BSG Simulation Final Report - MOS 4410 Final Report BSG...

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MOS 4410 Final Report – BSG Simulation Professor Sergio Janczak Company D:
Executive Summary: As consultants of Dynamic Shoes we have implemented a strategic plan of action to improve upon operational efficiencies, market expansion and customer satisfaction. The report outlines what Dynamic Shoes is currently doing well and what it needs to improve in the future. Dynamic Shoes enjoys three core competencies including: low rejection rates, large selection of models, and great strategic flexibility. However, it has large amounts of cash on hand and poor inventory control. Because of the high cash on hand and low debt levels, Dynamic Shoes can afford to invest in expansion of current operations as well as new market segments. Moreover, the acquisition of small companies will also be feasible in the future. The report finishes by listing the strategic action plan that Dynamic Shoes will implement to meet its operational goals. Capabilities, strengths, and weakness Currently, Dynamic enjoys three core competencies. First the company has low production rejection rate due to high investment in equipment improvements and employee training. Moreover, Dynamic Company offers one of the largest selections of models in the industry. Differentiation gives us a higher market share because of the customer satisfaction gained from larger selection. In addition, the company has great strategic flexibility. Dynamic Company is able to respond to the fluctuations in demand by increasing capacity, decreasing shipping time, and making a large investment in marketing tactics. The company has two weaknesses affecting its profitability. First, Dynamic has high amounts of cash on hand with a current ratio of 14.97, and an A+ credit rating. It indicates that the company is holding too much money on hand that could be invested in projects with a much higher rate of return. Moreover, an A+ credit rating indicates that the company is able to finance
at a very low cost, but the company has not taken this advantage yet. In addition, ending inventory has been inconsistent with some years seeing high sales losses and some seeing high ending inventory. This is partially due to the demand fluctuation and inaccurate anticipation, but most importantly due to the limited capacity compared to the high demand. Opportunities As mentioned before having high amounts of cash on hand and a low amount of debt demonstrates that the company is being solely financed by its own resources and not by credit.

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