Timex Company has had losses in the last four years although the loss is decreasing. They have also recently changed the way they handle their financial data from the manual to using software that manages much information in a short time. There have been some factors that contributed to the improvement in sales like innovations. There are also some forces that made the company incur losses. Overproduction has compelled the firm to sell watches at the cost lower than the production cost. The reason is that they need to finish the stock of analog watches to give space for digital and newly innovated ones that are in a high demand. The report compares the past and current financial management systems to explain a milestone the organization has made in enhancing its accountability to generate profits. It also describes various categories of innovations pursued by Timex to improve its competitive advantage in the market. Furthermore, the research explains the economic growth realized by the organization and the challenges it has faced. Finally, the report gives some recommendations on what the company needs to change to gain profit.

One of the innovations that have led to increasing in the sales is Timex Ironman One. The new watch allows a person to leave the watch behind and remain connected. It is very useful especially for the activities that do not rhyme with carrying phones like exercises. It is also waterproof. This feature makes it suitable for swimming and the activities, which are done when it is raining. The challenge is that the company has to spend a lot of money on innovation as the watch is at a risk of being duplicated by fake manufacturers that may sell it at a lower price. The firm also needs to do a market research to determine market demand regularly. The analysis will help the business to avoid overproduction. The step to receive consumers views and complaints is a good one as the organization is able to know clients needs.

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Timex is a company that has its roots in America and sells watches of different designs. The firm has existed since 1854. It manufactures high-quality watches (Timex, 2016). Innovation is a key to its plans to enable meeting the needs of every customer. The company combines the design by Italian fashion and German engineering. It has the designs for everyone including men, women, boys, and girls. The watch of this firm can be used to track laps and measure speed. The watches are durable and resistant to harsh weather conditions. Thus feature makes them fit for adventure and outdoor activities. Timex Weekender collection allows consumers to change their watch color as often as they wish since they have reversible straps. The intelligent quartz collections have the designs for men who are interested in the features such as chronographs, fly-back movements, and night light. It has survived in the market for so long due to a regular change of plans and incorporating a new technology. However, it has made a loss in the past few years making it strategize and come up with the new ways of doing business.

Previous Financial Report Management: Hyperion Enterprise

Timex initially contracted Hyperion enterprise to handle the financial statements. However, the company has grown rapidly in size and complexity as there is always acquisition and introduction of new products. Timex is also being in collaboration with other brands and has around 4000 employees throughout the world. Moreover, it sells millions of watches in a year (Timex, 2016). This complexity has made Hyperion enterprise lack flexibility in accounting and reporting. Therefore, it was unable to meet the companys financial and information needs. The process was manually updated hence it could take weeks especially whenever there was a business change or introduction of a new product. There was a need for Timex to modify the way it handled its financial statements to make them more useful. The company was not able to track easily where it had lost its money or why it had faced a loss. It was hard to analyse the firms results as whole. The reason is that the information was bulk and used a lot of financial terms to provide an explanation.

Current Financial Report Management

The company had to get a solution on the management of its financial report. Multiple vendors had been evaluated for a single solution for about a year so that they could settle on their best. They needed a company that could manage their corporate budgeting together with the detailed financial reporting. The system had to be capable of dealing with complex financial report needs at all levels. It had to manage the financial reports of different co-operations, regions, countries, and business units. The system had to be easy to use so that various branches across the world would be able to use it without an extensive training. It also had to integrate with a variety of sources the system had used across the Timex group. The system also had to be affordable to them as they did not wish to spend all the money on it. They settled on Tagetik in 2013. As a result, it became operational in August 2014 (Timex, 2016; Tagetik, 2016). The system implementation was possible through the efforts of representatives from corporate finances and the key stakeholders in Europe. Internal IT resources were used to build a translation table needed to create the feeds from Oracle General Ledger. Currently, more than 80 people in Timex group use Tagetik to make regular report packages (Tagetik, 2016). Tagetik indicates the single data that had been previously represented in thirty different reports.

Tagetik is the performance management software designed to manage office finances. It takes the complex office financial statements and translates them into an intuitive, enterprise-scale performance management software solution. It merges financial and operational planning, shortens the consolidation, and analyses the results within a short time. It also molds and compares full financial statement scenarios and adjusts a strategic business plan, updates progressing future prediction and produces financial and management reports, as well as automates board reporting (Tagetik, 2016). It improves efficiency, minimizes risks, and gives results fast. It has gained trust among many leading companies across all industries. They are always innovating and utilizing future technology. It is a useful tool, which is helping Timex to manage its finances, as it is one way of ensuring growth.

Recent Innovations

To survive in the market, Timex must have used the effective marketing strategies. One of them was to welcome a change and make watches with current technology. The firm has collaborated with the mobile phone manufacturing industry. Therefore, the features they use are compatible with those in phones. For example, in 2015, it launched Timex Ironman One GPS+ (Timex, 2016). It has allowed consumers to access wireless connectivity without being tethered to a phone. The customer can leave the phone and music devices behind and remain connected regardless of the distance unlike Bluetooth gadgets. This watch is very useful in field and fitness activities where carrying a phone can be a menace.

