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Capsim - Baldwin Presentation (Team Erie)

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by

Mathew King

on 1 June 2016

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Transcript of Capsim - Baldwin Presentation (Team Erie)

BALDWIN
01
02
03
04
05
MISTAKES & ETHICS
STORY AND STRATEGY
2020
2018
2017
2016
STORY
MISTAKES & ETHICS
BOARD
COMPETITION
EVALUATION
BOARD SHAKE-UP
COMPETITION ANALYSIS
25%
98%
63%
Andrews
Ferris
Baldwin
EVALUATION
PERFORMANCE //
2016 to 2024
//AMANDA LEI
//MICHAEL CULLEN
//JAMES FAN
//MATHEW KING
//GEORGIA ROWLEY
2019
2021
2022
2023
2024
//STRATEGY - Cost Leader:
R&D: Every Segment
Marketing: Low price
Production: Increased Automation
Finance: Long Term Bonds, Stock Offerings
Lowest price in all five segments
R&D problems emerged
High-tech segments poorly placed
Marketing investment too low
Loss of competitive advantage
Sacrificed R&D
Automation low
High end R&D until 2020
Emergency loan
Change in success measures
Invested in TQM
Sale of capacity
Shrinking market share
Triple the sales
Market dominance
Increased capacity
Conservative approach
Took risks
Introduced new products
Slow product introduction
Utilised second shift
Market leader by 2020
BALDWIN
//MARKET SHARE
8.52%
13.26%
27.47%
Andrews
Baldwin
Ferris
//PRODUCTS
Traditional (11 sensors):
Baker - ranked 6th
Low End (7 sensors):
Bead - ranked 3rd
Budget - ranked 7th
High End (10 sensors):
Bid - ranked 10th
Performance (7 sensors):
Bold - ranked 5th
Size (7 sensors):
Big - ranked 7th
//CREDIT RATING
2016 - B
2017 - CC
2018 - CCC
2019 - CC
2020 - C
2021 - C
2022 - C
2023 - DDD
2024 - DDD
//STOCK PRICE
2016
2018
2020
2017
2019
2021
Loss
Sales & promo cut
Pricing set too low
Emergency loan
Sales & promo increased
Recovery
Major R&D updates
Utilitarian approach toward consumers
Total Quality Management
$2.8 million - UNEP Green Program
//LABOUR NEGOTIATIONS
//ETHICAL CONSIDERATIONS
Starting rate
2020
2022
Industry average
Ceiling
Industry median
$20.10
$25.75
$22.11
$28.30
$25.50
$28.00
$30.80
$34.19
//OVERTIME
//STRATEGY
Strategy: Cost Leader
Measures: Product Cost, Market Share
PRICE: BALDWIN v INDUSTRY AVERAGE
MARKET SHARE: BALDWIN v INDUSTRY AVERAGE
SALES: BALDWIN v INDUSTRY AVERAGE
//NEW BOARD MEMBER
Added: knowledge, commitment to strategy
Improved alignment between marketing and production
Increase in promotion and sales
ENTERPRISE VALUE = MARKET CAPITAL + DEBT + SHARES - TOTAL CASH
ENTERPRISE VALUE = 3,000,000 + 79,716,000 + 2,517,924 - 0
BALDWIN ENTERPRISE VALUE = $85,233,924
ANDREWS
BALDWIN
CHESTER
DIGBY
ERIE
FERRIS
$68m
$85m
$522m
$389m
$167m
$1.093b
Value
EV Multiple
(9.64)
(4.77)
10.09
8.13
6.30
8.80
RECOMMENDATIONS AND CONCLUSIONS
//RECOMMENDATIONS:
Reassess products and segments
Look for strong growth areas
//STRATEGIES:
Reconsider current strategy
Focus on successful markets
Slowly rebuild market share
Differentiate products
Price competitively
//MARKET SHARE SIMULATION
References
Schiff, Jonathon B. 2014. "Building A Sustainable Cost Leadershop Culture". Strategic Finance 96 (3).

"Shaping Ethical Decisions". 2011. Capsim.

The Boards Role In Strategic Planning: An Interview with Chris Clare, former CEO of PwC Canada: PWC

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