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Team Venture

by

ollie Adkins

on 17 August 2015

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Transcript of Team Venture

Quality
2
4
2
3
4
5
Achieving Overall Cost leadership in
all three markets

Cohesion & Team Dynamics

Leadership & Decision making

Culture & Ideologies

Ethos

Effectiveness

Quantitative Review

Sales Finance Production

Week 1
Week 2
Week 3
Week 4
Week 5
Week 6
Week 7
Week 8

Laetitia

Oliver
Ilan
Ilan
Laetitia

Oliver
Oliver
Ilan
Laetitia
Laetitia

Oliver
Ilan
Ilan
Laetitia

Oliver
Oliver
Ilan
Laetitia
Laetitia

Oliver
Ilan
Ilan
Laetitia

Oliver

Table of contents
d
Qualitative Review
Production
Conclusion
Oliver Adkins
Team Leader - 5795639

Ilan Cohen
Coordinator - 5793989

Laetitia Chambard
Decision Manager - 5980394

Background Information

Qualitative Review

Quantitative Review

Review of operations
Production
Sales
Finance

Conclusion

References
Mission Statement :
" To offer everyone an affordable
means to live healthy lives"
1 - PRODUCTION 2 - SALES 3 - FINANCE
d
Strategic Outlook
Corporate
Business
Operational

Vision:
"
To become the market leaders of simulation"

Years 1 - 6

1 - To maximize capacity utilization to around 99% - 100% in all markets for both products.

2 - Increase capacity utilisation by 15% to meet our forecasted demand.

3 - Counterbalance high variable prices with low fixed prices.


4 - Lower the wages by 5 to 10%.


5 - Increase quality control / sales by 10%.

6 - Increase production capacity by 20%.
1 - Reduce the prices of products in all
markets to increase sales and make
profit on economies of scales.

2 - Increase capital expenditure by
10%.

3- Keep fixed costs with less than 5% increase.

4- Increase production efficiency (k units / person) by 0,05 for both products in each plant.

5 - Increase the quality control of both products by 15%.

6 - Invest reasonably in capital expenditure.
Vision & Mission Statement
Sales
Finance

Goals Objectives Strategies

Goals Objectives Strategies
1 - To achieve a ROCE that exceeds those of the main competitors by end of year 3

2 - Maintain best Sales costs/sales, % (under 5.00%)

3 - Increase the equity in the capital structure by 10% by year 6

4 - Reduce debt by 4%


5 - Avoid threat of currency risk

6- Increase the equity in the capital structure by 10%
Strategies
1 - Implement cheaper good strategy.

2 - Invest in machinery to to meet the demand. Invest in buildings as well to increase production capacity in the long term.

3 - Invest very few in quality control, advertising and customer care.

4 - Establish just-in time strategy.


5 - Invest 20% more in quality control to justify the price's increase and make customers buy more products.

6 - Invest in 20 k units in buildings even if the prices are very high and 60 k units in machinery even if we needed more.
1 -Build economies of scale by producing & selling at 100%


2 - Invest 900k in production efficiency

3 - Invest 40K in fixed assets (buildings)


4 - Pay off 1-5% of the long term loans

5 - Prioritise USA first to benefit from strong USD

6 - Invest in fixed assets (buildings) in both plants
Market Performance
Production
Sales & Marketing
Market
Share
Finance

Results
Production
Capacity
Production &
Wages
Buildings:
Sales
EBIT
87.89K - 2nd
17.48k - 2nd
Marketing Total
4042 - 2nd
Long term Debt
75015
Sales costs/sales, %
4.60
Gross margin, %
58.38 - Lowest
38.69%
Equity ratio, %
Cultural
Dimensions
Indulgence
Individualism
Masculinity
Uncertainty
avoidance

Long term
orientation
Hofstede cultural dimensions (1991)
Work Hard
Play Hard
Process
Tough - Guy
Macho
Bet Your
Company

Risk
Honey & Mumford Learning styles (1982)
Activist
Reflector
Theorist
Pragmatist
Oliver
Ilan
Laetitia

