Pure Solutions Limited’s Consultancy Challenge

Subject: Company Analysis
Pages: 10
Words: 2742
Reading time:
10 min
Study level: PhD

Executive Summary

First and foremost, the team appreciates the fact that the main goal of any organization is to maximize the shareholder’s wealth. This objective usually arouses confrontations between the shareholders and the management when it realizes both the short-term and long-term goals of the organization. Therefore, an agreeable equilibrium has to be struck between profit maximization which is a short-term goal that the management strives to achieve, and wealth maximization for future purposes which are the long-term goal that concerns the shareholders in an organization.

This reflective essay is going to evaluate Pure Solutions Limited, a personal computer manufacturing company. The mission of this company is to achieve profitable growth through value for money, technology, and being a responsible employer. It adopts a marketing strategy of instantly attacking its competitors whenever possible to lead the industry and maintain its supremacy. To preserve its huge market share, it aims to be a low price provider in the market and provide high-quality services in addition to having the most reliable products in the market.

Introduction to the Areas of Investigation

The author of this essay is going to critically analyze the report that was provided by Pure Solutions Limited. Some of the areas of investigation that this report is going to look at including the management technique, performance of the company during the five quarters, asset management, market share, and marketing strategy, human resource management, investments for future purposes, product management, and development, and sales and financial analysis (Moon 2000).

A critical investigation of the above-mentioned areas will clearly show the strengths and weaknesses of Pure Solutions Ltd. From this perspective, the challenges that the company faces shall be tackled. To add to this, the writer is going to shed light on the level of completion in the industry and the market and also rate Pure Solutions Ltd by these factors.

Personal Reflections

Performance Issues

The following are some of the performance issues that are going to be addressed by the author in this personal reflection report. It is important to note that these issues are the ones surrounding the company and which the author identified as some of the most significant. They affect the performance of the company in one way or the other.

Management Technique

The team in this case decided to use the all-inclusive management technique which seemed to pay off in the presence of an overall leader. This can be seen from their report given the fact that it does not implicate departments, sections, or heads. On the contrary, the report cumulatively apportions the blame for the company’s failure to those sections. Statements such as “the team believes” and “one of the poor indicators of our performance” can be seen throughout the report (Johns 2004).

Andersen, Grude & Haug (2004) are of the view that this technique is the main reason why there are failures in companies. For instance, there was no market research or development of the products within the last five quarters. It is noted that it is important to conduct such studies to identify the changing needs of their customers. As a result, this led to the loss of a large portion of their market share (Milan 2010). Also, the research and development department was poorly funded simply because no individual was solely responsible for this. This means that at the end of the day there was no product development. Assigning key duties to individuals will create a fully responsible team of employees (Maylor 2005).

Performance of the Company from Quarter 4 to Quarter 8

It is noted that the company recorded an increase in profit growth in comparison to the previous quarters. It is further noted that during this period income and sales grew by more than 100%. Due to the saturation in the market and stiff competition, the growth declined in the eighth quarter. In comparison to Velcom Innovators- the major competitor in the industry- Pure Solutions performed well. This is attributed to the fact that the latter had a larger share in the market thus outshining others in the industry.

Asset Management

Asset management was the weakest area for Pure Solutions in the company’s scorecard and that of the industry in general. This component of management measures the capability of the leaders to use the firm’s assets to generate revenue that will benefit both the management and the shareholders (Turner & Simister 2008). On the scorecard, Pure Solutions lagged behind its key competitor Velcom as shown in table 1 below:

Table 1: Analysis of Asset Management

Q4 Q5 Q6 Q7 Q8 Cumulative Score Competitor Industry Average
Asset Management 0.63 0.93 0.83 0.76 1.14 0.91 1.28 1.10

Pure Solutions performed poorly recording an asset management base of 0.91(cumulative score) behind Velcom’s 1.28 cumulative score. Even though the company had cash in hand of USD 17,136,992 in Q8- representing 70.1% of the total assets- it only had USD 9,400,000 in debts. This implies that there was practical spending on the part of the management and a calculated risk aversion, thus compromising the ideal situation for the shareholders (Clark & Fincham 2008).

According to Desalvo (1972) cash is a liability rather than an asset if it is not used in a resourceful way in the company. In this case what the scholar refers to as ‘resourceful way’ is when cash is used to generate revenue. This translates to penalties for any foregone or unmade investment from the cash balance in the cash books. In the case of Pure Solutions Company, there was a huge cash balance that was not invested translating into poor asset management in the industry. This made the company lose focus of the long-term strategy of the organization and instead opted for profit maximization. On a positive note, the company reported high Earnings per Share figures.

