Mercury Shoes Final Exam Paper
Mer To: Board of Directors, Mercury International, Ltd. From: Robyn Miller of Mosaic International, Inc. CC: Jerome Thorson Date: April 25, 2013 Re: Performance Review of Mosaic International, Inc.
The following memorandum will give a brief performance review of the last four years Mosaic International, Inc. (Mosaic) has spent consulting and advising Mercury International, Ltd. (Mercury). Mosaic’s contract with Mercury began in 2013 and terminates at the end of 2016. The standard used for comparison is the last set of data available in Q4 2012. Mosaic was hired to meet a set of goals set by Mercury’s Board of Directors (BOD).
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The Board’s goals for Mercury were as follows: increase stock performance, revenue, and EBITDA each by 10 - 15%; double top line revenue; achieve the number three position globally. Some of challenges met while working towards the goals were avoidable while others were out of the control of either company. Mosaic strived to meet and exceed the BOD’s expectations, but was unfortunately unable to achieve any of the given objectives. In addition to the objectives set for the company, the BOD was expected to be monitoring “worldwide market share, operating margins, inventory turns, factory utilization, fulfillment rate and ROA as indicators of the team 's sound management practices” (Mercury Simulation Management Reports, 2013).
OBJECTIVES, OUTCOMES & REASONABLENESS
Objective #1:
“10% - 15% annual growth in top line revenue, EBITDA and stock price over the next four years” (Mercury Simulation Management Reports, 2013).
Outcome:
Mercury’s financial performance did not meet the BOD’s objectives. Mosaic began making business recommendations in 2013; given the revenue in Q4 2012, and with a minimum target of 10% growth, final global numbers are 14% short of the goal. See Appendix D for Mercury’s revenue trend for the previous five years and Table 1 for
The following memorandum will give a brief performance review of the last four years Mosaic International, Inc. (Mosaic) has spent consulting and advising Mercury International, Ltd. (Mercury). Mosaic’s contract with Mercury began in 2013 and terminates at the end of 2016. The standard used for comparison is the last set of data available in Q4 2012. Mosaic was hired to meet a set of goals set by Mercury’s Board of Directors (BOD).
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The Board’s goals for Mercury were as follows: increase stock performance, revenue, and EBITDA each by 10 - 15%; double top line revenue; achieve the number three position globally. Some of challenges met while working towards the goals were avoidable while others were out of the control of either company. Mosaic strived to meet and exceed the BOD’s expectations, but was unfortunately unable to achieve any of the given objectives. In addition to the objectives set for the company, the BOD was expected to be monitoring “worldwide market share, operating margins, inventory turns, factory utilization, fulfillment rate and ROA as indicators of the team 's sound management practices” (Mercury Simulation Management Reports, 2013).
OBJECTIVES, OUTCOMES & REASONABLENESS
Objective #1:
“10% - 15% annual growth in top line revenue, EBITDA and stock price over the next four years” (Mercury Simulation Management Reports, 2013).
Outcome:
Mercury’s financial performance did not meet the BOD’s objectives. Mosaic began making business recommendations in 2013; given the revenue in Q4 2012, and with a minimum target of 10% growth, final global numbers are 14% short of the goal. See Appendix D for Mercury’s revenue trend for the previous five years and Table 1 for
References: Consumer Market Research, Inc. (CMRI), 2009. The "Tween," Adolescent, and Adult Athletic Footware Market. Consumer Market Research, Inc./Regis University. Investopedia, 2013. Earnings Before Interest, Taxes, Depreciation and Amortization – EBITDA. © Investopedia 2013. Retrieved from http://www.investopedia.com/terms/e/ebitda.asp Mercury Simulation Management Reports http://mercury2010.rlslearn.com/Sites/533/default.aspx Otey, A., 2009 Reilly, T., 2006. Don’t Fool with Pricing. Industrial Distribution, January 2006, p. 25. Schwientek, R., Schmidt, A., 2008. Operations Excellence: Smart Solutions for Business Success. © Roland Berger Strategy Consultants. Sodhi, M Tay, M., 2011. Nike Touts Big Agenda Despite Tough Headwinds. Footwear News, Vol. 67, Issue 24. July 4, 2011. Retrieved from Business Source Premier. Wallace, T. (2006), Forecasting and Sales & Operations Planning: Synergy in Action. The Journal of Business Forecasting, Spring 2006. P. 16 – 36.