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(solution) I am needing to create a 5 year budget for my strategic timeline.


I am needing to create a 5 year budget for my strategic timeline. "What specific ?interim target measures? should be used to gauge success/failure of your strategy? (Use the ?Target Measurement form)." I have attached the excel form and balance sheet needed.



Strategic Implementation Cost Budget 1 Qtr Strategy

 

Obj1

 

Obj2

 

Obj3

 

Obj4

 

Obj5 Developing Economies

 

Recalls and Quality

 

Asian Market

 

Profitability and Efficiency

 

Building a Global Brand

 

Totals $1,250,000

 

$5,000

 

$3,450,000

 

$10,800,000

 

$1,000,000

 

$16,505,000 2 Qtr 3 Qtr 4 Qtr Strategy

 

Implementatio

 

n Total FY1 $250,000

 

$300,000

 

$3,950,000

 

$3,600,000

 

$25,000,000

 

$33,100,000 $10,000,000

 

$5,000,000

 

$22,000,000

 

$2,500,000

 

$500,000,000

 

$539,500,000 $25,000,000

 

$50,200,000

 

$7,800,000

 

$5,750,000

 

$1,000,000,000

 

$1,088,750,000 $36,500,000

 

$55,505,000

 

$37,200,000

 

$22,650,000

 

$1,526,000,000

 

$1,677,855,000 Objective #1 Timeline Contract market study agency to determine suitable economies

 

Assess the cost

 

Utilize existing subsidiaries and relationships to penetrate the market

 

Implement brands in phases 1/1/2016 Start

 

Date Duration in days End Date 1/1/2016

 

1/15/2016

 

2/20/2016

 

4/1/2016 Objective #1: Increase market share in developing economies 30

 

40

 

365

 

1460 1/31/2016

 

2/24/2016

 

2/19/2017

 

3/31/2020 5/15/2017 9 /27 /2018 2/9 /2020 Contract market study agency to determine suitable economies Assess the cost

 

Duration

 

Start Date

 

Utilize existing subsidiaries and relationships to penetrate the market Implement brands in phases Objective #2 Timeline Create inspection criteria suppliers would need to pass

 

Evaluate all supplier parts

 

Make list of suppliers that do not meet standards

 

Search for new suppliers

 

Differentiate new parts from old parts by VIN 12/14/2015 2/2/2016 Start

 

Date Duration in days End Date 12/14/2015

 

1/1/2016

 

2/1/2016

 

2/29/2016

 

6/1/2016 Objective #2: Reduce recalls by improving quality 9

 

30

 

14

 

90

 

60 12/23/2015

 

1/30/2016

 

2/15/2016

 

5/29/2016

 

7/31/2016 3/23/2016 5/12/2016 7/1/2016 Create inspection criteria suppliers would need to pass Evaluate all supplier parts Make list of suppliers that do not meet standards Search for new suppliers Differentiate new parts from old parts by VIN Duration

 

Start Date Objective #3 Timeline Objective #3: Create and Market Automobiles That Appeal to the Asian

 

Market, Particularly China

 

R&D for regulations, safety requirements, laws, and consumer desires

 

Create brands to fit these needs

 

Breakdown of costs to implement and market designs. Forecast sales

 

Implement design of new brands and make changes to existing brands

 

Market to Asian, particularly the Chinese market Start

 

Date Duration in days End Date 1/1/2016

 

4/1/2016

 

4/1/2016

 

6/1/2016

 

7/1/2016 90

 

90

 

60

 

120

 

365+ 4/1/2016

 

7/1/2016

 

6/1/2016

 

10/1/2016

 

Ongoing 12/12/20151/31/20163/21/20165/10/20166/29/20168/18/2016

 

R&D for regulations, safety requirements, laws, and consumer desires Create brands to fit these needs Breakdown of costs to implement and market designs. Forecast sales Implement design of new brands and make changes to existing brands Market to Asian, particularly the Chinese market Duration

 

Start Date Objective #4 Timeline Objective #4: Decrease cost of revenue and operating expenses in order

 

to increase profitability and efficiency Start

 

Date Duration in days End Date Assess input efficiency to decrease waste

 

Analyze and negotiate contract prices with suppliers

 

Assess marketing and advertising cost

 

Assess consolidation and reallocation of employee staffing and distribution center

 

locations 1/1/2016

 

3/1/2016

 

5/2/2016 500

 

120

 

65 5/15/2017

 

6/29/2016

 

7/6/2016 7/15/2016 425 9/13/2017 1/1/2016 7/19/2016 2/4/2017 8/23/2017 3/11/2018 Assess input efficiency to decrease waste Analyze and negotiate contract prices with suppliers Assess marketing and advertising cost Assess consolidation and reallocation of employee staffing and distribution center locations Duration

 

Start Date Objective #5 Timeline

 

Objective #5: Building a Global Brand Start Date Duration in days End Date 1/1/2016

 

1/1/2016

 

1/1/2016

 

1/1/2016

 

1/1/2016 150

 

365

 

365

 

365

 

1095 5/31/2016

 

12/31/2016

 

on going

 

12/31/2016

 

12/31/2019 Perform a worldwide market analysis to determine best vehicle for the regions.

 

Add new dealers to sell the Jeep brand

 

Develop new models and redesign current models.

 

Develop joint venture partners

 

Develop and open new plants in new markets 1/1/16 5/15/17 9/27/18 2/9/20 Perform a worldwide market analysis to determine best vehicle for the regions. Add new dealers to sell the Jeep brand Develop new models and redesign current models. Develop joint venture partners Develop and open new plants in new markets Duration

 

Start Date Projected Cost of Strategic Implementation Existing Resource Costs Objective #1: Increase Market Share

 

in Developing Economies

 

Project Manager

 

Legal Personnel (Lawyers)

 

Support Personnel

 

Accountant

 

Project Leader

 

Total

 

Objective #2: Reduce recalls by

 

improving quality

 

Project Manager

 

Buyer

 

Support Personnel

 

Project Leader

 

Total

 

Objective #3: Create and Market

 

Automobiles That Appeal to the

 

Asian Market, Particularly China

 

Project Manager

 

Legal Personnel (Lawyers)

 

Support Personnel

 

Project Leader

 

Marketing Manager

 

Research & Development Personnel

 

Total Objective #4: Increase Market Share

 

in Developing Economies

 

Project Manager N/E # of

 

Units E

 

E

 

E

 

E

 

E

 

N/E

 

E

 

E

 

E

 

E N/E

 

E

 

E

 

E

 

E

 

E

 

E N/E

 

E Unit Cost

 

3

 

5

 

8

 

4

 

2 # of

 

Units $250,000

 

$20,000

 

$58,245

 

$80,265

 

$150,000

 

Unit Cost 2

 

1

 

10

 

2

 

# of

 

Units $250,000

 

$76,574

 

$58,245

 

$150,000 Unit Cost 4

 

2

 

10

 

3

 

5

 

12

 

36 # of

 

Units $250,000

 

$20,000

 

$58,245

 

$150,000

 

$76,450

 

$62,225

 

$382,170 Unit Cost

 

1 $250,000 Total Cost

 

$750,000

 

$100,000

 

$465,960

 

$321,060

 

$300,000

 

$1,937,020

 

Total Cost

 

$500,000

 

$76,574

 

$582,450

 

$300,000

 

$1,459,024

 

Total Cost

 

$1,000,000

 

$40,000

 

$582,450

 

$450,000

 

$382,250

 

$746,700

 

$3,201,400 Total Cost

 

$250,000 Legal Personnel (Lawyers)

 

Support Personnel

 

Economist/Market Study Consultant

 

Accountant

 

Project Leader

 

Total

 

Objective #5: Building a Global

 

Brand

 

Project Manager

 

Project leader for designer

 

Designer

 

Project leader for Engineering

 

Engineers

 

Support Personnel

 

Misc. Staff (office staff)

 

Total Grand Total of Existing

 

Resources E

 

E

 

E

 

E

 

E

 

N/E

 

E

 

E

 

E

 

E

 

E

 

E

 

E 2

 

4

 

3

 

2

 

1

 

# of

 

Units

 

6

 

6

 

60

 

6

 

60

 

120

 

20 $20,000

 

$58,245

 

$120,000

 

$80,265

 

$150,000

 

Unit Cost

 

$250,000

 

$150,000

 

$90,000

 

$150,000

 

$100,000

 

