Industry 41848 Presented By Ricky Y. LIU
! http://www.rickyview.com
Pre-view • Overall Performance • Strategy Background • Initial Strategy • Emergent Strategy • Future Situation Analysis • Future Strategy Consideration • Q&A http://www.rickyview.com
Overall Performance Final Scores 5.7
6 5
4.75 4.1
4
3
3 2
1.8 1.3
1 0 Andrews Baldwin Chester
Digby
Erie
Ferris http://www.rickyview.com
Overall Performance Cumulative Profits
Stock Price
$72,308,844 $40,107,55 2
$39,941,59 9
$60,219,87 9
$95.13
$100.00 $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 -$7,873,562 $10.00 $0.00 $20,856,02 7
R1
R2
R3
R4
R5
Andrews
Baldwin
Chester
Digby
Erie
Ferris
R6
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Overall Performance Ending Market Capitalisation in Millions
Market Share 25.00%
356
21.40%
20.00%
21.10%
22% 20.40%
15.00% 182
170
4
18.40% 17.30%
10.00% 25
5.00% 3
0.00% R1 R2 R3 R4 R5 R6
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Strategy Background Cumulativ e Profits
Ending Market Share
avg ROS
avg Asset Turnove r
avg ROA
avg ROE
Ending Stock Price
Ending Market Cap
30%
30%
0%
0%
0%
0%
10%
30%
• The selected success criteria are based on the final round result in stead of the average performance. • Associated with higher risks at the beginning. (eg. Large Investment for Plant ) • However, it may result in higher returns.
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Assumption “Six Rounds ONLY” About Capacity Here is the process we used in calculation. If the simulation continued to Round 6, Gap between selling and repurchase the capacity, which we named Lost.G is
0.65 0.35 5.25 Loss.G = 1 ! = = 1 1 15 Capital loss depreciation, which we named Lost.D is
years Loss.D = 15
, “years” represents the years interval between selling and repurchase. If,
Loss.D ! Loss.G " years ! 6 The loss associated with repurchasing the capacity before Round 7 is greater than the total depreciation. http://www.rickyview.com
Initial Strategy Niche Cost Leader strategy in Low Tech class: • Improve the Automation to reduce labor cost. • Reduce MTBF to reduce material cost. (Eg. Traditional: 9%, Low End: 7%)
Niche Differentiation in High Tech class: • • • •
Low Automation Rate. R&D in every round. Highest MTBF. Introduce Dodgy in High End segment.
TQM: • Earlier Investment More Benefits. • $1.5M in R1; $1.5M in R2; $1.0M in R3 – Reach Diminishing Return.
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Assistance Tools High End
Pfmn
Size
Months
Prmn
Size
8.9
11.1 Janurary
9.0
11.0
Round 1
9.8
10.2 February
9.1
11.0
March
9.1
10.9
April
9.2
10.8
May
9.3
10.7
June
9.4
10.7
July
9.4
10.6
August
9.5
10.5
September
9.6
10.4
October
9.6
10.4
November
9.7
10.3
December
9.8
10.2
Round1
Round 0
Round2
Round 1
9.8
10.2 Janurary
9.9
10.1
Round 2
10.7
9.3 February
10.0
10.1
March
10.0
10.0
April
10.1
9.9
May
10.2
9.8
June
10.3
9.8
July
10.3
9.7
August
10.4
9.6
September
10.5
9.5
October
10.6
9.5
November
10.6
9.4
December
10.7
9.3
Ideal Spots In Month
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Emergent Strategy Marketing • Marketing Promotion • Sales Budget Production • Actual sales versus Potential sales • Automation Rate
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Market Promotion
10000 9000 8000 7000
Dodgy
6000
Dune
5000
Dot
4000
Dixie
3000
Dell
2000
Daze
1000 0 R1
R2
R3
R4
R5
R6 http://www.rickyview.com
Sales Budget 16000 14000 12000
Dodgy
10000
Dune Dot
8000
Dixie
6000
Dell
4000
Daze
2000 0 R1
R2
R3
R4
R5
R6 http://www.rickyview.com
Actual Sales VS Potential Sales Market Share in Percentage 24 22 20 18 16 14 12 R1
R2
R3 Actual
R4 Potential
R5
R6 http://www.rickyview.com
Automation Rate 10 9 8 7
Daze(Trad)
6
Dell(Low)
5
Dixie(High)
4
Dot(Pfmn) Dune(Size)
3
Dodgy(High)
2 1 0 R0
R1
R2
R3
R4
R5
R6 http://www.rickyview.com
Future Situation Analysis 30000
2nd Shift Capacity VS Industry Demand for R6 24015
25000 20000
17404
16533 15000
12526
12481
10000 6286
6573
8217 5662
5437
5000 0 Traditional
Low End
2nd Shift Capacity
High End
Performance
Size
Industry Demand for R6 http://www.rickyview.com
Strategy for the Next Three Rounds Strategies Would Be Employed Within the First 6 Rounds
Six Rounds ONLY • Labour Negotiation: Not Pulling Trigger. • Other Consideration: Introduce Dual to High End; Dixie moved to Traditional (Pfmn/Size) from High Low End Positioning Consideration
End. http://www.rickyview.com
Strategy for the Next Three Rounds Strategies for the Next Three Rounds
R&D • Overall Positioning • MTBF for Daze (Trad) may decrease
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Strategy for the Next Three Rounds Strategies for the Next Three Rounds
Marketing & HR • Maintain the current strategy.
Production • Increase overall capacities and Automation Rates. • Increase capacity of Dot (Performance). (eg. Ferris 19%)
Finance • Issuing stock will be the major source to raise cash. • Account Receivable (AR) to be 90 days. http://www.rickyview.com