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 2|27 3|27 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. 4|27 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 5|27 Production Expected low contribution margins Continuous plant automation Purchase of additional capacity Finance Prepared for low earnings Priority: high efficiency Dividend policy 6|27 7|27 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. 8|27 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 9|27 Market Share & Contribution Margin 10|27 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 11|27 Financial Performance 2010-2017 Emergency Loan 12|27 Financing & Capex. 2010-2017 13|27 Capital Expenditures & Financing 14|27 15|27 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 16|27 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 17|27 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 18|27 HR/TQM Amount budgeted based on need Assumed that all funds required would be available If not, adjusted based on consensus 19|27 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 20|27 Visually 21|27 22|27 Five Year Strategic Plan Overview – Business Life Cycle 23|27 Five Year Strategic Plan Overview – Financial Life Cycle 24|27 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 25|27 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 26|27 27|27