Based off the images attached, what would be a SWOT Analysis for this company, and what 2-3 strategy would be recommend?

To: Functional Managers From: William Sellums (Marketing Manager) Product & Industry Background We are developing an advertising theme, which will focus on the history of our product, its labor-saving and productivity features, and its high degree of reliability. We will be asking each of you for your input as we develop the advertising plan. Most of you are aware of the background of our product and our industry. To summarize: - Three companies entered the Reader technology business in 2017 and began selling products in the first quarter of 2018. The Reader was developed to satisfy a need to reduce the time hospital nurses devote to paperwork and administration. Several independent studies revealed that approximately 40% of a nurse's time was consumed in non-patient activities. Trial installations of standard computer terminals at nurse's stations have not solved the problem because data entry and computer training requirements placed resource demands on the hospital staffs that were unattainable. - Hamada, Ltd., a Japanese electronics producer, developed a pick-up cell constructed as a solid-state magnetic sensor using tunnel diodes and special ceramics. This pick-up cell detects marks made with magnetic ink and records their position on a predesigned form. The cell is extremely tolerant of registration errors and allows the remainder of the Reader device to be relatively simple and inexpensive to build using off-the-shelf materials. The Reader is an input peripheral that can be programmed to work with virtually all hospital computer systems. Each Reader requires one pick up-cell. 0 When installed, a Reader system includes a Reader, a special pen containing magnetic ink, and preprinted, computer-generated patient forms. These forms are coated with a special chemical compound similar to that used on heat-sensitive paper for fax machines. Using the pen provided, a nurse marks the form to indicate procedures, drugs, dosages administered, and other information relating to the patient. The form is inserted into the Reader, which converts the marks to computer sensible form for transmission to a database. Like our competitors, we sell Readers to hospital equipment distributors who package the Reader and its ancillary components for sale to some 5,300 hospitals in the United States. We believe that we make a quality product that will get better. We sell at a competitive price. The industry is healthy and on the verge of tremendous growth. Aggressive advertising, marketing, and pricing strategies will stimulate demand. TO: Functional Managers FROM: Ferris Futrell (Finance Manager) Discretionary Operating Plans 2020 (Compan y Use Only) During our November 2019 planning meeting, we agreed on the following discretionary budget for 2020: Quality Engineering: $150,000 RED: $295,000 Marketing: $219,000 Advertising: $90,000 Lean Six Sigma: $128,000 However, since that time, each functional manager made increases in one or more areas. l have heard from you that we need to increase overall investment to successfully improve the product, the manufacturing process, and our market position. Clearly we have limited cash resources at this time, and although we have a line of credit, we must be sensitive to our cash position so that we do not exceed that credit limit. I suggest that we revisit the planning decisions for 2020 during our next staff meeting to ensure that our spending is consistent with our competitive strategy and the availability of resources. At that time, we may wish also to continue our discussions on our resource allocation policies. For example, some of you have suggested that discretionary expenditures in your functional area should increase as our sales volume grows. We must come to agreement as to how this should be done. Product pricing is extremely important to our fiscal strategy and corporate profitability. The market may be receptive to a higher price until demand is satisfied, but we must watch this carefully. Be aware that Stanley Sloane will not approve any price changes exceeding 20% up or down in one quarter. Control of our production costs is essential if we are to be competitive and profitable. Marketing and Manufacturing must address these topics if we are to be profitable. TO: General Manager FROM: Ferris Futrell (Finance Manager) Line of Credit In response to your question about State Street Bank's method of determining our adjustable line of credit, I am providing a portion of the most recent bank letter from Loan Manager, Francine Friendly, on the subject. . . Our analysis of your industry reveals consistent, modest growth during the past year with little fluctuation in price or terms. After discussions with your parent company regarding the prior quarter's performance and your company's increased cash needs to align with potential industry growth, we are pleased to extend your credit line to a minimum of $425,000. We will continue to review your position and adjust your credit line every quarter, as we do with all new companies. Your credit line will increase as your company grows, but it will not go below $425,000. In each quarterly review, we will allow: 1. $100,000 for personal collateral now held; 2. Sixty percent of Accounts Receivable; 3. Thirty percent of the value of all finished goods inventories. Your total line of credit will be either the sum of the above or $425,000, whichever is greater. An interest rate of 15% per annum (3.75% per quarter) will be charged on money borrowed. Borrowing up to the limit of the credit line will be automatic. As cash is received, repayment will also be automatic. In any quarter, interest will be charged based upon the outstanding loan amount (i.e., your negative cash balance) at the end of the previous quarter. You may, therefore, borrow automatically against your credit line during any quarter, and you will pay no interest until the following quarter. We will inform you of any changes in our policies or interest rates. When a line of credit is exceeded, dependent upon the severity of the overdraft and the company plan to remediate the issue, the bank will determine the appropriate actions. In the quarter following the overdraw, the current rate of interest will be charged on money borrowed up to the credit line; a loan restructuring fee of $3,500 will be charged, and an interest rate of 21 % per annum may be charged at the bank's discretion on money borrowed in excess of the credit line. If such an incident should occur, the bank and the company will make every effort to resolve the overdraw condition immediately. Should that not happen and should a successive overdraw occur, the bank may invoke additional remedial steps.