UTC Business Analysis
Improving Earnings Outlook
Through 2002-2006, UTC has had positive earnings. Over the past 5 years UTC’s revenues, net income, and working capital have all gone up.
To help achieve positive earning every year, UTC uses a process throughout all of their companies called ACE (Achieving Competitive Excellence). ACE has been implemented at UTC for seven years and is really improving their appearance, customer service and sales by employees implanting ACE tools.
Some of the most important ACE tools implemented to help UTC receive such positive earnings every year are:
- 6S (Safety, Sort, Straighten, Shine, Standardize and Sustain) - This tool helps employees improve the workplace organization, efficiency, safety and employee morale.
- Benchmarking- A process of measuring and comparing products, practices, and services against industry leaders.
- DIVE (Define, Investigate, Verify and Ensure) - A customer service problem solving process tool.
- Kaizen- Improves process organization and flow by employees taking apart a product, studying it, and then putting it back to together better than it was.
- MFA (Market Feedback Analysis) - Using customer feedback to identify and improve a problem.
- Mistake Proofing- Asking employees to brainstorm and implement techniques and devices, which prevent defects from occurring.
- QCPC (Quality Clinic Process Charting) - Used to continuously analyze a process for quality improvement by tracking turn backs to solve inefficiencies or delays in a process.
- Standard Work- Defined sequence of specific activities and work methods.
Within ACE, you have ACE gold, silver, bronze and qualifying. Qualifying means that your group of employees understands ACE and that they are starting to implement the tools to improve customer service, turn backs, and sales. ACE gold (the highest and most prestigious award you can receive) means that your group of employees completely understands the ACE tools and implements them in their daily work to achieve low turn back, high customer service, and high sales. Right now only a handful of sites are ACE gold within UTC. It is UTC’s goal to have every site ACE gold in the years to come. With every UTC site striving for ACE gold, the earnings are bound to go up every year.
Below is a graph that shows UTC’s earning outlook from 2002-2011. This shows that UTC’s earning outlook will be positive for the next 5 years to come.
Cost Structure
By looking at the income statement, 82% of UTC’s revenue is made up of variable cost. 54% of their revenue comes from cost of products sold, 18% comes from cost of service sold.
a high sales year, since it has been increasing in revenue, operating income and net income over
TWC have many strengths that essentially relate to one another. These strengths consist of having strong financial results, having a collection of great brands and having diversity in their media operations.Time Warner Cable strong financial results has shown their ability to continue to expand and fulfill their business needs. Full-year revenue increased 3.4% year over year. According to Time Warner Cable Reports 2013 4th-Quarter results this increase is driven primarily by the growth of 21.6% in business service revenue and 14.4% residential high-speed data revenue (http://ir.timewarnercable.com/investor-relations/investor-news/financial-release-details/2014/Time-Warner-Cable-Reports-2013-Fourth-Quarter-and-Full-Year-Results/default.aspx)
The above graph illustrates the CVS Health’s stock performance on yearly bases over the last twenty years. This growth in the stock price between 2011 and present is due to a few factors. CVS early strategic acquisitions positioned them to expand their reach across the Midwest and Southeast areas which increase their revenue.
In the current industry trend of Universal Health Services, the company has a common stock traded on the New York Stock Exchange under the symbol UHS. This organization acts as the advisor to Universal Health Realty Income Trust (uhsinc.com, 2014). In fact, the annual reports of 2012-2014 show the attributable to UHS was $406.4 million in 2012, $452.1 million in 2013, and $581.8 million in 2014. Hence, compared to 6.96 billion in 2012, the net revenue increased 4.6 percent; to 7.28 billion in 2013, which further increased 10.7 percent; to 8.07 billion in 2014 (Annual Report Archive,
Ensure that effective measurements and monitoring mechanisms are in place to determine whether implemented solutions have yielded predicted benefits and to drive continuous process improvement.
The company has won awards for example the 2014 Ad Age Marketing Award for its strong marketing campaign to promote its women lines. UA’s “I
When mistakes are made no one takes care of them. Management tends to say they’ll take care of it, then never does. Management has a “lack of quality attitude”.
... As it has already done with its customers, the company has taken its suppliers as partners in pursuing Six Sigma quality, and it technical assistance and offers training to help them continuously improve.
reputation of being the best in the industry. To do this they focused on and
ACE is a program designed for students to get involved within their communities. In the beginning of this program, T.J. was very quiet, but getting to know the program more made him enjoy the activities. T.J. soon started to become a leader within this program. T.J. now liked the program and began setting records and improving his community in a variety of
[2] Excerpted from Nancy R. Tague's The Quality Toolbox, Second Edition, ASQ Quality Press, 2004, pages 359-361.
So this shows that quality has always been their number one concern in the products, although their quality management has changed throughout the years of their existence , the change has only been to continuously improve their process to what it is now . At first quality management was prescriptive and centrally controlled by the parent company but after the company has grown into other regions of the world, the company realized the need to cater a certain type of quality according to the requirements and the type of market they are dealing with. Although consistency is needed in their products they offer hence they have developed TCCQS in 1995 so that the quality requirements can be standardized for everyone to easily follow as
Sharman, P. (1992). A Tool Kit for Continuous Improvement. CMA. 66 (4) 17. Retrieved April
...es dealing with team building, activities that will help in diagnosing, feedbacks, activities for process consultation etc (Robbins, 2010).
In the operations area we need to consider five aspects which will be critical to measure. These ‘performance indicators’ are: