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Glo-Bus Simulation Results: Flawless

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Emily Martin

on 16 November 2012

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Transcript of Glo-Bus Simulation Results: Flawless

• Competitive report of team:
- Lost sight of our mission trying to follow what our internal data informed us was profitable.
• Competitive report of competitors:
- Top competitors maintained high investment into core competencies like tech support and advertising, but sold low P/Q rating cameras at a low price. Year 15 (Cont.) • Competitive report of team:
- 20-50% more invested into tech support budget than industry average.
- 20% less invested into advertising than industry average.
- Multi-featured models selling for 25-50% more than industry average
- Demand for it is 40-70% below industry average.
• Competitive report of competition:
- Top competitors spending 230% above the industry average on advertising.
- Spending 175% above industry average on tech support.
- Producing multi-featured models and entry-level models with extremely low P/Q rating and low price. Year 14 (Cont.) Product decision
Production costs— $116,423— 2% increase
Marketing decision:
Overall marketing costs— $39,133— 17% increase
Financial decision:
Net sales revenue— $225,164— 8% increase
Operating profit— $51,109— 16% increase Year 14 (Cont.) • Strategy:
- Maintained strategy of applying more attention/resources to regions in which we were already succeeding.
- Focused decisions less on competition and more on analyzing internal data.
- Did not want to deviate far from last year’s decisions.
• Overall:
- Believe fall from 6/12 to 7/12 is because we have not been paying enough attention to multi-featured model. Price is too high.
- Spent the majority of time trying to pump up spending for some important investments. Year 14
Net Income: $37,073
Scoreboard Position: 7/12 • Product decision:
- Production costs— $114,317— 8% increase
• Marketing decision:
- Overall marketing costs— $32,377— 45% increase
• Financial decision:
- Net sales revenue— $207,325— 14% increase
- Operating profit— $43,147— 1% increase Year 13 (Cont.) • Competitive report of team:
- Steadily raising profits and moving in the right direction.
- Still a vulnerable company overall.
• Competitive report of competition:
- Top competitors have extremely large advertising budgets, the largest about 8 times the size of ours.
- Embraced low quality/low cost strategy that is working very well for them. Year 12 (Cont.) • Product decision
- Production costs— $105,275— 2% decrease
• Marketing decision:
- Overall marketing costs— $17,774— 5% increase
• Financial decision:
- Net sales revenue— $181,610— 11% increase
- Operating profit— $42,468—48% increase Year 12 (Cont.) • Competitive report of team:
- Definite failure this year.
- All regions at least 20% less dealers than the industry average.
- Advertising budget was 15-50% less than the industry average in all regions except Europe-Africa in which it met the average.
- Entry level camera sold at industry average, but multi-featured model’s price was approximately 20-50% more than the industry average.
- Demand for both models 20-80% below the standard.
• Competitive report of competition:
- Top competitors allocate a large amount to advertising budget.
- The industry leaders have very low prices for their multi-featured models (in the $300 range) and offer a larger discount price for both models during promotional periods. Year 11 (Cont.) • Strategy:
- Cut costs across the board
- Raise prices
• Overall:
- Extremely large disappointment.
- Fell to the bottom of the scoreboard as a result of our strategy. Year 11
Net Income: $13,549
Scoreboard Position: 12/12 • Competitive report of team:
- Product price and market share barely differ at all from the industry average.
- Demand for our products is far below that of our competitors.
• Competitive report of competition:
- Investing large amounts of money into tech support.
- Offering longer and larger promotions. Year 10 (Cont.) • Product decision:
- Production costs— $120,342— 8% increase
• Marketing decision:
- Overall marketing costs— $21,358— 9% decrease
• Financial decision:
- Net sales revenue— $209,296— 14% increase
- Operating profit— $50,604— 40% increase Year 10 (Cont.) • Competitive report of team:
- Weakened competitive position.
- Net income of best companies 3 times ours with more than double the retail locations.
- Net sales $60,000 less than average company.
• Competitive report of competition:
- Competitors net income around 25% higher than ours. Year 9 (Cont.) • Strategy:
- Opportunistic, sacrificed revenues for image rating (didn’t work).
• Overall:
- Weakened position from poor decisions in years 6 and 7. Year 9
Net Income: $21,592
Scoreboard Position: 7/12 • Competitive report of team:
- Net income and operating profit 30% higher than industry average
- Net sales 10% under industry average
- High return on equity
• Competitive report of competition:
- One top competitor filling the niche of the very high quality/very high price model (only one doing so).
- Other competitors sticking with the low quality/low price strategy. Year 8 (Cont.) • Strategy:
- Aggressive buyback of stock
- No more following the leader
• Overall:
- Trim the fat—increased return on equity and profit.
- Paid off debt. Year 8
Net Income: $27,558
Scoreboard Position: 6/12 • Competitive report of team:
- Had approximately 4 times more money invested in Europe-Africa and Asia-Pacific.
- Demand was still down significantly.
• Competitive report of competition:
