apply to boost small changes in revenue into sizable changes in profitability. Fixed cost is the force managers use to attain disproportionate changes between revenue and profitability. Therefore, when all costs are fixed every sales dollar contributes one dollar toward the potential profitability of a project. Once sales dollars cover fixed costs, each additional sales dollar represents pure profit. A small change in sales volume can significantly affect profitability (Edmonds, Tsay, & Olds, 2011). So, therefore, if sales volume increases,
Our research team did wonderful job in providing us information relative to the market trend, product positioning and so much more. Their finding allowed us to update and upgrade our marketing efforts in the way that is desirable and beneficial for the company.
But divesture of three out of four divisions leads to a very small portfolio which leads to chances of high risks as well. The process of restructuring and forming a better portfolio would provide the firm with a lot many opportunities including exploring newer and more compatible product lines and segments, thus increasing its opportunities to earn better revenues with efficient management.
Gaughan, P. A., 2002. Mergers, Acquisitions, and Corporate restructuring. 3rd ed.New York: John Wiley & Sons, Inc.
The major downfall and/or reorganization of companies have cost: lost securities, downsized or vacancies in employment, lost or minimized retirements, and assisted in the economic recession. The following companies have been involved in varying experiences that led to financial improprieties and unethical decisions.
Research and development is a very important aspect of this industry and it is very draining on a company's funds. Great emphasis is also placed on product placement and marketing. Though these products are usually marketed towards industry professionals such as doctors and hospital management.
...strategy when the initial downsizing failed to take them out of the red or gain back lost market share.
Boston Beer uses a quality strategic planning system in order to achieve their corporate objectives. They have a good system in place that they use when considering the future decisions of the company. They utilize this system each time that they decide if they are going to introduce a new product into the market. This is one of the reasons that their hard cider was able to become the number one cider in the United States in only eight months.
A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.
These values are manifest through a simple, five level hierarchical structure. Each plant has three levels - the plant manager, seven area superintendents and front-line staff while a divisional layer oversees the plants and projects by area providing the interaction between the headquarters and plants followed by the CEO.
Monitor and adjust strategies in response to problems in the revitalization process. Every firm has to know how to continually monitor its behavior, in order to be able to learn how to learn.
Research and development plays a big role here at Samsung creating the ability towards taking the next step of building a better future. In 2015, Samsung spent $14 billion dollars on research and development alone, so it’s surprise why we are willing to spend $50 million on the first year of the product. We will use our research and development team to improve the quality of our smartphone via updates and discover reasons why consumers are passing up on our new smartphone. From year 1 to year 2 there will be an increase of 16% in the research and development expense and from year 2 to year there will be a 7% increase. Most of our highly praised tech like the Galaxy S7 and S7 Edge are due to are research and development teams. The general / selling/ administrative expenses all include fixed costs, advertisements, and direct and indirect costs. With the percentage nearing the profit margin it represents that we’re are in the competitive smartphone market. The change from year 1 to year 2 for the general / selling / administrative expenses increased by 9% and it increased again but only by 4%. The pie graph at the bottom displays the % that goes to in expense. For General / Selling / Administrative expense, I’ve separated the advertisement budget to its own
Factors that affect good people developing bad behavior is too much power and generalizing a group. In the Stanford Experiment the guards had the power to do what was necessary to maintain order in the prison. The psychologist never told them what they could and couldn’t do to the prisoners. This reminds me of when I was younger and my parents would put me in charge of my sister when they had to leave the house. I thought that I could tell her what to do and she had to listen to me because i’m in charge. This is the same for the guards in the experiment, no one was telling them how to discipline the prisoners so they thought they could make them do whatever they wanted them to do and they would get away with it. Another factor that affects
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.