Financial Analysis: Success indicator, Performance indicator, Target performance level (Essay Sample)

VISION STRATEGIZATION OF PZ CUSSONS PLC COMPANY
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Executive summary
This is a report of PZ Cussons plc Company describing the vision and strategies the company should follow briefly. The strategies are clearly stipulated in the scorecard and the right action to be taken to fulfill the visions explained briefly. This report will enable the board of directors to manage the various activities of the company making sure that the right actions are in progress to attain the visions of the company. This report will not only help in the management of financial strategies but also non-financial strategies. The use of this report when managing the day-to-day activities will also help the board of directors to predict the fate of the company in the future since the main aim of a scorecard is to ensure that the business fate in the future is on the right track. The following of the scorecard’s suggested course of action will ensure the success of the business. The recommendations give the board options on how to implement their current management strategies to better ones to emphasize on the company’s success. Keeping the fact that the PZ Cussons plc is an expansive company carrying out its activities in several continents,(Ebinum et al 2014) it may be very challenging to manage the company effectively. But with the help of this report the management will be made easier and more articulate.
Introduction
PZ Cussons is a global company involved with the manufacture and distribution of health assigned products. The company’s prior strategies have been working effective to eradicate their current problems, but an improvement will help make the company the best. The company has been facing decreased market share for the previous years. The Board of Director should consider revising their previous strategies or even setting new strategies to prevent their business from losing more customers. This is indicated by having the lowest stock turn over compared to its direct competitors (Ebinum et al 2014). The company’s success is predictable from the current issues that the company is going through. The business is currently not on a bad side as we can observe from CW1. The Board of Directors should look for loopholes in their business that is putting the success of their business on the line. The profitability of the business has increased with minimal mergin due to increase in taxes almost doubled for the two years (2012-2013) ,(Ebinum et al 2014). The company’s production cost has reduced hence making the overall operating cost to increase. The company’s high debts are making it difficult to implement new projects because of financial constraints. The company’s products are also facing increased competition evidenced by it having the lowest stock turn over compared to its direct competitors. Generally the company is not badly off given that most of their services have been improving.
VISION AND STRATEGY OF PZ CUSSONS PLC
VISION

STRATEGY

IMPLEMENTATION

TIME SCALE

Increased amount of sales

Increased advertisement

Rebrand some of the products with diminished sales

Current

International transformation

Increase diversification of their products

Invest on current technology

Previous- Now

Increase the affordability of their commodities

Shorten the chain of distribution

Personal delivery of their products

Current

Increase profitability
Excellent customer service

Increase accountability on the cost of production
Invent a customer care body

Improve the financial management board
Work on the current customer complaints

Previous- Now
Previous- now

Vision
The PZ Cussons Plc Company aims at being the best producer of; Beauty, food and nutrition, electrical and home care products in the world. (PZ Cussons 2014). Since George Paterson and George Zochonis initiated, it had continued to improve in quality and innovation. The company is almost at par with the current technology in the world. Its continued innovation has kept it on the market for a long period it has been operating. The vision of the company is to conquer the current market barriers it has been facing due to its direct competitors.
Strategy
The Board of Directors should follow the strategies to the letter to ensure continued relevance of
their products in the market. The cost of their products hinders some customers from using their
products. The main aim of PZ Cussons Plc is to ease the price of their products to reach more
customers in the market. They should aim at distributing their products by themselves o reduces
the chain of distribution which renders the final price of their commodities to be high
discouraging the final consumer of the commodity.
Balanced scorecard.
1)Financial perspective
Key success indicator

Key performance indicator

Target performance level

Summary action plan

Maximize profits

Net profit

Increase the sales by 5% for 3 years

There should be expansive advertisement to increase the customer awareness of their products.

Minimize on cost

Net finance expenses

Invest on more efficient production machineries for 1 year

Invest on current technology to enhance fast production rates at a reduced cost. The funds saved on production cost can then be used on other investments within the company’s production.

Maximize market share

Stock turn over compared to direct competitors’

Reduce the prices of their products by 1% for 2 years

Reduce the prices of the products to encourage increased demand on their products in the market to increase the amount for their products in the market.

Management of finances is a basic predictor of the fate of a certain business. The board of directors of PZ Cussons Company should pay special attention at the finance management techniques to ensure success of their business. On maximizing profits, the company should look at the three types of profits that are; Gross profit margin, operating profit margin and net profit margin. Gross profit margin indicates the extra income earned after the goods are sold. The gross profit was stunted for the two years. (Ebinum et al 2014).
Gross profit margin = (Sales – the cost of the goods sold)
Operating profit margin is the total earnings after the interest rates, and taxes have been deducted. Operating margin shows how efficient the company has been in its process to generate income. "The operating profit almost doubled with a difference of £ 46 million" (Ebinum et al 2014). Lastly, net profit margin is the total profit after all the expenses within the production process have been deducted. "The net profit was worth noting , which increased by 86.84%" (Ebinum et al 2014).
Net profit margin = Total profit after taxes or sales
Minimizing the cost of production processes within the company will highly render to the high profits at the end of all activities are executed. Minimizing the cost of production may even double the net profit for this year provided that the administrative costs will keep on falling. The main strategy to reduce the cost of production is by investing on current technology that is more efficient in production. Maximization of the market share is the other way the company can ensure its long existence in the business activities. The market size a company serve is an indicator of the track the business is following. Currently the company is facing reduced market shares given that the company is having the lowest stock turn over compared to its direct competitors. (Ebinum et al 2014). Reduction in cost will lead to an overall reduction in the price of their commodities hence increased demand of their products in the market increasing the size of the market it serves.
2) Customer perspective
Key success factor

Key performance indicator

Target performance level

Summary action plan

Increase customer knowledge and understanding

Change in sales

Increase informative advertisement

Advertisement in the media should aim at attracting customers and also informing them on the right usage of their commodities

Ensuring customer satisfaction

Customer satisfaction manifestation per year

Invention of new products at least one product per year

The company should ensure that customer demands are well taken care of by looking for business opportunities available due to customers demand.

Attracting new customers and holding the existing customers

Size of the market share

Increase customer in the management opinions

Customers opinions on the quality and form in which products should be greatly taken care of to ensure existing customers continue using cussons products.





Customers are the facilitators of business activities. Customers well being should be the priority of any business to ensure it continue carrying out its business activities. Customers ensure continued profitability to any business enterprise. PZ Cussons PLc Company should aim at increasing the awareness of their products to any an informed customers by increased advertisement. In addition, the informative advertisement should also be prioritized to enhancing best outcomes after the use of their products.
3) Internal business perspective
Key success factor

Key performance indicator

Target performance level

Summary action plan

Organizational improvement

Administrative costs
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