DIGBYS

FINAL RESULTS

We care thats why we specialize

OUTLINE OF
PRESENTATION
1) Strategy Overview
2) Round by Round Analysis
3) Financial Overview (Final Results)
4) Success and Failures
5) Conclusion (what was learned)

We care thats why we specialize

STRATEGY
OVERVIEW

Initial Strategy Broad

Differentiator
Maintain

presents in both

segments
Differentiate by excellent
design, high awareness and
accessibility
R&D to keep designs fresh and
exciting
Constantly improving size and
performance to keep pace
with the market

Ultimate Strategy Follower

Strategy
Advantages:
Take

advantage of pioneers positioning

mistakes
Take advantage
Take advantage
mistakes
Take advantage
Take advantage

of pioneers Product mistakes

of pioneers Marketing
of latest tech
of pioneers limited resources

Disadvantages:
Lack

Economies of Scale and Experience

Pioneer defines the rules of the game
Lack Influence on customer choice
criteria and attitudes

Ultimate Strategy Cost

Leadership
Advantage
More cost effective than its
competition

Disadvantage
All operations must be as
efficient as possible

We care thats why we specialize

ANALYSIS OF
ROUND 1 TO ROUND
6

Round 1 The Plan

Research and Development

Daze

Pfm
m

Size

Age

MTBF

6.4

13.6

4.1

2000

Marketing
Daze
Price
Promo Budget

$1500

Sales Budget

$2000

Sales Forecast

$33

1600 units

Assumed the current positioning was

suitable for Year 1.
Dino will be in production until end of
Year 2
Low Promo Budget due to high
investment cost

Production

Increased Daze Automation from 3.0 to 6.0

Invested in 2.0 Automation for Dino
Bought 350 capacity for Dino

Finance

Maximize equity issue

Maximize acquisitions of debt
for heavy investment activities
Contribution Margin of 18%

Results

Overall Market Share

Low Tech (Daze) : 18%
High Tech (Daze) : 15% (Lower compared to competitors)

Sales
: $45,158,530
Sales is at 5th placing, performance is very poor as
compared to competitors

Cumulative Profit : $1,953,380

Net Profit : -$531,807

Due to High Financing Cost & High Variable Costs

Stock Price : $6.41 (Decrease by $5.47)

Due to negative earnings and information asymmetry

Emergency Loan

: $4,168,836

Round 2 The Plan

Research and Development
Pfm
m

Size

Age

MTBF

Daze

6.4

13.6

5.1

20000

Dino

10.0

10.1

0.0

23000

Marketing
Daze

Dino

Price

$30.5

$45

Promo Budget

$2000

$1500

Sales Budget

$1800

$50

1400 units

700 units

Sales Forecast

Reduced price (41% importance)

Based on experience, allocate high
amount on promo budget
We do not need to create
accessibility for Dino in this round
because it will only be available at
the end of the around on Dec 23.

Production

Further investment in automation for daze from

6.0 to 8.0 and;
automation for Dino 2.0 to 3.0 for Dino
Increased Dinos capacity by 50

Finance

Maximize equity issue

Maximize acquisition of debt

Results
Overall Market Share Low Tech (Daze) : 17%
High Tech (Dino) : 12%
Daze recorded the second highest market share. Dino had
been
introduced on 23/12 and thus was only in the market for 8
days.

Sales

: $42,685,954

Cumulative Profit : $810,817

Net Profit

Stock Price : $5.79 (Decrease by $0. 62)

: -$1,142,563

Round 3 The Plan

Research and Development
Pfm
m

Size

Age

MTBF

Daze

6.8

13.2

3.2

20000

Dino

11.0

9.0

0.6

23000

Marketing
Daze

Dino

Price

$30.5

$45

Promo Budget

$2500

$2500

Sales Budget

$2000

$2000

1500 units

850 units

Sales Forecast

Maintained low pricing

Increase promo and sales
budget for both products due to
unsatisfactory market share

Production

Further investment in automation for daze from

8.0 to 9.0 and;
For Dino from 3.0 to 4.0

Finance

Maximize equity issue

Maximize acquisition of debt

Results
Overall Market Share Low Tech (Daze) : 16%
High Tech (Daze) : 8%
High Tech (Dino) : 6%
Daze ranked 5th highest market share. Dino suffered due to
bad
positioning.

