Business Game - Final Version — копия

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Introducing Our Team..:

Introducing Our Team.. Chief executive officer – Saeed Ali (928259) Marketing Director –Suman Aamer (768154) Finance Director- Edwin Morris (610747) Head of Research and development and HR - Anton Kim(201405) Navi Tel Born to win

Our Mission Statement:

Our Mission Statement To be an ethical and environmentally focused technology brand which encourages corporate social responsibility. We will endeavour to be the innovators of our generation and to do this without causing harm. To combine aggressive strategic marketing with high quality technology products at competitive prices to provide the best value and brand for consumers To build shareholder value by delivering sustainable, profitable growth by providing technology products and solutions in innovative and cost effective ways. We will realise this mission by setting the highest standards in service, reliability and cost containment in our industry

Marketing :

Marketing Suman Aamer

What market are we aiming at? :

What market are we aiming at? Tech 1 will be aimed at America and Europe – high end luxury product called NaVi 1 America has an average income rate of $51 939 which makes it a profitable location to continue targeting, alongside Europe with an average income of $36 000, specifically in Luxemburg and Sweden. Tech 2 will be aimed at Asia – cheaper alternative, high durability and more reliable, called NaVi 2 The market will be segmented by age and wealth Our main age market will be for young adults

The Product :

The Product NaVi 1 and NaVi 2 (Strengths, weaknesses and features) Market reviews every 6 months – identify customer needs and wants Reach early adopters by releasing a new model each year with slightly different/new features e.g. camera quality

Our main competitors:

Our main competitors Global Inc. Orion Inc. Skytel Grey Innotech Empire We have investigated the current market and have found reasons as to how we can overtake competitors. For Example: Orion Inc. – have committed to recruiting 176 employees Global Inc. – Although they made large amounts of profits, they’re investment in production is rather risky

Global Market Shares :

Global Market Shares

How are we going to reach our customers? :

How are we going to reach our customers? Social Media – Facebook, Twitter and Instagram Bloggers Bill boards Newspapers TV adverts

Aims and Predictions :

Aims and Predictions Our main aim is to deliver high share value, whilst taking environmental and economical aspects into consideration, maintaining ethical brand image High share value : Remove uncertainty for management Prevents risk of takeover Encourage reinvestment for shareholders How we are going to reach these Aims : An increase in demand will stimulate a growth in share value Selling tech 2 at a discounted rate, enabling people to get familiar with the product before charging the initial price Opportunity cost Market Research for customers’ needs and wants after first 100 000 have been sold

Profit and Pricing :

Profit and Pricing Current profit margins are 16%; therefore our revenue has exceeded costs by 16%. We hope to increase this to 37% by the 5 th year of sales. Our selling price is currently £450 for NaVi 1 and £250 for NaVi 2 How will we manage pricing? Pricing Strategy NaVi 1 – Price skimming, come into the market with a higher price to attract early adopters and maximise sales. - We hope to come into the market with a higher price to generate profits and maximise sales from early adopters. Before dropping the price to attract more price-sensitive consumers. NaVi 2 – Penetration pricing, drive competitors out of the market and gain customer loyalty as a substitute good

S.W.O.T Analysis :

S.W.O.T Analysis Strengths Consider customer needs and wants by conducting regular market reviews Innovative product to suit target audience found via strong market research Our product will be priced in relation to current income Viewed as economically and environmentally friendly, have CSR by for example offering welfare packages to employees and getting rid of our own waste safely. We aren’t going to lay off workers for higher profits like our competition have done Provide training of a high quality as well as retraining Weaknesses Lose some of our control over customer buying because supplies to retail companies to sell our product Risk of uncertainty from investing in new factories Pricing too low may make our products quality come across cheap Opportunities Technology is a fast growing trend, which everyone wants and uses in the modern day Targeted Asia where technology in some countries is slow developing Aiming tech 1 in America as well as Europe where population is high Opportunity for more jobs and training   Threats Current competitors have recruited more, increasing production levels and reach high economies of scale Competitors have priced their product lower than us Global Inc. have added one more additional feature than we have

How to stay competitive :

How to stay competitive Increase the number of factories, reach economies of scale, therefore we can cut costs increasing our profit margins and potential to lower prices if need be. Provide social and economical infrastructure Improve brand image Economic Growth Patents and Copyright – increase barriers to entry Future? 12 months – slow growth because we wish to get NaVi 2 but this requires equipment we do not yet have access to. 5 years - Leading the tech industry because we have invested in 3+ factories in each country

Operations :

Operations Saeed ali

Operations strategy :

Operations strategy To maximise opportunity and growth by strategically building factories around the globe and creating a worldwide innovative technology brand. To create a durable, reliable and high performance smartphone available at a competitive price to the mass market

Slide15:

Location of Factories : We will build 6 factories in the USA and a further 6 in Asia to spread risks associated with the present currency fluctuations and to ensure we have more than enough capacity to meet demand We will outsource heavily whilst our factories are under construction to meet the demand of our products but cut this once we have the capacity to deal with all demand. Outsourcing will provide short term relief for product demand. Heavily increase expansion to Asia and invest in factories and increase marketing for new technology products We plan on locating our initial Asia factories in Suzhou a manufacturing powerhouse. This will allow us to further reduce cost whilst maintaining our high quality. We will also monitor working conditions of our suppliers to ensure that there is a high level of safety. 3 factories will be built in both Asia and the USA initially, followed but a further 3 in the second round, We will reduce the construction of factories once the growth of our product has slowed down to a comfortable level.

