Co-managers: Adriana Cuskova, Damien Vargas, Esmir Deljanin,

Nuzhat Shorna, Olya Gerasimo

FOCUS LLCFocus your camera - Focus your life ©

1. Introduction

2. Mission Statement

3. Overall Strategy

4. Year 6-8 Performance

5. New Strategy

6. Year 9-12 Performance

7. Overall Performance

8. Achievements

9. Lessons Learned

AGENDA

Headquartered in U.S.A.Production facility in TaiwanDesign, assemble, and market: Entry-level and multi-featured camerasStrong regions: Europe-Africa (40% of unit sale)Asia-Pacific (30%)Weak regions : North-America (10%)Latin-America (20%)

INTRODUCTION

Task➔ Meet diversified and sophisticated customer needs➔ Introduce new and improved models, add performance features, restyle camera bodies

and housing, and upgrade internal camera softwareValues

➔ Fulfill expectations of our customers, investors, and society, emphasizing remarkable corporate governance and implementing activities that contribute to environment and social sustainability

➔ Improve the life of our American workers who are extremely knowledgeable and highly skilled

MISSION STATEMENT

Vision and Goals➔ Become the global leader in market for digital cameras➔ Distinguish our cameras from the products of our competitors➔ Bring the best user experience to our customers through improved products

and innovative designs

MISSION STATEMENT

OVERALL STRATEGY: YEARS 6-8

Why did we employ a cost-leadership strategy?

During the first few years we wanted to:

➔ Gain competitive advantage

➔ Achieve lower overall costs than competition

➔ Market to a broad consumer base

OVERALL STRATEGY: YEARS 6-8

Achievements:

4th place

Stock price $30.17

ROE $18.1

EPS $2.12

Credit Rating A-

Image Rating 62

Net Income $21,149K

Sales Revenue $200,135K

Competitive Efforts:

Set competitive prices EL: $169 (Industry Avg: $163) MF: $391 (Industry Avg: $392)

Hired 50 additional PATs for 3rd quarter and offered fair wages and benefits

Paid some debts and dividends

Introduced improved models, added performance features, restyled its camera bodies and housing ( ELC 4 models, MFC 2 models, more features, 2.5stars)

YEAR 6: EFFORTS & ACHIEVEMENTS

Competitive Efforts:

Gain competency-based advantage (Unique internal resources and capabilities- ownership of resources and frequent innovations)

Increase advertizing budget for weak regions, improve technical support, increase warranty periods for MFC, increase number and lengths of promotions, and offer special discounts in our weakest regions

Achievements:

2nd place

Stock price $32.64

ROE $16.9

EPS $1.99

Credit Rating A-

Image Rating 59

Net Income $19,493K

Sales Revenue $188,818K

YEAR 7: EFFORTS & ACHIEVEMENTS

Competitive Efforts:

Increase number of ELC- 4 models, MFC 2 models, each 2.5 stars, improved quality

All decision entries were made based on the Glo-Bus Projected Performance feature

YEAR 8: EFFORTS & ACHIEVEMENTS Achievements:

6th place

Stock price $24.67

ROE $24.6

EPS $0.63

Credit rating C

Image Rating 45

Net Income $5,958K

Sales Revenue $138,257K

What went wrong?● We attempted to incorporate our expectations based on whether or not competitive efforts will on

average weaken or intensify for the upcoming year. What did we anticipate from our competitors?

● Price - HIGHER by 5% to 10%● P/Q Rating- HIGHER by more than ½ star● All other marketing variables - Significantly MORE competitively aggressive

PROJECTED OUTCOME YEAR 8

PROJECTED VS. ACTUAL PERFORMANCE

Why? ➔ Economical, functional business structure ➔ More ability to control costs➔ Offer single design or several ➔ Gain cost advantage➔ Narrow segment

NEW STRATEGY: COST-FOCUS

YEAR 9: IMPLEMENTING NEW STRATEGY

Achievements6th place

Stock price: $17.67

ROE: $9.2

EPS: $0.54

Credit Rating: C-

Image Rating: 40

Net Income: $6,614K

Sales Revenue: $136,818K

Competitive Efforts

Narrowed Segment by differentiating cost by region, while keeping the same quality and same # of models:

Lowered prices for entry-level

Lowered prices for multi-feature

Lowered production costs in all 4 regions

Decreased core component costs for both entry-level and multi-feature cameras,

Increased advertising

Build a brand

Perception of unique product● Product features● Advertising● Tech support● Warranty period● Selling prices● Autonomy of workers

YEAR 10: DIFFERENTIATION STRATEGY

Competitive Efforts:

Issued stocks to increase cash

No dividends, # models 1 ELC and 2 MFC, debt

Advertising budget for weak regions

Technical Support

Warranty Periods for MFC (3 years)

Increase number and length of promos

Special discounts in weakest regions

Achievements:

6th place

Stock price $12.52

ROE $4.1

EPS $0.32

Credit Rating C+ (IMPROVED)

Image Rating 59 (IMPROVED)

Net Income $5,066K (INCOME)

Sales Revenue $212,978K (INCREASED)

YEAR 10: COMPETITIVE EFFORTS

Achievements Year 11 Year 12

Stock price $8.68 $13.24

ROE $1.3 $12.1

EPS $0.10 $1.13

Credit r B- A-

Image r 62 62

NI $1,749K $18,781K

S Rev $229,356K $273,617K

1 model ELC 2.5

1 model MFC 4

Warranty period 3 yrs for MFC, 2yrs for ELCcompetitive marketing, production, distribution

YEAR 11-12: EFFORTS & ACHIEVEMENTS

● Capture momentum● Regain investors’ trust through stronger performance● Become “Leap Frog of the Year” ● Off credit watch list● Keep building up that brand!

YEAR 11: CONTINUED DIFFERENTIATION STRATEGY

● Differentiation rocks!● Lower labor & warranty costs● We finally got good and the game is over!?

YEAR 12: CAN WE KEEP PLAYING?

OVERALL PERFORMANCE: NET REVENUE, EPS

OVERALL PERFORMANCE: ROE, STOCK PRICE

OVERALL PERFORMANCE: CREDIT, IMAGE

OVERALL SWOT ANALYSIS

S- Warranty period for ELC and MFC- MFC P/Q rating- Tech Support in Europe-Africa- Advertising budget in Asia-Pacific

W- Retailers- High Labor Costs- Low Operating Profits- Number of models

O- Higher P/Q rating- Increase Advertising Budget- Improve Tech Support- Increase market share

T- Pricing pressure from competitor- Exchange rates- iphones

North America ELC 5% vs 11.8% MFC 5% vs 10.9%

Latin AmericaELC 10% vs 10.8%MFC 10% vs 10.1%

Europe-Africa ELC 20% vs 11.1 % MFC 20% vs 17.5%

Asia-PacificELC 15% vs 15.9% MFC 15% vs 14%

MARKET SHARE: YEAR 5 vs. YEAR 12

● Strong and improved quality of our product

● Extensive global presence

● Commitment to innovations and consumers

● Our workers’ improved quality of life

● Our greatest asset is PAT members who are extremely knowledgeable, highly skilled, and American workers

OUR MAIN ACHIEVEMENTS

● Reject Globus Projected Performance feature● Don’t find yourself “stuck in the middle” - Take a risk and change strategy if it is

required or combine strategies● Keep labor costs according to industry average● Establish your company- pay debts- pay dividends-stay socially responsible● Trade-off● Set benefits different from competitors - Differentiate yourself● Stay optimistic, positive, and hard-working

LESSONS LEARNED

FOCUS LLCFocus your camera - Focus your life ©