For my analysis I have chosen a small tortilla factory that is located here in Miami and where I work for a few months. In the time I was there I learned about the production process and the resources that are used in the manufacture of this type of food. The company is called Easy Foods Inc (EFI). They invested in a state-of-the-art facility in South Florida and filled it with new and better production equipment (Easy Foods Inc, 2015).
To develop a cost analysis we need to understand the influence of factors such as technology, space, availability of raw materials, human resources and time. Costs that are directly related to the product and increase according to production volumes can be classified as direct costs. In EFI, variable costs constituted an important percentage of the cost structure. In this group we must obviously include the raw material. To make the tortilla, corn flour, wheat flour, water, flavorings, other additional foods and chemical preservatives were needed. In this case, the rules varied in relation to the size of each type of tortilla. Salary expense is a cost that is also variable because the production cycles are measured by volumes / hours. Each employee in the production line added a cost to the product as it went through the different processes, from the preparation of the mixture to the packaging department. Other variable costs that can be mentioned are the depreciation of the machinery. In this case, when equipment is depreciated by units produced, the cost of depreciation can be directly identified with a unit of product.
On the other hand, fixed costs do not increase or decrease necessarily with the volume of production. For example: the rent of the premises and the warehouses, the salary of the administrative personnel, the costs of financing, the insurances and other administrative expenses. These elements of expenses are more difficult to standardize because they are not determined by the total tons produced (Hasan, Halid, Ahmad, Hasdiana, & Ilato, 2018)
8
Internal and External Environmental Analysis
Internal and External Environmental Analysis
Hoosier Media Inc. has noticed a decline in their newspaper circulation and subscriptions, which resulted in a significant drop in revenues over the last five years. While online ad revenues have increased, they only account for 5% of the company’s revenue. The Fletcher Firm has been hired to assess the current strategic operations to assist Hoosier Media Inc. increase their profits. The following analysis will discuss internal and external factors that will help improve Hoosier Media’s business operations.
Economic, Legal and Regulatory Forces and Trends
It is necessary to consider economic forces when determining reasons for declining revenue and strategizing effective business practices. Consumer behavior is one of the many economic forces that affect businesses today. Consumer spending sets the trends that will either help or hinder Hoosier Media Inc. wit ...
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For my analysis I have chosen a small tortilla factory that is loc.docx
1. For my analysis I have chosen a small tortilla factory that is
located here in Miami and where I work for a few months. In
the time I was there I learned about the production process and
the resources that are used in the manufacture of this type of
food. The company is called Easy Foods Inc (EFI). They
invested in a state-of-the-art facility in South Florida and filled
it with new and better production equipment (Easy Foods Inc,
2015).
To develop a cost analysis we need to understand the influence
of factors such as technology, space, availability of raw
materials, human resources and time. Costs that are directly
related to the product and increase according to production
volumes can be classified as direct costs. In EFI, variable costs
constituted an important percentage of the cost structure. In this
group we must obviously include the raw material. To make the
tortilla, corn flour, wheat flour, water, flavorings, other
additional foods and chemical preservatives were needed. In
this case, the rules varied in relation to the size of each type of
tortilla. Salary expense is a cost that is also variable because the
production cycles are measured by volumes / hours. Each
employee in the production line added a cost to the product as it
went through the different processes, from the preparation of
the mixture to the packaging department. Other variable costs
that can be mentioned are the depreciation of the machinery. In
this case, when equipment is depreciated by units produced, the
cost of depreciation can be directly identified with a unit of
product.
On the other hand, fixed costs do not increase or decrease
necessarily with the volume of production. For example: the
rent of the premises and the warehouses, the salary of the
administrative personnel, the costs of financing, the insurances
and other administrative expenses. These elements of expenses
are more difficult to standardize because they are not
determined by the total tons produced (Hasan, Halid, Ahmad,
2. Hasdiana, & Ilato, 2018)
8
Internal and External Environmental Analysis
Internal and External Environmental Analysis
Hoosier Media Inc. has noticed a decline in their newspaper
circulation and subscriptions, which resulted in a significant
drop in revenues over the last five years. While online ad
revenues have increased, they only account for 5% of the
company’s revenue. The Fletcher Firm has been hired to assess
the current strategic operations to assist Hoosier Media Inc.
increase their profits. The following analysis will discuss
internal and external factors that will help improve Hoosier
Media’s business operations.
Economic, Legal and Regulatory Forces and Trends
It is necessary to consider economic forces when
determining reasons for declining revenue and strategizing
effective business practices. Consumer behavior is one of the
many economic forces that affect businesses today. Consumer
spending sets the trends that will either help or hinder Hoosier
Media Inc. with meeting their business goals and objectives.