Feedback
Deal and Kennedy corporate culture model (1982)
Strengths

Weaknesses
Similar ideals

Commitment to the simulation

Variety of skills

Range of professional & cultural experiences

Decision making efficiency

Democratic environment and understanding
Lack of experience in finance

Communicational issues with different languages

Logistical inefficiency due to living / working distances

Differences in personal ambitions
Activist
Pragmatist
0% Increase
Kurt Lewin's Leadership Styles (1939)
Authoritarian
Participative

Delegative
REFERENCES - Page 1
Atrill, P., McLaney, E., (2013) Accounting and Finance for non-specialists 8th ed. Harlow: Pearson Education Ltd Porter, M (1980). Generic Strategies, Performance and Risk. USA: Harvard University Press.

Bowman, C (1996). Competitive and Corporate Strategy . 2nd ed. London: Irwin Professional Publishing. p.56.

Berk, J, (2012). Corporate Finance. 2nd ed. United State Cananda: Pearson Doyle, J. T., Ge, W. & McVay, Sarah. (2007). Accruals quality and internal control over financial reporting. The Accounting Review, Vol. 85. No. 5. pp 1141-1170.

Doole, I., Robin, L.(2012) International Marketing Strategy, 6th edn.
Hampshire: Cengage Learning

Glen, A (2013) Corporate Financial Management. 5th ed. Essex: Pearson Education ltd.

Hambrick, D, MacMillan, I, & Day, D 1982, 'Strategic Attributes and Performance in the BCG Matrix--A PIMS-Based Analysis of Industrial Product Businesses', Academy Of Management Journal, 25, 3, pp. 510-531, Business Source Complete, EBSCOhost, viewed 22 June 2015.

Implementing effective TQM 2005, Emerald Group Publishing Ltd, Bradford, GBR. Available from: ProQuest ebrary. [22 June 2015].

Jacobs, M, & Shivdasani, A (2012) 'Do You Know Your Cost Of Capital?', Harvard Business Review, 90, 7/8, pp. 118-124, Business Source Complete, EBSCOhost, viewed 27 April 2015

Johnson, J.; Scholes, K. (2011) Exploring Strategies. 9edn. Essex: Pearson Education

Jonson, G (2002). Exploring Corporate Strategy. London: Prentice Hall. p.101.

Kennedy, A (1982). Corporate Cultures: The Rites and Rituals of Corporate Life. 2nd ed. London: Basic Books. p.45.

Kotler, K (2012) Marketing Management. 14 Edn
Essex: Pearson Education Ltd

Lai, K, & Cheng, T 2009, Just-in-Time Logistics, Ashgate Publishing Group, Abingdon, Oxon, GBR. Available from: ProQuest ebrary. [22 June 2015].

Lanz, R, Miroudot, S, & Nordås, H 2013, 'Offshoring of Tasks: Taylorism Versus Toyotism', World Economy, 36, 2, pp. 194-212, Business Source Complete, EBSCOhost, viewed 22 June 2015.



d
TOWS
Background Information
Founded In 1865 in Finland

Pharmaceutical company producing antioxidants and Painkillers

In the 50’s the company expanded into France and the USA

The company is quite profitable and fairly well leveraged
Opportunity
Threats
Strengths

Weaknesses
Ability to access funds in the form of Debt

Large market with established demand
Hyper competitive market

Large demand with opportunity in different countries

Price
1
2
3
4
5
6
7
8
Perceived
value
Bowmans Clock (1995)
Market challenger strategy
Large profit margin allows us to reduce prices

Price leaders could create a 'price war'
Threat of new products and money market instability

Lack of ability to invest internationally
Phase 1 => Cheaper Goods Strategy



Phase 2 => Prestige Goods Quality
Perceptual map
High Price
Product Life Cycle
Introduction
Growth
Maturity
Decline/Renewal
Time
Sales
Rubbana
Customer Loyalty Ladder
Prospect
Customer
Client
Supporter
Advocate
Increasing loyalty
Fist time Purchaser
Unlikely Consumer
Production Capacity Utilisation %
PDCA Cycle
PLAN
DO
CHECK
ACT
Price and Offer Management
Market Share
Perceived relative Price
Mass Market
Excellence
Niche
Attack
Gearing ratio
Market Share
Year 1
Year 2
38.69
41.69

