You will be turning in your completed Q-SWOT spreadsheet along with a 2-3 pages that summarizes your findings.? Please follow the guidelines posted above. Instructions:? This wee

Part 1 

Here's what you'll need for this assignment:

Case – Timberland – Accounting for Sustainability.pdf Download Case – Timberland – Accounting for Sustainability.pdf

Timberland 2010 Annual Report.pdf  Download Timberland 2010 Annual Report.pdf

BUS 4060 Q-SWOT 2022.xls Download BUS 4060 Q-SWOT 2022.xls

Case Study Paper Guidelines

Deliverables:  You will be turning in your completed Q-SWOT spreadsheet along with a 2-3 pages that summarizes your findings.  Please follow the guidelines posted above.

Instructions:  This week we are ramping things up just a bit.  You'll see that you have a case study AND the annual report for the company.  This is because we are now adding the work of Financial Analysis (which we practiced a few weeks ago) and creation of the pro-forma income statements.  This is the only true way to understand the full impact your strategy will have on the financial standing of the company.

We'll use the Discussion Board this week to practice the work of estimating cost and return for a strategy together, and that exercise will help inform the work of creating the pro-forma statements.

 Part 2

We'll use this week's discussion board to practice generating the information that goes into the Strategy Summary Tab in the Q-SWOT spreadsheet.

Once you have identified the strategy you'd like to use for Timberland, please post the summary of that strategy in the discussion board.

Also post the answers to the following 4 questions:

How much are you willing to spend on this idea? (and show us how you got that number).

What is the source of that funding?  (Are you using Cash, Debt, Equity (stock sale), or are you taking it out of operations (the Income Statement))

What is the expected return on this strategy?  (This could be cost savings, increased revenue, added market share, or other benefits to the company)

What is the timing of this strategy?  (when do you expect to see the expense happen, and when will the return (ROI) be taking place).

Instructions

Q – SWOT
The study of Business Analysis and Decision Making requires one to be thoughtful and organized. This spreadsheet is meant to be
used as a tool to assist you with organizing the information presented to you in various cases. The process of listing, ranking and
classifying the internal and external factors for any particular business is the first step to understanding the current effectiveness of
the business strategy, and a guide for the decisions that need to be made in the future.
Begin by listing the internal factors on the Internal tab (below) and the external factors on the external tab. Follow the
instructions on each of the tabs. Do not add or delete columns or rows – use those that are provided. Don't modify the formulas that
exist in the spreadsheet.
Next, move to the SWOT tab and click the button that says "sort".
Next, move to the "I&E Matrix".
If the * appears in cells I, II or IV = Grow and Build. Internal is strong, and external is primarily one of opportunity.
If the * appears in cells VII, V or III = Hold and Maintain. Moderate to average both internally and externally.
If the * appears in cells VIII, IX or VI = Harvest and Divest. Company is predominantly weak, and external environment is mostly threats.
Keep in mind that these are only suggestions, and are based on your own list of factors, your weights and your ratings.
Next, move on to the Strategies tab. Create potential strategies by making combinations from the SWOT page. Use these combinations:
Strength and opportunity
Strength and threat
weakness and opportunity
weakness and threat
Next, on the Strategy – Summary page, briefly describe the cost and ROI of your strategy, including when the cost and return will be realized.
Next, show your work regarding financial analysis – show both the caclulations and the explanation of what the analysis is telling you.
Lastly, construct both your pro-forma income statement and balance sheets on the tabs shown. Add tabs if necessary.

