Team Digby

MGMT 4300 Debriefing

Adrian Olivas Angelina Legarreta Cassandra de la Cruz Diego Bedolla Jasmyn Pena

Vision Statement To be the leading innovative manufacturer in the sensor industry. Mission Statement Digbys focus will cater to the ever changing wants and need of our customers through our continuous Research and Development efforts. We understand and appreciate the needs of our customers by delivering exceptional products. To provide a pleasant, nurturing and growth oriented environment which encourages our employees to be highly productive and to grow personally and professionally. We strive to provide and maintain the highest quality products that will set standards within the industry. Strategy We want to maintain a presence in all segments of the market by having exceptional products that will lead to gain a competitive advantage. By targeting all markets we will gain a competitive advantage by distinguishing our products with high awareness and easy accessibility. The primary objective was to focus on Performance and Size segments to increase our profits because the growth rates for both are the highest in the industry. We decided to set price by overlooking past performances and taking into consideration our total production costs. The targeted contribution margin for each product would be 30% or greater. We increased each products promotional budget and sales budget by $2.5 million in order to increase our customer awareness and accessibility. Due to the forecasting being a critical element, we based production on the computers prediction

as well as our ending inventory. We took 85% of the computers predictions and subtracted ending inventory. By producing the right amount, we strived to lower our inventory carrying cost. For Traditional and Low-end, we invested our resources for automation and in return, we lowered our labor costs. . For MTBF we increased Traditional by 1000 and Performance by 2000; this helped increase the life expectancy of the product. We changed our accounts receivable to 35 days to attract more customers to use credit. We spent 80 hours on additional training in order to keep our productivity high.This helped increase the quality and productivity to our products. 2nd Round For research and development, we increased Traditionals performance by (.1) and decreased its size by (.1). High-ends performance was increased by (.3) and decreased its size by (.3). Performances performance was increased by (.5) and decreased its size by (.2). Sizes performance was increased by (.5) and decreased its size by (.7). 3rd Round For research and development, we increased Traditionals performance by (.2) and decreased its size by (.2). High-ends performance increased by (.2) and decreased size by (.2). Performances performance was increased by (.4) and decreased size by (.4). Sizes performance was increased by (.3) and decreased its size by (.3). Our strategy for research and development was to have our revision date within the first quarter of the year. We were able to maintain a competitive advantage by being first movers in the market.

Success and Failures Along with strategies, one must expect both success and failures. Our production forecasting was a success because we were able to keep up with demand as well as by not stocking out. In Round 3, we had an advantage in production because of lack of inventory from our competitors. Our pricing strategy was also successful because we had a high contribution margin.For TQM we decided to invest in $15 million by dividing it equally amongst the 10 categories. By investing this amount in TQM, we would receive a reduction in total costs and increase our demand. We financed all of our investments by issuing long-term debt of $30 million rather than issuing stock. Fortunately, we did not borrow an emergency loan, this increased our stock price. This proved to be both a success and failure because of high interest rates. After the third round, our Research and Development began to decline because of our decision to bring our products out first. Due to the union labor dispute, we renegotiated our wages between $24.50-$26.95, benefits from 2650-2915, our profit sharing from 2.1%-2.3%, and the annual raise from 5.3%-5.8% and had a strike of 3 days. After taking a look at our BCG Matrix, we discovered that we did not invest enough in our performance product, which was part of our mission. Unfortunately, our working Capital was under the required time of 60 days at 55.9 days. On our last round, our market share decreased by 2%. Plans and Recommendation For the next three rounds, we would recommend letting Low-end fade out of the fine cut and eventually getting rid of the product. The second recommendation would be

allowing our Traditional product to fade into the Low-end segment and our High-end fade into traditional segment. After accomplishing this, we would introduce a new innovative High-end product. This will keep us at the top of the market for all three segments.