- Top competitors seemed to be beginning to embrace a low quality/low cost strategy with large amounts of advertising. Year 7 (Cont.) • Product decision:
- Production costs— $94,772— 8% decrease
• Marketing decision:
- Overall marketing costs— $16,432— No change
• Financial decision:
- Net sales revenue— $144,744— 6% decrease
- Operating profit— $19,664— 3% increase Year 7 (Cont.) • Product decision:
- Production costs— $103,190
• Marketing decision:
- Overall marketing costs— $16,434
• Financial decision:
- Net sales revenue— $154,452
- Operating profit— $19,924 Year 6 (Cont.) • Competitive report of team:
- Stared with very low advertising budget in North American and Latin America, but very high in Europe-Africa and Asia-Pacific.
• Competitive report of competition:
- Top competition in out successful regions are companies C, G, and K in Asia-Pacific, and B and J in Europe-Asia. Year 5 (cont.) • Tried to focus equally on both types of cameras.
• Three paths of decision-making:
Follow the leader
Trimming the Fat (cost cutting)
Addressing weaknesses Introduction • Equal camera focus did not end up going the way we wanted, and from primarily analyzing internal data, the multi-featured model wound up becoming very expensive.
• Strategy changed many times.
• Missed crucial targets a few times that dragged us down significantly (not adding available retail locations, large loan, removing money from important budgets)
• When we thought we had a good idea, we often made a drastic change with it—not always the ideal thing to do. One year we were up, the next we were at the bottom of the scoreboard.
• Company performed well, but just not at the same caliber of competition. Conclusion • Product decision
- Production costs— $105,392— 9% decrease
• Marketing decision:
- Overall marketing costs— $33,769— 14% decrease
• Financial decision:
- Net sales revenue— $223,597— 1% decrease
- Operating profit— $65,938— 22% increase Year 15 (Cont.) • Strategy:
- Didn’t make any drastic changes, just small, profitable improvements .
• Overall:
- Best scoreboard position so far! Seems that making only a few, small changes was actually a very good decision to allow us to make slow improvements. Year 15
Net Income: $47,126
Scoreboard Position: 5/12 • Competitive report of team:
- Starting to take the safe road. Recognized that massive changes are too much of a shock to the system and change needs to be incremental.
• Competitive report of competition:
- Top competition seems to be solidified and has not made strategy change. Year 13 (Cont.) • Strategy:
- Trying to make improvements without large jumps and changes.
• Overall:
- Identified the need to improve the lack of store chains, online retailers, local camera shops, tech support budget, advertising budget, and warranty period. Year 13
Net Income: $30,069
Scoreboard Position: 6/12 • Strategy:
- Cut costs
• Overall:
- Increased profits significantly.
- Image rating and credit rating hurt. Year 12
Net Income: $25,543
Scoreboard Position: 11/12 Large loan was taken in this year Year 11 (cont.) • Product decision:
- Production costs— $106,924— 11% decrease
• Marketing decision:
- Overall marketing costs— $16,797— 23% decrease
• Financial decision:
- Net sales revenue— $161,556— 23% decrease
- Operating profit— $22,174— 56% decrease Year 11 (Cont.) • Product decision:
- Production costs— $110,552— 9% decrease
• Marketing decision:
- Overall marketing costs— $23,547— 10% increase
• Financial decision:
- Net sales revenue— $180,373— 8% decrease
- Operating profit— $30,606— 17% decrease Year 9 (Cont.) • Product decision:
- Production costs— $121,262— 22% increase
• Marketing decision:
- Overall marketing costs— $21,134— 22% increase
- Realized that we were not fully utilizing all retail locations available to us and added them all this year.
• Financial decision:
- Net sales revenue— $196,099— 26% increase
- Operating profit— $36,947— 47% increase Year 8 (Cont.) • Strategy:
- Cut production costs
- Follow the leader– Imitate competition
• Overall:
- Neglected to add shops that were available to us. Holding us back and we didn’t even know it. Year 7
Net Income: $14,787
Scoreboard Position: 12/12 • Competitive report of team:
- Didn’t look at the whole picture.
- Put too much money into production and marketing and didn’t focus on camera quality (part of our mission).
• Competitive report of competition:
- Competitors seemed to be starting with a similar strategy to ours; favoring those regions in which they already had higher market share, but they were still providing their lesser regions with more investment than we were. Year 6 (Cont.) • Strategy:
- Continued to focus resources on those regions in which we already held largest portion of market share (Europe-Africa and Asia-Pacific).
• Overall:
- Response to our strategy was generally good, but since we were only focusing energy on the available regions, our overall score suffered. Year 6
Net Income: $13,707
Scoreboard Position: 11/12 • Strategy:
- Focused resources on those regions in which we already held largest portion of market share (Europe-Africa and Asia-Pacific). Year 5
Net Income: $0
Scoreboard Position: N/A Mission: To provide the highest quality camera at the price simultaneously most profitable to our company and lowest to the customer. Emily Martin
Paul Quillin
Kyle Visser Glo-Bus Simulation Results: Flawless Received global rating this year with ROE of $48.60 Year 12 (Cont.) • Strategy:
- Focused less on how competition was performing, and more on experimenting with internal data.
• Overall:
- Doing much better this year after breaking away from our old strategy. Year 10
Net Income: $34,592
Scoreboard Position: 6/12
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