Fluent Essays

Scenario You have been asked to evaluate Company A and Company B and make your recommendation for acquiring one or both companies. Based on your initial assessment, you have created balanced scorecards for both companies. You are now ready to analyze the information you have gathered so far about the two companies so that you can compare the costs, benefits, and risks associated with acquiring each company and make a well-informed decision. In this milestone, you will first analyze the current situation of TransGlobal Airlines using the given data and other sources to understand their business environment. You will also evaluate the performance of Company A and Company B using the balanced scorecards you created in Milestone One. Prompt Write a report with your performance evaluation of the three companies involved in the acquisition. Specifically, you must address the following rubric criteria: Situation Analysis of TransGlobal Airlines (parent company). Use the provided TransGlobal Company Information and Financials to highlight the company’s current business environment. Internal environment: culture, leadership, internal processes, human resources, operations, and financial performance External environment: competitive, market, regulatory, customers, suppliers, and other relevant stakeholders Balanced Scorecard Analysis of Company A. Using the balanced scorecard for Company A from Milestone One, describe your analysis of Company A’s performance. Perform a cost-benefit-risk analysis to explain whether the benefits justify the costs of acquisition. Opportunity cost: What will it cost to move forward with this opportunity? Risk: Identify and explain the magnitude (low, medium, or high) of the risks this acquisition poses to the parent company related to its market, financial, cultural, and operational environments. Balanced Scorecard Analysis of Company B. Using the balanced scorecard for Company B from Milestone One, describe your analysis of Company B’s performance. Perform a cost-benefit-risk analysis to explain whether the benefits justify the costs of acquisition. Opportunity cost: What will it cost to move forward with this opportunity? Risk: Identify and explain the magnitude (low, medium, or high) of the risks this acquisition poses to the parent company related to its market, financial, cultural, and operational environments. Guidelines for Submission Submit a 6- to 8-page Word document using double spacing, 12-point Times New Roman font, and one-inch margins. If references are included, they should be cited in APA format. Consult the Shapiro Library APA style guide for more information on citations. Basic Balanced Scorecard BASIC BALANCED SCORECARD Name: Alexander, Apanyin 3 COMPANY NAME A ADDRESS QPH Inc. CITY Miami, FL STATE ZIP STRATEGIC OBJECTIVES KEY PERFORMANCE INDICATORS TARGETS INITIATIVES YEAR 1 YEAR 2 YEAR 3 PROGRAMS/INITIATIVES BUDGETS FINANCIAL Sales are key indicators of the profit an organization is trying to maximize. Expenses are the costs that an organization seeks to minimize. Therefore, it is important to identify revenues and expenses to obtain the cash flow that is generated from the internal operations of the organization. Cash flow is a key indicator of financial liquidity. This indicates that the business can meet its obligation wen they fall due. The implimentation of the key perfomance indicators will receive approximately $200 Maximize revenue Revenues 27,981 28,784 29,610 Minimize expenses Expenses 10,028 10,020 10,020 CUSTOMER Customer satisfaction is of crucial importance, especially for new customers. It must be ensured that the customer retains other customers as they remain loyal to the company's products. Therefore, customer satisfaction leads to customer loyalty in the long term. The budget for implemetation will be $50 Winning the customers Customer Satisfaction 22% 60% 80% Long term business customer relationship Customer Retention 19% 50% 60% INTERNAL PROCESSES Employee skills are critical to the success of the business. The company needs to retain employees with high skills to maintain the efficiency of the operation. The budget is $100 Enhancenment of quality of products or services Employyee skills 40% 70% 90% Enhancenment of consistency and achievement of effieciency Employees retention 60% 90% 99% LEARNING Inventory control is essential for business operations. It ensures that the right quantity of supplies of the right quality is available to the company at all times. This ensures effective control of inventories. Burget is $300 Effcient management of inventory Inventory 60% 80% 100% The standard of goods and services are not compromised. Quality Control 80% 89% 95% MBA 620 TransGlobal Airlines Company Information Location, size, and age of the firm: • Name: TransGlobal Airlines • Home Country: USA • HQ Location: Miami, FL • Size: 40,000 employees • Age: began operations in 1951 Customer segment and target market: • Class: global airliner with dominant U.S. presence • Market: global • Destinations: 242 destinations serving 52 countries across six continents • Market segment: first class, luxury, business class, and economy • Global market share: 18% (ranked 2nd, American is number one at 18.6%) • U.S. market share: 18.3% (ranked 2nd, Southwest first at 19.1%) • Retention: 80% return customers • New customer growth: 27% annually (prior to COVID) • Passenger kilometers: 278 billion (American is number one at 287 billion) Major competitors: • All international and domestic U.S. airlines Company leadership: • Publicly held with a board, president, VP admin, CEO, CFO, COO, VP sales, division VPs, subsidiaries Current financials: • Annual gross revenues: $13.2 billion • Annual net income: $1.5 billion • Adjusted earnings per share of $2.31, a 30% increase year-over-year • Delivery of 88 new aircraft during the year • Number of aircraft in fleet, end of period: 1,062 • Average age of aircraft: 13 years • Domestic revenue grew 7.7% in the last quarter on 1.6% higher passenger unit revenue (PRASM) and 6% higher capacity. Domestic premium product revenue grew 11% and corporate revenue grew 6%, driven by strength in