Market Share and Marketing Strategy

As earlier mentioned in this personal reflection report, Pure Solutions had the largest share in the market in the period between the fourth and seventh quarters. However, this market share declined. Cumulatively, the company’s market share declined from 81% to 55% in the sixth quarter. This was attributed to new entrants in the market. Their key competitor (read Velcom) had closed the gap of six percent in the eighth quarter. According to Turner (1999), this can be attributed to poor product development. It is noted that this had significant impacts on the consumers’ preference for the products of their competitors. This loss of market share may have occurred as a result of a lack of future investment and weak asset management in comparison to that of the competitors such as Velcom.

The company’s marketing strategy involves reacting to any changes in the market especially after the competitor changes their marketing strategy. This includes lowering the price of their products, a strategy aimed at undermining their competitors. Even though this is unhealthy to businesses in any given industry, it has worked to the advantage of the company in this case. The strategy has contributed to the growth of the market share for Pure Solutions for four consecutive quarters. Another marketing strategy is aggressive marketing which has the effect of creating demand for their consumer (Elliot & Elliot 2004). The number of qualified sales personnel has also worked to the team’s advantage because they are rated above average when it comes to the training of sales staff.

The company’s performance in terms of marketing strategy was rated average despite it being unrealistic. The charging of lower prices than the competitors can be termed as a bogus strategy that the company has adopted (Argyris 2000). Armstrong, Kotler & Silva (2005) argues in favor of the training of sales staff in a company, terming it as a wise strategy on the part of the management. It helps in ensuring that they are motivated and can convince the customers.

Human Resource Management

The company advanced the skills of its employees whereby the entire sales personnel attended training sessions to perfect their marketing skills (Cockman, Evans & Reynolds 1999). Additionally, the company has a motivated workforce given that it was the market leader for a long period, something which is not possible with a demotivated workforce.

The company’s performance in human resource management can be described as impressive. On the scorecard, Pure Solution had a cumulative score of 0.8 out of 1. According to Moon (2000), this can only be achieved through the hiring of qualified personnel, especially in the sales and manufacturing departments. It is in these two departments where there was a tremendous increase in productivity and sales recorded in all quarters except the eighth one when competition intensified.

Investment in the Future

There was a poor investment in the company especially for future purposes despite the healthy cash inflow in the balance sheet. The company’s investment cumulative score is shown in Table 2 below:

Table 2: Scores Analysis of Investment for Future Purposes

Q4 Q5 Q6 Q7 Q8 Cumulative Score Competitor Industry Average
Investment in the Future 2.93 7.42 4.92 1.71 1.59 3.91 5.37 4.64

From the table above, it can be concluded that investment for future purposes declined from 7.42 cumulative points in the fifth quarter to 1.59 points in the eighth quarter. The competitor was ahead of the company with a difference of 1.49 points from their 3.91 points.

Product Management and Development and the Four Ps

Product is one of the four Ps in marketing and it plays a considerable role in any business. The company has nine different products in the market. The products are distributed in four different market segments as of the eighth quarter. These products (for example that of innovators) scored 85 points in terms of brand judgment as compared to 75 points for the three competitors. The second segment (traveler’s segment) scored 86 points in brand judgment as compared to 83 points in the product judgment. The other three Ps- place, price, and promotion- work to Pure Solutions’ advantage but if left unchecked, the company may end up losing its market share and relevance shortly to their competitors.

In terms of product development, research and development were almost at par with that of its chief competitor. Velcom had invested heavily in this sector compared to us and as a result, has improved on its product uniqueness. This greatly affected our market leadership helping Velcom catch up with us. As a result, the market structure was altered and ended up becoming a duopoly.

The marketing department had an outstanding performance and was rated the best performing department in the organization. This is because the team sufficiently used resources available for marketing and implemented the four Ps of marketing- product, price, promotion, and place. According to Armstrong et al. (2005) the four Ps which the company was intended to create a need and means of satisfying such a need (the product). There were also meant to help in deciding how much the company will charge for the offer (price) and in designing delivery means to ensure that the offers are availed to the target customers (place). Finally, the 4Ps strategy was meant to help in making decisions on how to communicate with target customers about the offer and persuade them of its merit (promotion).

The company was challenged in terms of product development but the other three Ps were sufficiently catered for. This aspect helped the company to cling to the market share despite losing a small percentage to its competitor.

Sales and Financial Analysis

Even though the management provided scanty information regarding the sales and financial position of the company, it can be concluded that the company’s overall performance is good (Elliot & Elliot 2004). Table 3 below illustrates both the sales and income growths in the company.

Table 3: Growth of the Company Quarter by Quarter

Q4 Q5 Q6 Q7 Q8
Sales Revenue Growth 129% 86% 41% 67% 110%
Gross Margin Growth 162% 103% 43% 75% 76%
Net Income Growth 262% -612% 90% 2806% 28%

There is a constant growth in sales even when competition increases. This is attributed to the company’s superior products and marketing approach. This means that even though competition increases, consumers are satisfied with our products. There are various reasons why the consumers are satisfied with the products of this company. Some of them as already explained include the fact that the products at times are offered at lower prices than those of the competitors. As such, the threat of substitutes is neutralized in the company.

