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DigbyShareholder’s Meeting: 2009 - 2015     MGT 667 – Strategic Management            Dr. Vinay Garg           Bandar Al M...
DIGBY   Mission Statement:      Offer premium products for the industry.      Our brands withstand the tests of time.  ...
Strategy Implementation   R&D:      Our goal is to offer customers products that match their ideal criteria       for po...
Strategy Implementation   Production:      Avoiding second shift/overtime when possible.      After products are well p...
Round 1CEO: Ihab Judeh
Key Decisions   R&D to improve our product.      Reposition High, Size and Performance to leading edge.      Reposition...
Performance Measures EPS = $(0.06) vs. Baldwin $(0.07) CM = 31.2% vs. Baldwin 31.9% Turnover Rate = 10.4% vs. Baldwin 9...
Round 2CEO: Srinath Raju
Key Decisions   Investment in TQM ($10.5M):      3.61% increase in demand vs. 1.30% for Ferris      13% decrease in mat...
BCG Matrix: End of Round 2
Performance Measures EPS = $2.48 vs. Baldwin $1.42 CM = 35.2% vs. Baldwin 34.8% Turnover Rate = 9.7% vs. Baldwin 10.3%...
Round 3CEO: Bandar Al Mogesib
Key Decisions   Increased sales and promo budget ($25M) to increase    accessibility and awareness while investing in TQM...
Contribution Margin                           50.00%                           45.00%Contribution Margin in %             ...
Round 4CEO: Srinivas Damera
Key Decisions   Conservative Forecasting      Anticipated lower demand due to repositioning of Dell       (low-end).    ...
Performance Measures   EPS = $4.12 vs. Baldwin $7.11                                       EPS               $25.00      ...
Round 5CEO: Finy Mathew
Key Decisions   $47M Investment in plant improvement.      Automation to 10 in traditional(+5.5) and low-end(+2).      ...
Round 6CEO: Finy Mathew
Key Decisions   Reduce prices in all segment, except Size segment to increase    customer survey scores.   Continued R&D...
BCG Matrix: End of Round 6
BCG Matrix: Round 2 vs. Round              6
Performance Measures EPS = $20.10 vs. Baldwin $13.99 CM = 46.1% vs. Baldwin 39.3% Turnover Rate = 7.7% vs. Baldwin 10.5...
Digby 2016 and beyond… Buy more capacity to meet future  demands. Reduce labor and material cost by TQM  and increasing ...
Thank You….          Questions?
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Strategy Digby Mgt667 001

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Capsim Strategic Management Simulation: First Place. We simulated developing silicon wafers for 6 rounds representing 6 years. We chose broad differentiation as a a strategy. Even though I was CEO for round 5 & 6, I drove the strategy starting round 1

