Recommend a corporate finance strategy to enhance the value of an organization
Student Success Criteria
View the grading rubric for this deliverable by selecting the “This item is graded with a rubric” link, which is located in the Details & Information pane.
Scenario
Fitbit has been around since 2007. Complaints are on the rise as the customer service department is outsourced and only consists of a chat feature. Sales have started to decline as bad reviews increase.
One of the suggestions to boost sales and retain existing customers was to bring customer service back in house. This creates the need for a $2 million-dollar call center to house 60 call, chat, and email agents. You are the financial manager and therefore must review the capital structure strategy for this project, review all the financial risk associated with the project, and analyze the budget to decide if the organization will accept or reject the proposed project.
In Microsoft Word, write a recommendation that addresses the following:
Discuss Fitbit’s organizational structure from production to current customer service.
Explore all the financial risk associated with this project
Analyze the provided financial statements for budgeting and savings methods
Recommend project be accepted or rejected with detailed reasoning
Fitbit is a company that produces wearable fitness tracking devices and has been around since 2007. The customer service department for Fitbit is currently outsourced and only consists of a chat feature, which has led to an increase in complaints and decrease in sales. In order to boost sales and retain existing customers, it has been suggested that Fitbit bring customer service back in-house by creating a $2 million call center with 60 agents assigned to handle calls, chats, and emails.
In order to assess the financial risk associated with this project, one must review the organization’s capital structure strategy. This includes assessing their current debt level as well as their ability to take on additional debt if necessary (Tiwari & Jain 2020). Additionally, there are tax implications which need to be taken into consideration when determining whether or not the project should be accepted (Srivastava & Sharma 2015). Finally, it is important for Fitbit’s financial manager to analyze the budget for this proposed project as any cost overruns may make the project unfeasible from a financial standpoint (Kumar et al., 2018).
Overall, bringing customer service back in-house could benefit Fitbit financially but there are some risks associated with such an investment. By reviewing their capital structure strategy, analyzing the associated tax implications, and carefully evaluating the budget for this proposed project the financial manager can determine if this initiative will be worth accepting or rejecting.
The utilization of sentimentality assists a brand with empowering the client to experience passionate feelings for, as Picard states “All that we do is intended to make individuals go gaga for our image. Every one of the decorations of our industry – the shows, the promoting the VIPs, the media inclusion” (M.Tungate 2014). Wistfulness has related itself in design with ‘In vogue 20-year-olds stroll around seeming as though they jumped out of a vast wormhole from the 1963 or 1944 or 1922, or even 1890’. (Matchar p. 2 2015) The current highstreets is taking motivation from all periods, making a half and half time from “A-line dresses, specked swiss covers, grassland skirts”.(Matchar 2015) With A-line dresses, dabbed swiss covers and grassland skirts all creating nostalgic recollections of the homegrown housewife.
A reason for sentimentalities developing fame is the dematerialization in items in the public eye. .’This work to make up for dematerialization likewise happens on different degrees of society: in day to day existence, we frequently see the arrival of past qualities epitomized objects, for instance in the dress of those style peculiarities known as ‘trendy people’ (Neiyemer 2014 pg44) Youthful teenagers and grown-ups like to wear one of a kind dress with a significance and story to them. With an interest into their parent’s past, giving a “worth of coolness its music, its garments and its frill”. Through this one of a kind peculiarity brands are embracing this tasteful for the dress and giving another life to past patterns and pieces of clothing. Huge brands, for example, Nike and Pepsi are reusing one of a kind plans and logos from earlier years, “reporting them as legacy or retro” things. Alongside style, shows and motion pictures are additionally applying “old plan highlights and procedures to stimulate the nostalgic nerves of their watchers.” (Harvey 2017). From style to film, sentimentality is being utilized as a key offering point to draw in clients and make a profound association with their crowd. Brands know how significant wistfulness and a ‘story’ are to clients, to such an extent brands make a set of experiences for themselves. Through making a set of experiences to the brand, the client acquires a feeling of solace, as commonality and dependability is produced. As Van Dyck states ‘according to the shopper, the historical backdrop of a brand – regardless of whether it has vanished from the scene for a period (like the Smaller than normal Cooper) or regardless of whether the set of experiences is ‘phony’ (like Hollister) – addresses a sort of dependability. These nostalgic brands summon different affiliations and every affiliation has its own personal association. Along these lines, there is potential for the more effectiv