$75,000

 

$65,000 $40,000

 

$232,980

 

$360,000

 

$160,530

 

$150,000

 

$1,193,510

 

Total Cost

 

$1,500,000

 

$900,000

 

$5,400,000

 

$900,000

 

$6,000,000

 

$9,000,000

 

$1,300,000

 

$25,000,000 $32,790,954 New Resource Costs

 

Objective #1: Increase Market

 

Share in Developing Economies

 

Project Manager

 

Economist/Market Study

 

Consultant

 

Support Personnel

 

Office Space

 

Office Supplies

 

Total

 

Objective #2: Reduce recalls by

 

improving quality

 

Project Manager

 

Buyer

 

Supplier Quality Engineer

 

Total

 

Objective #3: Create and Market

 

Automobiles That Appeal to the

 

Asian Market, Particularly China

 

Project Manager

 

Economist/Market Study

 

Consultant

 

Support Personnel

 

Office Space

 

Office Supplies

 

Total

 

Objective #4: Increase Market

 

Share in Developing Economies

 

Consultant for Waste Efficiency

 

Marketing Consultants

 

Total Objective #5: Building a Global

 

Brand

 

Consulting Contract

 

Legal Costs N/E # of

 

Units Unit Cost Total Cost N 1 $85,000 $85,000 N 2 $120,000 $240,000 N

 

N

 

N 3

 

3

 

3 $43,175

 

$50,000

 

$10,000 $129,525

 

$150,000

 

$30,000

 

$634,525 N/E # of

 

Units N

 

N

 

N N/E Unit Cost

 

1

 

1

 

2 # of

 

Units $85,000

 

$76,574

 

$76,900 Unit Cost Total Cost

 

$85,000

 

$76,574

 

$153,800

 

$315,374

 

Total Cost N 2 $85,000 $170,000 N 4 $120,000 $480,000 N

 

N

 

N 2

 

2

 

2

 

12 $43,175

 

$50,000

 

$10,000

 

$308,175 $86,350

 

$100,000

 

$20,000

 

$856,350 N/E # of

 

Units N

 

N N/

 

E

 

N

 

N Unit Cost

 

2

 

2 # of

 

Units $50,000

 

$46,900 Unit Cost

 

1

 

4 $1,000,000

 

$2,500,000 Total Cost

 

$100,000

 

$93,800

 

$193,800 Total Cost

 

$1,000,000

 

$10,000,000 Design of Retool Plant

 

Design and construction of new

 

facility

 

Total Grand Total of New Resources N 1 $495,000,000 $495,000,000 N 1 $995,000,000 $995,000,000

 

$1,501,000,000 $1,503,000,40

 

9 Total Resource Costs

 

Total Existing and New Resources $1,535,791,363 Other Expenses for all Objectives:

 

Office Supplies

 

Office Space

 

New Suppliers

 

Consultant for Waste

 

Efficiency

 

Economist/Market Study

 

Consultant

 

Total Other Expenses

 

Grand Total of Expenses and

 

Resources $50,000

 

$250,000

 

50,000,000

 

$100,000

 

$480,000

 

$51,660,000

 

$1,587,451,363 Implementation Cost Breakdown

 

Fiat Chrysler Automotive Implementation Strategic Cost

 

Objective Costs

 

Objective #1: Increase Market Share in Developing

 

$36,500,000

 

Economies

 

Contact market study agency to determine suitable

 

economies

 

Assess the cost

 

Utilize existing subsidiaries and relationships to

 

penetrate the market

 

Implement brands in phases

 

Objective #2: Reduce recalls by improving quality

 

Create inspection criteria suppliers would need to pass

 

Evaluate all supplier parts

 

Make list of suppliers that do not meet standards

 

Search for new suppliers

 

Differentiate new parts from old parts by VIN

 

Objective #3: Create and Market Automobiles That

 

Appeal to the Asian Market, Particularly China

 

Work with Guangzhou Automobile Group on joint

 

venture in China

 

Integrate sales and marketing for Fiat, Chrysler, and

 

Jeep brands

 

Import and build vehicles in China

 

Implement brands in phases Cumulative Cost

 

$36,500,000 $1,250,000

 

$250,000

 

$10,000,000

 

$25,000,000

 

Objective Costs

 