Space Matrix for Round 3

Financial Position (FP) Dig y's leverage ratio 2.2%, between average range 2.2 and 2.8 Net Profit Margin of 1.4%, above industry average of Current Ratio 3.9%, below Industry average of 5.83% Working Capital 55.9 days, required Working Capital of 60 days Industry Position (IP) Barriers To entry Growth Potential Resources Utili ation Pr i t Potential Competitive Position (CP) Largest Market Share in Industry, 21.6% Customer Satisfaction decreased in comparision to round 1 Pr ct Quality Product Life Cycle Stability Position (SP) High Inflation Technology changes Productivity, capacity utili ation Competitive Pressure Conclusion SP Average is CP Aver ge i Directional Vector Coordinates: Ratings 7 3 1 3 14 4 7 5 6 22 -1 -5 -2 -1 -9 -4 -2 -1 -5 -12

x-axi : y-axi :

-3 -2.25

I r g i FP Aver ge i 3.25 0.5

5.5 3.5

( .25,.5)

BCG

trix for ound

Relative arket Share I try Growth Rate(%) +9.2 + .7 +16.2 +19.8 +18. -

ate (Pe ce tage)

t Sale G o t

Lo

ba

ED

CB 6 A @

1 .

ed c b

7 65

-1 1 % -8 %

1%

g 1.0

G QPI 5 I I

ELATI E A KET S A E POSITIO I T E I e 0. 0

ST Y Lo 0

4 5 Tot l

''

(( (( (( 0 ( (( '

'' )

E CB 6A @ G 5

434 3 (( ( (( ( ( (( )) (( ') (( ('

G@ H

22 2 (( ( ' ' ') 0( (0 '

52,6 7 , 8 , 9 27, 62 29,2 18 ,118.

29% 22% 17% 15% 16% 100%

$2, 2. 5, 7. 1,2 . (4, 6 . ) (2, 67. ) $ , .00

8 % 2 % 49% -161% -82% 100%

 $ #

 "

7 65

 "

v o

e ve

ro i t

 $ # #

e rce t e ve e

e rce t ro i t

. .8 1. 1. 1. -

"&


I

 

Aggre

ve

! #

   ' ) 1 R V X V U WV UT RS ` Y

us rtsr
ve
.

y xwv

c Pos o P b 's e ve a e a . , be e en ave Ne f a n f . , ab ve ndus u e n Ra . , be Indus ave a n ap a .2 da s, e qu e d W

Sp c

o Ro

a e an e 2.2 and 2. ave a e e f . n ap a f da s

m f d e lf h f e

d e lfk e if d h fe e f h f j e f e ie hg fe d y v y vy x x xwx

s Pos o IP a e s en h en a Res u e s U za n f en a

d e ef e f f e d e u f d e ef eift e fs r y qp w o ny xwx

omp Pos o P a e s a e ha e n Indus , . us e a sfa n de e ased n du Qua du fe e

22

-5 -2 -

f fe f {fu h e
pa s n

und

S Pos o SP H h Inf a n e hn han e s du v , apa u pe ve e ssu e

-2 -5 - 2

ee {f fe de eu u e eu f u fdf u s f e d
za

xwx

du y eu f e d eu f feu e z {fe z e l j e y y xwx wxxwxww v

o c so ve a e s ve a e s e na Ve

-2.25 d na e s: x-ax s: - ax s:

ve a e s ve a e s .25 2.25

Aggre

hgg

ff feu d y

P P
(3.

5.5 5.25

IP

feu z o y v

qwx x| vw

5 2

o Ro

5
Re ative a et ha e . . . . . Industry rowth Rate( ) + .2 + . + .2 + . + . -

5 To

100%

5 -2 5 100%

e ( e en

1.0

20
-2%
5%

le

ow

Med um

14.5

15%

49%

Indu

ow

33%

E TIVE MARKET

ARE ASITI N IN T E IND STRY Med um 0.50

,5 ,2 5 2 , 2 , , $ 175, 70.00

2 2 5

,55 . , . , 5. ( 25. ) 2, 5. $19,962.00

~}

Division

Revenues

ofits

~} ~ }

e en Revenues

e e nt ofits

~ ~

~ }

ow 0