1 / 7

GenuSync Company Background

GenuSync Company Background. September 2002. Agenda. GenuSync Background Business Issue: Achieving Profitability Need for Product Cost Information Next Steps. GenuSync. Background

uri
Download Presentation

GenuSync Company Background

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. GenuSync Company Background September 2002

  2. Agenda • GenuSync • Background • Business Issue: Achieving Profitability • Need for Product Cost Information • Next Steps

  3. GenuSync • Background • GenuSync, a new Internet service provider, has advanced proprietary products, a solid reputation and a high quality nationwide technology infrastructure. • It is now marketing, selling and successfully delivering high-quality products and services to over 200 customers. • Future product/service strategy will emphasize more value-added products, such as the “premier managed server;” this should result in higher average revenue per customer.

  4. I. GenuSync (cont.) • Background (cont.) • Internally, GenuSync is hiring key management staff, and attempting to improve internal controls and its administrative infrastructure (such as administrative systems and an annual budgeting process). • As with many start-ups, GenuSync has not yet become profitable. Its network and data center infrastructure costs exceed current revenue.

  5. I. GenuSync (cont.) • Business Issue: Achieving Profitability • To move closer to achieving profitability, GenuSync must answer key questions: • Are we pricing our products appropriately? • What is it costing us to provide each of our products? To serve each type of customer? • Are we making money on each of our products? Which has the highest profit margin? • How do our costs compare to our competition’s? • Can we produce our products at lower cost? • What changes in pricing, product/service mix, or operations are required to improve long-term profitability?

  6. I. GenuSync (cont.) • Need for Product Cost Information • GenuSync must have the capability to measure its product costs to answer these strategic questions. • Its product costs will be difficult to measure: • a high percentage of the costs incurred are indirect; determining how to allocate the indirect costs will affect which products look most profitable. • “excess capacity” must be determined; allocating costs of excess capacity will distort product costs. • as a new business, accurate cost information may be difficult to obtain.

  7. Next Steps • Develop approach for Strategic Cost Analysis project (Sun Consulting) • Discuss/revise approach as necessary • Identify GenuSync staff who will participate • Project team • Interviewees • Corporate management • Sales & marketing managers • Data center managers • Determine approximate project schedule

More Related