The device has different features that include; stand- alone wireless network connectivity without being tethered to a phone. It also allows email based messaging, has a tracking device that lets a user be tracked by both friends and family. A ccstom building mode allows a consumer to send a quick message in case of danger. It can also track speed, distant, and pace in real time and immediately sends the findings to the social media handles and online fitness platforms. It has a water resistance feature of up to 50 meters whereby one can even train in the rain or wear it while swimming (Timex, 2016). It as well has a four GB memory and a MP3 component that enable it to play music via a Bluetooth headset. It can detect sunlight and has a high-resolution touch display. The company gives an offer of one year free data connectivity to new consumers. Moreover, in the second year, the data cost $40 (Timex, 2016).

Financial Growth

The company has grown in the past two fiscal years registering a positive index in the revenue gained reducing the loss with a large margin (see the appendix). The improvement was due to the new measures taken in past years to re-position its brand, reducing the amount of spending, improving the product portfolio, increasing the employee's productivity and improving merchandising and retailing presence (Pellikka & Malinen, 2015). The company has invested its time and resources greatly in connecting with the customers in the few past years by establishing brand stores on different franchise and various e-commerce platforms. The firm has even set a Timex call center to listen to customers views, questions, and complaints. In the year that ended in March 2015, the company won gold in POPAI awards. It is a worldwide platform that promotes retail practices due to its Indigo retail concept (Timex, 2016). Timex has its striving to increase the bottom and top line financial growth performance so as to enhance revenue and gain profit.

Another factor that has led to increased revenue is the fact that the watch market has grown in recent years making it a competitive company both nationally and internationally. The firm has been able to lure customers with a new innovative watch brand giving an ability to reach out to a bigger market. There has also been a shift in the traditional perception of the watch. Initially, people have viewed it as a device whose use was to keep time only. That view has changed with the recent superb innovation done in the industry. The watches are now made putting in different mindsets of society and different age groups. They are turning into a hi-tech interactive device. There has also been an increase in purchasing power whereby a type of watch is seen to define the one's lifestyle and personality. It is just like it has been with other technological gadgets. With the present kind of attitude, the company is expecting to make more sales in the coming years (Pellikka & Malinen, 2015).

In most countries, both in India and Africa, the middle and upper-class people are greatly influenced by the western fashion. It is leading to an increase in demand the watches of this firm, which has its roots in America (Turban, Sharda, & Delen, 2014). The classes of individuals are more open-minded. They are more experimental hence want to have new devices that are in the market. Their watches are also affordable to most people as they cost as low as below $2000 and as high as above $20000. They also have regular discounts to attract customers, which can be as high as above the 50% discount (Timex, 2016). They use the Internet as a way of advertising their products hence can reach out to many clients.

 
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For any company to increase its productivity and sales, employees must have worked extra hard. The business cannot realize its goals without involving its workers. Timex views its employees as the most critical assets. It provides for them a conductive working environment that makes them feel motivated to improve their performance. Therefore, there appears a feeling of ownership to the organization and encourages teamwork. They receive a good treatment, appreciation of work well done, and look after their health and safety. Turban, Sharda, and Delen (2014) say the employees determine the growth of business. Therefore, the company should ensure they are well qualified and treated in a way that they will be able to increase their productivity.

Workers are also enabled to give their views and advice which are put into practice if they are good. They take part in decision-making and other company processes. Moreover, the employees potential is being developed. The firm has developed the principles of good labor standards, given the same chance and treatment to every employee, an ethical work environment, and advocated for respect among them. It has allowed diversity and believes so as to develop the culture of social responsibility at all levels. The firms workers are the professionals who are committed and loyal to it even though their number is not too large per branch. However, it is not able to get and retain the incredibly talented workforce with high qualities at retail shops. They regularly train the employees to cope with innovations.

Revenue and Profit/Loss in the Last Five Years in Millions (US Dollars)

The company has continually made losses. Although it is recovering and considering the strategies put in place there is the hope of making a profit when the next financial year closes.

 
 

2012-03

2013-03

2014-03

2015-03

2016-03

Revenue

1835

1214

1236

1424

1733

Gross profit

861

470

572

688

735

Net income

45

(420)

(330)

(110)

(93)

EBITDA

91

(397)

(275)

(62)

(16)

 

Challenges

The fact that the company has been facing losses for four consecutive years is a sufficient proof that it has had some challenges. The problems are both internal and external. One of the internal issues is its workforce. The company was having more workforces that its finances could have supported. Even though the production might have been high, it was exceeding the market demand. It led to high supply; and so the company was forced to sell some watches at a through away price. The latter one, at some point, was lower than the production cost (Timex, 2016). They have not solved the problem as they are giving a very high discount for some watches intended to eliminate from the stock. It means the company did the production without assessing the need that had been in the market. It has also been trying to save its reputation by maintaining employees even at the loss since it is an old organization.