Qualitative
Positive team culture & attitude
Effective (Fast) team work
Improve communication ability's


Quantitative
Sustained one of the top market leadership
Increasing current ratio (15%)
Cumulative earnings increased
(38700 to over 6.5m )
Growing profit (300% increase from year 1)
Increased production capacity (15%)



1 - Improve operating profit margin by from 17.48 to over 18%


2 - Reduce production costs & increase k units/person by 0.2 pa

3 - Pay off additional 75k debt taken & increase long term assets by investing in buildings and machinery

4 - Pay off 1-5% of the long term loans by year 6

5 - Change prioritization of the markets

6 - Invest 40K in buildings and machinery
Flow production
Mass production
Quality control
Identical products
Economies of scale
Low cost
Advantages
Repeat Consumer
Try new Products
Brand Ambassador
Thank You For Listening

Any Questions ?
44.89

Cannot pay our expenses e.i Long term debt

Effects our ability to get a business loan

Difficult to expand the business

Good profitability

Improve the top line in year 5 (i.e. increase operating profit) without a corresponding increase in capital employed
Highly differentiated
product, meant that we have less competition
within years 1-3.

However to gain the same levels of revenue
we have to sell more
products than our
competitors.

By year 6 we had a similar strategy and were in direct competition
Goals & Objectives

Fixed costs
Cost efficiency improvements
Power
Situational Analysis
Forecasting and Matching the Demand
Year - 1

Year - 2

Year - 3

Year - 4

Year - 5

Year - 6
Venture
PINK Panthers
Year Opportunities / Threats Strengths / Weaknesses
Situational Analysis
Year - 1

Year - 2

Year - 3

Year - 4

Year - 5

Year - 6

Year

Opportunities / Threats Strengths / Weaknesses
Situational Analysis
Year - 1

Year - 2

Year - 3

Year - 4

Year - 5

Year - 6
Year Opportunities / Threats Strengths / Weaknesses
47.84
52.67
55.49
Year 3
Year 4
Year 5
Year 6
PRODUCTION CAPACITY
Kaizen
TQM Model
Total
Quality
Management
Customer
Focus
Total
Participation
Process
Improvement
Planning
Process
Process
Management
Goals Objective Strategies
Penetration Price Strategy
European central bank begins to lower the interest rates
USD strengthening against the EUR
Increase in borrowing rates
EUR up against the USD
Financial situation looks relatively easy
Borrowing rates are expected to fall
Lowest Gross margin, %
Best Sales costs/sales, %
Main competitors have a better Equity ratio
Highest Sales costs/sales, %
Best Operating profit margin, %
2nd highest Cumulative Earnings
Pay our short term obligations

Able to meet creditor’s demands

Low risk of liquidity

Highly attractive to investors

Share price likely to increase
Attract Shareholders

Attract growth

Indicator of good performance

Highly attractive to investors

Share price improve earning of directors / consultants
EPS - Earnings Per Share
Environmental scanning

SMART Goal and objectives

Theories and models

Benchmarking

Independent Research

Lean production
Less wastes
Just-in-time
Better customer satisfaction
Less working capital
Better quality product
Advantages
TPS
BCG Matrix
Promotion
3-6% Increase demand USA and France for both products
5-10% increase demand antioxidant all market areas
Substitution products for antioxidants in the market, slowing demand in all countries

15% increase demand antioxidant all markets, also boosting general demand for painkillers
10% decrease demand painkillers & antioxidants all markets

6-8% decrease demand antioxidants in US
2-5% decrease demand painkillers all markets
Market Prioritization




Laurence, S. (2014). corporate-culture. (Online) Available: http://www.psychologytoday.com/blog/platform-success/201405/ceo-personality-corporate-culture-and-sales-0. Last accessed 10 Dec 2014.

Lewin, K 1939 (1939). Exploring Corporate Strategy. London: Financial Times/ Prentice Hall. p.1.