Internal

Internal Factor Evaluation
Internal Key Factors Rate Weight Total
1 – 4 .01 – .99 FACTOR RATING SCALE
Turns over inventory very quickly 3 0.10 0.30
Rapidly increased debt-to-equity ratio too high now 2 0.10 0.20 1. Major Weakness 3. Minor Strength
High net profit margin allows for lots of cash to continue growing 3 0.10 0.30 2. Minor Weakness 4. Major Strength
Diversified array of products for sale 3 0.10 0.30
Strong brand recognition and brand loyalty 4 0.28 1.12 Factor Weighting Scale – 0.01 = Low importance 0.99 = High importance
Limited Distribution Network currently 2.5 0.07 0.18 All Factor Weights must sum to 1.0.
High Selling Prices limit customers to high end market 2 0.10 0.20 INTERNAL FACTOR CODE:
Effective and proven innovation process 3 0.05 0.15 FN = FINANCE
Growth portion of iPhone product life cycle is over 2 0.05 0.10 MG = MANAGEMENT
Ability to collect funds from customers quickly 3 0.05 0.15 MK = MARKETING
0.00 IS = INFORMATION SYSTEMS
0.00 PR = PRODUCTION OF A PRODUCT
0.00 RD = RESEARCH AND DEVELOPMENT
0.00 SV = THE PROVIDING OF A SERVICE
0.00
0.00
0.00
0.00
0.00
Total Weight must equal 1.0 = 1.00 3.00 Internal Score Analysis
1.0 – 2.0 = Weak internal structure and execution.
2.0 – 3.0 = Moderate to Average internal strength is seen in the in the analysis of the busienss.
3.0 – 4.0 = Internal factors are primarily very strong and can be used to advantage over competitors.

External

External Factor Evaluation
External Key Factors Rate Weight Total
1 – 4 .01 – .99
Aggressive competition in all areas of business 1 0.25 0.25 FACTOR RATING SCALE
Rapidly changing technology market 2.5 0.10 0.25
Dependent upon global and regional economic conditions 2 0.10 0.20 1. Major Threat 3. Minor Opportunity
Plenty of room for continued market share growth currently at 20% of global market 4 0.25 1.00 2. Minor Threat 4. Major Opportunity
The acquisition of Beats offers growth opportunities with iWatch & iTunes radio 3 0.15 0.45
Creation of new product lines 3 0.05 0.15 Factor Weight Scale – 0.01 = low importance 0.99 = high importance
Distribution network expansion opportunities 3 0.10 0.30
0.00 EXTERNAL FACTOR CODE:
0.00 CP = COMPETITIVE
0.00 CL = CULTURAL
0.00 DM = DEMOGRAPHIC
0.00 EC = ECONOMIC
0.00 GE = GEOGRAPHIC
0.00 GV = GOVERNMENT
0.00 IN = INDUSTRY
0.00 LG = LEGAL
0.00 PL = POLITICAL
0.00 SC = SOCIAL
0.00 TC = TECHNOLOGICAL
Total Weight must equal 1.0 = 1.00 2.60 External Score Analysis
1.0 – 2.0 = External environment is hostile and threatening. Will require definsive strategies for success.
2.0 – 3.0 = External environment is average and may contain pockets of opportunity.
3.0 – 4.0 = External environment is primarily loaded with opportunity.

SWOT

S W O T
STRENGTHS (S) Rating Weight WEAKNESSES (W) Rating Weight
1 Strong brand recognition and brand loyalty 4 0.28 1 Growth portion of iPhone product life cycle is over 2 0.05
2 Diversified array of products for sale 3 0.10 2 High Selling Prices limit customers to high end market 2 0.10
3 High net profit margin allows for lots of cash to continue growing 3 0.10 3 Rapidly increased debt-to-equity ratio too high now 2 0.10
4 Turns over inventory very quickly 3 0.10 4 0 9 9.00
5 Effective and proven innovation process 3 0.05 5 0 9 9.00
6 0 0 0.00 6 0 9 9.00
7 0 0 0.00 7 0 9 9.00
8 0 0 0.00 8 0 9 9.00
9 0 0 0.00 9 0 9 9.00
10 0 0 0.00 10 0 9 9.00
11 0 0 0.00 11 0 9 9.00
12 0 0 0.00 12 0 9 9.00
13 Ability to collect funds from customers quickly 3 0.05 13 0 9 9.00
14 0 0 0.00 14 0 9 9.00
15 0 0 0.00 15 0 9 9.00
16 0 0 0.00 16 0 9 9.00
17 0 0 0.00 17 0 9 9.00
18 0 0 0.00 18 0 9 9.00
19 0 0 0.00 19 0 9 9.00
OPPORTUNITIES (O) Rating Weight THREATS (T) Rating Weight
1 Plenty of room for continued market share growth currently at 20% of global market 4 0.25 1 Aggressive competition in all areas of business 1 0.25
2 The acquisition of Beats offers growth opportunities with iWatch & iTunes radio 3 0.15 2 Dependent upon global and regional economic conditions 2 0.10
3 Distribution network expansion opportunities 3 0.10 3 0 9 9.00
4 Creation of new product lines 3 0.05 4 0 9 9.00
5 0 0 0.00 5 0 9 9.00
6 0 0 0.00 6 0 9 9.00
7 0 0 0.00 7 0 9 9.00
8 0 0 0.00 8 0 9 9.00
9 0 0 0.00 9 0 9 9.00
10 0 0 0.00 10 0 9 9.00
11 0 0 0.00 11 0 9 9.00
12 0 0 0.00 12 0 9 9.00
13 0 0 0.00 13 0 9 9.00
14 0 0 0.00 14 0 9 9.00
15 0 0 0.00 15 0 9 9.00
16 0 0 0.00 16 0 9 9.00
17 0 0 0.00 17 0 9 9.00
18 0 0 0.00 18 0 9 9.00
19 0 0 0.00 19 0 9 9.00
SORT

