Business Expansion Plan: Depth Analysis Essay

Question:

Discuss about the Business Expansion Plan for Depth Analysis.

Answer:

Introduction

This paper describes the various aspects of the Fischer Sports Gmbh. The objective is to evaluate the depth analysis of the Fischer Sports GmbH in the perspective of the business expansion plan. It enables to determine the description of the venture, literature review, assessment of associated theories, strategy formation, operation overview, financial overview, approaches to sustainability & ethics and timeline. Indeed, Fischer Sports GmbH was founded in 1924. Its headquarter located in Austria. It manufactured several products such as Alpine Skis, Nordic Poles, Jumping Skis, Accessories and Hockey.

Description of the venture: Fischer Sports Gmbh manufactures the Nordic skiing and Alpine equipment. It delivers the poles, skis, boots, binding, jumping skis, apparel, and hockey products that involving men and women gloves, socks, race and leisurewear. It is not sold regular basis. So, the most of stock would be outdated and wasted. It is a big risk in the Fischer Sports Gmbh. They sold their products in Austrian market that is another venture because it has limited market for sales. Austria is a well developed country where people take high education. So, sports product has low sales that is venture of it. (Fischer & Naro 2012).

Literature review: Literature review of the Fishcer Sports is to “the global expansion of the associated and Internet technologies have developed an environment of gambling that is tough to evaluate and regulate Sports equipment. It includes a systematic review of the literature. The objective of the literature review is to present the theoretical background related to the Fischer Sports. It will start reviewing literature related issue in the Fischer Sports. It includes associated theories in the perspective of the Fischer Sports and appraisal the strategy formation, operation, financial overview and timeline of the Fischer Sports. (Jones 2014).

Assessment of associated theories: A theory of business is a framework of an approach, mental model and philosophy. It affected the objective or goals, the choice of policies, the choice of structure, the formation, development of company culture and the getting work done. The theory of Fischer Sports business is purposeful. Then, leader can articulate it. It is not consciously stated. Then, Fischer Sports is able to surmise the theory of business. (Kaufam 2016).

Strategy formation: It is the process of developing the strategy. Fischer Sports includes six steps strategy formation to evaluate the scenario. First, organization objective that is the key part of Fischer Sports strategy formation in the long-term perspective. Second, organizational environment that evaluate the general economic and sports industrial environment. It review the organization competitive position that necessary to conduct a quantitative and qualitative review of the Fischer sports. Third, setting quantitative target that fix the values of some Fischer Sports objectives. Fourth, decide the divisional plan that helps to check the Fischer Sports manufacturing department that they are working as per strategic planning or not. It requires a careful evaluation of macroeconomic trends. Fifth, performance analysis involves the gap between the desired and planned performance. Fischer Sports evaluate the performance of the organization strategy that help to judge the manufacturing speed and sales of the products in the current competitive market. Six, choice of strategy is the ultimate step in strategy formulation of the Fischer Sports. It helps to select the Fischer Sports goals, strengths, potential and limitations as well as the external opportunities. (Meige & Schmitt 2015).

Operation overview: Sports is a multibillion dollar fast growing sector in the world. Fischer Sports provide a high job opportunity to workers in their operational department. Fischer Sports GbmH has $235000 million expected sales in 2017 and it would be raise constantly till 2021 and it would be reach $411016 in 2021. It has $199750 expected operation income in 2017 and it would be $229713 in 2018, $263088 in 2019, $302706 in 2020 and $349364 in upcoming years till 2021. It would be possible through the expansion plan in worldwide country. When Fischer Sports will expand their business. Then, the operation income would be also increase that will help to survive in the competitive market. (Drake & Fabozzi 2012).

Expected Profit & Loss statement for the first 5 years at the end of the year of Fischer Sports GbmH

2017

2018

2019

2010

2021

Sales

$235,000

$270,250

$310,788

$357,406

$411,016

Cost of Goods Sold

35250

40538

47700

54700

61652

Gross Margin

85.00%

85.00%

84.65%

84.70%

85.00%

Operation Income

199750

229713

263088

302706

349364

EXPENSES

General and Administration expenses

15400

16700

17368

19847

21475

Salary & Wages

11800

12272

12763

13273

13804

Professional Fees

6400

6656

7411

7707

8016

Interest Expenses

8750

9100

9464

9843

10236

Marketing & Selling Expenses

10245

10474

10893

11329

11782

Rent & Utilities

7880

8195

8523

8864

9218

Insurance cost

9540

9922

10318

10731

11160

Other Expenses

8750

9100

9464

9800

10241

Total Expenses

78765

82419

86204

91394

95933

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)

