Balogne Pty. Ltd. Is a mill and refinery from Mackay, Queensland that was founded by a former Cane Sugar farmer named Louis Hape, a former Cane Sugar farmer? The business grew over the years into a multi-million dollar business selling a range of sugar products including raw sugar, white sugar, brown sugar, icing sugar, etc., as well as golden syrup and treacle. This report is created to study the financial performance of the company for which Microsoft Excel modelling has been used and the information on sales trends is presented with forecasts based on trends (Beane, 2003).
The table above shows the forecast of the earnings received by the company against the sale of all its products in 2015. Based on the figures of 2015 and the rate of inflation, the forecasts have been made for the years 2016 and 2017 (Kemper, 2009).
The graph above shows the earning trend of each product sold by the company over the three years 2015, 2016 and 2017. The trend shows that the earnings have slowed down for Raw Sugar, White Sugar and Brown Sugar, increased for Icing sugar, Sugar Cubes, and Golden syrup while remained constant for Caster sugar and treacle (AJAYI, 2003).
The Chart above shows the estimates of the total earnings expected over 3 years by products. As the figure shows, the most profitable product for the company is Brown Sugar that made 27% of the total earnings followed by Raw Sugar and Caster sugar that each made 16% of the share of earning for the company over three years.
The table above shows the forecast of the earnings categorized by products for the company for the three years.
Contemporary issues in technology and business
Knowledge management and business intelligence (BI)
With knowledge management in focus, companies can accelerate their learning and improve their efficiency and agility in operations (J, et al., 2011). With knowledge management, the information is centralized and easily accessible by teams in the real time such that people can use it for learning and practicing which improves their productivity and thus, the efficiency of the company. Moreover, with the availability of all the information of the company at one place, decision making becomes fast and its quality is also improved (Dalfard, et al., 2012). With sharing of knowledge between people working in the company, a collaborative culture can be established which would enhance the value for customers as the people would be able to respond to customer queries fast as well as serve them faster and with efficiency (In Tae & Youn Sung, 2015). Considering these benefits, it is clear that knowledge management has many benefits to bring to an organization (Armesh, 2010). In Balogne, there is no knowledge management practice that is implemented and thus, the critical information on what is happening in the company is only with a few managers who are handling the respective divisions. Thus, a person from one department may not have any knowledge about how the other department is performing (Jennex, 2005). This makes it difficult for the managers in the company to take decisions fast because every time they have to take decisions, they have to depend of others to generate reports and send the information which managers can collate to get the complete picture of the company performance (Brandas, et al., 2015).
Business intelligence is a process of analysing company data to come up with actionable information that can assist managers in making decisions (Porter M. & Millar, 1985). The graphs below have been prepared using the concept of BI that involved analysis of the sales data of the company and generation of forecasts for the years 2016 and 2017 (Dataware Technologies, Inc., 1998).
As per the forecasts, the demand for Icing sugar, Sugar Cubes, and Golden syrup is rising and may be focused on for production while the sales for Raw, White and Brown sugar has drastically reduced and thus, company needs to find out the reasons behind this decline in earnings from these products (Kemper, 2009).
Despite the reduction in sales of Brown sugar as shown in the forecasts, it would still make the maximum share of earning in three years as shown in the chart above. Similar is the case with Raw sugar which is contributing 16% to the earnings. However, the earning from White sugar is expected to reduce in comparison (Ubiparipovi? & ?urkovi?, 2011).
The earning table above shows the yearly figures for different products of the company. The most earning segments from this table appear to be raw, brown, and caster sugar.
Porter’s Five Forces model
The Five forces model identifies 5 market forces that can affect operations of a company that include:
Bargaining Power of Buyers: There are limited companies that manufacturer sugar products and thus, buyers have to purchase what is available. Thus, their bargaining power is low.
Bargaining Power of Suppliers: The Porter’s five forces model identifies supplier has one of the market force that can affect the operations and performance of Balogne. If the bargain power of suppliers is high, they can increase the prices without the company having any power to bargain which would make the company suffer its margins as their costs would rise and earnings would reduce. With increased costs, the product may not remain profitable unless the company increases its price in which case, the customer acceptance for the product would reduce and the sales would decline. Thus, it can be said that the bargaining power of suppliers is high (CIPS, 2013).
Competitive Rivalry: The Company faces severe competition from some major players selling sugar but at the same time, the demand being high, their competition is not cut throat and thus, it can be said that competitive rivalry is only moderate.
Threat from substitutes: Products like honey, sugar free products, and jaggery can replace core sugar products when buyers are conscious of the health effects. However, the demand for these products is not very high still on the increasing side. Thus, it can be said that threat from substitutes is also moderate (Bischoff, 2016).
Threat from New entrants: Establishing a sugar factory is a very capital intensive business and thus, new entry is not easy. Thus, it can be said that the threat from new entrants is low (Magretta, 2012).
Balogne generates and stores data of their employees, customers, farmers, distributors, inventory, sales, and more. This data storage can also cause threats for the company if not secured properly. For instance, if the rival companies or corporate customers get the data of suppliers of the company, they could get the supplies from them which would give them cost benefit and the company would lose the business. Similarly, the customer data getting leaked to the competitor can also pose major threat to the company. Thus, data leakage can be a major security threat. Data leakages can be prevented by putting appropriate access control and authentication measures allowing only the authorised people to have access to the data (Choi, et al., 2007).