I&E Matrix

THE INTERNAL AND EXTERNAL FACTOR MATRIX (I/E)
IFEM TOTAL WEIGHTED SCORES
INTERNAL FACTOR SPACE
HIGH LOW
EFEM 3 2 1
TOTAL
WEIGHTED HIGH
SCORES
EXTERNAL
FACTOR
FAVORABLENESS
EFEM Total: 2.60
LOW
IFEM Total: 3.00
STRATEGY AREA:
2.80
*NOTE: DIVESTITURE, LIQUIDATION, RETRENCHMENT,
AND RESTRUCTURING SHOULD BE ONGOING STRATEGIES,
REGARDLESS OF THE ORGANIZATION'S STRATEGIC POSTURE.
POSSIBLE STRATEGIES: GROW & HOLD & HARVEST &
BUILD MAINTAIN DIVEST
BACKWARD INTEGRATION……………. X
CONCENTRIC DIVERSIFICATION……… X X X(?)
CONGLOMERATE DIVERSIFICATION……. X X(?)
DIVESTITURE…………………….. X* X* X*
FORWARD INTEGRATION…………… X
HORIZONTAL DIVESIFICATION……….. X X(?)
HORIZONTAL INTEGRATION……….. X X(?)
LIQUIDATION……………….. X* X* X*
MARKET DEVELOPMENT……………. X X(?)
MARKET PENETRATION……………. X X
PRODUCT DEVELOPMENT………………… X X(?)
RESTRUCTURING………………… X* X* X*
RETRENCHMEMT…………………. X* X* X*
(?) DEPENDS ON THE FINANCIAL CONDITION OF THE ORGANIZATION

I&E Matrix
IFEM
EFEM
I&E Chart

STRATEGIES

THE SWOT MATRIX STRATEGIES
STRENGTH/OPPORTUNITY (SO) STRATEGIES
Add additional distribution networks to expand global market share.
WEAKNESS/OPPORTUNITY (WO) STRATEGIES
Develop a moderately priced new product to attract a wider customer base and help grow market share.
STRENGTH/THREAT (ST) STRATEGIES
Continually develop new products and innovate current products to stay on top of competition.
WEAKNESS/THREAT (WT) STRATEGIES
Use high net income to pay down debt and decrease debt-to-equity ratio to a healthier level under 1.0. This will help protect the
company during times of global and regional economic recessions.
I
II
III
IV
V
VI
VII
VIII
IX

