Big Dog Collars Harvard Case Solution & Analysis

Big Dog Collars

Positive or Possible

  1. able to maximize profit each year
  2. lower health care expense
  3. no debt at the end of year 2014
  4. return on sales is higher

It may appear the positive factors are persuasive to the client without considering the four good workers who helped generate those figures described on graph in appendix C. So, RDY, LLC team will reiterate to its client that the figures may not even work, if the employees well being are not being met, prioritize and be able to obtain medication. So, the higher figures describes on the graph C may diminish.

Negative or Worse

  1.  BDC Company choose not to provide health insurance
  2. the oil increases 15-25% every year
  3. raw material cost has increased 15-25% each year as oil increases
  4. and possible loosing 4 good workers for not having health insurance
  5. higher interest expense
  6. higher taxes expense
  7. sales price increase
  8. higher repayment to the bank by the end of 2014

Evidently, the above negative factors are waste expenses, slow to speak. The graph on appendix C indicates that the company is paying more on intangible factors than the tangible assets which are their employees. BDC invest so much money on expenses than compare with providing health coverage for its employees.

Therefore, it is crucial for the client to make resounding decisions by providing health insurance coverage first and foremost. Also, Big Dog Collars (BDC) Company’s mission and philosophy statements should indicate that their employees should come first. Thus indicate that working for Big Dog Collars (BDC) is a great opportunity for either part time, full time employees or even to prospective applicants. In addition, the company net income is maximizing gradually over the years, so the four full time employees are more likely to stay with the company, as it prospers. So, healthy employees are more productive which provide higher outputs and profit increases. So, at the end of each fiscal year both employer and worker are winners!

Model Communication to Management

Spreadsheet models were used to show different possible scenarios with different possible outcomes. Assumptions and predictions were made to create possible, probable, worst case, and optimal results in relation to the decision to offer health care coverage for four full-time manufacturing employees. The business concerns when comparing costs versus returns were considered when developing the models and their outcome recommendations. By using the historical data provided and by analyzing different scenarios while using assumptions and predictions RDY was able to provide a quantitative approach to decision making. The outcomes from the methods and models used provide scenarios which allow BDC to “see” the different results and thus come to a decision that best fits the company.  Real data along with predictions, assumptions, and expert opinion conclude that BDC should consider offering partial health care coverage to their four full-time manufacturing employees with the terms that BDC will pay for fifty percent of the coverage and the employee will pay the remaining fifty percent beginning in 2013 and continuing through 2014 at which time, another analysis would be run. BDC is a growing company with room for expansion in the future and its current financial backing by the bank along with a potentially successful e-commerce business supported by the increased use of “smart phones” indicates that there is a large guarantee that recent years’ return on sales will continue in the future.

RDY made reasonable assumptions and predictions and used inputs that were constant and assumed to project different scenarios, with real world predictions to provide reasonably good results. Some of the variables will continue to remain relatively constant in future years and some will continue to increase or decrease resulting in outcomes that reflect the concerns of BDC in determining how to face expansion in the future.

Model Implementation

          After utilizing and accomplishing all the necessary steps using business modeling process by RDY, LLC team, the last step is to test the historical data obtained. The team will demonstrate the selected model and test it for the client. Again, it is a discrete data with a problem of association.  It associates the health insurance coverage, oil increase or decreases, raw material increases as well, maintaining the 5% return on sales, and increase profit. RDY, LLC recommends to provide health insurance coverage for the four full time employees only to offset the profit versus cost. The Big Dog Collar Company will pay 50% of the health insurance starting year 2013 to buy down the debt. Other restrictions are described below which correlated with team’s decisions making process, as follows;

  • BDC can provide health insurance for 4 fulltime employees
  • three males and one female workers
  • with a three year package to maintain employment expenses and control cost.
  • vision and dental are not included, an option is available for family member
  • each employee will pay 50% of the cost,
  • with a co-pay of $10.00, which is deducted upon medical visit
  • employee dependents are not covered, an option is available for family member
  • prescription drugs are generic
  • brand drugs will have $30.00 co- pay after deductible
  • emergency $ 100.00 co-pay after deductible
  • hospitalization $ 450.00 co- pay after deductible
  • outpatient $ 250.00 co-pay after deductible

Also, RDY, LLC team is suggesting utilizing one of the top three health care providers; Kaiser Permanente, Aetna, or United Healthcare. Kaiser Permanente offers the lowest insurance in the industry with more coverage including out-of-network. The out-of-network health coverage is not being offered by two other insurance companies, please see appendix F for verification.  This coverage is important for international business expansion in the near future which the BDC Company is set to achieve with health insurance coverage, if they send workers outside the headquarter. Also, both models on appendixes B and C shows by using what-if analyses on each scenario the value of each historical data where all the factors mentioned above are being met and utilized. Thus the possible and worse scenarios in which RDY, LLC team decided to utilize, in order to come up with the best implementation.

Big Dog Collars is a growing company. RDY, LLC team provides four steps to implement the model to its client. As a quick look, in the year of 2013 data the third year of BDC business operation will be providing health insurance coverage with the goal of maximizing profit, minimizing cost, using all the variables both of inputs and outputs. All of these information’s will be the tested and to conduct experiment for the year 2013.

