Hill Country Snack Foods Co

1361 Words6 Pages
The case “Hill Country Snack Foods Co.” outlines the current operating and financial strategy and the Chief Executive Officer’s concerns: whether the company needs debt and what is the optimal capital structure to the company? As a snack foods company, Hill Country Snack Foods Co. did very well based on the data outlines from Exhibit 1 – Financial Information for Hill Country Snack Foods Co. (2006-2011). All of the figures of sales revenue, net income, liquidity holdings, growth rate of sales and EPS, return on assets and return on equity have stably incremental trends from 2006 to 2011. The company’s growth and success is mainly driven by its operating strategy. Current Operating Strategy and its impact There are a few of components of Hill Country’s operating strategy. The first one is that the simple and clear goal of the entire especially board of management is to maximize shareholder value. Meanwhile, the one-sixth of the shares that held by the CEO and management insiders can be regarded as a stimulation to develop management. The second component should be the efficient operations, lean and aggressive operating and capital budgets, and tight cost controls in this highly competitive industry. The third one could be the managerial philosophy of caution and risk aversion, especially to the decision-making process like introducing new products into market. In addition, according to the example of specific product for school system, the company has continual work to solicit, collect, analyze, and internally distribute customer feedback so the company could quickly react to customer requirements or preferences, and reinvent and expand its products as required to succeed in the rapidly changing marketplace. Based on Hill Country’s culture and managerial philosophy, the CEO has strong preferences for equity finance and against debt finance. As a result, Hill
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