Globus Report PDF

Preview

Summary

GLOBUS Repor for industry...

Description

GLO BAL

TABLE OF CONTENTS

REVIEW OF FINANCIAL PERFORMANCE..........................................................................2 Trends in the company’s annual total revenues........................................................................2 Trends in the company’s annual earnings per share (EPS).....................................................2 Trends in the company’s annual return on equity investment (ROE).......................................3 Trends in the company’s annual credit rating..........................................................................3 Trends in the company’s year-end stock price..........................................................................4 Trends in the company’s annual image rating.........................................................................4 STRATEGIC VISION...................................................................................................................4 PERFORMANCE TARGET FORECASTING..........................................................................6 COMPETITIVE STRATEGY –...................................................................................................6 Cameras...................................................................................................................................6 Drones......................................................................................................................................8 COMPETITORS’ ANALYSIS......................................................................................................8 STRATEGY TO ‘OUT-COMPETE’ CLOSEST COMPETITORS........................................10 LESSONS LEARNED.................................................................................................................11

Review of Financial Performance Trends in the company’s annual total revenues

Global Vision has had consistent growth in annual total revenues; globally surpassing industry averages by 15% in action-capture camera sales and 25% in UAV drone sales. In our first year of management we brought in $334,128 in revenue and saw a 72% growth from year 5 to 11 bringing in $1,183,030. Our biggest year of revenue growth occurred from year 8 to 9 with a 27% spike. Trends in the company’s annual earnings per share (EPS)

Global Vision has also showed consistent growth in our earnings per share starting at $0.75 at the start of year five and growing to $13.88 at the end of year 11. The biggest jump in earnings per share occurred in years 6 and 7 with it growing to 7.27 by the end of year 7. With

our focus on consistently bringing in larger net profits year after year we can see our success with our growth in earnings per share. Trends in the company’s annual return on equity investment (ROE)

Global Visions returns on equity dramatically increased during our first year of management and after year 7 we saw a decline through the years. In our last years of management, we focused on bringing in higher returns as shown through a lower decline from years 9 to 10. From years 10 to 11 we can see our return on equity increasing again which was done by increasing our net revenues and issuing a stock repurchase. Trends in the company’s annual credit rating

We’ve had a consistent credit rating throughout all our years of management at Global Vision with ensuring an A+ rating from year 8 onward. Our focus on budget and not overspending allowed us to not take out unnecessary loans. Global Vision used its existing

resources and cash flow from previous years to invest in marketing, upgrades and other expenses. Trends in the company’s year-end stock price

Global Vision’s year-end stock price started at $12.00 and increased to $408.25 at the end of year 11. We consistently had the highest stock price out of all our competitors in the industry which shows our success as a company. We managed to grow in every year of our management which contributes to our stock price, with our lowest years of growth occurring in years 8 to 9.

Trends in the company’s annual image rating

Global Vision had success in our image ratings, despite our dip from year 6 to 7, factors contributing to this include rewarding employees and high marketing. As of year 8 we had the highest image rating in the industry where we were tied, after year 9 we gained a significantly higher image rating than the other companies. Our high growth from years 7 to 9 was caused by our green initiatives in sustainability, improved working conditions, compliance monitoring of

supplies and renewable energy programs. By doing so we won the corporate responsibility award three times during our management at Global Vision.

Strategic Vision Our strategic business at Global Vision focuses on using a differentiation strategy to gain a competitive advantage. Using a differentiation strategy allows us to provide unique features in our broad market and offer a desirable product while continuing to do more research and invest in effective marketing. Moving forward from year 5, management created a specialized product that aimed to be set apart from all others in the industry. With both AC cameras and drones having the most models and features in the industry we looked to give consumers some of the best possible upgrades and features. Along with our focus to increase product ratings we set to invest in new research and development with every year of decisions. The focus on research and development allows us to create and find some of the best technology for our AC cameras and drones but also aid in the production process of both our products. Not only was investing in research and development important, Global vision wanted to expand our workplaces early to minimize our future costs and create a better production and working environment. Global Vision targeted certain geographic areas differently when it came to marketing and pricing of our AC cameras and drones. We projected to dominate the market early and establish a good consumer base; by creating a high marketing strategy we were able to advertise our higher end product to consumers and retailers. Our main vision is to create a high-end product that would have the highest p/q rating on the market and combat this with a high volume

of our budget going back into Search Engine advertising, retailer discounts, sales promotions and other advertising.