So, first RDY, LLC will advocate to its client on the first year to strive early in using best business ethics by prioritizing the healthcare of its workers by 2013. It is also an ethical and moral practice. The team will also collaborate with the BDC human resources personnel in hiring employees including the criteria, benefits, qualifications and requirements. And before the end of the year of 2013, the team will examine the inputs and outputs as follow up, if the model implementation provided is working or not with no charge to BDC.

By doing so, the client can have a great discernment, if the firm is in the right direction, in order to achieve its goal for that particular year. As a result, BDC will be more confident to go forward for the next year without changing anything or with minimal adjustment, but certainly the company is going forward to become more productive and growing. On the other hand, RDY, LLC team will gain the trust and confident from the client and maintain BDC as a loyal customer. Also, RDY, LLC team provides quality and promotes excellent service in order to increase the number of clients from their existing customers which is the best way or form of advertising and marketing.

Second, RDY, LLC teammates will examine and scrutinize both inputs and outputs in the historical data of its client, if there is some changes need to be done within the year, especially when an economic crisis arise. It is a part of quality control service provided by the team. For example, oil price increases and so, raw materials increases as well. RDY, LLC proposes to its client to control or lower the production outputs to minimize cost, but maintain the amount of profit by keeping its quality production stagnant. In short, the client will be take advantage or can manipulate the supply and demand of its products. Therefore, the client will have less trouble keeping its operation running and without losing the business in the early stage. So then, BDC Company will simply reuse the same strategy on the following years.

Third, the possible and worse tools scenarios will be examining in the middle of the year in order to find out, if RDY, LLC team proposal is effective and functional. The team will pull out all old historical data and the current data to compare and contrast the business operation of Big Dog Collar Company. It also verifies its progress and development. Thus RDY, LLC team will be able to discern if the possible and worse scenarios are being managed well and under control.

Lastly, reinforcing the importance of covering employee’s health and making a profit are vital with business development. However, Big Dog Collar Company (BDC) cannot separate the two. It is too impossible. They are interconnected to each other. RDY, LLC will strongly recommend and impose to its client that in order to gain its goal of making a profit, the workers must be taken care of first. Also, by obtaining and generating the company historical data from possible and worse scenarios. It is very feasible for the company to provide the health insurance to its employees as a main concern of BDC Company. The company can still make a decent profit on the second year of its business operation. Therefore, the model provided by the team is worth it for the company to use and reuse!

Conclusion and Biblical Application

To conclude this case study, it is clearly defined in the business world that money and people are not separable. And people are important regardless of their education. It also indicates the relationships and accountability between the company and its employees. It has been proven and tested many times by different great companies by caring for its peoples well being first are extremely important to the integrity and the success of the company. Wal-Mart and Gillette Corporation, both CEOs promote employees morale first before the figures bottom line in the company’s income statement. For examples, Wal-Mart founder Sam Walton cares about its people and its customer,” To make better things ever more affordable to people of lesser means (S. Walton, 1962).” He decided to have an affordable price on each product that is on display on each shelf of all his stores, which is known today as “Price Roll Back.” As of today the company has a, “Net sales for the first quarter of fiscal year 2011 were $99.1 billion, an increase of 6.0 percent from $93.5 billion in the first quarter last year. Net sales for the first quarter included a currency exchange rate benefit of $2.5 billion. Income from continuing operations attributable to Wal-Mart for the quarter increased to $3.3 billion from $3.0 billion in the first quarter last year.”

(Wall-Mart.com). Thus Wal-Mart is the number one retail store in the country.

The second one, is Gillette Corporations,  Colman Mockler, CEO of Gillette from 1975-1991, faced three attacks that threatened to destroy the company’s opportunity for greatness (Collins, 2001).The two giant attackers wanted to take over bids to gain control of the Gillette bonds and try to pocket a quick gain of shares. The expected profit is 2.3 billion with 116 million shares which most executives would have yielded pocketing millions from tossing their own stock and cashing in on generous early farewell to its employees. However, Colman did not yield to the temptations; instead he fought for the people that are behind the great success of the Gillette Corporation.

However, Colman Mockler, a gracious gentleman, high integrity and great leader, did not give in, choosing instead to fight for the future greatness of Gillette. He remembers his people and their hard work. He was a remarkable and an unselfish leader.

Therefore, money is not always the key for success of the company. Also it is a result of the dedication and commitment of each worker along with their leader that posse’s humility, promotes and practice unselfish acts of kindness.

The biblical verses that RDY, LLC provided to Big Dog Collar (BDC) to reinforce the company’s goals and objectives are the following;

BDC Foreseeable Future: Proverbs 24:20 For the evil man has no future hope, and the lamp of the wicked will be snuffed out. Jeremiah 29:11 For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future.

BDC Achieving Profit: I Timothy 6:10  For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.

BDC Employee Treatment: James 5:4 Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, are crying out against you, and the cries of the harvesters have reached the ears of the Lord of hosts.     

Lastly, clearly the above verses God also warn leaders to treat their people fairly and properly. So, every person who becomes a business owner must follow the pattern of the two examples of how to become great leaders and practice Gods teaching. So, Gods word, workers and employers must connect to each to other!.............

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