TRƯỜNG ĐẠI HỌC KINH TẾ THÀNH PHỐ HỒ CHÍ MINH
KHOA KINH DOANH QUỐC TẾ - MARETING
------------
COMPANY A – INDUSTRY 2
REPORT OF YEAR 13 AND
PLANNING FOR YEAR 14
LỚP IBC10 (ST4) – NHÓM 2
Châu Thuý An
Lý Gia Bảo
Lê Trần Khánh Chi
Trần Thị Kim Ngân
Phạm Thị Minh Phương
Đỗ Hồng Quyên
Nguyễn Minh Thư
Lê Vân Trang
Phan Ngô Bảo Trâm
Đặng Hoàng Quốc Vương
CONTENTS
ANALYSIS BUSINESS PERFORMANCE OVER YEAR 13
I. INDUSTRY ANALYSIS ................................................................................2
1. AC Camera ...................................................................................................2
2. UAV Drone ..................................................................................................3
II. COMPETITVE ANALYSIS .........................................................................5
1. Market North America .................................................................................5
2. Market Europe – Africa ................................................................................9
3. Market Asia – Pacific ..................................................................................12
4. Market Latin America .................................................................................15
III. IMPLEMENTED STRATEGY OF YEAR 13 AND ITS RESULT ..........19
1. Performance highlights ...............................................................................19
2. Assembly and Facility Operating ................................................................24
3. Financial statements ....................................................................................29
PLANNING FOR YEAR 14
I. PRODUCT DESIGN .....................................................................................31
1. AC Camera .................................................................................................31
2. UAV Drone .................................................................................................32
II. MARKETING STRATEGY.........................................................................32
1. AC Camera ..................................................................................................32
2. UAV Drone .................................................................................................33
III.CORPORATE SOCIAL RESPONSIBILITY AND CITIZENSHIP.........33
IV.COMPENSATION AND FACILITIES………………………………….33
V. SPECIAL CONTRACT OFFERS ………………………………………..33
VI.FINANCE AND CASHFLOW................................................................34
1
ANALYSIS BUSINESS PERFORMANCE OVER YEAR 13
I. INDUSTRY ANALYSIS:
This year, the company reduced the P / Q rating of ACC and increased
the P / Q rating of UAV in all markets.
- Average wholesale prices in Year 13 were higher than Year 12 in
UAV, lower in ACC but there was no change too much than the
previous year.
- The company’s profit this year was the lowest. We ranked 4th such as:
Earnings per Share, Return on Equity, Stock price.
- In North America and Europe, customer preferred high - quality
products, despite the price was high.
- In Asia - Pacific and Latin - America, customers considered more
about the price, they preferred a product with lower price.
- We are working every day to bring Alicute to the forefront of the
industry. And we believe we will.
AC Camera:
- Average wholesale prices in Year 13 were decreased by 5.6% from
Year 12.
- AC Camera Demand was 0.9% higher than forecast.
- Unit Assembled/Shipped/Sold was up by 6.0% from Year 12.
- Assembly capability industry-wide was adequate to satisfy Year 13
demand.
- Demand for AC Cameras is expected to increase by about 5.1%
annually.
2
Year 13’s trend:
- In general, in the year 13, we had change in all 3 aspects of price, P/Q
rating and product features. This year, we had a significantly
decreased in Price and slightly fall in Features and P/Q Rating.
- We had no significant change in the P / Q rating. It can be
demonstrated that we have made other changes in product
development and market segment.
- Therefore, next year we will consider to have a reasonable
combination between increasing the features and P / Q rating of the
product as well as the price to create more value for customers,
helping us to increase profits and market share.
UAV Drone:
- Average wholesale prices in Year 13 were unchanged from Year 12.
- UAV Drone Demand was equal to the forecast.
- Units Assembled/Shipped/Sold were up by 6.8% from Year 12.
3
- Assembly capability industry-wide was adequate to satisfy Year 13
demand.
- Demand for UAV Drones is expected to increase by about 4.8%
annually.
