Mensa Strategy Essay

A five- class strategical planMensa has been engaged with the various handicraftes, which allow packaging, forest point of intersections, energy and financial go businesses. There is a chain reactor of change on bigeminal levels of the company which is necessary for Mensa to execute positivity. This strategic plan pull up stakes provide the correct direction to the business to achieve this goal. Mensa will need to implement a variety of diametric techniques in order to become a successful leavening business. Without the changes outlined in this strategic plan, the company faces significant financial distress. Mensas Financial serve BusinessThis business provides insurance, mortgage loan, real state financial services and consultancy services to its nodes. It was not a long business but the perplexity had done a good job with cash flow and profitability for the size of the business. They had proven their know how by selecting target markets and avoiding any undecompos ed head-to-head competition with competitors, this alleviateed in creating a bright outlook for this persona of Mensas business. Therefore, it will be give out for the firm to expand this business.I recomm reverse increasing the size of the operation. In order to be able-bodied to ex cristald the sales and returns within this sphere of influence, there call for to be capital enthronisation funds. I agree with the outlook, the firm should invest $250,000,000 initially and could profit it to $300,000,000 in the following 5-7 years, with a decrease to $100,000,000 a year at that time. This will generate $200 million to $300 million for the business, at the end of the investment period. Although this will be a lot of upfront investment, the huge increase in profitability will be worth the money spent. Increasing the size of this orbit of the business is a good run into for the company, which will provide them with a significant amount of returns. Mensas vigour BusinessMensa energy divider deals with the geographic expedition, development and production of the crude oil color and fluff. skill of EasyGas Energy was beneficial to the firm, as it was the sole supplier of natural gas to Florida. This business has strong position in some segments the demand for oil and gas would be increased by next years, annual prices for oil and gas will also increase.The adviser felt that demand and tack on picture is increasing and would be favorable for those firms that had developed the business earlier.However, match to the consultant, it would not be favorable to invest more in exploration and production, so Mensa should expand this business through intensification strategy. As the production would invoice from 2002 to 2010, they advised that their animate reserves and the land they own would only increase in value everywhere time, even though Mensa could never grow to be competitive within this industry due to the size of their existing competitors. T he Florida pipeline in this sector is a significant tool for avail in profits, as the cash flow for this business was estimated to increase $100million to $300million in year 5. For exploration and production division, if divestment strategy is followed then the division could be sold for $1,560,000,000 at present and it will be increased up to $2,000,000,000 within 5 to 6 years. The profits would be increased by 8-10%, with a focus on holding supplies of both oil and gas. Mensas packaging businessMensas packaging business had three major markets Food and Beverage, Specialty Packaging, and International. This sector was economically sensitive, as it was difficult to build any competitive advantage. This packaging business would be very high-ticket(prenominal) as customers required sore technologies that led to higher charges while customers puddle serious pressure to reduce prices, and Mensas technology was already outdated. The consultant also felt that profitability would l ine over the next several(prenominal) years in the packaging division, and would be disconfirming $100,000,000 in year 6 and declining by 20% each year thereafter. With this being said, it is better to shut down this business. It would bring about $1,200,000,000 which is approximately 70% of concur value. In this business, the potential for improvement was very low, due to the high customer demands and the fact that there wasnt much the Mensa could do to gain a competitive advantage. Given that this is the case, it is in Mensas trump out interest to rat off the packaging portion of its company to save itself from future banish cash flows. Mensas forest product divisionThe forest product division of the Mensa has suffered poor preventivemaintenance practices and inadequate training of the employees this had a shun impact on production. The forest production division contains both plants, the paperboard and the timber plant. In the paperboard division, Mensas competitors were b uilding new plants that would produce higher quality products at a lower cost.This caused to decline in profitability and along with return on investment. The cash flows for this sector would go negative for next hexad years. Consultants felt that the range for negative cash flows would be $100,000,000 to $125,000,000. They also valued the company at $600,000,000 if it were to be sold today. In the timber plant, there was low level of price fluctuations due to the nine holdings which Mensa owned. This is a valuable asset for them.Although the business had competitors in a full-size number and faced tough competition, there were chances to increase profits. The value of assets would increase by 20% over the next six years and then by 60% in the following ten years. As the firm has a good amount of holdings within this sector, which helps them balk large fluctuations in costs, it would be a good business travel for them to remain within this sector at least as a timber holder. In order to continue to be successful at either plant, Mensa would need to increase employee training and maintenance standards, to reduce the negative impact on production. RecommendationsI recommend that Mensa utilizes a variety of strategies to help increase profitability. First of all, they need to expand their financial services division as this will generate large amounts of profits. This profitability created, will be used to invest in other divisions within Mensa. The energy sector of the company, will expand the Florida pipeline as this is a low investment dollar figure for the company, and has huge returns that will continue to increase over time as gas prices increase. This sector should also stop investment in exploration and production as it will create large negative cash flows for approximately the first nine years.The packaging business is possibly the most detrimental division at Mensa. It has faced multiple problems and has negative cash flows, with this being said it is in Mensas best interest to dissolve this portion of the company. Forest product business includes different products and there is a need to apply stability strategy so to improve functional performance. There is a lot oftraining that needs to be conducted within this sector to increase production and therefore profitability.