Performance Target Forecasting Earnings Per Share (EPS) Based on our trends in net revenue we will continue to see increased profits, therefore, we our forecasting for a continued growth over the next 2 years. The last few years we have seen a consistent growth of around $2.00 from year to year, so we are predicting our year 12 earnings per share to grow to $15.88 and a growth to $17.50 in year 13. Returns on Equity (ROE) We predict a growth in ROE by repurchasing stocks therefore it should increase to 35 % in year 12 and to 38% in year 13. Since we focused on improving our ROE in the last few years, we are setting higher goals on returns through our success in repurchasing stocks in our last year. Credit Rating Our spending budget has been very managed and have always had a focus on not exceeding our cash flow. We are not foreseeing any future loans since our growth is very consistent and have tight margins.

Image-Rating In our next years, we are looking to bring our image-rating back up and to create an even higher image-rating than we’ve ever had. Since we’ve had the highest image-rating in the industry since year 8 we are confident that our continuing focus on corporate responsibility and marketing will allow us to do so. Year-End Stock Price Based on our efforts to increase on return on equity and Earnings per share we foresee our stock prices consistently as it has in previous years. With our stock repurchase strategy it will further increase our stock price compared to previous years that have not seen as much growth. We have had the highest stock prices in the industry and are looking to increase year 12 stock prices to around $458.25 and to approximately $501.36 in year 13.

Competitive Strategy – Our competitive strategy for our two products, action-capture cameras and drones, had some similarities to each other. Global Vision looked to focus on the quality of work and of the productions, maintain high image ratings and gain higher market shares in the industry. Cameras Global Vision optimized the action-capture cameras to have more features and models than the other companies in the industry. Management wanted to create a unique product to create an advantage among competitors and stick to our strategic vision. With every year of decision, the product continued to be improved with the addition of more features, housing space

and even better resolution specifications. The company looked to offer a better product than others in the industry. Along with having a better product Global Vision knew that marketing was a big factor in selling. It was important to out-market and advertise our competitors; by doing so we increased market shares throughout the years and kept building our reputation. This reflects our strategic vision in offering a different product in the industry and marketing it on a broad scale. While the product itself and marketing is important, Global Vision took to offer different compensation practices that rewarded employees based on best practices and the quality of their work. Through every year, we increased our wages and attendance bonuses to keep our employees working hard. The quality of our product is just, if not more, important as what features it offers. Global Vision also took to doing a robotics upgrade in Year 7, although this is a costly thing to do it decreases production costs in the long run and allows for a higher output in a shorter amount of time. To stay consistent to improving our product we invested in research and development in hopes of finding the best technology and having the most advanced products in the industry. Global Vision also differentiated our marketing and prices among the different geographic regions as this would maximize our profits and goals. In our first years of management, we took to implementing a higher advertising budget in the Asia-Pacific and Latin America regions thinking it would give an advantage, suspecting that competitors would focus on North America and Europe-Africa. The company also offered lower prices in Asia-Pacific and Latin-America that were comparable while offering a higher price in North America and EuropeAfrica. This was based on projections in the industry and on dollar values in each region.

As more years and decisions went by, we created a greater focus on overall advertising and marketing. Global Vision started to invest more in North America and Europe-Africa to increase our market shares in these regions. The company knew that eventually we would need to improve in these areas and shift our focus as time went by. We remained to have a strategy where our prices were higher in North America and Europe-Africa and lower in Latin-America and Asia-Pacific. Not only did we differ the marketing and prices in these regions but offered higher discounts in Latin-America and Asia-Pacific, it was found that by doing so we could sell more of our output in these regions. Drones In order to set ourselves apart from our competitors, we suspected that other companies would focus more heavily on upgrading their action-capture cameras rather than UAV drones. Global Vision responded to this inclination by putting more effort and upgrades into our UAV drones as a way of success in our industry. We set to continually market our UAV drones more heavily and create a better product than our action-capture cameras. In our UAV drones, Global Vision wanted to create a high-end drone that had a lot of feature upgrades as opposed to focusing solely on hardware upgrades. We focused to create a product that was unique to the industry and was of better quality and specifications. Year by year we strived to add an additional feature or a new model to our UAV drones on top of our other upgrades in order to keep ourselves current and in demand for consumers. Our marketing cost per drone was significantly higher than it was for action-capture cameras. By year 11 our marketing cost per unit in UAV drones was $209.94 compared to our marketing cost per unit in cameras which was $39.87. Our focus to heavily market UAV drones

was brought in to get a higher consumer base and ensure than enough information and distinction was made between Global Vision and our industry competitors. Other than having a higher spend for UAV drones our strategy was similar to our action-capture cameras; but, for our drones we spent more in search-engine advertising as it produced a greater return at a lower cost. Global Vision decided to use a strategy that rewarded workers for the quality of work done. It gave its UAV drone workers higher base wage increases, assembly quality incentives and attendance bonuses than its action-capture camera workers. Compared to the industry, Global Vision gave lower base wages for its workers but a higher quality incentive for work that was well done. Although we spent less on base wages our employees took home a higher salary than the industry average because of our incentive and attendance bonus pay. This ensures a higher quality product that is consistent with our strategic vision and gives a competitive advantage to our products. Not only did we focus on employee quality, but our robotics facility upgrade in year 9 allowed for better quality drones and higher production rates. Global Vision’s main focus geographically was in North America where we invested the most money; however, our advertising budgets among all regions remained balanced. We did offer a higher discount to online retailers in both Asia-Pacific and Latin America regions. Our price among the regions differed slightly, with Europe-Africa maintaining a higher price while Latin America and Asia-Pacific regions had the lowest prices for our UAV drones.

