2. Andrews Mission Statement We will strive to be the leader in the High End, Traditional, & Low End segments of the market Overall Strategy Focusing on our segments & implementing a cost leadership, product lifecycle focus Success Measures Return on Assets (ROA) – 40% Return on Equity (ROE) – 40% Return on Sales (ROS) – 20%
3. R&D Reduced MTBF to minimum standards in all segments Reduces material costs Marketing Increased Sales & Promotion budget in Traditional, High End, & Low End Decreased Sales & Promotion budget in Size & Performance Production 18.8% left in inventory Stocked out in Low End segment Finance Issued $18,994,000 bond Had an $8,769,036 emergency loan Year 1
4. R&D Introduced new product – Awsum Marketing Set Promotion & Sales budget for Size & Performance to $0 to prepare to phase out Decreased Promotion & Sales budget for Traditional, High End, & Low End Production 9.0% left over in inventory Stocked out in Traditional segment Maintained production levels in all segments except Size Did not produce any products in the Size segment Finance Retired $6,950,00 in long-term debt Paid back emergency loan from Year 1 Year 2
5. Year 3 R&D Reduced Adam’s MTBF to 14,000 Introduced Ace on April 23, 2014 Marketing Began to phase out the size & performance segments (Aft & Agape) Production Sold 200 units of capacity for Acre and Awsum Sold all but one unit of capacity for Aft and Agape Bought 200 units of capacity for Ace 5.4% of production remained in inventory at end of year Sold out of Able, Acre, Adam Aft, and Ace Finance Retired $40,000,000 in long term debt
6. Year 4 R&D Acre’s performance changed from 3.0 to 3.5 and size from 17.0 to 16.6 Adam’s performance changed from 7.6 to 7.5 and size from 12.4 to 12.5 Marketing Increased promotion & sales budget for Adam, Acre, & Ace Production 12.4% of production remained in inventory at end of year (down from year 3) Sold out of Able, Adam Finance Issued $10,000,000 loan
7. R&D Introduced new High End product called Apple Costs totaled $1,673,000 Marketing Increased promotional budget & decreased sales budget in Low End Increased promo budget for Ace (High End) Production Purchased 200 units of capacity for Awsum (Traditional) Sold 400 units of capacity for Acre (Low End) Finance Sales increased to 118,948,000 Net profit increased to $10,786 Year 5
8. R&D Traditional product, Aooookintroduced (1/16/2017) Costs of Adam (Low End)totaled $56,000 High End costs of $673,000 Marketing Acre’s (Low End) sales budget decreased while promo budget increased Adam’s (Low End) sales budget decreased Awsum & Ace priced at $27.50 Production Purchased 400 units of capacity for Able (Low End) Sold 400 units of capacity for Adam for $9,880,000 (Low End) Purchased 200 units of capacity for Apple (High End) Finance Retired 2,500 worth of stock Net Profit increased to $11,970 Year 6
9. R&D 3 products in the traditional segment this round Introduced Aooook to our customers Goal: Take market share away – only sold 325,000 Marketing Maintained Marketing Investments Production 15.8% left over in inventory 3 products stocked out Finance Issued $30 Million Bond Retired 6,555,000 Shares of stock Year 7
10. R&D Made High end product slightly better Traditional Segment did well Sold over 4 Million between 3 products Marketing Maintained Marketing Investments Production 10.9% left over in inventory 1 product stocked out Finance Retired $87 Million in bonds Retired 10,427,000 Shares of stock Year 8
12. Product strategy 3 Products in Traditional 3 Products in Low End 1 or 2 in High End Positioning “No one has a STAGGER like us” Focus more on customer buying criteria R&D http://www.youtube.com/watch?v=TiS9-yPvBnY
13. Maintain sales and promotion budgets at necessary levels Awareness goal: 90% Allocate more time and money to the products that perform better Improve sales forecasting Price products at competitive levels Marketing >
14. Increase capacity to adequate levels to enable us to produce forecasted amounts Maintain automation at required levels to minimize costs Maintain investment in Human Resources to increase productivity Keep overtime levels to a consistent minimum Production
15. Increase leverage to satisfactory amounts Take out necessary bond amounts Continue to maximize ROS, ROA, ROE Retire stock Retire bonds early when able Make sure we have adequate cash levels to avoid emergency loans Finance