Shareholder Debriefing Executive Directors presenting: Guergana Anguelova Moritz Broelz Irina...
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Transcript of Shareholder Debriefing Executive Directors presenting: Guergana Anguelova Moritz Broelz Irina...
Baldwin Shareholder Debriefing
Executive Directors presenting:Guergana Anguelova
Moritz BroelzIrina Hubytska
Richard Williamson
AgendaReview of Mission and Vision StatementInitial StrategyEvaluation of StrategyDecision Making ProcessFive Year Strategic PlanQuestions and Discussion
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Initial Strategy
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Mission StatementBaldwin Co. focuses on a broad-based differentiation
strategy, providing products in all segments of the electronic sensor market. By creating increasingly higher levels of brand recognition and reputation, Baldwin will create a competitive advantage as the largest e-sensor producer.
Baldwin Co. strives to become a market leader in the electronic sensor industry. As a result, the combination of large sales with healthy margins will ensure a long-term competitive advantage in earnings volume and the success of the firm’s strategy.
Vision Statement
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Marketing Substantial expenses to build customer
loyalty and awareness Create higher demand for products
High-traditional-low segment overlaps Introduction of new products in the high-end
R&D
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Production Expected low contribution marginsContinuous plant automationPurchase of additional capacity
Prepared for low earnings Priority: high efficiencyDividend policy
Finance
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Evaluation of Strategy
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Unexpected EventsRound 2:
Erie became a Niche Player in Low-End & Traditional.
Round 5:Andrews created a sellers-markets in Low-End,
Traditional, Performance & Size segments by under producing.
Round 7:Ferris created a sellers-markets in Low-End &
Traditional segments by exiting these segments.
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Round 2What went wrong?
Marketing Expenses reduced – loss of competitive advantage
Needed Complement unadjusted – Overtime of 6.8% - loss in productivity increase of ≈ 3.9%
Dividend issuedLarge unsold inventory in Traditional due to Erie
Corrective Actions:Marketing Expenses realigned with Corporate
StrategyNeeded Complement adjustedDividend policy aligned with corporate strategy
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Market Share & Contribution Margin
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Marketing & Product Performance
2011 2012 2013 2014 2015 2016 2017Tradtional 1 2 6 1 2 1 1Low End 1 2 4 & 8 4 & 5 1 & 6 1 & 3 1 & 3High End 4 5 1 2 6 & 7 1, 6 & 8 1, 3 & 6Performance 3 5 4 2 1 2 1Size 3 2 4 1 1 1 1
Product Raking by Unit Sales
Baja
Bzum
Bully
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Financial Performance 2010-2017
Emergency Loan
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Financing & Capex. 2010-2017
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Capital Expenditures & Financing
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Decision Making Process
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Product placement graphed against demand:
Positioned so that demand curves overlappedBest: one high, one low and if possible one catchment
Where it started: R&D
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Marketing
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Price, Sales and Advertising budgetsBased on products in sectorWhen they peakedHow long they were desirable Competition
Finance: Pessimistic/Weak sales forecastProduction: Actual/Expected sales forecast
Production
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Schedule determined based on Expected sales
Automation levels adjusted, if possible/necessary
Headcount levels adjusted, where necessary
If production schedule unable to meet Expected salesReturn to Marketing
HR/TQM
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Amount budgeted based on need
Assumed that all funds required would be available
If not, adjusted based on consensus
Finance
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Working capital sourced from Sales, Bonds and SharesIf sufficient capital available: Plan executedIf insufficient working capital available
Capital requirements lowered where possible Incremental reductions in Marketing/Sales Incremental reductions in HR/TQM Product line additions held off until following year
Restriction goal: Do not cause long term disruption
Visually
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Five Year Strategic Plan
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Five Year Strategic PlanOverview – Business Life Cycle
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Five Year Strategic PlanOverview – Financial Life Cycle
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Five Year Strategic PlanFinance
Levered Buyout of company Digby ($58ml) and/or Ferris ($89ml)
Merger with company Erie – complements our strategy
ProductionMaximum AutomationBuild capacity
Marketing100% Awareness100% Accessibility
R&D
Baja
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Five Year Strategic PlanCorporate Strategy
Continue broad differentiation strategyContinue being a market share leaderContinue being the most profitable company by
transforming more revenues into net profitContinue increase of company value
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Questions and Discussion
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