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Digby presentation
- 1. DIGBY July 15, 2013 Lucy Hesse Jeremy Linn Shea Kirsop Lucinda Sparks Trent Speaker DIGBYCO.
- 2. Agenda I. Sensor Industry Overview II. Strategy a. Goals and Expectations III. Competitive Analysis IV. What We Could Improve V. What We Did Right VI. Overall Performance & Limitations DIGBYCO.
- 3. Sensor Industry Overview • Six companies (Identical Competitors) • Andrews • Baldwin • Chester • Digby • Erie • Ferris • Sensors are sold to multiple clients across various industries DIGBYCO.
- 4. The Digby Strategy Broad Differentiator: • Maintaining a presence in every market • Distinguishing products with excellent design, high awareness and easy accessibility • R&D keeps designs fresh and exciting • Products keep pace with the market • Improved size and performance • Prices will be above average • Capacity will be expanded with higher demand DIGBYCO.
- 5. Goals & Expectations Mission Statement: Premium products for the industry: Our brands withstand the test of time. Our stakeholders are customers, stockholders, management and employees. • Conservative approach to R&D DIGBYCO. TS
- 6. Competitive Analysis • Key Competitor Moves • Chester Dropped Traditional and Low End Products • Baldwin Dropped Performance Product • Aggressiveness • Competitor Positioning • Promotion Budget • Customer Accessibility DIGBYCO.
- 8. Competitive Analysis • Increasing the market share against competitors • Utilization of the industry conditions report • Focused on top competitors Erie and Chester DIGBYCO. LH
- 9. DIGBYCO. Where We Could Improve: Research & Development • Poorly developed low end product (Dell), near end • Making changes late in the simulation • Dot: constantly altered and marketed but never gained any traction
- 10. Where We Could Improve: Marketing • Didn’t market enough with sales and promo budgets early in the simulation • Sales forecasting suffered • In Year 8: • Dot production, 2300. • Sales Budget=$0. DIGBYCO.
- 11. Where We Could Improve: Forecasting/Production • Didn’t anticipate increase in demand in Year 5 • Late to react to other teams’ decisions • Were hesitant to produce over capacity DIGBYCO.
- 12. Where We Could Improve: Finance • Changed Accounts Payable in Year 6 to 60 Days • Didn’t Pay Off Bonds in Later Rounds DIGBYCO. LS
- 13. Strengths • Financial Structure • Capacity Utilization • Positioning (Rounds 1-5) • High End Product (Dixie) DIGBYCO.
- 14. Financial Structure Goal: 1.8-2.2 leverage DIGBYCO.
- 17. DIGBYCO. High End Product: Dixie • Best performing product throughout the past 8 years JL
- 18. Future Strategies & Recommendations R&D (positioning: size, performance, mtbf) • Shift products early to better utilize their ideal spots • Better fit the needs of the customer buying criteria • Introduce a new product early DIGBYCO.
- 20. Future Strategies & Recommendations Marketing • Price products more competitively • Increase sales and promo budgets to achieve higher awareness and accessibility early 73 87 98 100 100 100 100 100 71 86 96 100 100 100 100 10063 76 89 96 100 100 100 100 61 74 83 92 97 97 99 100 61 74 93 100 100 100 100 100 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Customer Awareness Daze Dell Dixie Dot Dune 61 57 59 66 71 71 78 8043 48 58 67 76 76 74 6249 46 52 60 65 65 76 78 37 39 43 51 65 65 82 86 45 43 50 57 69 69 84 87 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Customer Accessibility Daze Dell Dixie Dot Dune DIGBYCO.
- 21. FutureStrategies & Recommendations Marketing Continued • Forecast more accurately • Prevent stock outs 1 2 3 3 3 1 3 1 20% 40% 60% 60% 60% 20% 60% 20% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Product Stock Outs Number of product stock outs % of product stock outs DIGBYCO.
- 22. Future Strategies & Recommendations Production • Enhance production schedule through a more accurate sales forecast in marketing • Balance 2nd shift production with buying capacity • Be less aggressive with automation • Account for change in R&D when creating production schedules to avoid stock out • Keep A/P at 30 days DIGBYCO.
- 23. Future Strategies & Recommendations Finance • Continue to max out long term debt • Change stock price by issuing and retiring stock • Issue dividends after Year 6 • Continue strong leverage of 1.8 - 2.2 DIGBYCO.
- 24. What questions can Team Digby answer for you? DIGBYCO.
Hinweis der Redaktion
- 2. -Chester’s sell out new products introduced-didn’t keep tabs on competition well enough
- Most of you are already familiar with the situation regarding the government split of a monopoly resulting in the creation of Digby.
- Slow reaction time
- Goal: 1.8-2.2 leverageWanted to fund all R&D, Capacity, and Automation 100% to avoid emergency loans. Did not want to fund entirely from debt nor entirely from equity. Funding entirely from equity puts the company at risk and so does funding entirely from debt, because____. Were able to keep leverage down by splitting the long term-funding between common stock and bonds until round 5. We were unable to get the leverage to budge from 1.7. After getting half the points in round 5, we played around with capacity a lot more and were able to bring leverage back up. R&D changes were funding entirely with current debt. We paid off some bonds early when they were below par value to get some debt off the books.
- We took a conservative approach to capacity. In the earlier rounds, our capacity exceeded production. Round 4 was the first round where production exceeded capacity. We incrementally increased our capacity to reduce the gap between capacity and production without breaking the bank. We did not try to keep up with the large increases in production, but rather tried to minimize the increase in 2nd shift production as much as we could.
- Our positioning was good through round 5. It began to start slipping in round 5, but was still appropriate. Our strategy focused on keeping up with the ideal positioning and not having our products come out late in the year. We were able to keep up with the positions basically through round 5. When making decisions for round 6, it became much harder to keep up due to automation and large increases in the ideal positioning.
- With the exception of the final round, Dixie consistently increased in market share. The product was typically positioned fairly well, especially early on, which I discussed on the previously slide, when positioning was still in line with the ideal position. The particular screenshot is from round 6 when our products had started lagging behind the ideal position. However, it still showed an increase in market share. As a result of good positioning in the earlier rounds, we consistently stocked out each round. We attempted to forecast appropriately and increased our forecast each round; however, we still could not predict demand. This shows that the high-end product was doing well as the demand was high. We tended to see the high-end product as our best performing product.