Year 13’s trend:
- The features had a slightly increased than year 12.
- P/Q rating increased from 5.9 to 6.3.
- Besides, because of this year's P / Q rating, the total cost of Drone
components and features also increased moderately. My company still
has a significant investment in R&D, which can help us to improve
and develop my products well.
COMPANY ALICUTE:
AC Camera:
North America Europe - Africa Asia - Pacific Latin America
Industry Company Industry Company Industry Company Industry Company
Average 242 210 246 211 232 207 232 205
Wholesale
Price
AC 437 424.8 370 356.7 386 372.8 279 280.6
Camera (-2.8%) (-3.6%) (-3.4%) (+0.6%)
Demand
(000s of
units)
Comment for year 13:
- Wholesale prices of company in most regions are lower than that of
the industry.
4
- AC Camera Demand: In general, the AC Camera Demand of our
company is lower than the average industry except in Latin America.
- North America (around 2.8% lower than industry), Europe – Africa
(around 3.6% lower than industry), Asia – Pacific (around 3.4% lower
than that of industry), Latin America (around 0.6% higher than
industry).
UAV Drones:
North America Europe - Africa Asia - Pacific Latin America
Industry Company Industry Company Industry Company Industry Company
Average 2055 1822 2047 1802 1965 1717 1945 1699
Direct-sale
Price
UAV 88 88.9 73 71.7 57 61 35 36.8
Drone (+1%) (- (+7%) (+5.1%)
Demand 1.8%)
(000s of
units)
Comment for year 13:
- Direct-sale prices of company in 4 regions are lower than that of the
industry.
- UAV Drone Demand: The UAV Drone Demand of our company in
almost regions are higher than the average industry, excluded in
Europe-Africa.
- North America (around 1% higher than industry), Europe – Africa
(around 1.8% lower than industry), Asia – Pacific (around 7% higher
than that of industry), Latin America (around 5.1% higher than
industry).
II. COMPETITIVE ANALYSIS:
1. Market North America:
AC Camera:
5
- In year 13, our prices are 13.2% below the market ($ 210).
- Brand reputation has been a headache for our company for many
years, still lower than the market by 3.8% (75).
6
- This year we have reduced our budget for advertising and website
display, which is part of the reason that sales volume and market share
are the third in the industry (4,248,000 products and 24.3%).
- Compared to our competitors, our business results seem sad but based
on the years, the market share this year has increased 3% compared to
12 and sales increased by 20,000 products.
- In this market, company C continues to rank first, accounting for
28.8% of the market share. The reason for this victory is because they
increase stars but the price decreases. Besides, they have a series of
powerful stores and online retailers. They invest heavily in
advertising, website display and taking advantage of the available
brand reputation.
- In the following year, we will continue to carefully plan our strategies
so we can do good business in this market.
- As noted above, our market share as well as our sales volume has
increased significantly. We will continue to maintain this.
UAV Drone:
7
- This year, the price of UAV is 11.3% lower than the industry ($
1822), P / Q is also 8.7% lower (6.3 *).
- We have reduced our advertising budget as well as the website display
but that doesn't affect the business results.
- Our company ranks second in volume (88,900 products) as well as
market share (25.3%), which is an encouraging result for a difficult
business year for us.
8
- Our competitor continues to be company C. They win this market
because their P / Q rating and price are much lower than that of the
industry.
- In the coming year, we will come up with the right strategies to
continue this good business in the North American market.
- As you can see on this chart, the market share increase of 1.9% means
25.3% over the previous year, along with the increase in sales from
77,700 to 88,900 products.
2. Market Europe – Africa:
AC Camera:
9
- In this market, our prices continue to be 14.2% lower than the industry
($ 211).
- We only rank 3rd in this market with 24.1% market share.
- Company C continues to lead, it looks like they are doing very well in
markets. Overall, just like in the North American market, they sell
with high P / Q ratings combined with low prices, deep discounts and
a strong investment in advertising.
