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Final BA414 Strategic Management - Glo-Bus Simulation Presentation v10

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Darus Trutna

on 21 June 2011

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Transcript of Final BA414 Strategic Management - Glo-Bus Simulation Presentation v10

Hungary Exposure, Inc. HQ World Market Leader 1. Establish objectives according to what competitors on average are likely to be doing, and prices, sales volumes, market shares, costs, and profit margins

2. Global low-cost leadership strategy for entry-level camera and global differentiation strategy for multi-feature camera

3. Make pro forma statement to calculate growth trend

4. Red flags exist 3-Year Strategic Plans Secrets to Success Kim's US Office Exposure HQ Taiwan Background First Camera Built January 2010! Exposure, Inc. Overall Performance

Strategic Plan and Implementation

Lessons Learned Lessons Learned Hayley's Australia Offices GLO-BUS Learning Outcomes Competitive Strategy Katie's Russian Offices Entry Level Multi Feature Competitive Strategy Today Largest Camera Company in the World Largest Corporate Social Responsibility Programs in the World! Vision Company Culture Objectives Global Rankings The Team Hayley "We are the world's best known company for high quality entry-level and multi-feature cameras. We create cameras that people trust in order to capture the most important moments of life." Team Leader & Competitor Analyst Katie Strategy Consultant & Recorder Kim Current Technology & Real World Specialist Molly Competitor Analyst Xiaoyi Strategic Planner Darus Strategic Planner Newest Factory Cameras for Kids Program To the Next Frontier . . . . Taiwan Exp Year 6 Exposure, Inc. Year 9 Exposure, Inc. Year 5 3 Year Strategic Plan Revenues
Net Profit
Market Share
Image Rating Gold Star Awards Not Necessary Global Rankings Exposure, Inc. Year 12 Exposure, Inc. BA-414 Glo-Bus Strategic Shifts Started medium, but went lower quality with EL to meet customer demand

Multi-Feature Differentiation Xiaoyi's Brazilian Offices Production, Finance, & Marketing Strategies Darus' Egypt Office Decision Process Molly's South Africa Branch Office Year 6-8 Decisions Year 9-12 Decisions Year 13-15 Decisions Decisions Mistakes Lessons for the Future •Aim for Strong Corporate Culture
•Effective communication is key
•Keep Vision in Mind during all decisions
-Set and accomplish strategic and
financial objectives
-Develop and achieve corporate and
business strategies
-Adapt objectives and strategies to
current market conditions (i.e.
competitive forces) Myopic focus on market share, disregarded investors

Initial price for our EL camera was too high in the first two years of production.

Initially we sold shares in order to inspire growth; however we sold too many

Selling shares vs purchasing

Dividends vs Repurchasing 11 Feb 8-14
Return on average Equity 32.4%, 71st place
Feb 15-21
Overall game to date score of 106, tied 99th place.
Mar 1-7
Overall game to date score of 107.5, tied 73rd place.
Mar 8-14
Earnings per share $7.83, 95th place
Return on average equity 43.8%, 69th place
Stock price $121.43, 83rd place
Mar 22-28
Return on average equity 42.1%, 97th place
Mar 29- Apr 4
Overall game to date score 108, tied 86th place
Earnings per share 10.31, tied 75th place
Return on average equity 50.5%, 51st place
Stock price $190.11, 52nd place Global Ranking Revenues
Net Profit
Market Share
Image Rating Strong Focus on Relationships
Trust building Seminars
Corporate Retreats to inspire management bonds (Pancakes included)
Commitment to Family Support Systems
Sustainable Practices and Highest CSR Secrets to Exposure, Inc.'s
Success High Investment in Infrastructure
Highest tech support
Highest Advertising
Constant Industry Education
-(GSR, Quarterly Analysis)
Ship 10% more than requested
Projected Performance vs Actual 8.33% of Global Entry Level and Multi-Feature Camera Market Revenue $205,507,000
Net Revenue $20,000,000 Revenue $528,453,000

Net Revenue $48,751,000 Entry Level Market Share 29.10% 30 years experience in camera industry 27 years experience as Corporate Consultant 17 Years working in International Management Field 29 Years as Lead Project Designer for Multinational Technology Corporations 18 Years as International Business Consultant 47 Years as Strategic Glo-Bus Planner Corporate •Employ a global low-cost leadership strategy
•Pursue a competitive advantage
-Lower costs
-Selling at low prices compared to rivals •Employ a global differentiation strategy
-Sets cameras apart
-Higher P/Q rating
-More models/styles
-Marketing attributes
-Longer warranties
-Retailer support
-Technical support Global expansion
Demographic outreach
Commitment to investors and
Continuous improvement
-Product development
-Business operations Horizontal growth Differentiation Low-Cost Plan on 50% reduction! Camera Business Strategies Strategies follow Vision Cairo Offices Revenue $659,922