Competitors’ Analysis Global Vision’s strongest and closest competitors for AC cameras in recent years has been Alpha Tech; they have used a strategy that increases their market shares from previous years and have allocated more resources in marketing and retailer budgets. They have consistently shown to sell their product at a lower price than ours and offering lower discounts to retailers and to special contract offers. However, in the AC camera segment they seemed to start increasing their prices to match closer to ours so they can be more comparable. Not only did they have a focus on price and discounts, Alpha Tech had a high marketing and retailer budget throughout the last few years. By doing so, we suspected that it impacted their gaining market share in the industry, specifically in North America and Europe-Africa regions where their recruitment and advertising budget were higher than other regions. While looking at competitors in the drone market we found that Alpha Tech proved to still be our closest matched competitor. Their strategies seemed to remain similar for their AC cameras and drones; having a lot of focus on marketing and retailer support budgets. Although their strategies were similar in both their products through further analysis it was evident that their maintained lower prices in drones than our team has set for Global Vision. This differs from their AC Camera strategy where they seemed to follow our AC Camera prices in the last years of decisions. They have also allocated money and product prices differently among each region which suggests they followed dollar values and market trends using a plan similar to Global Vision’s. Alpha Tech also changed their strategy through the years and has changed their focus, which has given them a greater advantage that caused for adaptation to our strategy and decisionmaking.

In order to adapt to Alpha Tech’s rising success, Global Vision looked heavily into competitive strategy efforts through our last years of decisions. It was important to stay true to our strategic vision, continuously looking to ensure a better product than our closest competitors and high marketing budgets. Our team locked down on increasing our advertising budget, website displays and retailer support budget for our Action-Capture cameras; the increases in marketing allowed us to be even more competitive and maintain a lead in the industry. Global Vision followed a similar approach for our UAV drone marketing where we invested a great degree more in search engine advertising, website product displays and retailer recruitment budgets. Not only was a high marketing budget attained, Action-Capture cameras and UAV drones were some of the best products with the highest p/q ratings in the industry. Global Vision looked at its top competitors and industry decisions to find new ways to be unique, such as winning multiple Corporate Social Responsibility Awards, and to set the products apart from others in the industry. Competitive effort analysis allowed for further development and gave Global Vision a leg up in the industry to continue to come out on top and gain more market share and become even more profitable.

Strategy to ‘Out-Compete’ Closest Competitors Further strategies would be needed to keep Global Vision at the top of the industry for Action-Capture Cameras and UAV drones. In order to do this, the company would need to continue marketing at a high level and to compare marketing budget efforts with others in the industry. The company continued to keep a high p/q rating and it would be important to keep that up throughout the next years of decision-making. Improving our product to offer the most

features and Marketing factors into a big part of our competitive advantage. Offering a better product with more features and at a price that remains fair comparing to our greatest competitive. The marketing aspect of our vision and efforts is important as it lets consumers know of our furthering development and product improvements; keeping a good budget continues to give us an advantage in the industry This would allow Global Vision to remain a highly advertised company while also keeping a high image rating. Not only does marketing help maintain our image rating but our corporate responsibility is also a big factor; Global Vision has won multiple Corporate Social Responsibility rewards. Ensuring good practices in the industry and putting forth Green Initiatives along with charitable contributions allows for a better workplace and environment within the company as well as outside the industry. Continuing these efforts along with better compensation efforts for production and further workstation expansions helps produce a quality product and increase our image ratings. It would be increasingly important for Global Vision to improve its own faults and increase its falling return on equity which has only slightly improved the last years. By doing so it will increase our net revenues or hopefully bring in more money after potential stock repurchases. These efforts would contribute to a higher return on equity that our competitors have done a better job at.

Lessons Learned Although Global Vision had a winning strategy in the end of decisions the team still learned a lot throughout the simulation. Through analysis of our own decisions and success along with looking at how other groups in the industry were doing we found that formulating a strategy and improving on it throughout the simulation created the best results. Looking at how we could further improve our strategy we looked into our research and development investments where we found that we were below average on these investments. By possibly putting more money into research and development it could create better products with higher ratings. Along with spending more on research and development we found that expanding the number of workstations would have benefited the company more and reduced our ...