Strategy – Summary

Apple currently only holds 20% of the global market share for their industry. Although they are a premium priced brand
they still have a significant portion of the global market that they can grow into. The strategy is to add Marketing Distribution Channels
in order to increase market share and as a result increase revenue and net income.
After looking at Customer Acquisition Costs (CAC's) for companies in the eCommerce and retail sectors I found that a reasonable
number for new customers is $82 online and $31 in brick and mortar stores.
The simplest way for Apple to grow market share is to increase marketing through Social Media in order to acquire new customers
and generate sales from existing customers.
We will increase the Selling General & Administrative expense by about 7% which gives an additional $1 Billion to spend on customer acquistion and re-engagement.
The plan is to spend $500 Million on acquiring new customers and $500 Million on re-engaging existing customers.
We will assume that a portion of new customers will be acquired from online and a portion will be acquired in store so we will average the two for a CAC.
Additionally, we will assume that customer re-engagement cost is 50% of the CAC for new customers.
This will allow us to acquire about 8.85 million new customers with a CAC of $56.50 each
This will allow us to re-engage about 17.7 million existing customers with a cost of $28.25 each
Although there isn't a lot of information available for the average revenue per customer Apple typically sells expensive high end products so we will assume
average revenue per customer is $150
We will expect an additional 26.55 million customer transactions from this strategy with an average revenue per customer of $150 generating $3,982,500,000 of revenue the first year
We will assume that 1 in 5 of these customers will make a purchase in year 2 and 1 in 10 customers will make a purchase in year 3 for this strategy.
As a result this will generate an additional $796.5 Million of revenue during year 2 and $398.25 Million of revenue in year 3.

Financial Analysis

Place selected ratios and trends here – show both the calculation and what the ratio or trend is telling about performance.
Apple, Inc. Financial Ratios Analysis
Financial Ratio: 2015 2014 2013
Gross Profit Margin 40.05% 38.58% 37.62%
Operating Profit Margin 30.48% 28.72% 28.67%
Net Profit Margin 22.85% 21.61% 21.67%
Return on Assets 18.38% 17.04% 17.89%
Return on Stockholder's Equity 44.73% 35.42% 29.98%
Debt-to-Equity Ratio 1.43 1.08 0.68
Inventory Turnover 59.63 Turns 53.18 Turns 60.43 Turns
Average Collection Period 3.67 Days 4.22 Days 3.77 Days
Days of Inventory 6.12 Days 6.86 Days 6.04 Days

Pro Forma Income Statement

Apple, Inc.
Pro Forma Income Statement
Fiscal Years: 2016 – 2018
(All Numbers in Thousands)
2016 2017 2018
Revenue $ 235,000,000.00 $ 246,750,000.00 $ 259,087,500.00
Revenue from Strategy $ 3,982,500.00 $ 796,500.00 $ 398,250.00
Total Revenue $ 238,982,500.00 $ 247,546,500.00 $ 259,485,750.00
COGS (60%/Rev.) $ 141,000,000.00 $ 148,527,900.00 $ 155,691,450.00
COGS Strategy (60% Rev.) $ 2,389,500.00 $ 477,900.00 $ 238,950.00
Gross Profit $ 94,000,000.00 $ 99,018,600.00 $ 103,794,300.00
Gross Profit Strategy $ 1,593,000.00 $ 318,600.00 $ 159,300.00
Research & Development (3.5%/Rev.) $ 8,225,000.00 $ 8,636,250.00 $ 9,068,062.50
Selling General & Administrative $ 14,500,000.00 $ 15,225,000.00 $ 15,986,250.00
SG&A from Strategy $ 1,000,000.00 $ – 0 $ – 0
Total Operating Expenses $ 23,725,000.00 $ 23,861,250.00 $ 25,054,312.50
Operating Income $ 71,275,000.00 $ 75,157,350.00 $ 78,739,987.50
Operating Income Strategy $ 593,000.00 $ 318,600.00 $ 159,300.00
Other Income (0.55%/Rev.) $ 1,314,403.75 $ 1,361,505.75 $ 1,427,171.63
Earnings Before Taxes $ 72,589,403.75 $ 76,518,855.75 $ 80,167,159.13
Earnings Before Taxes Strategy $ 593,000.00 $ 318,600.00 $ 159,300.00
Income Tax Expense (26%) $ 18,873,244.98 $ 19,894,902.50 $ 20,843,461.37
Income Tax Expense Strategy (26%) $ 154,180.00 $ 82,836.00 $ 41,418.00
Net Income $ 53,716,158.78 $ 56,623,953.25 $ 59,323,697.75
Net Income from Strategy $ 438,820.00 $ 235,764.00 $ 117,882.00