$55,505,000

 

$5,000

 

$300,000

 

$5,000,000

 

$50,000,000

 

$200,000

 

Objective Costs

 

$37,200,000 Cumulative Cost

 

$92,005,000 Cumulative Cost

 

$129,205,000 $3,450,000

 

$3,950,000

 

$22,000,000

 

$7,800,000 Objective Costs Cumulative Cost Objective #4: Decrease cost of revenue and operating

 

expenses in order to increase profitability and

 

efficiency $22,650,000 $151,855,000 Assess input efficiency to decrease waste

 

Analyze and negotiate contract prices with suppliers

 

Assess marketing and advertising cost $10,800,000

 

$3,600,000

 

$2,500,000 Assess consolidation and reallocation of employee staffing

 

and distribution center locations Objective #5: Building a Global Brand $5,750,000

 

Objective Costs Cumulative Cost

 

$1,526,000,000,.0 $1,677,855,000.0

 

0

 

0 Market study of Jeep brand by regions $1,000,000.00 R&D work on new products for Jeep brand and redesign $25,000,000.00 Joint venture, retool existing facilities $500,000,000.00 Build new manufacturing plant for Jeep brand TOTAL $1,000,000,000.00 $1,677,855,000.0

 

0 Projected Outcomes of Projected Strategy

 

Quantitative Outcomes

 

In order to achieve the desired outcomes FCA will need to utilize their existing resources as well

 

as take on additional resources. This means FCA will Utilize some existing cash

 

Increase their inventory which will likely increase their accounts receivable

 

Increase their property, plant, and equipment to handle a larger market The above asset adjustments will likely lead the following liability and equity adjustments: Increase in accounts payable due to more resource consumptions

 

Increase in long-term debt to finance expansion and expenditures

 

Increase shareholders equity through the successful implementation of the plan The quantitative outcomes the FCA Group looks to achieve from this five-year strategy will be

 

to: Increase Gross Margin by 8% By focusing on the utilization of resources, strengthening relationships with suppliers,

 

and increasing the synergy across the company will decrease the cost of sales, while at

 

the same time FCA will be looking to expand into new markets increasing their sales

 

potential. These strategies will help to drive up their gross margin to better align with

 

their competition. Stabilize Operating Expenses By reallocating the use of existing and future resources will help FCA operate more

 

effective and efficiently sustaining their ratio of operating expenses to sales. Increase Net Margin by 8% By effectively implementing and achieving the above outcomes will lead to an increase in

 

net margin. This increase will better align FCA with their industry and competition. Qualitative Outcomes

 

FCA will not have the ability of meeting their quantitative outcomes with meeting their

 

qualitative outcomes. FCA looks too effectively:

 

Increase the quality of their product By analyzing product recalls will give FCA the understanding of what issues are leading

 

to their quality problems. Through this understanding FCA will focus on supplier and

 

manufacture utilization to correct the issues. This should increase the quality of product

 

FCA sends to the market. Provide a better customer experience By providing the industries best customer service will help to drive sales, brand loyalty,

 

and the overall success of the company?s products. Increase their brand presence Through effective marketing campaigns, expansions into new markets and providing a

 

better quality product will help to increase FCA?s global presence driving success for the

 

company. FCA Strategy Target Measurement Timeline

 

Projected Budget:

 

Projected Increase in Gross Margin: 8% or $19,641,000 (over 5-year lifetime of strategy)

 

Projected Increase in Net Margin: 8% or $12,914,000 (over 5-year lifetime of strategy)

 

Projected Stabilization of Operating Expenses: This one is a little more difficult change of

 

$6,365,000 over a 5 year period but that is a sustained percentage in line with sales. This

 

shows operation efficiency. FY 1:

 

Budget Start

 

$0

 

$0

 

0

 

0% Qtr 1 Qtr 2 Qtr 3 Qtr 4 FY 2:

 

Budget Start Qtr 1 Qtr 2 Qtr 3 Qtr 4 FY 3: Start Qtr 1 Qtr 2 Qtr 3 Qtr 4 FY 4:

 

Budget Start Qtr 1 Qtr 2 Qtr 3 Qtr 4 FY 5:

 

Budget Start Qtr 1 Qtr 2 Qtr 3 Qtr 4

 


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