Corporate Strategy Assignment Sample

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Corporate Strategy Assignment Sample

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Company Overview

The global Totto Company which was brought up in business after it was sold by the company Nalsani around the year 2013. The company mainly deals with clothing, various types of accessories and also different types of backpacks. The company mostly operated through their own stores, which numbered 480 during the time it was sold by Nalsani. Whereas, in the year 2019, the company set up an aim of constructing 650 stores in 30 different countries across the globe. The company has a total of 10000 working employees in their company and the headquarters is based in Latin America.

The company is well known for its unique designs of clothing and accessories and also for the making of briefcases and backpacks. According to this, the company generated total net profit in the year 2018 which was 592301 and 586086 in the year of 2019. It also generates total sales of 596497 in the year 2020 and total sales of 580935 in the year 2021.

Corporate competitive environment

The concept of a competitive environment is nothing but a system in which different types of organizations compete by the help of various channels of marketing and strategies for or higher customer acquisition. According to this system, there are several rules and regulations which are required to be followed by the companies (Feldman et al .2020). Some of the systems are promotional strategies, methods of price strategy, different channels of marketing and many more.

According to the global company Titto, the competitive environment is highly challenging. The company follows the strategy of retail business and also the direct method of marketing. The company also has franchise businesses through which it generates a high amount of revenue every year. It takes a lot of time for the company to build 18 franchises, 64 chains and 1637 distributors across different sections of the world.

Organization and organizational development and governance

The company has faced lots of challenges during the time of expansion of the company to different sections of the world. As the company was formerly owned by the Nalsani, it has faced various problems due to the different governance system across the world for the trade of clothing and accessories.

The strategy which helps the company Totto to become a multinational company and well known brand across different sections of the world is that the company uses a method of direct marketing and selling in which it distributes all the different products through the process of initial distribution by the chain stores of the company (Hernandez .2021). A total of 80% of the products were stored in the warehouse of the store and only 20% of products were displayed in front of the customer. This leads to the purpose of understanding the future scope of all the business and also fulfills the demand of the customer at any point of time.

Analysis

Analysis of the company is done by the analytical tool of MS Excel in which the different financial ratios were calculated by the help of the different financial information of the company. According to this data, it helps to understand the current financial situation of the company as well as it provides information about the future aspect of the company.

Financial Ratios of the Totto Company

Profitability Ratios

Particulars

2021

2020

2019

2018

Net Profit Margin

580934.37

596496.36

586085.37

592300.38

Return on Capital Employed

0.10

0.09

0.12

0.14

Liquidity Ratios

Particulars

2021

2020

2019

2018

Quick Ratio

1.04

1.07

1.08

1.19

Current Ratio

1.39

1.50

1.51

1.58

Solvency Ratios

Particulars

2021

2020

2019

2018

Debt to Equity Ratio

0.76

0.74

0.70

0.69

The concept of profitability ratio is optimal for understanding the total profit progress and ratio of the company. This ratio helps to understand the total profit making capacity of the company on a specific amount of revenue it generates every year (Hutsaliuk .2020). In the year of 2018 the net profit margin of the company was 592300 with sales of 592301. In the year 2021, the net profit margin is 580934 out of the revenue of 580935 which provide information that the company is progressing and the total profit making ability of the company is also increasing.

In accordance with the liquidity ratio, it provides information about how quickly the company can convert its current assets into the form of money. According to the quick ratio of the company, in the year 2018 the quick ratio of the company is 1.19 and in the year 2021 the quick ratio of the company is 1.04 which means the company has degraded its ability to generate quick cash.

Scope of the Analysis

The above analysis of the company provides an overview about the health and the quality of the financial aspect of the company which helps to make decisions for the different purposes in the company (Menz .2021). It also signifies the term of different accountability for better understanding the progress and growth of the company in a specific time period. It helps to understand the current financial situation of the company as well as it provides information about the future aspect of the company

Strategic Decision Making

The analysis helps the making of this strategy for the purpose of decision making in the different sections of the company. The analysis will help for making strategies by understanding the historical data of the company and comparing it with the current financial aspect of the company. This strategy will help you understand and measure the progress which is done within the company and also outside the company (Tanriverdi .2020). It will provide an overview about the financial and organizational aspect of the company for the future purpose. It also signifies the term of different accountability for better understanding the progress and growth of the company in a specific time period.

Conclusion

Here it is concluded from the above section of the report that the company mainly deals with clothing, various types of accessories and also different types of backpacks. There are several rules and regulations which are required to be followed by the companies. The company also has franchise businesses through which it generates a high amount of revenue every year. It helps to understand the current financial situation of the company as well as it provides information about the future aspect of the company. This strategy will help you understand and measure the progress which is done within the company and also outside the company.

References

Journals

Feldman, E.R., 2020. Corporate strategy: Past, present, and future. Strategic Management Review1(1), pp.179-206.

Hernandez, E. and Menon, A., 2021. Corporate strategy and network change. Academy of Management Review46(1), pp.80-107.

Hutsaliuk, O., Koval, V., Tsimoshynska, O., Koval, M. and Skyba, H., 2020. Risk management of forming enterprises integration corporate strategy. TEM Journal9(4), p.1514.

Menz, M., Kunisch, S., Birkinshaw, J., Collis, D.J., Foss, N.J., Hoskisson, R.E. and Prescott, J.E., 2021. Corporate Strategy and the Theory of the Firm in the Digital Age. Journal of Management Studies58(7), pp.1695-1720.

Tanriverdi, H. and Du, K., 2020. Corporate Strategy Changes and Information Technology Control Effectiveness in Multibusiness Firms. MIS Quarterly44(4).

Velikorossov, V.V., Maksimov, M.I., Orekhov, S.A., Huseynov, J.E.O., Khachaturyan, M.V. and Kolesnikov, A.V., 2020. Integration as a corporate strategy. DEStech Transactions on Social Science, Education and Human Science, (icpcs).

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