- In the last few years, most companies in the industry have competed
for quality but cheap prices, which shows that if the cost is cheap and
the budget is as low as the reasonable price, our company will be win
in this market.
- As you can see, our production this year plummeted from 386.2 to
356.7 (000s units). This of course led to a serious drop in market share
from 26.8% to 24.1%.
UAV Drone:
10
- This year, prices are 12% lower than the industry ($ 1802).
- The good news is that we have almost achieved good results in the
sales of UAV drones.
- We have won the second position in terms of sales volume (71,700
products) and market share (24.6%).
11
- In this market, company C continues to lead, still a low P / Q rating
strategy with low prices. Besides, they invest heavily in advertising
budget as well as website display.
- Next year, we will continue to maintain this status and above all try to
lead the market.
- As you can see, the good business has increased the number of
products sold from 61.3 to 71.7 (000s units) and the market share
increased from 22.2% to 24.6%.
3. Market Asia – Pacific:
AC Camera:
12
- In general, this year the company decided to continue to reduce the
price of its products by reducing the quality of its products from P / Q
rating 4.8 * in 12 to 4.5 * in 13, bringing the price of its products
from 229$ to 207$. This year, much lower than the industry average
selling price of 232$.
- At the same time, reduce the number of models from 5 models in 3 to
4 models this year. This might be because these strategic changes have
not been effective as the company's market share has dropped
significantly from 27.4% to 24.1% this year.
- In the next year, the company will definitely try to research the market
so that it can come up with the best strategy possible.
- In general, this year, the indexes of sales units and market share
changed somewhat. when sales decreased from 393.90 to 372.80.
Market share also decreased from 27.4% to 24.1%.
13
- The company needs to research the market more closely to come up
with the best business strategy to improve the business situation of the
company in the next year.
UAV drone camera:
14
- This year the company decided to lower the price of its UAV
camera from 1,722$ in year 12 to 1,717$ this year, but the quality
of the product has improved compared to the year 12, when P / Q
rating increased from 5.9 * to 6.3. *. While keeping the number of
models unchanged to minimize unnecessary costs.
- In addition the company also offers discount for retailers from 15%
in 12 to 20% this year.
- Besides, it significantly improved marketing when it decided to
increase the time of displaying ads on the web from 1,470 to 1,715.
Search engine ads also increased from 2,080 to 2,451. Retailer
employment decreased from 77.52 to 50.10. Possibly due to the
above adjustments, the market share of UAV cameras increased
from 23.5% to 26.8%.
- In the following year, the company will definitely improve its
business results to the best level.
- This year, the indicators of sales units and market share increased as
expected, specifically. Unit sales increased from 49.90 to 61.00. The
share also rises from 23.5 in year 12 to 26.8 this year.
- The company's strategy seems to have worked for UAV cameras.
4. Market Latin America:
AC Camera:
15
- This year, companies have generally pursued a strategy of lowering
product costs by reducing product quality and reducing other
unnecessary production costs. Our company typically reduced its
16
selling price from $ 235 at P / Q 4.8 * product quality in year 12, to $
205 with P / Q 4.5 * product quality this year.
- This is because the company decided to pursue a profit-maximizing
strategy by minimizing unnecessary expenses. Because the selling
price is much lower than the industry average price of $ 232, the
company holds a very good market share of 25.1%, competing
directly with Company C with 26.7%.
- Overall, this year, the indices are still growing, specifically the sales
of UVC drone camera units increased from 247.00 to 280.60. The
market share also increased this year, when last year the market share
was 24.5%, this year the market share increased to 25.1%.
- As if the UAV camera business strategy is on the right track, next year
the company will definitely come up with better business strategies to
be able to break through in the last years.
UAV Drone Camera:
17
- This year the company decided to increase product quality but lower
the product selling price. Specifically, the quality of P / Q rating
products increased from 5.9 * in year 12 to 6.3 * this year. However,
although the quality has improved significantly, the company decided
to lower the price of its products from 1,718 in 12 to $ 1,619 this year.