There is a steady growth in net income within the first four quarters of business. However, this decelerates in the long run. This is a result of the management’s focus on satisfying the shareholder’s demand. As a result, the Earnings per Share grew from 11% to 64% in the last quarter which is an outstanding performance in a technology-based company.

Company’s Strengths and Weakness

After critically analyzing the information provided above, it can be concluded that the company’s strongest and vital section is the marketing department which ensures that the organization stays ahead of the others in the market. This is by having the greatest share in the market. Another strong aspect of the company is the management team. Going by the record that it has set, it is obvious that the management team has proven to be efficient and effective in running the firm by setting objectives and ensuring that such objectives are met. This is also seen from the quarterly reports that it has posted. The reports are a reflection of the company’s performance in these areas.

The company’s weakest areas include the research and development and investment sections. For investment, the company lacks a clearly defined investment schedule that will ensure that the current idle cash is turned from a liability to a steady cash inflow now and in the future (Nissi & Penman 2005). Lack of research and development has been one of the major reasons why the company has lost a huge chunk of its market share. Therefore, routine research and development of the products should be done to avert cases of product “obsolesce” (Armstrong et al. 2005). The company’s competitors exploited this aspect and came up with unique features in products that seem to have attracted some of the customers drawing them away from Pure Solutions.

Exploration and Interpretation of the Issues

It is noted that Pure Solutions explored all the available avenues in an attempt to ensure that it retains its position in the market by combining various techniques. This translated into a steady growth in net income and an increase in Earnings per Share. Despite having a poor investment portfolio, the company managed to ensure that short term objectives are fully realized


Pure Solutions has proven to be an effective company since it has managed to maintain its market share despite stiff competition. However, the company should change its core marketing strategy since the competitors can use it to drive them out of the industry. The company should integrate some aspects of its long-term goals into the short-term goals to ensure that future uncertainties are catered for. A critical assessment of the company’s financial records reveals that it tends to accumulate more cash and this should be discouraged.


To start with, bogus marketing strategies such as ensuring that the prices are low should be discouraged. Meredith & Mantel (2008) are quoted as saying that the operating expenses can surpass net income. This may lead to a loss-making trend which will then be followed by the collapse of a company. Informed strategies should therefore be adopted. Maylor (2005) recommends some strategies such as promoting consumer intelligence, product development, regular market research, and others. This is to avert loss of relevance in the market. The scholar also recommends the adoption of cost-efficient management techniques that will ensure the effective and efficient running of the company. This will not only increase shareholders’ wealth but also value for money paid by the customers.

The short-term objectives should be realigned with the long-term objectives. This will help solve the company’s investment problem. As such future investment will be adequately catered for in realizing short-term goals. Product research and development should be a routine practice. This calls for a prudent investment schedule to ensure that funds are availed in time for such research and developments to be carried out on the products. The tradition of holding cash should be discouraged; instead, the money should be invested in other ventures to diversify business risks.


Andersen, ES Grude, KV & Haug, T 2004, Goal directed project management, Kogan Page, London.

Argyris, C 2000, Flawed advice and the management trap, Oxford University Press, New York.

Armstrong, G Kotler, P & Silva, G 2005, Marketing: an Asian perspective, Pearson Prentice Hall, New Jersey.

Clark, T & Fincham, R 2008, Critical consulting: new perspectives on the management advice industry, Blackwell, Oxford.

Cockman, P Evans, B & Reynolds, P 1999, Consulting for real people, McGraw-Hill, New York.

Desalvo, JS 1972, Urban household behavior in a model of completely centralized employment, Faculté Universitaire Catholique de Mons, Sao Paulo.

Elliot, B & Elliot, J 2004, Financial accounting and reporting, Prentice Hall, London.

Johns, C 2004, Guided reflection: advancing practice, Blackwell, Oxford.

Maylor, H 2005, Project management, Prentice Hall, London.

Meredith, J & Mantel, S 2008, Project management: a managerial approach, John Wiley & Sons, London.

Milan, K 2010, Management consulting: a guide to the profession, International Labor Office Printing Services, Geneva.

Moon, J 2000, Reflection in learning and professional development: theory and practice, Routledge, London.

Nissi, MD & Penman, SH 2005, Ratio analysis and equity valuation, McGraw Hill, Chicago.

Turner RJ & Simister, S 2008, Handbook of project management, Gower Publisher, London.

Turner, JR 1999, The handbook of project-based management, McGraw Hill, Maidenhead.