Manufacturing Cost:

Manufacturing Cost USA Asia Europe Total manufacturing cost (K USD) Factory Cost (k USD) 591841.8 0 0 591841.8 Outsourcing (k units) 0 101271 0 Total 591841.8 101271 0 693112.8 Ways to cut manufacturing cost: Employ more specialist staff Invest in employee training Use Just In Time delivery methodology Locate factories in ideal locations with good transport links and close to consumer base to reduce logistics cost.

Logistics :

Logistics

Logistics cont. :

Logistics cont. We currently boast one of the lowest logistics cost in the market for products sold in both Asia and Europe We plan on further lowering these cost by implementing A Just in time (JIT) delivery process, this links with our green corporate image of reducing our carbon footprint. We plan on prioritising products made in the USA for sale in the USA and vice versa for products manufactured in Asia. Products sold in Europe will come from either of the factories in Asia and the USA

Variable Productions Cost:

Variable Productions Cost Ways we can reduce cost: reduce the price that we pay for the parts by negotiating with suppliers and using our buyer power implement some kind of a manufacturing process, such as lean manufacturing or six sigma. These programs are designed to reduce the amount of waste that is created when we are manufacturing our products increase the amount of products that we are manufacturing to take advantage of economies of scale Year 1 Year 2 Year 3 Year 4 Year 5

Human resources & Research and development :

Human resources & Research and development

Human Resources Strategy:

Human Resources Strategy We aim to hire 290 employes Initial 200 and 290 hired , so total of 490 workers Mainly High-skilled labour force The total number of employees will be splitted into teams of 48 workers and management team of 10.

Training and Salary :

Training and Salary Salary is based on individual skills, experience and perfomance Average salary is 4000$ per head/month 56 Working hours per week Training is offered every month to keep workers up to date with company's systems and future plans 500$ Trainings per/head

Rewards and Benefits :

Rewards and Benefits We will offer bonuses to salary for the best team of the month to increase motivation. The advantages of employee motivation are: It enhances individual and organizational growth It improves productivity and performance It enhances quality Improves safety It enhances group dynamism

Employee Turnover:

Employee Turnover  To reduce: 10% discount for all products to purchase Free 15$ lunch for employees Team building Social packages Employees with children will be offered flexible working hours Bonuses to salary for the best team of the month

Total Human Resources Cost:

Total Human Resources Cost Salary 23,520,000$ Training 2,940,000$ Free lunch 2,116,800$ (15$ lunch based on 490 employes and 288 working days) Bonuses 864,000$ (Based on 1500$ bonus and a team of 48) Recruitment 1,160,000$ Administrative costs 1,399,200$ Left (Used for extra bonuses, unexpected costs, charity, public or private events)

Research and Development Strategy :

Research and Development Strategy Aim is to invest in own R&D for Tech 1 as more luxurious product and then Purchase license for Tech 2 Benefits of R&D   New technologies can increase product demand Differentiate product from competitor giving DKM a competitor advantage Increase productivity & efficiency levels, leading to a reduction in unit cost hence a rise in profit levels Costs of R&D   High costs in terms of large investment leading to higher risk Uncertain outcomes whether product will meet customer requirements Complex to use without training and product knowledge

Tech Features :

Tech Features 122,500 Person-days available Tech 1: Tech 1 has 2 features and 2 more will be introduced by allocating person-days: 108,219 person-days used for Tech 1 Long Life battery Water Resistant User Interface Solar panel on the back cover for phone charging Tech 2: 13000 person-days for Tech 2 New Tech 2 + 2 Feature costs 205,000,000$ Features: Android operating system (More favourable in asian market) Multi-Simcard Total cost: 240,000,000$

Finances :

Finances Edwin Morris

Overall Financial Decisions :

Overall Financial Decisions Increase Shareholder Wealth through by innovating tech 2 into the market ahead of competitors Invest heavily in assets early in the process through long term loans Reduce contracting through planned horizontal integration Focus on long term profits at the sacrifice of short term margins Fixed percentages for allocations to departments Dividend pay-out annually from year 3 onwards after introduction of the new mobile handset at a fixed rate

Fixed Percentages Follow as Such:

Fixed Percentages Follow as Such R&D – 15% then 5% Year 3 Onwards once our second tech has been released HR – 2%, total 6% for Admin Marketing – 2.5% Dividend Pay-out – 3% (Year 3 Onwards) Long Term Debt Payback – 4% (Year 3 Onwards)

Our Predicted Cash Flow:

Our Predicted Cash Flow

Forecast Cost Allocation – Year 1 and 2:

Forecast Cost Allocation – Year 1 and 2

Forecast Cost Allocation – Year 3, 4 and 5:

Forecast Cost Allocation – Year 3, 4 and 5

Forecasted Profit Allocation :

Forecasted Profit Allocation

Managing Debt :

Managing Debt Avoid loans under 12 months focusing on longer investments Reduce our Long Term debts from Year 3 onwards at a rate of 4% Adjust our rate our payback in line with inflation

The End :

The End Thank you, from all of us at Navi tel

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