“Caves d’Ausone S.A.”
Wine MBA London 2010
Richard Sagala and Paulo Lopes
Structure
 Our strategy
 Our market forecast
 Our pricing strategy
 Our marketing strategy
 Our social strategy
 Our...
Our strategy
Maximizing income generation and increasing the
profitability, while being socially responsible using the
bes...
Our forecast market
y = 1504.9e0.5959x
R² = 0.9941
0
20,000
40,000
60,000
80,000
100,000
120,000
2005 2006 2007 2008 2009 ...
Our pricing strategy
1000
1200
1400
1600
2010 2011 2012
Priceperunit(€)
Time (years)
A
B
Cave d'Ausone
D
Brand A
800
900
1000
1100
1200
2010 2011 2012
Priceperunit(€)
Time (years)
A
B
Cave d'Ausone
D
Our pricing strategy
Brand B
Our marketing strategy
0
500
1000
1500
2000
2500
3000
2010 2011 2012
Marketingbudget(K€)
Time (years)
P.R.
Sales
Comm.
Bra...
Our social strategy
Indicator 2010 2011 2012
Salary (€) 23 324 24 023 24 503
Social budget (K€) 500 500 500
Productivity (...
Our investment strategy
Plant 2010 2011 2012
A (K€) - 8 008 4 656
B (K€) 17 882 - 6 207
Financement 6 022 - -
Raising equi...
Our profitability
31.9
36.19
38.3
30
32
34
36
38
40
42
44
15000
20000
25000
30000
35000
2010 2011 2012
MDC/Turnover(%)
Sal...
Our profitability
Brand B
-19.91
2.67
11.05
-30
-20
-10
0
10
20
30
10000
15000
20000
25000
30000
2005 2006 2007
MDC/Turnov...
Our profitability
Ratios 2010 2011 2012
Net result/turnover (%) 4.1 9.5 12.1
(ROE) Net result/SH equity (%) 7.7 20.5 23,1
...
Our operational results
Ratios 2010 2011 2012
Operation result (K€) 17 578 21 515 25 637
Fin. costs/Op. result (%) 9.7 6.6...
Learning outcomes
Accurate forecasting of underlying market trends
Timely investment to anticipate future production nee...
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Richard Sagala, Paolo Dinis, French Paradox Business forecasting simulation

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A business simulation game my colleague Paolo and I won in London, fall 2010

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Richard Sagala, Paolo Dinis, French Paradox Business forecasting simulation

  1. 1. “Caves d’Ausone S.A.” Wine MBA London 2010 Richard Sagala and Paulo Lopes
  2. 2. Structure  Our strategy  Our market forecast  Our pricing strategy  Our marketing strategy  Our social strategy  Our investment strategy  Our profitability  Our operational results  Learning outcomes
  3. 3. Our strategy Maximizing income generation and increasing the profitability, while being socially responsible using the best management practices Brand A Increase the mark-up per unit, if possible increasing the market share in a mature market Brand B Increase the sale volume in a growing market, being lean and efficient and increasing the mark-up per unit
  4. 4. Our forecast market y = 1504.9e0.5959x R² = 0.9941 0 20,000 40,000 60,000 80,000 100,000 120,000 2005 2006 2007 2008 2009 2010 2011 2012 Totalmarket(units) Time (years) Brand A_Forescast Brand A_Real Brand B_Forecast Brand B_Real
  5. 5. Our pricing strategy 1000 1200 1400 1600 2010 2011 2012 Priceperunit(€) Time (years) A B Cave d'Ausone D Brand A
  6. 6. 800 900 1000 1100 1200 2010 2011 2012 Priceperunit(€) Time (years) A B Cave d'Ausone D Our pricing strategy Brand B
  7. 7. Our marketing strategy 0 500 1000 1500 2000 2500 3000 2010 2011 2012 Marketingbudget(K€) Time (years) P.R. Sales Comm. Brand A Brand B
  8. 8. Our social strategy Indicator 2010 2011 2012 Salary (€) 23 324 24 023 24 503 Social budget (K€) 500 500 500 Productivity (%) 4 4 4 Resignation (%) 0 0 0 Satisfaction sign 103 103 104 Good salaries and generous benefits
  9. 9. Our investment strategy Plant 2010 2011 2012 A (K€) - 8 008 4 656 B (K€) 17 882 - 6 207 Financement 6 022 - - Raising equity 7 622 - - Raise debt in 2010, self finance 2011 and 2012
  10. 10. Our profitability 31.9 36.19 38.3 30 32 34 36 38 40 42 44 15000 20000 25000 30000 35000 2010 2011 2012 MDC/Turnover(%) Salesquantity(units) Time (years) Sales MDC/Turnover Brand A Consistent progression of mark-up while product is losing momentum
  11. 11. Our profitability Brand B -19.91 2.67 11.05 -30 -20 -10 0 10 20 30 10000 15000 20000 25000 30000 2005 2006 2007 MDC/Turnover(%) Salesquantity(units) Time (years) Sales MDC/Turnover Robust progression of mark-up and sales while product is gaining momentum
  12. 12. Our profitability Ratios 2010 2011 2012 Net result/turnover (%) 4.1 9.5 12.1 (ROE) Net result/SH equity (%) 7.7 20.5 23,1 Fin. debts/SH equity (%) 55.0 29.6 12.9 Debts/SH equity (%) 72.5 46.3 29.2 Net treasury (K€) 8 4 341 7 548 Increasing profitability ,SH equity and cash , while decreasing debt
  13. 13. Our operational results Ratios 2010 2011 2012 Operation result (K€) 17 578 21 515 25 637 Fin. costs/Op. result (%) 9.7 6.6 3.1 Op. result/Econ. capital (%) 30.9 41.6 44.5 Increasing management and operational efficiency
  14. 14. Learning outcomes Accurate forecasting of underlying market trends Timely investment to anticipate future production needs Good social policy pays Strategic focus and consistency, while remaining flexible  Price strategy a bit conservative  Miscalculation in work force kept some employees idle for a while  Occasional costly inventories

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