Businesses go through cycles of expansion, recession and
recovery. Monetary and fiscal policies can affect the timing and
length of these cycles (Basu, 2017). Fiscal policies can affect
spending policies, leading consumers to a reduction in taxes and
an increase in disposable spending.
Regulatory forces monitor businesses to ensure they are
following the necessary operational rules and standards.
Regulatory agencies such as the Federal Trade Commission
(FTC) have the authority to monitor marketing actions and
advertising strategies of businesses and enforce fines, if
3. necessary. According to Pride and Ferrell, marketing consists of
external forces that directly or indirectly affect an
organization’s acquisition of inputs and generation of outputs.
The marketing environment includes competitive, economic,
political, legal and regulatory, technological, and sociocultural
forces (Pride, 2016).
Legal forces hold businesses accountable for maintaining
honest business practices. Local, state, and federal laws, as well
as regulatory agencies and special-interest groups, can have a
major impact on the strategies of small, large, for-profit, and
non-profit organizations. Many companies have altered or
abandoned strategies in the past because of political or
government actions (David, 2017). It will be most necessary for
Hoosier Media Inc. to adhere to all legal and regulatory
requirements in order to remain compliant.
Adapting to Changes in Business
Businesses operate on business-cycles; therefore, they are
fluid and forever changing. For any business to survive in its
industry, it must remain open and flexible and adapt to strategic
plans to remain successful.
Although they have seen a decline in subscriptions and
circulations, Hoosier Media Inc. is in a stable environment with
their printed newspapers, as the industry typically won’t see any
new competitors. They have seen an increase in their online ad
revenues, so Hoosier Media Inc. may need to consider ways to
leverage relationships with their advertising clients to assist
with increasing their online presence.
Primary Internal Organizational Considerations
The success of a business is dependent upon how the
strategic plan is developed and executed. Internal organizational
considerations include the culture of the company, the financial
resources of the company, and current trends.
Company Culture. In order for a strategic plan to be successful,
it must align with the culture and structure of the company.
Leaders must have the buy-in from the entire workforce when it
comes to executing strategic plans. If the staff that implements
4. the plan isn’t excited or believes in the direction the company is
setting course for, work quality drops as people grow apathetic
to the goals (Leonard, 2018).
Financial Resources. In order to execute a strategic plan, the
business must be able to support the cost of the expenses related
to research, development and marketing campaigns. Companies
must set growth index goals when growth rates have lagged the
industry norms or when they have high operational leverage
(Kono, 2010).
Current Trends. We are currently in the age of the millennials.
When considering expanding their reach, Hoosier Media Inc.
must regard topics that are popular and trending. Current
trending topics include cooking, meal preps and healthy
lifestyle changes. These topics should be included in the digital
circulation, as millennials are more prone to search their phones
for digital newsfeeds. Change is constant, and the rate of
change is accelerating. What worked yesterday in business
might be a disaster tomorrow. [It is important that businesses]
think strategically. Anticipate change and position proactively
with products and services to meet emerging needs (Huxtable,
2018).
Primary External Organizational Considerations
Customer Satisfaction. To determine the reasons their revenue
is decreasing; Hoosier Media Inc. must consider the external
factors causing their profits to drop. One main external
consideration are the customers – more specifically the current
and past print subscribers. Speaking with and gathering the
feedback of the customers will allow us the opportunity to hear
their opinions and suggestions and identify areas of
improvement to begin working towards increasing revenue,
surpassing the highest profit projection.
Technology. Technology plays a part as an external factor.
Since news is now accessible to everyone via internet searches
and mobile apps, Hoosier Media Inc. will need to widen their
reach by enhancing the age of technology. I would also suggest
increasing their online presence by collaborating with their
5. advertising clients to create marketing strategies which will
drive an increase in traffic to their site.
Major Company Issues
The company must consider ways to keep up with trends to
remain relevant and this will require changing business
practices which are outdated. No one likes change, especially
employees who have been a part of the team for several years. It
is necessary to keep these individuals engaged and onboard with
the vision and direction of the firm. Employees must feel
needed, respected and valued during the process of change.
According to Halvorson, fostering employee loyalty is essential
for the long-term success of any business. Not only will it
decrease turnover costs, but it can also boost productivity,
increase efficiency, and provide a much more stable work
environment for everyone (Halvorson, 2013).
Possible Opportunities
While competition is a concern for the online publication, I do
not believe that concern is as demanding for the print side of
the firm. According to a recent Nielsen Scarborough study, print
remains the most popular newspaper format, with 81 percent of
readers reading print format, and half of the respondents – 51
percent – reading print only (Fletcher, 2016)
In strategic planning, Hoosier Media Inc. will need to look at
broader scope to adjust priorities, resources and goals for the
future. This will cause for a meeting of the minds with internal
and external stakeholders such as key level employees,
investors and partners, so that everyone can have a clear
understanding of what the next steps should be.