Kotler, P., Armstrong, G., Brown, L., and Adam, S. (2006) Marketing, 7th Ed. Pearson Education Australia/Prentice Hall.

mbaskool. 2015. MARKET CHALLENGER STRATEGIES. [ONLINE] Available at: http://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/8582-market-challenger-strategies.html. [Accessed 17 May 15].
Product Life Cycle Stages. 2015. Product Life Cycle Stages Explained. [ONLINE] Available at: http://productlifecyclestages.com. [Accessed 17 May 15].

NYSE. (2015). Liquidity. [Online] Available: https://www.stock-analysis-on.net/NYSE/Company/GlaxoSmithKline-PLC/Ratios/Liquidity#Current-Ratio. Last accessed 5/6/15.

Panneerselvam, R. (2007). Production and operations management. New Delhi: Prentice Hall of India.

worldbank. (2015). Gearing. [Online] Available: http://www.worldbank.org/financialcrisis/pdf/levrage-ratio-web.pdf. Last accessed 7/6/15.

Watson, D.; Head, A. (2010) Corporate Finance: Principles and Practice. 5th Edn.
Pearson Education ltd: Harlow

Wildflower, L (2011). The Handbook of Knowledge-Based Coaching: From Theory to Practice. London: Jossey-Bass. p.65.
QUALITY CONTROL
AndyOx
1- To become market price leader of the simulation by the end of year 1
1- Lower all prices comparing to competitors in all market
1- Penetration price strategy
3- Increase profit margin by 10%
2- Increase customer's acquisition
by 5%
2- Lower price point (Penetration)
4- Increase net profit ratio by 10% by the end of the year
4- Allocate a 4 million euros budget to advertising and promotion
4- Pull marketing strategy
6- Obtain 0% inventory ratio by the end of the year
6- Accurately forecast demand to match production capacity
6- Demand matching / chase strategy
The productivity of the personnel is increasing
Price of machinery is about to decrease
Machinery price fell by 30%
Production wages are rising
Rubbana's demand is decreasing by 10%
Building prices increasing by 40-50%
Well prepared company developed plan
Highest variable costs
Best production capacity utilisation
Highest production wages of the year
Best rubbana seller of the year
Lack of production capacity to match the demand
R
A
Lowest prices, market share leaders
Products shortage Finland
Lost market share leadership
Budgeting mistake
Lowest sales costs/sales ratio
Highest net profit ratio
Highest prices of simulation & Highest sales costs/sales
5- Reduce Variables costs by 5%
5- Reduce delivery costs to the minimum
5- Shuffle market prioritization
2- Increase sales revenue by 10%
Debt is the least costly source of long-term financing

Creditors consider debt as a relatively less risky investment and require lower return

Interest on debt is tax-deductible

Creditors and have no interference
Q = T x E x M
estimated demand
total market demand
estimated % of evolution
estimated % of market catch
Vision:
Mission Statement :
"To offer our share holders security and return on investment through consistent profit"
"Giving value to our customers and to owners"
Strategic change due to excessive delivery costs

Flanking main competitors gave use market domination

Finland however had a lower price due to an establish market
Low Price
High Quality
Low Quality
1
2
3
4
5
6
1
2
3
4
5
6
INTRODUCTION
Year 1 to 3
Year 4 to 6
Year 1
Year 2
Year 3

Year 4
Year 5
Year 6
31% increase
170% increase
3- Experience Curve Pricing
3- Achieve economies of scales
High volatility

Started third and low but finished high

Upward trend

Historical trends are difficult to identify

Unable to request more issuing shares

Necessary to increase ROE to initial levels
Consistent performance

Not very good last year again because of the mistake

More competitive
year 1 to 3

Better results year 4 to 6
Understand customers' need
Constant benchmarking
Investments in cost
efficiency improvements
Shifts defined
Efficient allocation
Adapted production capacity
2nd
2nd
1st
2nd
2nd
3rd
REFERENCES - Page 2
levitt (1965)
Henderson (1968)
(Kotler 2012)
kotler (1997)
Full transcript