Another threat could be the loss of privacy and confidentiality of the customer in case the company misuses the same or sells it to someone else. This can be done by internal employees of the company and thus, categorized into insider threats (Schulze, 2015). Insider threat can be minimized with monitoring the data usage by the staff such that any unhealthy pattern can be identified and an insider can be stopped from misusing or leaking the data out of the company (GILBERT, 2014).
Despite the already mentioned threats, the attacks caused by hackers can still be big risk for the company. The company needs to use appropriate malware and antivirus software in the company systems to prevent such threats or at least minimize them (IPC, 2015).
Conclusions and overall recommendations
This report explored the performance data of Balogne Company that sells sugar products in Queensland. It explored the data of 2015 and the inflation figures prevailing to forecast sales and earnings of the company for three years. It was found that the earnings have slowed down for Raw Sugar, White Sugar and Brown Sugar, increased for Icing sugar, Sugar Cubes, and Golden syrup while remained constant for Caster sugar and treacle. It also identified the need for using KM and BI as well as explored the competitive forces and security threats. Based on the analyses, some recommendations may be made for the company including:
- The company is facing a decline in the revenues from raw, white, and brown sugar that have been the star products of the company. The managers must gather the data and monitor the same to find out the causes and take appropriate decisions in the favour of the company(Glennon, et al., 2012).
- As the demand for icing sugar and golden syrup is on rise, the company may enhance its production capacities to make way for stocking more of these products and sell them in the market(Turpin & Plooy, 2004).
- The company must start to use knowledge management systems to enable efficiency and increase performance of its employees
- Company can hire a business intelligence expert and take assistance of the person for implement BI measures in the company that would support the company with sales forecasts and data analysis that can help managers take better decisions in the future(Sallam, et al., 2014).
Ajayi, O. T., 2003. Interactive Data Visualization In Accounting Contexts: Impact On User Attitudes, Information Processing, And Decision Outcomes,, Lafayette: University of Louisiana.
Armesh, H., 2010. Decision Making , s.l.: WBI Con Pro.
Beane, B., 2003. Analyzing Financial Statements and Ratios. s.l.:Holocomb Hathaway.
Bischoff, A. L., 2016. Porters Five Forces. Innovation through Business, Engineering and Design: How does rivalry in a market as well as customer expectations influence the process of a design concept from a business perspective?. s.l.:GRIN Verlag.
Brandas, C., Megan, O. & Didraga, O., 2015. Global perspectives on accounting information systems: mobile and cloud approach. Procedia Economics and Finance, Volume 20, p. 88 – 93 .
Choi, J. P., Fershtman, C. & Gandal, N., 2007. Network Security: Vulnerabilities and Disclosure Policy, s.l.: Michigan State University.
CIPS, 2013. P&SM: Supplier Rationalisation, s.l.: CIPS Knowledge.
Dalfard, V. M., Jafari, A. & Alizadeh, T., 2012. Application of Knowledge Management in Customer Relationship Management Processes. Research Journal of Applied Sciences, Engineering and Technology , 4(12), pp. 1762-1766.
Dataware Technologies, Inc., 1998. Seven Steps to Implementing Knowledge Management in YourOrganization, s.l.: Dataware Technologies, Inc..
GILBERT, P. L., 2014. Surveillance of workplace communications:What are the rules?, s.l.: TOBIN.
Glennon, B., Kusch, C. & Nelson, E., 2012. Improve Reliability and Power Quality on Any System, Jeddah, Saudi Arabia: Schweitzer Engineering Laboratories, Inc.
In Tae, L. & Youn Sung, K., 2015. Technology Information Sharing and Technology Innovation Performance: An Empirical Study of the Mediating Role of Technology Development Capability. International Journal of u- and e- Service, pp. 217-230.
IPC, 2015. IT Security and Employee Privacy: Tips and Guidance, s.l.: IPC for British Columbia.
Jennex, M., 2005. Case Studied in Knowledge Management. San Diego ,USA: Idea Group Publishing.
J, M. et al., 2011. Big Data: The Next Frontier for Innovation, Competition, and Productivity, s.l.: McKinsey Global Institute.
Kemper, P., 2009. Data Analysis and Simulation, s.l.: CSWM Education.
Magretta, J., 2012. Understanding Michael Porter: The Essential Guide to Competition and Strategy. s.l.:Harvard Business Press.
Porter M. & Millar, V., 1985. How information gives you competitive advantage. Harvard Business Review, pp. 149-160.
Sallam, R. L. et al., 2014. Magic Quadrant for Business Intelligence and Analytics Platforms, s.l.: Gartner.
Schulze, H., 2015. Insider Threat Spotlight Report, s.l.: Bitglass.
Turpin, M. & Plooy, N. d., 2004. Decision-making Biases and Information Systems , s.l.: CSIR.
Ubiparipovi?, B. & ?urkovi?, E., 2011. Application of Business Intelligence in the Banking Industry. Management Information Systems, 6(4), pp. 023-030.