Conclusion
The interest of acquiring information from a printer
circulation has decreased due to digital publishing. In order for
Hoosier Media Inc. to remain relevant and successful, they must
be flexible enough to stretch the limits of technology, since
digital circulation is gaining momentum when compared to
print. I would suggest creating an interactive news subscription
6. app that provides real-time reporting and offers the ability for
subscribers to log in and chat with each other about topics
which matter to them.
We should measure the level of satisfaction from current
and past print subscription holders. This will allow us to see
what improvements can be made to sustain and increase growth
in the print subscription sector. I also recommend garnering the
input of all stakeholders, as it will take the dedication and
determination of the entire team for Hoosier Media Inc. to be
successful and remain relevant in the industry, thus setting the
path for future strategic planning sessions.
References
Basu, C. (2017, September 26). How Monetary and Fiscal
Policy Affect Businesses. Retrieved from BizFluent:
https://bizfluent.com/info-7967081-monetary-fiscal-policy-
affect-businesses.html
David, F. R. (2017). Strategic Management: A Competitive
Advantage Approach, 16th ed. Florence, SC: Pearson Education.
Fletcher, P. (2016, December 26). Good News for Newspaper;
69% of US Population Still Reading. Retrieved from Forbes:
https://www.forbes.com/sites/paulfletcher/2016/12/26/good-
news-for-newspapers-69-of-u-s-population-still-
reading/#6d3d4bfa723c
Halvorson, C. (2013, September 5). 10 Steps to Increasing
Employee Loyalty. Retrieved from When I Work:
https://wheniwork.com/blog/10-steps-to-increasing-employee-
loyalty/
Huxtable, E. (2018, August 24). Capitalize on Emerging Trends:
Strategic Planning for 2019. Retrieved from Business to
Community:
https://www.business2community.com/strategy/capitalize-on-
emerging-trends-strategic-planning-for-2019-02110220
Kono, P. B. (2010). The Role of Finance in the Strategic-
Planning and Decision-Making Process. Retrieved from
Graziadio Business Review:
7. https://gbr.pepperdine.edu/2010/08/the-role-of-finance-in-the-
strategic-planning-and-decision-making-process/
Leonard, K. (2018, November 28). What Are the Primary
Internal Organizational Considerations for the Development of a
Strategic Plan? Retrieved from Chron:
https://smallbusiness.chron.com/primary-internal-organization-
considerations-development-strategic-plan-2779.html
Pride, W. F. (2016). Marketing: Concepts and Strategies 7th ed.
Hougton Mifflin Co.
Mac inc fixed, and variable costs Cost Accounting and
Management Decisions of Apple Inc. Apple Inc is a US
manufacturing imaginative association set up by Steve Jobs and
Steve Wozniak in the year 1976. Apple Inc is seen as one of the
vast associations on the planet. Variable and fixed costs The
modification in apple business exercises as for the iPhone X
will adjust the organization's variable and fixed costs. Apple
variable costs consolidate costs that move with the proportion
of thing conveyed. In this condition, Apple's variable costs
combine rough material for iPhone X, work costs, etc. They are
considering the iPhone X has foreseen enthusiasm to be the
greatest Fixed And Variable Costs Of Apple Incorporated.
Prosperity organizations overseers are fundamentally interested
in how changes in volume impact costs. Cost lead suggests a
cost's reactions to activity level. A price may rise, fall, or
remain steady as development levels change. Apple Inc Apple
Inc. (2017).
A variable expense is a corporate cost that adjustments in the
extent to creation yield. Variable costs increment or diminishing
relying upon an organization's creation volume; they ascend as
generation increments and fall as generation reduces. Instances
of variable expenses incorporate the expenses of crude materials
and bundling. (Lerch,2016)
Fixed expenses are costs that are autonomous of yield and the
organization can't change these costs, regardless of what the
8. interest for the item (Variable expense and fixed costs, 2018,
Economics Fundamental Finance). Apple inc fixed and variable
costs The overall gross revenue is the benefit Apple wins on the
majority of the gadgets it sells when you incorporate variable
costs, similar to the expense of acquiring segments and
assembling an item, yet not other Aug 04, 2017 Apple
(NASDAQ: AAPL) gets heaps of merited acknowledgment for
its extraordinary items and income. Insufficient consideration is
given to its brilliant cost the executives. Of all tech
organizations, Apple has variable and fixed expenses. A portion
of the variable expenses is innovative work. Since there is little
correspondence between the creative work dept.what's more, the
fund dept. There is a great deal that can change the sum Apple
spends on R& D every year. Apples essential variable expenses
in making iPods are expenses of the segment parts (chips,
housings, electronic parts), and direct work. The cost of
working the plant and hardware are fixed because paying little
respect to generation levels these item expenses are brought
about.(Buchheit,2017).