Currently, the firm is using web-designed software to ensure that all employees have reported to the working station in time and have not missed reporting. This software is an excellent program to control the lateness of employees to work (Tagetik, 2016). However, it does not always mean that a person will work extra hours when he or she gets to work in time. In fact, it can make them feel demoralized as they will view it as machines are controlling their behavior instead of them controlling the computer. There will also be no attachment to workers with the top management. Therefore, it will be hard to know what they are going through and what is preventing them from producing maximally. It will also be complicated for one overseer to solve all the cases of lateness, for example, when more than ten employees have reported working late. The human resource manager will use more time getting an explanation why each one of them is late leading to a further reduction in productivity.

The management is also vertical where it has a president at the top being an overseer of all stores. Then there is senior vice president followed by a design director and a chief financial officer (Timex, 2016). This type of management makes employees inferior and makes them feel as if they are not a part of the company. They do not have a need to work as hard as seem to be working for those people at the top that receive huge salaries. Even though the firm says innovations by employees are welcome, it will be very hard for a regular worker to approach a manager to give ideas. They will even consider selling their ideas to small companies which will make them feel important.

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There have also been the challenges caused by external factors (Turban, Sharda, & Delen, 2014). The competition, for example, from other watch trading companies have been a primary challenge. Some firms like Titan and Casio were able to create digital watches being sold in the market faster than the analog Timex watches. Their sales automatically have reduced and hence had to invest in the innovations to survive in the market. This period has been a huge drawback as they made a loss that they are still trying to recover. They had to borrow some loans to cater for their expenses as they hoped that the sales would improve.

The introductions of phones in the market also have led to the reduction in watch demand. People no longer rely on a watch to know time. Everybody has started viewing a watch as an ornament rather than a time keeping device. Ladies and girls will go for other time of decoration on their wrist rather than having a watch (Pellikka & Malinen, 2015). For this reason, the company had to collaborate with fashion and design firms so that they could improve their aesthetic value. This design, of course, has been not done for free leading to the increment of the watch production costs.

Another problem is fake imitation carrying the brand's name (Pellikka & Malinen, 2015). It always sells at a lower price hence most mid to low earning people will quickly go for them. Since Timex is known for its high-quality watches, it will be hard to resist buying it. It affects the firm in two ways. First, it reduces the companys sales as the original watches will be costly than the fake ones. Second, it will decrease the firm's profit margin. Then, once a consumer has bought the fake watch which will not last, he or she will think that Timex quality is no longer good. They will go for a different brand the next time to be bought.

Conclusion

With the current demand for newly innovated watches, the company has a chance of doing even better in the market. More so, the organization has already employed software that will enable it to manage its financial report in a simpler way. They can now see where they lose their finances to or the stores that are not doing well. The reduction of loss made is the clear evidence that the strategies they have employed are working positively. Their treatment towards employees is one of the ways that will help the company to increase its productivity. The continued innovation in the Timex watches is another reason that will enable them to increase sales and revenues. The fact that they have put their stores all over the world helps them to be near the customers making their product readily available and reachable. They can now get a feedback from their consumers. It gives them a chance to act on complaints and get the ideas on ways of improving their sales.

Recommendations

It is a belief of Timex company that the only way to survive in the market is through innovations. It is, therefore, critical for the enterprise to ensure that it has come up with new products regularly. There might already been other companies trying to produce a similar product which may be cheaper than produced by Timex. These fake watches will disadvantage them and reduce their sales in a large way. The only chance to avoid a loss is to make a new product before then. The company should consider investing heavily in innovation than any other thing. The new innovation should be unique and offer clients a new test. That would be an only way of enhancing customer loyalty towards the firms product.

Timex financial data shows that it has a positive index in the last four years that they have made a loss. Even though their loss is reducing, they should consider decreasing their expenses further. They should do an analysis to look at what they no longer need or what will not affect its productivity even when removed. They should, for example, reduce the number of workers and instead adopt more technology to increase efficiency in production. Besides, Timex should conduct a regular market research to identify the changes in consumer tastes and preferences. It would provide a platform for the organization to satisfy needs for its clients and hence remain relevant in the industry.

The company also needs to avoid overproduction. It should do an assessment using its sales trend to determine the approximate number of the products required in future. It will help the firm to avoid having too much stock which it will have to cater for storage cost. It will also avoid selling watches at a throwaway price offering a discount of even more than 50% like the company is currently doing. The organization should also pursue legal actions to deal with producers using Timex brand to make fake products. It will scare away counterfeits and hence help in protecting an image of business.

The company should also consider creating a better working environment where it might find a vertical form of management. In this management, all employees should be relatively equal hence can interact freely. Its workers will be able to communicate their issues easily. They will also have a chance to share their innovations and will not feel as if they are working for few individuals at the top. They will feel the ownership to the firm and work towards its success. The company should also be more prepared for any innovation in future and have insurance against losses. These measures will help it to rise again in case it fails.

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