Case Scenario 1: Syco

question 58

Essay

Case Scenario 1: Syco.
Syco is a diversified company that has six primary lines of business. Fifty percent of its revenues and 18 percent of its profits come from retailing. Most of its retail outlets are discount department stores that serve as anchor tenants for large suburban shopping malls. The remaining businesses are broken out as follows: Insurance accounts for 30 percent of revenues and 50 percent of profits; consumer credit card operations are 6 percent of sales and 17 percent of profits; 5 percent of revenues and 6 percent of profits come from its stock brokerage business; commercial and residential real estate operations generate 4 percent of sales and 8 percent of profits; finally, 5 percent of revenues and 1 percent of profits come from its online portal business. The company's management states that all these businesses are essential to its competitive future.
-(Refer to Case Scenario 1). Why might there be so much variability among the proportion of sales versus profitability contributed by each of the businesses? Does this mean that Syco is more successful in its insurance business than in its retail business?

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Definitions:

Health Plans

Insurance schemes or programs that provide coverage for medical services and support health care management.

HEDIS

The Healthcare Effectiveness Data and Information Set is a tool used by more than 90% of America's health plans to measure performance on important dimensions of care and service.

Managed Care Organization

A health insurance company that provides healthcare services to its members through a network of doctors, hospitals, and other healthcare providers.

Health Maintenance

Activities and practices aimed at promoting wellness and preventing disease, through regular check-ups and healthy lifestyle choices.