Net Revenue $78,261 Entry Level Market Share 28.48% MF 14.48% Ranked 1st
GSR Vision Achieved! EL 21.28%
MF 16.05% Largest Overall Market
Share Production Finance Marketing Egypt "World Leader in Camera Sales" Cold Place Always find propitious niche we had low cost cameras with economies of scale Value Discipline Triad Corporate Social Responsibility Expenditures #1 Camera Company in Industry 6
#1 Entry Level Camera in the World
Greatest Net Profit ratio
Implement Vision through Sustainable Practices Offered more features on MF camera (yr 13)
-Cost of core components
decreased 5% annually

Increased number of models for EL & MF to increase retailer demand (yr 14)

Lowered R&D budget (yr 13) Quality Lowered prices of both EL and MF cameras to stay true to Low Cost strategy (yr 13)

Decreased quarterly advertising (yr 13) to cut costs and increase operating profit

Increased quarterly advertising (yr 14) to re-confirm market share

Maintained warranty periods and discount rates from previous year (yr 13) Marketing Hired temporary PATs in the 3rd quarter (yr 13-15)

Fired temporary PATs in the 4th quarter (yr 13-15)
-Continued to use this method in
order to avoid paying fringe benefits
and severance packages (yr 13-15)

Continued increasing base wage per PAT member by 1% (yr 13-15) Production and Labor Paid off Loans (yr 13 & 14) to maintain A credit rating

Year 15 Paid $79,700,000 in dividends vs Industry Avg ~$10m

Repurchased 800 shares of stock (yr 14) Finance Maintain Growth Strategy Quality Marketing Production and Labor Finance Marketing Quality Production and Labor Finance Price War with Capture 1.2 PATs Hard at Work •Gained competence in analyzing and comprehending statistics, operating reports, financial statements, benchmarking data, and intelligence reports

•Gained experience in conducting ethical competitive research

•Acquired thorough understanding of cause and effect relationships within a business
-Revenue-cost-profit relationship The most important lesson is that our live simulation applies to our real lives

Lessons learned in this simulation can be applied to the real World

Learning to work together, persevere, dig through piles of financial reports, and make decisions in a collaborative environment is priceless. Culture is Key Knowledge Growth Conclusion Intergalactic Domination! -Invested heavily in R&D
-Increased training to improve productivity
-2 Star EL at Year 6, 1 star in Year 8 -Advertising 3 to 4 times Industry Average

-Aggressively pursued Image Rating

- Y8 and Y9 Lowered price of Entry Level camera in order to gain market share and potentially sell more Multi Feature cameras due to brand loyalty -Invested in infrastructure with $10 million in new PAT stations
-Support families with child care to increase PAT productivity
-Hired additional PATs in 3rd quarter and lay off in 4th quarter to avoid severance packages while keeping production high -Year 6 sold shares to fund infrastructure investments

-Year 6 Decreased dividends to save money, Investors were not happy

- Year 7 Increased dividends to $2.42 per share Trial and Error 257% 243% 321% 391% We We We We We Exposure! Exposure! Exposure! Exposure! Exposure! Ultra Super Tiny Secret of all Secrets The Participant's Guide Odd Statements Pg. 6 - "It is common for camera retailers to also have special sales
promotions for overstocked multi-featured models." What does this mean? Ship Extra Cameras! Exposure HQ Fierce price competition with Capture Y9 and Y10

Nearly changed strategic position

Increased Warranty period from 90 days to 6 mos

Maintained Discount at 20% for EL and MF

Modified Promotions to match industry best practices

Maintained Advertising at 3x to 4x industry average Absolutely Zero Outsourcing

Increased Infrastructure in Y9

Increased PATs to 542 for third quarter, fired 215 in 4th Quarter

Increased perfect attendance bonus to reduce costs overall Paid down credit line

Increase Dividends by $0.06 per year

Project $40,000 ending cash balance (fail) The Boom Years! 35.4% of the EL Market! Cut Quality and Costs as low as possible

PQ Rating at 1 star because of R&D Economies of Scale Above Average Training and Bonuses Highest Dividends in Industry Maintain Credit rating to increase credit line and decrease interest rates Use CSR to boost Productivity Above Industry Average Marketing Most cost effective promotion options Above Industry Average Tech Support Focus on stock price every year Year 13 This is a plane.
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