Sales

: $52,645,048

Cumulative Profit : ($2,619,282)

Net Profit

Stock Price : $2.69 (Decrease by $3.09)

: ($3,430,099)

Round 4 The Plan

Research and Development
Pfm
m

Size

Age

MTB
F

Daze

6.8

13.2

4.2

2000

Dino

11.0

9.0

1.6

2300

Marketing
Daze

Dino

$28

$42

Promo Budget

$1400

$2500

Sales Budget

$2000

$2000

Price

Sales Forecast

1600 units

1000
units
Reduce Daze price because the market is
highly competitive
To use Dino to increase overall
profitability
Daze have achieved 100% awareness,
scale down on promo budget while
focusing on Dino
Sales budget at optimum
Sales forecasting is obtain by anticipating
total demand by each segment and
divide it among number of competitors

Production

Production Schedule is a rough estimate on

sales forecast from Marketing department
No changes made on automation

Finance

No changes were made

We hope that sales were forecasted
accurately so that we do not run into
emergency loan

Results
Overall Market Share - Low Tech (Daze) : 19%
- High Tech (Daze)
: 6%
- High Tech (Dino) : 6%
Daze recording the second highest market share while Dino
recorded the lowest market share as compared to competitors.

Sales
: $57,863
Increase by 9% with Daze contributing to the overall sales.

Cumulative Profit : -$2,243,932

Net Profit : $375,350

Increase by 11%

Stock Price : $2.67 (Decrease by $0.02)

Digby has shown poor success

Round 5 The Plan

Research and Development
Pfm
m

Size

Age

MTB
F

Daze

7.2

12.8

2.6

2000

Dino

10.9

9.1

1.7

2300

Marketing
Daze

Dino

$28

$42

Promo Budget

$1400

$1400

Sales Budget

$2000

$2000

1800 units

1200
units

Price

Sales Forecast

Prices are maintained after observing

competitors pricing
Dino promo budget have been scaled down
while maintaining sales budget for both
products
Sales forecasting is obtain by anticipating
total demand by each segment and
divide
it among number of competitors

Production

Production Schedule is a rough estimate on

sales forecast from Marketing department

Finance

Repurchase common stocks and retire long term

debt to increase ROE

With sufficient profits at hand, we hope

we do not run out of money because it
would lead to emergency loan.

Results
Overall Market Share - Low Tech (Daze) : 17%
- High Tech (Daze)
: 3%
- High Tech (Dino) : 20%
Daze market share fell taking the third position. Dino market
share rose and came second right before Ace.

Sales
: $88,831,677
Sales peaked to the highest after 5 years.

Cumulative Profit : $9,386,384

Net Profit : $11,630,316

Profits rose by 200% from the previous year
Stock Price : $17.47 (Increase by $14.79)
Post a record high because of high ROE and EPS

Round 6 The Plan

Research and Development
Pfm
m

Size

Age

MTB
F

Daze

7.2

12.8

3.6

2000

Dino

11.6

8.4

1.6

2300

Marketing
Daze

Dino

$28

$42

Promo Budget

$1400

$1400

Sales Budget

$2000

$2000

2000
units

1500
units

Price

Sales Forecast

Prices are maintained

Both sales budget and promo budget for
Dino and Daze are maintained
Sales forecasting is obtain by anticipating
total demand by each segment and divide
it among number of competitors

Production

Production Schedule is a rough estimate on

sales forecast from Marketing department

Finance

Repurchase common stocks and retire long term

debt

Paid dividends

Results
Overall Market Share - Low Tech (Daze) : 19%
- High Tech (Daze) : 2%
- High Tech (Dino) : 20%
Daze market share rose again from the previous year while
Dinos market share is the same

Sales

: $103,559,431

Cumulative Profit : $24,737,163

Increasing profits from previous years contributed to higher
cumulative profit

Net Profit : $15,350,779

Profits rose marginally based on prior year
Stock Price : $29.71 (Increase by $12.24)
Stock price rose higher but the increasing at a slow pace

We care thats why we specialize

FINANCIAL
OVERVIEW

Digbys Net Profits: Round 1 6

Digbys ROS, ROA, ROE: Round 1 6

Digbys Asset Turnover: Round 1 6

Digbys Market Share: Round 1 - 6

Digbys Stock Price: Round 1 6

Market Share (as at Round 6):

Digby vs. Competitors

Stock Price (as at Round 6):

Digby vs. Competitors

We care thats why we specialize

SUCCESSES &
FAILURES

Decisions We Regret of
Taking

Pricing
Very

low price for low tech

Drastic drop in high tech price
Loss of higher profit potential hence
loss of higher cumulative profit

Decisions We Regret of
Taking

Positioning

Overestimated Dinos ideal positioning

Loss in sales
Emergency loan
Higher Inventory
Loss of market share
Worst Year- Round 4 followed by Round 3

Doing The Right Things

Realize our mistakes and take

appropriate actions
Positioning

For Dino its near the edges of the inner circle

Capital

Lower debt to reduce high interest payment

High

Structure

Automation

Helped to reduce price and still maintain a

good contribution margin

Best Year- Round 5

Doing The Right Things

Starting all over again

Positioning
Dino-inside the inner circle rather
than out of it
Price

Study

Competitors and adjust price

accordingly

Production Capacity
To

Be Optimistic and increase

production capacity

CONCLUSION

Market is unpredictable

It is vital to analyze competitors

persistently

Each department is not able to

function independently requires
countless coordination