- In addition the company also offers discount for retailers from 15% in
12 to 20% this year.
- At the same time, to keep the number of product models at the level of
2 models in order to limit unnecessary production costs. This is
because the company wants to bring consumers a product with good
quality but low price, in order to pull more market share to the
company. perhaps the company's strategy was correct when in the
year 12 the company's market share was 24.1%, but this year
increased to 26.3%, competing directly with Company C holding
38.8% market share.
- Company C leads the market share because it sells for only $ 1,260,
which is much lower than the industry average.
18
- Based on the chart, we can see that the company's business indicators
have increased, specifically. unit sales increased from 30.9 to 36.8.
The market share this year also increased from 24.1% to 26.3%.
- This is because the company's strategy has been trying to cut down
unnecessary production costs in order to maximize market share and
profit when making products of good quality but low cost compared to
other companies. Other companies in the market.
III. IMPLEMENTED STRATEGY OF YEAR 13 AND ITS
RESULT:
1. Performance highlights:
19
- EPS: #4 with 10.49$
- ROE: #3 with 54.9
- Stock price: #4 with 262.34$
- Credit rating:A
- Image rating:76
Looking at the overall indexes, they have not changed significantly
compared to the previous year:
- EPS: increased from 8.60 to 10.49 but our company is still ranked 4th
as the previous year. Due to rival companies EPS also increased
significantly.
20
- ROE: increased from 52.3 to 54.9, this increased but brought the
company to the 4th rank.
- Stock price: increased from 223.80 to 262.34, although the index has
grown over the years, but there is no breakthrough when it is still
ranked 4th in terms of stock price.
- Credit rating: kept A in 13.
- Image rating had changed to the level 76 this year.
→ In general, the indexes are still growing over the years, but not enough
breakthroughs to rise to higher rankings than competitors. In the following
years, the company must continue to research to come up with the best strategy.
2. Detailed description:
a.EPS, ROE, Stock Price:
AC Camera:
21
Product design:
This year we decided to decrease the AC camera quality at a P / Q rating
of 4.5 *. Much lower than the quality of AC camera products on the market
with an average P / Q rating of 5.6 *.
In this year R&D costs compared to previous years, $ 20,000 in year 12
and $ 24,000 this year. Possibly due to reasonable adjustments in costs and
quality indicators that helped the company to earn a profit of 315,886,000 lower
than that of 12, earning only 351,761,000. This shows that the company is not
still growing well enough to compete with the leading companies.
UAV Drone Camera:
22
- About the UAV camera this year the company decided to increase
product quality with P / Q rating 6.3* from the previous year with P /
Q rating 5.9 *. At the same time, maintain the number of models this
year.
- This year we decided to keep our R&D investment at $ 27,000 to
minimize costs.
- The revenue earned from camera sales this year is higher than that of
competitors when it only earned $451,200,000 compared to
$376,354,000 in 11.
→ Companies should carefully research the market to come up with the
best strategies to improve the business situation of the next years.
b. Image Rating:
- In year 12, the company increased image rating (76).
- This year we invested 11.5 million dollars in renewable energy
program, which involves ongoing expenditures to incorporate
renewable energy resources at the Taiwan assembly facilities. These
expenditures are treated as capital investment and depreciated at 5%
per year.
23
- As planned next year, we will continue to invest in the Renewable
Energy Program to help protect the environment.
2. Assembly and Facility Operating:
This year, the rate of PQ increased 4.5*. The cumulative product R&D
Expenditures is $241,000,000. The product R&D expenditures in Year 13 keep
stable 24,000,000.
This unit is running effectively, so we decided not to add new spaces for
workstations (420), so workstations were installed still at 400.
24
Our company focused on investment in AC cameras facilities, total gross
investment rose at $287,750,000. However net investment decreased slightly
compared to last year, at $157,342. We are trying to find a solution to make this
unit more efficient.
