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ASSIGNMENT INSTRUCTIONS:
Review:
https://investor.ridefox.com/investor-relations/default.aspx
https://investor.ridefox.com/financial-information/quarterly-results/default.aspx
You are playing the role of the divisional manager of the new e-bike division of Fox Factory Holding Corporation. The divisional manager is preparing to request funding to introduce the product and begin sales. Three options have been identified (note that these are fictitious assumptions):
Produce the new e-bike internally
Outsource manufacturing to another manufacturer
License the design to an existing company for royalties on future sales.
In your assignment
Develop a three-year spending and headcount forecast in Excel for the next three years for the three potential options. Please do not forecast the current year.
Explain the key issues and considerations for the forecast.
Please use the most recent https://investor.ridefox.com/financial-information/quarterly-results/default.aspx
published on the Fox Factory Investor Overview website. Please use the earnings announcement, for example: “Fox Factory Holding Corp. Announces Third Quarter 20XX Financial Results” for the relevant required information.
The Case Study–Spending and Headcount Forecast Project,
must include an Excel sheet for the forecast and a Word document for the introduction, explanations, and conclusion.
You must do the forecast on an Excel sheet with separate tabs for each option.
Each tab should include a three-year forecast of the next years for spending and headcount for one of the options.
There must be enough detail to differentiate the options. Totals and notes should be included if needed.
must be 1–2 double-spaced pages in length (not including title and references pages) which should contain the introduction, key issues, considerations for the forecast, title of the Excel sheet, and conclusion paragraph.
Please explain the different options, how they impact the spending and headcount forecasts, and why.
Your introduction paragraph needs to end with a clear thesis statement indicating the purpose of your paper.
HOW TO WORK ON THIS ASSIGNMENT (EXAMPLE ESSAY / DRAFT)
Introduction:
Fox Factory Holding Corporation is a leading manufacturer of suspension products for mountain bikes, motorcycles, and off-road vehicles. As the divisional manager of the new e-bike division, I have been tasked with preparing a three-year spending and headcount forecast for three potential options: producing the new e-bike internally, outsourcing manufacturing to another manufacturer, or licensing the design to an existing company for royalties on future sales. This paper will explain the key issues and considerations for the forecast, and analyze how each option impacts the spending and headcount forecasts.
Key Issues and Considerations:
To prepare an accurate spending and headcount forecast, several key issues and considerations must be taken into account. The first consideration is the cost of production, including material costs, labor costs, and any additional costs associated with each option. Another important factor is the potential revenue and profitability of each option, which will determine the return on investment for the company.
Additionally, the impact on the company’s brand and reputation must also be considered. Producing the e-bike internally could enhance Fox Factory’s brand image as a manufacturer of high-quality products while outsourcing to a manufacturer could potentially damage the company’s reputation if quality control issues arise. Licensing the design may result in a loss of control over the product and brand identity.
Forecast Analysis:
The Excel sheet for the forecast includes separate tabs for each option, with a three-year forecast of spending and headcount for each. Producing the e-bike internally requires a higher initial investment in machinery and equipment, as well as hiring additional staff for production, resulting in higher spending and headcount. Outsourcing manufacturing reduces spending and headcount in the short term but may lead to higher costs in the long run if quality control issues arise. Licensing the design requires minimal spending and headcount, but also provides less potential revenue for the company.
Conclusion:
In conclusion, the spending and headcount forecast for Fox Factory’s new e-bike division is a critical aspect of preparing for the introduction of the product and beginning sales. The analysis of the three potential options of producing internally, outsourcing manufacturing, or licensing the design highlights the key issues and considerations that must be taken into account. While each option has its advantages and disadvantages, ultimately, the decision will be based on a balance of profitability, brand image, and long-term sustainability.
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