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Andrews: Niche Differentiation

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by

Kaitlyn Frantom

on 17 June 2013

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Transcript of Andrews: Niche Differentiation

Andrews
Objectives
Company Overview
Explain our strategies including mission statement and our corporate strategy
Financial Highlights
Competive Advantage
Conclusion
Lessons learned throughout the simulation
Plans for our company in the future
Strategies
Financial Highlights
Conclusion
Besides the introduction of new products, our strategy never changed from the beginning of production
Heavily invest in the 3 high technology markets in beginning, aggressively seeking a high market share
At the end, we obtained 30% of our target markets, at which point we wanted to maintain this percentage
Focused automation efforts in high end, performance, and size segments combined with the high price expectations in those markets, we were able to generate high profit margins
Justin Agogbua
Kaitlyn Frantom
Stuart Hunt
Charles Jennings
Lauren Lindberg

Mission Statement
At Andrews we strive to provide premium sensors, focused on the technology oriented customer. We hold our products to a higher standard to lead the industry in quality and value. We take pride in our stakeholders and view them as our highest priority.
Corporate Strategy
Niche Market Differentiator: High End
Company Overview
Targeted markets were high end, performance, and size
R&D Strategy: Satisfy customer expectations
Marketing Strategy: Placed product prices around what the various market expectations
Production Strategy: Increase product margins by increasing automation
Finance Strategy: Issued long-term debt to help finance start-up production while issuing stock to raise capital
Labor Negotiations: Negotiate all wages and benefits slightly above their ideal requests
Plans for the Future
Lessons Learned
Pay more attention to our sales budget
Up capacity in low-end to prevent from selling out
Investing early can greatly benefit the company in the long run
We would have paid more attention in the low-end and traditional segments to take advantage of the segments extremely high demand by increasing production and using aggressive pricing strategies
Performance measures
Cumulative Profits: 30%
Ending Stock Price: 20%
Average Market Share: 10%
ROS: 10%
ROA: 10%
ROE: 10%
Ending Market Cap: 10%
Continue to strive to be the best and hold our current position
Maintain the advantage of the market we captured and utilize our strong foundation of improved plants and equipment
We predict that our recent size market product release in the last year will continue to benefit our shareholders through increasing returns and our company's value
Competitive Advantage
Low Debt to Equity Implications:
Reinvested all of our profits
Low interest expense
Better bond ratings
Not highly levered-less risky investment

Fund Raising
Systematically increased automation of target segments
Implications:
Decrease in labor cost
More leverage in labor negotiations


Automation

Heavily invested in driving innovative new products
Implications:
Created the best products coming to market
Products were put out quickly
Met market expectations of quality
Counterbalanced our automation

Research and Development

Invested In reducing material and overhead cost
Implications:
Increased margins on our products
Allows more pricing power


Cost Reduction

Taking advantage of being on the top
Implications:
Paying workers better to induce strikes
Keeping prices at moderate levels when necessary
Held enough market share in segments to make them non viable for competitors


Position Exploitation

SWOT
Full transcript