AC workforce statistics include:
- Base Wage per PAT Member: increased at $25,999/worker equivalent
1%. At this rate, we will continue to encourage workers to work well.
- Incentive Bonus: we increased $1.6/ unit.
- Attendance Bonus: we set at $300/worker.
- Fringe Benefit Package: $800
- Best Practices/Productivity Improvement Training: $9000/worker was
the
- amount of money we spend on training workers.
- Total Number of Workers Employed stood at the same 1176 from last
year.
- Besides, the number of workers per PATs remained at 3 workers.
Overall, our company has taken workers’ issues into consider, more
bonuses are showing their good effects on productivity and PATs
employed workers.
25
Because our company increased P/Q rating, all components and features
of AC Cameras also remain (image sensor, LCD Display Screen, photo
modes,...)
- Regular-time cost, PAT training cost also went up reasonable and
overtime labor cost increased. It can be seen that this year we had
more focused on quality of staff. So total cost of labor and training
decreased by $26.27/unit.
- Generally, total camera production/assembly cost decreased from
$205,424,000 to $183,062,000.
UAV Drone production:
In Year 13 P/Q rating increase to 6.3* which is 0.4* higher than the
previous year. This is a leap in product quality to reach customers who value
quality to bring more profit to the company.
In year 13, we invested $231,000,000 for the Product R&D Expenditures,
which will make it easier for us to increase product quality next year. This is a
26
sharp increase and a huge investment in R&D and is a change in our strategy in
year.
Because workstations are still capable of producing, there is slight change
this year so the Total Installed Workstation remain. Therefore, in the following
year, we will add new space if that is needed.
Our company still remained slightly higher investment in UAV Drone
facilities. But net investment decreased slightly compared to last year, from
$82,156,000 to $79,463,000.
- Base Wageper PAT Member $27,053 perworker, increases 6%.(lower
the before year)
- Incentive Bonus: we stayed at $2.40/ unit. Attendant
Bonus:$700/worker,stayed at the same.
27
- Fringe Benefit Package: $1,200/ worker.
- Best Practices/Productivity Improvement Training: $8000 / worker
(was the amount of money we spend on training workers. This year
we have focused on training to increase employee productivity and
much better performance, same as for ACC)
- Total Number of Workers Employed increased 532. Thus, in
following years, we will try to maintain and maximize productivity
with minimum wasted effort or expense.
- Total cost of components and features increased from $612.54/unit to
$638.18/unit
- We decreased on investing in all the features of the UAV Drone.
- Total Labor cost and training is $16,759,000 with more cash on
Regular Time Labor and more on PAT Training and Overtime also.
- Total Drone Production/Assembly costs: $241,799,000, increased over
the previous year.
- In the following year, our strategy for UAV will not change. We will
focus on being able to offer a product of good quality and affordable
price, bringing more value to customers, while also bringing more
profits to the company.
28
3. Financial statements:
29
At the end of Year 13, the ratio between debt and equity percentage was
16:84 which indicates equity take the most part in the assets of the company. In
Year 13, EPS is $10.49, $1.89 higher than the previous year. This year has been
an effective year for us. To be more specific, the company statements in Year
13 are:
- Beginning cash balance: $0 (overdraft loan 13,664,000)
- Receipts from Sales: $ 764,364,000
- Interest on Year 10 Cash balance: $0
- → Total cash available: $764,364,000
- Interest Coverage Ratio: 113.81
- Current Ratio: 2.66
- Credit Rating: A
30
In year 13, we continue pay back the previous loans as well as cover the
costs incurred. This year, our profits fell in Europe Africa market along with a
slight increase in the North America market, Asian Pacific market and Latin
America market compared to the previous year. This is the result of our accurate
decisions in the past year. Our operating profit margin, net profit margin and
market capitalization are all increased than in year 12. This has shown our
success in decision making. Company development and out main goals in this
year are as the same as last year which is to try to maintain Credit rating, more
equity and also increase the Profitability. We will try to maintain net cash
balance at its best to have better support operating and marketing activity for the
following years. In the coming year, we will try to be able to make the right and
more reasonable decisions to be able to regain our position for the company.
