Assessment Details Step 1: Choose a Company In the first Competency Assessment, you completed a SWOT analysis on a successful company that demonstrated a sustainable competitive advantage in the marke

Learning Objective

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Select and research a company that is having financial difficulties or is on the brink of bankruptcy.

Conduct a strategic analysis of the company’s current financial operations. Determine strategies for achieving a sustainable competitive advantage in the marketplace and increasing financial performance.

Write a 750 to 1,000-word analysis. When writing your analysis, complete the following:

[Evaluate Current Financial Plan]

Evaluate the company’s current financial plan, including charts and/or graphs showing financial data from the struggling company and make recommendations for improvement.

This section touches upon sound point regarding the firm’s struggles, albeit at a high level. This section needs to build upon this to craft a fuller and deeper assessment of the firm’s financial performance and financial health/financial position. In order to create this assessment it will be necessary to have access to the firm’s financial statements, in particular the firm’s annual 10-K filings (this will provide much greater insight than will quarterly 8-K statement). Unfortunately, the firm has not published these full financials since it declared bankruptcy in Oct. 2018 bankruptcy, and subsequently became a private company. While it would be stronger to study a struggling that is currently publicly traded (and thus publishes full financial statements), we can make an assessment of Sears work if you prefer. Here we can begin the financial analysis using the firm’s fiscal 2017 10-K and looking backwards from there.

As a result put yourself in the position of becoming the firm’s new CEO on Feb. 4, 2018 (the beginning of its 2018 fiscal year), and needing to determine the firm’s financial performance and financial health/ condition that you have inherited as of the end of its fiscal 2017 (then in the sections below you can determine what you would propose to not only turn the firm around, but to create a sustainable competitive advantage). But first you will need to play “financial detective”. Here is what this fuller and deeper financial assessment might look like:

In order to assess the firm’s financial performance work to assess the key lines on the firm’s income statement over time (using five years of annual data tends to work best, augmented by the most recent quarterly data if you think important). In addition to assessing revenues (both in terms of their absolute level and then why they have changed year over year), work to identify and assess specific key expense lines in order to better understand the firm’s net profits. This is where you play “financial detective” to try to uncover the reasons why this firm’s financial performance is struggling, resulting in losses in each of its last five years (i.e. 2017-2013).

In order to assess the firm’s financial health/financial condition, work to identify and assess the key lines on the firm’s balance sheet. Here make sure to go beyond looking at just current assets compared to current liabilities (a key measure of the firm’s liquidity/ability to “pay its bills”. Look at the firm’s long-term and total debt, but also look for other key lines that impact the firm’s financial health.

Then work to assess the firm’s cash flow statements, which will provide important insights into both financial performance and financial health/financial position. Here look to identify key lines under both “sources” and “uses of cash” (for a struggling firm in particular, “cash is king”). This is where the “financial detective” gets to “follow the money”. As a part of this, look to find how the firm has been financing its losses.

This section ends with generally sound proposals to help with the firm’s turnaround. Consider presenting those as part of your larger strategic plans for the firm in the two section below. Then use this section to identify and assess ways to improve the firm’s financial performance & financial health in the short-run (think “stop the bleeding”).

81% / ME

[Strategies for Sus Comp Adv]

Determine strategies for achieving a sustainable competitive advantage in the marketplace and increasing financial performance.

This section (I’m assuming this is the paragraph at the bottom of page 3/top of page 4) presents a number of potentially sound proposals that would help the firm’s turnaround, although several of these are at a relatively high level. This section needs to precede this with a fuller and deeper assessment on how best to achieve a “sustainable competitive advantage”.

Begin this by first determining the best long-term, overarching business-level strategy for the firm (the firm’s fundamental, long-term, overarching strategic approach to the market). Here work to apply your learnings from chapter 1 on “what makes strategy a winner” (pp. 12-14), and then choose the one best business-level strategy that is best suited to create a “sustainable competitive advantage”, building upon your learnings from chapter 5.

As a part of this, work to identify the key drivers of your chosen business-level strategy, building upon your learnings from chapter 5. If you are choosing one of the differentiation strategies, you will want to consider possible “value drivers” (see fig 5.3) If you are choosing one of the low cost business-level strategies, you will want to consider possible “cost drivers” (see fig. 5.2). As a part of this, understand that while all drivers presented may well be important, almost certainly only a select few will be truly key to driving your proposed strategy.

Then end this section by presenting a succinct description of the specific sustainable competitive advantage that your business-level strategic choice, accompanied by your chosen drivers, are intended to achieve.

Note – as you refocus this section you may find that these proposals change and/or would be better presented as part of the implementation plan below. Be open to new implementation proposals that will stem from this refocused strategic assessment.

82% / ME

[Plan to Implem Proposed Strat]

Create a plan to implement the strategies you selected.

This section touches lightly upon sound points regarding the implementation process, but then needs to build upon this to more strongly assess the specific steps/action needed to implement the proposed strategies presented above. Consider the points raised in the comments above to fuel your strategic thinking on the implementation plan needed for the firm to create a sustainable competitive advantage based upon your chosen business-level strategy (your learnings from chapter 5 regarding your specific business-level strategy, and the key drivers you choose, will help to further fuel your strategic thinking here). Work to strengthen this further by working to integrate these implementation proposals with the near-term “stop the bleeding“ financial fixes discussed at the end of section 1.

82% / ME