Pro Forma Balance Sheet

Apple, Inc.
Pro Forma Balance Sheet
Fiscal Years: 2016 – 2018
(All Numbers in Thousands)
Assets 2016 2017 2018
Current Assets
Cash $ 74,836,159.00 $ 131,460,112.26 $ 190,783,810.01
Cash from Strategy $ 438,820.00 $ 235,764.00 $ 117,882.00
Short Term Investments $ 20,481,000.00 $ 21,505,050.00 $ 22,580,302.50
Net Receivables $ 35,889,000.00 $ 37,683,450.00 $ 39,567,622.50
Inventory $ 2,349,000.00 $ 2,466,450.00 $ 2,589,772.50
Other Current Assets $ 9,539,000.00 $ 10,015,950.00 $ 10,516,747.50
Total Current Assets $ 143,532,979.00 $ 203,366,776.26 $ 266,156,137.01
Long Term Investments $ 164,065,000.00 $ 172,268,250.00 $ 180,881,662.50
Property Plant and Equipment $ 22,471,000.00 $ 23,594,550.00 $ 24,774,277.50
Goodwill $ 5,116,000.00 $ 5,371,800.00 $ 5,640,390.00
Intangible Assets $ 3,893,000.00 $ 4,087,650.00 $ 4,292,032.50
Other Assets $ 5,556,000.00 $ 5,833,800.00 $ 6,125,490.00
Total Assets $ 344,633,979.00 $ 414,522,826.26 $ 487,869,989.51
Liabilities
Current Liabilities
Accounts Payable $ 60,671,000.00 $ 63,704,550.00 $ 66,889,777.50
Short/Current Long Term Debt $ 10,999,000.00 $ 11,548,950.00 $ 12,126,397.50
Other Current Liabilities $ 8,940,000.00 $ 9,387,000.00 $ 9,856,350.00
Total Current Liabilities $ 80,610,000.00 $ 84,640,500.00 $ 88,872,525.00
Long Term Debt $ 53,463,000.00 $ 56,136,150.00 $ 58,942,957.50
Other Liabilities $ 33,427,000.00 $ 35,098,350.00 $ 36,853,267.50
Deferred Long Term Liability Charges $ 3,624,000.00 $ 3,805,200.00 $ 3,995,460.00
Total Liabilities $ 171,124,000.00 $ 179,680,200.00 $ 188,664,210.00
Stockholders' Equity
Common Stock $ 27,416,000.00 $ 28,786,800.00 $ 30,226,140.00
Retained Earnings $ 146,438,979.00 $ 206,418,076.26 $ 269,360,002.01
Other Stockholder Equity $ (345,000.00) $ (362,250.00) $ (380,362.50)
Total Stockholder Equity $ 173,509,979.00 $ 234,842,626.26 $ 299,205,779.51
Total Liabilities & Stockholders' Equity $ 344,633,979.00 $ 414,522,826.26 $ 487,869,989.51

,

Internal

Internal Factor Evaluation
Internal Key Factors Rate Weight Total
1 – 4 .01 – .99 FACTOR RATING SCALE
0.00
0.00 1. Major Weakness 3. Minor Strength
0.00 2. Minor Weakness 4. Major Strength
0.00
0.00 Factor Weighting Scale – 0.01 = Low importance 0.99 = High importance
0.00 All Factor Weights must sum to 1.0.
0.00
0.00 INTERNAL FACTOR CODE:
0.00 FN = FINANCE
0.00 MG = MANAGEMENT
0.00 MK = MARKETING
0.00 IS = INFORMATION SYSTEMS
0.00 PR = PRODUCTION OF A PRODUCT
0.00 RD = RESEARCH AND DEVELOPMENT
0.00 SV = THE PROVIDING OF A SERVICE
0.00
0.00
0.00
0.00
Total Weight must equal 1.0 = 0.00 0.00 Internal Score Analysis
1.0 – 2.0 = Weak internal structure and execution.
2.0 – 3.0 = Moderate to Average internal strength is seen in the in the analysis of the busienss.
3.0 – 4.0 = Internal factors are primarily very strong and c

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