TRY MULLERMBA CAPTSTONE

April 8, 2023

Strategies for Profit Maximization and Improved Performance

Try L. MullerCapstone

Performance Institute

04/08/20232

Objective & Content

Objective: The purpose of this project report is to identify strategies for maximizing profits and formulate an action plan for executing them

Content:

A. Problem Statement & Storyboard Questions, Statements, Data Frames

B. Conclusion I & Findings Supporting Data

C. Conclusion II & Findings Supporting Data

D. Solution & Deductive ArgumentE. Project Scope & Action Plan

Project scope, Work Break Down, Work Plan , Force Field Analysis, Best Practices

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A. Problem Statement & Storyboard

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Problem Statement & Storyboard

Problem Statement: The Performance Institute (PI) has been suffering financially over the past four years. The inability to drive revenues and minimize costs has resulted in diminished financial performance an d has the organization on the brink of bankruptcy.

 

Hypothesis and Supporting Questions

An overextended program offering has diluted conference attendance and resulted in the company's inability to manage costs and maximize profits

How have revenues changed over the past 12 quarters?

How has conference attendance changed over the past 12 quarters?

What is the increase in program offerings over the past 4 years?

What percentages of quarterly revenues have been allocated to conference costs over the last 12 quarters?

How does our pricing compare with competition in similar program centers?

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Problem Statement & Storyboard

 

Hypothesis and Supporting Statements

An overextended program offering has diluted conference attendance and resulted in the company's inability to manage costs and maximize profits

We have experienced a heavy decline in revenues over 8 quarters.

Conference attendance has decreased at an increasing rate for 12 quarters.

We have significantly increased our product offering over the past 4 years.

Profits have declined and costs have simultaneously increased over 12 quarters.

We overprice our competitors by at least $150 for similar program centers.

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FRAME IStatement I: We have experienced a heavy decline in revenues over 8 quartersStatement Support: Revenues have declined 35%

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 $-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Reve

nue (

000’s

)

Data Source: Company financial records Approach: Quarterly revenue analysis Skills: Calculating percentages Accuracy: CRM database verified

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Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q120

10

20

30

40

50

60

70

Data Source: CRM database attendance records Approach: Quarterly attendance review Skills: Calculating percentages Accuracy: CRM database verified

FRAME IIStatement II: Conference attendance has decreased at an increasing rate over 12 quartersStatement Support: Avg. attendance per conference has declined by 42%

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2007 2008 2009 20100

20

40

60

80

100

120

140

160

180

200

Data Source: Historical Records Approach: Counting increase in programs Skills: Calculating differences Accuracy: Difference between 2010 – 2007

FRAME IIIStatement III: We have significantly increased our product offering over the past 4 yearsStatement Support: We have nearly doubled our program offering since 2007

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Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Reve

nue (

000’s

)FRAME IVStatement IV: We gave experienced a heavy decline in revenues over 8 quartersStatement Support: Profit margins have decreased between 25 -28%

Data Source: Company Financial Records Approach: Profitability analysis Skills: Cost structure Accuracy: Team calculation

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F P C S L G N$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

PI AvgComp. Avg.

FRAME VStatement V: On avg. competitor prices beat ours by at least $150Statement Support: Competitor prices beat ours by an average of about $175 for similar program centers

Data Source: Company Financial Records Approach: Competitive Intelligence Skills: Research Accuracy: Top 3 geographic competitors

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B. Conclusion I & Findings

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Conclusion I

 

Attendance and revenue will improve with a consolidated product offering and margins will improve with better cost management.

FINDINGS

Revenue has an indirectly proportional relationship with the product offering.

Attendance also has an indirectly proportional relationship with the product offering.

Minimizing venue and travel costs will play a large role in maximizing profits.

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FINDINGS: TrendsRevenue and conference attendance have an indirectly proportional relationship with the increased 12 quarter product offering

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 $-

$200.0

$400.0

$600.0

$800.0

$1,000.0

$1,200.0

$1,400.0

$1,600.0

$1,800.0

Revenue Attendance Product Offering

Data Source: Company Financial Records Approach: Trend identification Skills: Trend Analysis Accuracy: CRM database

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FINDINGS: Heavy venue and travel costs We will achieve greater profit margins if venue and travel costs are managed better(Cost in 000’s)

(2010) Q1 Q2 Q3 Q4$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

ProfitMeal CostsHotel CostsTravel CostsVenue Costs

Data Source: Company Financial Records Approach: Cost structure Skills: Cost analysis Accuracy: Team calculation

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C. Conclusion II & Findings

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Conclusion II

 

Sales & Marketing will drive attendance with more competitive pricing, cold calling, and market visibility.

FINDINGS

Lack of brand awareness and pricing are leading reasons for potential customers not to attend a conference. This also implies that we should enter the market as a price competitor.

Cold calling should be leverage more effectively to generate sales/revenue.

