Transcript Slide 1

Shareholder Debriefing
Executive Directors presenting:
Guergana Anguelova
Moritz Broelz
Irina Hubytska
Richard Williamson
Agenda
 Review of Mission and Vision Statement
 Initial Strategy
 Evaluation of Strategy
 Decision Making Process
 Five Year Strategic Plan
 Questions and Discussion
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Mission Statement
 Baldwin 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.
Vision Statement
 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.
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Marketing
 Substantial expenses to build customer loyalty and
awareness
 Create higher demand for products
R&D
 High-traditional-low segment overlaps
 Introduction of new products in the high-end
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Production
 Expected low contribution margins
 Continuous plant automation
 Purchase of additional capacity
Finance
 Prepared for low earnings
 Priority: high efficiency
 Dividend policy
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Unexpected Events
 Round 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 2
 What went wrong?
 Marketing Expenses reduced – loss of competitive
advantage
 Needed Complement unadjusted – Overtime of 6.8% loss in productivity increase of ≈ 3.9%
 Dividend issued
 Large unsold inventory in Traditional due to Erie
 Corrective Actions:
 Marketing Expenses realigned with Corporate Strategy
 Needed Complement adjusted
 Dividend policy aligned with corporate strategy
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Market Share & Contribution Margin
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Marketing & Product Performance
Tradtional
Low End
High End
Performance
Size
2011
1
1
4
3
3
Product Raking by Unit Sales
2012
2013
2014
2015
2
6
1
2
2
4&8
4&5
1&6
5
1
2
6&7
5
4
2
1
2
4
1
1
Baja
Bzum
2016
1
1&3
1, 6 & 8
2
1
2017
1
1&3
1, 3 & 6
1
1
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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Where it started: R&D
Product placement graphed against demand:
Positioned so that demand curves overlapped
Best: one high, one low and if possible one catchment
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Marketing
 Price, Sales and Advertising budgets
 Based on products in sector
 When they peaked
 How long they were desirable
 Competition
 Finance: Pessimistic/Weak sales forecast
 Production: Actual/Expected sales forecast
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Production
 Schedule determined based on Expected sales
 Automation levels adjusted, if possible/necessary
 Headcount levels adjusted, where necessary
 If production schedule unable to meet Expected sales
 Return to Marketing
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HR/TQM
 Amount budgeted based on need
 Assumed that all funds required would be available
 If not, adjusted based on consensus
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Finance
 Working capital sourced from Sales, Bonds and Shares
 If sufficient capital available: Plan executed
 If 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
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Visually
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Five Year Strategic Plan
 Overview – Business Life Cycle
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Five Year Strategic Plan
 Overview – Financial Life Cycle
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Five Year Strategic Plan
 Finance
 Levered Buyout of
company Digby ($58ml)
and/or Ferris ($89ml)
 Merger with company
Erie – complements our
strategy
 Production
 Maximum Automation
 Build capacity
 Marketing
 100% Awareness
 100% Accessibility
 R&D
Baja
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Five Year Strategic Plan
 Corporate Strategy
 Continue broad differentiation strategy
 Continue being a market share leader
 Continue being the most profitable company by
transforming more revenues into net profit
 Continue increase of company value
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