120985

147294

176883

211311

253431

Finance Cost

39950

45943

52618

60541

69873

Depreciation and Amortisation Expense

7100

7100

7100

7100

7455

Profit/(Loss) before Tax

73935

94251

117166

143670

176103

Tax Expense

Federal Income Tax

24399

31103

38665

47411

58114

State Income tax

3697

4713

5858

7184

8805

Total Tax Expense

28095

35815

44523

54595

66919

Net Profit/(Loss)

$45,840

$58,436

$72,643

$89,076

$109,184

Profit Margin

19.51%

21.62%

23.37%

24.92%

26.56%

(Source: Drake & Fabozzi 2012)

Financial overview: Fischer Sports produce sports equipment that require a lot of assests and cash capital to run their business in the competitive market. It has $5400 million inventory stock in 2017 that have target to sold in the market that generate revenue for it. It has expected $12509 million maintenance reserve in 2017 and it will reach $30540 million in 2021.

Balance Sheet for the first 5 years at the end of the year of Fischer Sports GmbH

2017

2018

2019

2020

2021

Assets:

Cash and cash equivalent

20648

24778

29733

35680

42816

Inventory

5400

6480

7776

9331

11197

Capital Work in Progress

8434

10121

12145

14574

17489

Intangible Assets under Development

542

650

780

937

1124

Property, equipment & furnishings

15239

18287

21944

26333

31600

Equipment purchase deposits

6901

8281

9937

11925

14310

Accumulated Depreciation

1369

2765

5586

11284

22793

Other assets

15875

19050

22860

27432

32918

Total assets

74408

90412

110762

137495

174247

Liabilities:

Accounts payable and accrued expenses

16833

21041

26302

32877

41096

Deferred income taxes

3504

3854

4240

4664

5130

Maintenance reserves

12509

15636

19545

24432

30540

Security deposits

15778

19723

49279

61278

79675

Long term liabilities

25784

30158

37698

47122

58902

Total liabilities

74408

90412

110762

137495

174247

(Source: Fridson & Alvarez 2011)

Approaches to sustainability and ethics: Fischer Sports sustainability depends on the fast growth and revenue of the organization. If the organization is earning revenue constantly. Then, it would be beneficial for the organization growth and development. Fischer Sports is not only linked with excercising the human body. But also related to global sports sectors that have millions employees, generates revenue and participate in global GDP. Fischer Sports company produce sports equipment that is ethical acceptable by Austrian government. So, it is a good business in the perspective of the ethical concern. (Kotter 2008).

Timeline: It is the significant part of the Fischer Sports because timeline should be clear when organization constructed the business expansion plan for it. Fischer Sports should achieve the expansion plan goal within the targeted the timeline period. If the Fischer Sports are able to achieve its target within timeline. Then, it would be consider as successful organization in the sports equipment industry. (Parent & Smith-Swan 2013).

Conclusion

On the basis of above analysis, it can be concluded that clear description of the venture, literature review, assessment of associated theories, strategy formation, operation overview, financial overview, approaches to sustainability & ethics and timeline as well as high ability to adopt new approach in Fischer Sports helps to achieve its expansion plan in the competitive market.

References

Cocchiarale, M, & Emmert, S, 2004, Upon Further Review: Sports in American Literature,

Greenwood Publishing Group, Melbourne.

Drake, PP, & Fabozzi, FJ, 2012, Analysis of Financial Statements, John Wiley & Sons, Melbourne.

Fischer, MB, & Naro, MW, 2012, Volume 48 of Trans?D. Arbeiten zur Theorie und Praxis des ?bersetzens und Dolmetschens, Frank & Timme GmbH, Melbourne.

Fischer, R, 2011, Trading With Charts for Absolute Returns, John Wiley & Sons, Melbourne.

Fridson, MS, & Alvarez, F, 2011, Financial Statement Analysis: A Practitioner's Guide, John Wiley & Sons, Melbourne.

Jones, I, 2014, Research Methods for Sports Studies: Third Edition, Routledge, Melbourne.

Kotter, JK, 2008, A Sense of Urgency, Harvard Business Press, Melbourne.

Loidl, F, Sabo, J, & W?hrer, G, 2012, Absatzkrisen anders bew?ltigen: Konsequenzen f?r Marketing und Management, Linde Verlag GmbH, Melbourne.

Meige, A, & Schmitt, J, 2015, Innovation Intelligence. Commoditization. Digitalization. Acceleration. Major Pressure on Innovation Drivers, Absans Publishing, Sydney.

Parent, MM, & Smith-Swan, S, 2013, Managing Major Sports Events: Theory and Practice, Routledge, Melbourne.

Kaufam, M, 2016, The Theory Of Business, Complexity, And Getting Work Done, View 7 July, 2016, from:

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