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FINDINGS: Uncompetitive pricing and lack of brand awarenessCustomers are reluctant to attend our conferences due to a better pricing alternative and the lack of familiarity with our brand

33%

25%

15%

9%

18%

Pricing Brand Awarness No Budget Program Accuracy

Data Source: Survey data Approach: Market survey Skills: Survey analysis Accuracy: Random sample (n > = 150)

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FINDINGS: Cold calling closes a higher rate of sales An impressive 25% of cold calls are converted to sales

Conversion rate for marketing virals

Conversion rate for cold calls0%

5%

10%

15%

20%

25%

30%

13%

25%

Sales avg. conversion rates since 2008

Data Source: Sales & Marketing Approach: Interview Skills: Information gathering Accuracy: Review with sales & marketing

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D. Solution & Deductive Argument

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Solution

 Eliminate unprofitable programs and devise a cost management strategy that accounts for key cost drivers. Subsequently, price more competitively and make cold calling responsible for 50% of the sales process.

Deductive Argument

We cannot compete if we commoditize our own product— it devalues our offering

The overextended product offering exceeds our cost capacity, diminishes profits and results in poor financial performance

This inhibits sales’ ability to price competitively for fear of losing profits even though customers want a lower price

We will achieve greater profits and become more competitive with a leaner product and cost structure, as well as better brand awareness.

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E. Project Scope & Action Plan

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Project Scope

  OBJECTIVE

Improve profits by 5% over the next 6 quarters

OBJECTIVE

Improve profits by 5% over the next 6 quarters

Business PlanningBusiness Planning Sales & MarketingSales & Marketing Cost ManagementCost Management

Market/ Competitive Intelligence

Market/ Competitive Intelligence

Product Offering/ Planning

Product Offering/ Planning

Sales & Marketing Strategy

Sales & Marketing Strategy

Program Pricing

Program Pricing

Location/ Venue

Location/ Venue

Travel costs

Travel costs

Conference attendanceConference attendance

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Work Break Down

  OBJECTIVE

Improve profits by 5% over the next six quarters

OBJECTIVE

Improve profits by 5% over the next six quarters

Analyze current cost structure

Analyze current cost structure

Redefine sales & marketing

approaches

Redefine sales & marketing

approaches

Strategic Planning Strategic Planning Strategy Implementation and execution

Strategy Implementation and execution

Identify key cost drivers Identify key cost drivers

Identify unprofitable

programs

Identify unprofitable

programs

Identify areas where we can

cut back spending

Identify areas where we can

cut back spending

Group collaboration

Group collaboration

Price point analysis

Price point analysis

Create sales process for more cold

calling

Create sales process for more cold

calling

Develop layout and content for

PI newsletter

Develop layout and content for

PI newsletter

Decide which

programs to consolidate

Decide which

programs to consolidate

Define cost management

strategy

Define cost management

strategy

Refine sales approach

Refine sales approach

Refine newsletter

content

Refine newsletter

content

Project Participant/

task delegation

Project Participant/

task delegation

Draft timeline and execution

plan

Draft timeline and execution

plan

Brief executive

team

Brief executive

team

Identify measures and monitor with

BSC

Identify measures and monitor with

BSC

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Work Plan

 Work Element Dependencies Issues End Products Responsibility Timing

Overall market Analysis

Understand demand drivers

Market orientation Report on demand drivers and inhibitors

VP of Marketing - Christopher Support - TJ

3 weeks

Customer analysis Customer Preferences

Understand who the customer is and

what they want

Survey and report of how to better retain customers

Director of Education – Maria Support - Janice

3 weeks

Cost analysis Cost-mitigation opportunities

Identifying cost capacity

Report of key cost drivers and cost

alternatives

Director of Event Operations – Brynn

Support – Laura

2 weeks

Review of sales list Maximize sales opportunities

Old lists, contact information

integrity

Identify how much money we will have to invest in new lists

Director of Sales – Peter

Support – Paul

2 weeks

Analyze and eliminate

unprofitable programs

Product vitality Wasted resources on unprofitable

activities

Report on unprofitable

programs

Sr. Program Director- ME

No support

1 week

Revised product schedule

Product vitality Cannibalizing revenues

Draft of revised product schedule

Sr. Program Director- ME

Support – Melvin

2 weeks

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Measures and Owners

 

Measure KPI Owner

Conversion rate of marketing viral messages (ensure the right message is

being communicated)

17% Marketing

Customer retention for marquee events (Gov’t Performance Summit,

Performance Conference, Budgeting & Forecasting, City & County

Performance)

5% Sales

Increase in conference attendance 10% Sales & Marketing

Decrease in costs as a percentage of revenue

5% Director of Event Operations, Production Team

Customer satisfaction 4.2 out of 5 Director of Education Services, Production Team

Average program profitability

15% EVERYONE

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Force Field Analysis

 Solution

Eliminate unprofitable programs and devise a cost management strategy that accounts for key cost drivers. Subsequently, price more competitively and make cold calling responsible for 50% of the sales process.

Worst Scenario Best ScenarioEconomy inhibits companies from spending on L&D

programs

We can’t find affordable training centers to supplant hotel conference room rentals

Demand for programs may be inelastic— we lose more money trying to be a price competitor

Our sales lists may not extensive enough to generate greater return on cold calls

We may not have the capacity (financial, human) to create the brand awareness we would like

We have relationships with big name speaker who can be catalysts to grass roots marketing

We own a well-designed conference center that will help us avoid the cost of taking programs on the road

Sales & Marketing teams possess a great level of market intelligence with over 30 years of experience

Economy is improving and business are generating profits— they may be inclined to be more liberal with their spending— sell to profitable businesses first

Marquee events still run extremely well so we can spread events out as not to cannibalize revenues