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2
Part Three
Based on your analysis, what are the financial strength and weakness of your organization
today?
The financial strength of the App Holster is their innovative application for the smartphones, this
innovation can boost the sales of their application which will have direct impact over App
Holster financial stability and can improve its yearly revenue from $ 50,000 (App-Holster-LLC,
Online). There are numerous financial weaknesses of App Holster LLC; the biggest pitfall of
App Holster LLC is the greater number of employees. According to the survey, the average
number of employees in the software development sector is 3 persons, whereas, the total number
of the employees in the App Holster LLC are 6 persons. This greater number of employees, as
compared to the market, results in higher salary cost and higher compliance cost. Lack of market
share is also another financial weakness of the App Holster LLC, which results in lesser revenue
as compared to its market competitor. It is surveyed that almost 66% of the market generates
higher revenue as compared to the revenue of the App Holster LLC. Therefore App Holster
should evaluate the technique which helps it to generate higher revenue and cope up with its
competitor to remain in the market.
What internal and/or external constraints will challenge your ability to improve financial
performance?
The biggest obstacle for the App holster LLC in improving its financial performance is its large
number of employees. Because of the large number of employees, App Holster LLC has to pay
huge cost in the form of salary to its employees, which is reducing its profitability. However, it
impacts App Holster in different ways, as it increases their number of employees whereas, in the
similar industry, the number of employees are three. The revenue per person is also lower than
the industry, which are operating in the similar sector. Another obstacle is the presence of large
application development companies, which holds major share in the market, limiting App Holster
LLCs ability to increase its revenue. Lack of innovative application and un-diversified
application portfolio also contribute as an obstacle in the way of App Holster to improve its
financial performance, as App Holster mostly develop application of same category not focusing
the requirement of the market, and maintaining the same category of application. By not
diversifying its portfolio, App holster will remain unable to enter into the competition that is
prevailing in the market and will remain unable to capture the market share in order to improve
its profitability and its financial performance (App-Holster-LLC, Online).
Evaluate your organizations financial prospects given these opportunities and constraints?
App Holster LLC has the financial prospects in improving its overall financial performance; this
can be evaluated by looking at their improved profitability form 2013-2015, and its improved
margin from 2013-2015. However, the necessary steps should be taken by the App Holster to
reduce the number of employees to the benchmark set in the industry, by hiring the specialist of
the application development which will reduce the number of employees. Through efficient sales
Bibliography
App-Holster-LLC. (n.d.). Official Website of AAP-Holster, retrieved dated 11/15/2015 from
http://appholster.com/
Tunguz, T. (n.d.). 4 Major Competitive Trends. App Competition Website, retrieved dated
11/15/2015 from http://tomtunguz.com/app-store-competition/