business and leisure demand through the holiday period. Revenue and margin improved in all domestic hubs, with revenue up 10% in coastal hubs and 6% in core hubs. • Atlantic revenue grew 0.8% in the last quarter on 2.4% higher capacity and a 1.6% decline in PRASM, driven almost entirely by foreign exchange rates • Latin revenue grew 6.7% on a 6.3% increase in unit revenue and 0.4% higher capacity. This revenue improvement was driven by continued double-digit unit revenue growth in Brazil and Mexico. • Pacific revenue was down 0.5% vs. the prior year on a 4.4% decline in unit revenue primarily due to continued softness in China. This was a 3.2 point improvement vs. the September quarter on improved trends in Japan. Strategic Plans and Goals The Board of Directors has recently approved a comprehensive plan identified as TransGlobal 2030. The plan is the result of eight months of data collection, customer focus groups, leadership retreats, and employee input. The TransGlobal 2030 Vision is to lead the industry in three critically important areas: safety, excitement, and stewardship (SES). This SES vision has been translated into a collection of guiding principles and goal statements: • SES Principles o We will always treat our customers with respect. o We will value our employees and business partners. o We will innovate to provide our customers with the most forward- thinking and exciting travel experience. o We will build lifelong relationships with our customers. o We will protect our planet. • SES Goals o Safely re-introduce and promote the MAX 737 aircraft1. o Expand the fleet of regional aircraft with capacities below 70. o Upgrade the reservation and ticketing experience, including smartphone apps and integration with apps associated with lodging, ground transportation, and attractions. o Achieve top-10 status in the 2030 World’s Best Workplaces rankings (currently not ranked in top 100). o Reach net-zero carbon footprint by 2075. o Accelerate adoption of fuel-efficient aircraft and alternative fuels. o Expand use of carbon offset measures. o Improve our Airlines.com safety rating from 5 stars to 7 stars. o Build brand awareness and customer loyalty. o Address workplace inequities and build an inclusive culture. o Train every employee in the basics of FAA’s SAS (Safety Assurance System) via 2-hour web-based training. 1 Note: The popular 737 aircraft has been the subject of considerable controversy and safety concerns worldwide. ASSETS: Current Assets: • Cash: $2,882 • Cash equivalents: $1,565 • Accounts receivable: $2,854 • Fuel inventory: $730,592 • Expendable parts and supplies inventories, net: $521,463 • Prepaid expenses: $1,262 • Other expenses: $1,406 • Total current assets: $8,249 • Property and equipment: $31,311 Other Assets: • Operating lease right-of-use assets: $5,626 • Goodwill: $9,781 • Identifiable intangibles: $5,167 • Cash restricted for airport construction: $1,136 • Other noncurrent assets: $3,759 • Total other assets: $24,969 • Total assets: $64,529 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: • Current maturities of long-term debt: $2,287 • Finance leases: $1,518 • Current maturities of operating leases: $1801 • Air traffic liability: $5,116 • Accounts payable: $3,266 • Accrued salaries and related benefits: $3,701 • Accrued salaries related benefits: $3,287 • Loyalty program deferred revenue: $3,219 • Fuel card obligation: $ 1,075 • Other accrued liabilities: $1,078 • Total current liabilities: $20,204 Noncurrent Liabilities: • Long-term debt: $8,873 • Finance leases: $8,253 • Pension, postretirement: $8,344 • Pension, postretirement Related benefits: $9,163 • Loyalty program deferred revenue: $3,509 • Noncurrent operating leases: $5,294 • Deferred income taxes: $1,478 • Other noncurrent liabilities: $1,387 • Total noncurrent liabilities: $28,885 • Stockholders' equity: $15,440 • Total liabilities: $64,529 • Stockholders' equity: $60,266 Margins • Gross profit margin: 37.84% • Operating margin: 14.078% • Net profit margin: 10.14% • Cash flow margin: 30.35% • Debt to equity: .0782 • ROE: 31.03% • ROA: 7.08% • Inventory turnover: 23.35% • Receivables turnover: 16.47% • Aircraft capacity: 98% • Current ratio: 0.681 • Quick ratio: 0.3824 Basic Balanced Scorecard BASIC BALANCED SCORECARD Name: Alexander, Apanyin 3 COMPANY NAME B ADDRESS NBA Inc. CITY Orlando, FL STATE ZIP STRATEGIC OBJECTIVES KEY PERFORMANCE INDICATORS TARGETS INITIATIVES YEAR 1 YEAR 2 YEAR 3 PROGRAMS/INITIATIVES BUDGETS FINANCIAL Keep the essential expenses and consider the expenses that have an impact on the production process. Eliminate the expenses that do not have a direct impact on production. This will help minimize expenses. When expenses are minimized, net profit is maximized if sales remain constant. Budget $100 Minimize the expenses Expenses 9778 8560 8840 Maximization of Net income Net Income 2025 3000 4500 CUSTOMER Customer satisfaction is crucial, especially for new customers. Care must be taken to ensure that the customer attracts other customers as they remain loyal to the company's products. Therefore, customer satisfaction leads to customer loyalty in the long run. Burdget $20 Winning the customers Customer sastisfaction 35% 40% 60% Long term business customer relationship Customer retention 40% 60% 80% INTERNAL PROCESSES Engage the experts on the training process, provide the key training that will improve your production capacity interms of quality and quantity. The training will help to increase the confidence of the employees and thus improve the performance of the company. Budget $22 Enhance the energy of the employees to work harder Employee Satisfaction 40% 70% 90% Ability to cope up with changing technology Employees Training 50% 90% 100% LEARNING Employee the inventory experts, ensure that the quality of items deliveries meet your required standards, ensure that the time of receipt and shipment of the product are shorter as possible. This will improve efficiency in the movement of goods and services. Budget $30 Deliver desired high of the product to customers Quality control 100% 100% 100% Shorter time to bring the product Product lead time 80% 90% 90%