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Transcript of Glo-bus Presentation
James Foster Glo-Bus Competition and Actions to Take Earnings PerShare Return On Equity Credit Rating Image Rating Net Revenues Stock Price Strategic Vision Performance Measure Performance Measure Our desire is to become the high quality low cost camera provider
for all of our prospective buyers. Our marketing and employment strategy will allow Da-Magic-Pixal to become the market leader in both entry level and multi-featured camera industries, and will allow us to satisfy all of our stakeholders. Strategies Low Cost Strategy - Above average P/Q rating - Above average price - But this resulted in low market share - Priced competitively, but were still profitable due to a high volume of sales. Entry Level Camera Multi-featured Cameras Compensation and Labor Marketing Strategy - Low quality, but about average when compared to industry average Competition Actions to Take Lessons Learned Yearly Decisions Year 6 Year 9 Year 11 Year 15 - Issued 27 Million Shares of commons stock which lowered out stock price - Low Cost Strategy with lowest cost compared to industry average - Kept P/Q rating at a constant low average thought the years - High advertisement budget and high tech support budget - Average core components with below average basic components - Increase in labor wages by 3% each year - High Warranty costs at 11.5%, 3% above industry average Low Cost Leader Strategy - Decided to never outsource due to quality worries, and increased warranty costs - Only hired new permanent workers twice due to worry of market downturn. - Invested heavily in PAT workstations which increased capacity which allowed for more productivity - Made sure we had the highest advertisement budget. - Maintained a high quarterly support budget. - Marketed heavier to countries with lowest exchange rates. Company Analysis Financial Strategy - Payed small amounts of dividends while the company was in it's growth state. - Bought back huge amounts of our own common stock to increase our stock price. - Constant Investments in fixed assets. - Implemented a more general pricing strategy in all regions, instead of pricing each camera depending on the region in which they were sold - After year 12 we increased dividends payout .50 per quarter - Were not too concerned with paying off all of our debt, instead maintained a constant debt/equity ratio. - Bought back an average of 70 million shares each year. - Promotions were kept constant, 2 weeks at 15% off -Net revenue 198 million
-ROE 12.1% - We issued too many stocks and for the rest of the simulation we had to re-purchase those stocks at a high price. - Our below average P/Q rating and above average price led to huge losses in market share of our entry level cameras. Entry level -Sock Price $24
-Credit rating B+
-Image rating 69 Multi-Featured - Increased Warranty from 90 days to 6 months,
which increased projected demand. - Our competitive prices and number models led to the increase in the market share of our multi-feature camera in all regions. Any Questions!? -Net Revenue $409 (+$119)
-EPS $5.66 ($3.04)
-ROE 30.5% ( +12.2) -Stock Price $63 (+$20)
-Credit Rating A
-Image Rating 100 (+9) Entry Level - Lowered the price below industry average, but kept P/G rating the same - Increased market share, along with revenues, and overall profits. -Increased worker incentives to reduce warranty claims. - Sacrificed some revenue for larger market share. Multi-Featured -Increased promotion period from 1 to 2 weeks -Increased Tech support by a large amount -only 1 other competitor (Baperature )to compete with ( low cost multi-feature camera ) - Lowered production cost per unit while keeping the same P/Q rating Year 13 -Net revenue $552 (+$30)
-EPS $7.59 (-$1.02)
-ROE 28.2% (-7.7%) -Stock Price $127 (+$35)
-Credit Rating A+
-Image Rating 100 Entry Level Multi-Featured -Decreased the overall quality on Entry level cameras while not properly adjusting prices in North America and Latin America ( prices did not change but quality lowered ) -Lowered Price in Asia pacific and Europe/Africa to 130 (compared to 140 for Latin and north America) -Increased Camera models from 4 to 5 -Increased warranty form 1 year to 2 for multi-feature cameras -Increased price of multi-feature by 5$ per region while not changing the quality of the camera. -did not anticipate competitors to lower prices as low as they did -Net revenue $757 (+$1)
-EPS $14.31 (+$2.11)
-ROE 43% (+1.7%) -Stock Price $236 (+$50)
-Credit Rating A
-Image Rating 100 -Lowered price of entry level by 7$ and the P/Q rating by ½ a star. Entry Level -Followed the low cost low P/Q trend that was beginning to dominate the industry. Multi-Featued -Significantly lowered price for all multi-feature cameras in all regions - Had to reduce P/Q rating in order to lower the price without loosing too much market share. -Our warranties were beginning to get out of control. We would need to take a closer look at our marketing strategies and adjust them to keep demand at a high level while lowering warranty claims.
-The components quality of our cameras could be increased to lower warranty claims. PQ rating has a large effect on the warranty claims of our camera.
- Continue to buy back stock in a similar fashion of pervious years. -Raising prices is a risky move that should be carefully done. - Issuing too much stocks can lead to expensive repurchasing in the future since their costs are a lot higher. -We were not prepared for the low price trend in the industry near the final years. We were forced to lower our prices while increasing promotions and warranties which lead to lower EPS and ROE for our company due to decreasing operating profits. -Net revenue $823 (+79)
-EPS $13.07 (-$0.33)
-ROE 30.3% (-7.4%) -Sock Price $241 (+$24)
-Credit Rating A+
-Image Rating 100 -Increased promotions to 3 weeks at 20%, the highest we have ever had. ( both cameras ) -Increased warranty period for both cameras up to 3 years to compete for more market share. -RD raised pq rating and we lowered price for entry level cameras (3$), but this lead to hihger production costs. - By the end of the year we lost money on every camera we made. - In regards to market share, and pricing of our cameras our biggest competitors were Exposure and GMoney. -Many of our decisions were made in attempts to take market share from these two companies. Da Magic Pixal