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Strategy Digby Mgt667 001

  1. 1. DigbyShareholder’s Meeting: 2009 - 2015 MGT 667 – Strategic Management Dr. Vinay Garg Bandar Al Mogesib Srinivas Damera Srinath Jayarama Raju Ihab Judeh Finy Mathew
  2. 2. DIGBY Mission Statement:  Offer premium products for the industry.  Our brands withstand the tests of time.  Our primary stakeholders are customers, stockholders, management, and employees. Strategy- Broad Differentiation:  Maintains a presence in all segments of the market.  Competitive advantage is gained by distinguishing products with an excellent design, high awareness, and easy accessibility.  R&D competency is developed that keeps designs fresh and exciting.  Products keep pace with the market, offering improved size and performance.  Prices are above average.
  3. 3. Strategy Implementation R&D:  Our goal is to offer customers products that match their ideal criteria for positioning, age, and reliability.  Maintaining a presence in all segments. Marketing:  Our company will spend aggressively in promotion and sales.  Every customer should know about our superb designs, and find our products easily.  Price at a premium. HR:  Invest consistently in training workforce to increase productivity.  Maintain a mean and lean workforce.  Offer superior benefits, wages, and annual raise.
  4. 4. Strategy Implementation Production:  Avoiding second shift/overtime when possible.  After products are well positioned, we will invest in high automation levels to improve margins.  Keep up with segments as they move across the perceptual map. Finance:  Finance our investments primarily through stock issues and cash from operations.  When cash position allows, we will retire stock.  Measure performance in terms of market share, market cap, ROA, and profits.
  5. 5. Round 1CEO: Ihab Judeh
  6. 6. Key Decisions R&D to improve our product.  Reposition High, Size and Performance to leading edge.  Repositioned Traditional to center of the segment. TQM investment in Process Management  Concurrent Engineering – reduced R&D cycle time by 27%.  Lowered material and labor cost. $6.5M in plant improvement.  Increased automation on traditional and low-end which was financed by short-term debt.
  7. 7. Performance Measures EPS = $(0.06) vs. Baldwin $(0.07) CM = 31.2% vs. Baldwin 31.9% Turnover Rate = 10.4% vs. Baldwin 9.3% ROA = -0.1% vs. Baldwin -0.1%
  8. 8. Round 2CEO: Srinath Raju
  9. 9. Key Decisions Investment in TQM ($10.5M):  3.61% increase in demand vs. 1.30% for Ferris  13% decrease in material and labor cost Lowered the price in every segment.  Decrease in contribution margins  Improved customer survey scores Labor negotiation  Increased wages, benefits, profit sharing, and annual raise  Increased labor cost and lowered margins for next round.
  10. 10. BCG Matrix: End of Round 2
  11. 11. Performance Measures EPS = $2.48 vs. Baldwin $1.42 CM = 35.2% vs. Baldwin 34.8% Turnover Rate = 9.7% vs. Baldwin 10.3% ROA = 4.8% vs. Baldwin 3.1%
  12. 12. Round 3CEO: Bandar Al Mogesib
  13. 13. Key Decisions Increased sales and promo budget ($25M) to increase accessibility and awareness while investing in TQM ($9M). Developed a new high-end product Dazey.  Did not buy sufficient capacity for 200% utilization. Repositioned Dell (low-end) before other teams.  Competitive advantage of having a mature well positioned product in later rounds. Optimistic forecasting in traditional segment to gain market left by Erie.  Inventory increased due to Andrews moving into the traditional segment and poor positioning.
  14. 14. Contribution Margin 50.00% 45.00%Contribution Margin in % 40.00% Digby Baldwin 35.00% Ferris 30.00% 25.00% 2009 2010 2011 2012 2013 2014 2015
  15. 15. Round 4CEO: Srinivas Damera
  16. 16. Key Decisions Conservative Forecasting  Anticipated lower demand due to repositioning of Dell (low-end).  Stock out due to Chester closing low-end production line. Increased prices on all products to improve margins.  Priced new high-end product Dazey at $44.  Increased prices by $1 for all other products. $17M in plant improvements.  Increased automation to 8 in low-end.  Financed using $15M in stocks, $2M short-term debt and cash.
  17. 17. Performance Measures EPS = $4.12 vs. Baldwin $7.11 EPS $25.00 $20.00 $15.00 Digby EPS in $ $10.00 Baldwin Ferris $5.00 $- 2009 2010 2011 2012 2013 2014 2015 $(5.00) CM = 34 % vs. Baldwin 40.6 % Turnover Rate = 8.5 % vs. Baldwin 10.3 % ROA = 7.7 % vs. Baldwin 12.4 %
  18. 18. Round 5CEO: Finy Mathew
  19. 19. Key Decisions $47M Investment in plant improvement.  Automation to 10 in traditional(+5.5) and low-end(+2).  Automation to 4 in all other segment(+1).  Lowered labor cost  Raised $35M cash through short-term and long-term debt Increased annual raise for employees.  Increased labor cost for other teams  Lower margins Positioning of traditional product (Daze).  To utilize the automation to the highest
  20. 20. Round 6CEO: Finy Mathew
  21. 21. Key Decisions Reduce prices in all segment, except Size segment to increase customer survey scores. Continued R&D to improve high-end, size and performance.  Moved the products to leading edge for differentiation. Forecasting for full capacity and production at 198% plant utilization. Avoided interest payment by retirement of debt.  Long term – $37M  Short term – $20M Retired stocks – $10M
  22. 22. BCG Matrix: End of Round 6
  23. 23. BCG Matrix: Round 2 vs. Round 6
  24. 24. Performance Measures EPS = $20.10 vs. Baldwin $13.99 CM = 46.1% vs. Baldwin 39.3% Turnover Rate = 7.7% vs. Baldwin 10.5% ROA = 29.3% vs. Baldwin 19.1% Productivity = 107 % vs. Baldwin103 %
  25. 25. Digby 2016 and beyond… Buy more capacity to meet future demands. Reduce labor and material cost by TQM and increasing productivity. Allow traditional product to mature before repositioning. Reduce prices without sacrificing margins. Establish a dividend policy  $113M in retained earnings.
  26. 26. Thank You…. Questions?

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