\" I hope this clarifies any questions you have on the terms of the line of credit. Please note that exceeding the credit line is not acceptable operating procedure. I recognize that certain negative business conditions may be unforeseen, but for the most part, I would recommend appropriate sensitivity analysis to avoid an overdraft situation. During our first 24 months of operation, we have gone from sales of 422 units in the first quarter to 829 units during the last quarter. That's nearly 100% growth since we started. We are convinced there is tremendous potential growth for our product in the market. Growing demand will follow expanding sales, marketing and advertising investment and decreasing prices. To get a major share of that growing market, we need to be price competitive with a quality product, and we must make a major dollar investment to market our product. Even though we have been in business for over a year now, our name is still unknown; it will take the right balance of marketing and advertising monies to build our brand image. The marketing dollars will support our distributor in his efforts to get "air time" with our end-users. Our distributor charges 10% of the selling price to the customer as his margin to cover pre and post sales costs of supporting our products. For example, if our price to the distributor is $630, the price to the customer is $700. The distributor receives 10% of $700 or $70 per unit. Our expenditures for 2018/2019 were as follows: 2018/2019 EXPENDITURES ADVERTISING MARKETING" 1st Quarter 2018 $36,000 $31,000 2nd Quarter 2018 $36,000 $31,000 3rd Quarter 2018 $36,000 $31,000 4th Quarter 2018 $39,000 $34,000 1st Quarter 2019 $18,000 $35,000 2nd Quarter 201 9 $23,000 $38,000 3rd Quarter 2019 $28,000 $42,000 4th Quarter 2019 $31,000 $46,000 *lncludes the cost of the MAA Marketing Report. We recommend an aggressive marketing program we should be looking at investing 15% of sales into marketing and 5-10% of sales into advertising each quarter in 2020. This market will not reach its potential without stimulation, and we cannot depend on our competitors to do the stimulating for us. Of course, there is a downside to this life cycle phenomenon. At some point, the "mature" phase follows the "growth" phase. Demand begins to level off and eventually declines. The marketing challenge is to anticipate when that is going to happen. We must balance our manufacturing and marketing efforts to be able to serve the market when the demand exists and to curb manufacturing before demand declines. Our manufacturing capacity is of real concern to me. Our projection for major growth must be matched by manufacturing expansion to keep up with that growth. There is more at stake than losing a few sales. An industry that lacks the manufacturing capacity to meet increasing demand often keeps prices high and loses sight of keeping costs low. Such an industry offers a tempting opportunity for a low- cost producer to enter into the market with a significantly lower price. Whenever we have shortage of capacity to meet the demand, we lose all of the unfulfilled demand. There is no backlog that would roll fonrvard to the next quarter. We cannot afford to allow any unfulfilled demand. TO: Functional Managers FROM: William Sellums (Marketing Manager) Marketing Plan 2020 (Compan y Use Only) MARKETING PLAN 2020 ASSU MPTIONS: 1. Demand for the product will increase as the product gains acceptance. The market is stimulated by advertising and marketing expenditures and value pricing. 2. Product quality will become a major factor in product selection. Competing manufacturers will emphasize quality improvements. 3. Costs to produce will be reduced through efficiencies and manufacturing improvements so that cost savings can be passed on to customers through more attractive prices and/or payment terms. OBJECTIVES: 1. Achieve a 36% market share by year-end 2020. 2. Price the product competitively to gain and maintain share; avoid erratic price shifts regardless of the competition; keep the price consistent with reasonable profit margins. 3. Increase our marketing investment as quickly as possible to 15% of sales, and maintain reasonable levels of investment through year end. Periodically evaluate our investment needs as our product offering evolves. 4. Stimulate market growth by attaining a 7% of sales advertising investment, and maintain reasonable investment through year-end. 5. Position the company to take advantage of an exploding market fed by innovation to drive expanding demand for our product. # Beds/Hospital # Hospitals Total # Beds* Total # Readers 100-199 2,209 331,425 33,143 200-299 1 ,155 288,750 28,875 300-399 720 252,000 25,200 400-499 477 214,500 21 ,450 Total 5,349 1,559,175 155,918 MAA offers quality surveys of our product and those of our competitors. For a small fee, MAA will analyze the product's technical quality in independent laboratories and survey the product's perceived quality among current and potential customers and users. In the future, it hopes to also provide demand projections in the service. Whether or when this will happen is not yet certain. A subscription to the survey reports costs $5,000 per quarter. Once we subscribe, we do not need to request it again each quarter; it will be delivered automatically. To start the subscription service, simply check the "Marketing Report\" check box on the "Qtrly Decisions" tab in the quarter in which you want to start the service. Below is a complimentary demand forecast at the end Q4 2019. I highly recommend subscribing to this service. We will only have access to limited competitive information if we do not subscribe, which will put us at a competitive disadvantage and negatively impact our ability to complete the Quarterly Business Report. I cannot overemphasize the value this survey will add to our understanding of the market. 9,000 5,750 4,500 2,250 The graph shows the market forecast as of Q1 2020 with a 90% confidence level. It shows actual total market demand for prior quarters, and expected demand for future quarters based on low, expected, and high estimates. Q3 2019 shows 2,091 units of actual total demand. Q4 2019 shows 2,485 units of actual total demand. For Q1 through Q4 of 2020, the low demand estimate is 2,934, 3,702, 4,743, and 6,166. For Q1 through Q4 of 2020, the expected demand estimate is 3,118, 4,003, 5,330, and 7,088. For Q1 through Q4 of 2020, the high