BuyThings.com Strategic Growth Plan Overview
How did BuyThings.com implement its growth-focused strategic plan in 2020?
Implementation of Growth-Focused Strategic Plan
In 2020, BuyThings.com (BT) developed and executed a strategic plan to stimulate growth and create shareholder wealth. The plan involved expanding into new markets and restructuring activities across three operating segments. These segments include online retailing, content enabling, and electronic device manufacturing. The company aimed to be customer-focused and provide a diverse range of products and services to its customers.
Expansion into New Markets
Online Retailing Segment: The first segment of BT focuses on offering a variety of products from large brands, including books, movies, video games, music, and electronic devices. The emphasis is on providing a wide selection, competitive prices, and convenience for home shopping. This strategy aims to attract and retain customers through an extensive product range.
Content Enabling Segment: BT also provides services to individuals worldwide to sell their products on the company's platform and fulfill orders through BT's purchasing information system. This segment focuses on empowering content developers, such as musicians, authors, filmmakers, and app developers, by offering visibility and market reach to publish and sell their intellectual property.
Electronic Device Manufacturing Segment: BT manufactures and sells electronic devices, with its flagship product being the eReads e-book reader. Customers can purchase eReads and downloadable books directly from BT's website. In addition to device sales, BT started offering advertising services, such as banner ads, to businesses seeking to advertise on its platform.
Strategic Incentive for Management
To motivate management to fully implement the strategic plan and enhance shareholder wealth, the board of directors approved a 5% bonus of the 2021 net income if both revenue and net income increased by 15% compared to 2020. This financial incentive aligns the interests of management with the company's growth objectives and financial performance goals.
As a manager in the internal audit department, your role in reviewing the accounting policies adopted by management is crucial to ensuring the accuracy and fairness of the financial statements. The audit committee's scrutiny of the new, nonroutine transactions resulting from the strategic plan emphasizes the importance of clarity and transparency in reporting financial results.