Mensa has been engaged with the various businesses, which include; packaging, forest products, energy and financial services businesses. There is a lot of change on multiple levels of the company which is necessary for Mensa to achieve profitability. This strategic plan will provide the correct direction to the business to achieve this goal. Mensa will need to implement a variety of different techniques in order to become a successful growing business. Without the changes outlined in this strategic plan, the company faces significant financial distress.
Mensa’s Financial Services Business This business provides insurance, mortgage loan, real state financial services and consultancy services to its …show more content…
The consultant also felt that profitability would decline over the next several years in the packaging division, and would be negative $100,000,000 in year 6 and declining by 20% each year thereafter. With this being said, it is better to shut down this business. It would bring about $1,200,000,000 which is approximately 70% of book value. In this business, the potential for improvement was very low, due to the high customer demands and the fact that there wasn’t much the Mensa could do to gain a competitive advantage. Given that this is the case, it is in Mensa’s best interest to sell off the packaging portion of its company to save itself from future negative cash flows.
Mensa’s forest product division
The forest product division of the Mensa has suffered poor preventive maintenance practices and inadequate training of the employees; this had a negative impact on production. The forest production division contains two plants, the paperboard and the timber plant.
In the paperboard division, Mensa’s competitors were building new plants that would produce higher quality products at a lower cost. This caused to decline in profitability and along with return on investment. The cash flows for this sector would go negative for next six years. Consultants felt that the range for negative cash flows would be $100,000,000 to $125,000,000. They also valued the