This year we have paid off our debt to strengthen the Debt / Equity
Percentage ratio as well as to increase the company's image compared to
competitors. We also spend a large amount of money to charity, CSRC
activities are promoted. Last year we continued to buy stocks and of course this
will continue in the coming years.
In addition, the EPS has not met investors' expectations yet, next year we
will try to achieve this index to increase the company's value.
PLANNING FOR YEAR 14
I. PRODUCT DESIGN:
1. AC Camera:
- In this year, we will decline the rating P/Q from 4.5* to 4.0*
- We will adjust the parameters of image sensor size, LCD display
screen, image quality, number of photo modes to make sure the
product is not only good quality but also low cost.
Specifically:
- Image Sensor Size: capable of maintaining 8mm diagonal.
- LCD Display Screen: unchanged.
- Image Quality: likely to decrease.
31
- Number of Photo Modes, Product Enhancements: will adjust the
increase and decrease appropriately.
- Extra Performance Features, Number of AC Camera Models: likely to
stay the same.
- Product R&D Expenditures: continue to invest in R&D to reduce
assembly and repair costs.
2. UAV Drone:
- This year, the P / Q rating will increase from 6.3 * to 7 * to attract
customers who are interested in product quality.
- In general, if we have decided to increase the P / Q rating, the features
will be enhanced but still ensure low cost.
Specifically:
- Battery Pack: will continue to maintain because this feature is already
the highest
- Number of UAV Drone Models: continue to maintain because we find
it effective
- Other features will be adjusted to increase or decrease appropriately.
- Product R&D Expenditures: continue to invest in it to improve the
product better.
II. Marketing strategy:
1. AC Camera:
- North America: The support of retailer companies decreased from the
previous year from $6.36/unit to $4.47/unit in this year. This is
because the company wants to limit unnecessary expenses. Other
indicators such as advertising budget, companies decided to drop
sharply in this market, whereas grew in website displays.
- Europe - Africa: In this market, the marketing indicators of the
company are slight increase. On supportive policy for retailers went
32
up from $5.23 to $5.33 per unit. Advertising policy decreased sharply
from $3,636,000 in year 12 to $2,646,000 in year 13.
- Asia - Pacific: In this market there is a little change in marketing
compared to the two markets above. About supporting the retailer, it
rose slightly. There were a dramatically growth in advertising budget
from $3,167,000 to $1,497,000.
- Latin America: On the policy of supporting retailers, it reduced
slightly from $5.47 to $5.35. Advertising budget increased from
$2,510,000 to $2,692,000. Display sites increased from $1,231,000 in
year 12 to $1,491,000 this year.
2. UAV Drone:
- Carry on low cost low price strategy in 4 marketplaces but there is an
essential change in retailer recruitment and sale promotion.
III. CORPORATE SOCIAL RESPONSIBILITY AND
CITIZENSHIP:
Financial considerations for Charitable Contributions $3000 and
Renewable Energy Program $5000, Additional Safety Equipment and Improved
Lighting / Ventilation to Improved Working Conditions which Involves one-
time capital investment of $3.0 million and increased administrative costs of
$500k annually. Results in one-time productivity increases of 100 units/year for
camera PATs and 50 units/year for drone PATs.
IV. COMPENSATION AND FACILITIES:
- Improve our productivity by spending more Fringe Benefit package so
that we can enhance the product’s quality.
- Install more workstations if needed for production.
- This year, the number of products will surely increase, we plan to
open more workstations for UAV Drone, AC Camera and install
workstations.
V. SPECIAL CONTRACT OFFERS
In terms of special contract deals, the company decided to offer all
markets at 40%. The company hopes to achieve as expected.
33
VI. FINANCE AND CASH-FLOW:
The following year we will continue to buy stocks, do charities and invest
in the renewable energy program to help protect the environment and improve
our Company Image.
---- THE END ----
34
