The board meeting agenda covered Digby's past performance, strategy, competitive advantages, competitor analysis, and management review. Over the past eight years, Digby achieved market leadership in the high-end segment through TQM focus on R&D cycle time, second product development, and exiting lower segments. Competitor analysis showed Baldwin and Erie posed threats that Digby responded to quickly. Management recommendations were to invest more in early TQM, sales/promotion, and product development to improve future performance.

1. Digby Enterprises
Transition
Board Meeting
Alan Chen, Liam Coates, Rebecca
Loo, Angel Tse, Peter Willett,
Management Team
C48296

2. Agenda
1. Performance Overview
2. Strategy
3. Competitive Advantages
4. Competitor Analysis
5. Management Review
6. Relative Performance

3. ROE Cumulative Profits
0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 6 7 8
The results of great teamwork leading to superior
performance

4. Digby Stock Price
0 1 2 3 4 5 6 7 8
Year
Presentation_ID © 2009 Cisco Systems, Inc. All rights reserved. Cisco Public 4

5. Strategy
guiding us though the past eight years and beyond
 Developed a second high-end
 Target high-end
markets product
 Focused marketing and sales efforts
 TQM focus on
Intended  Issued stock instead of debt
R&D cycle time, Del
demand
ibe
r ate
 Maximize profits
d
lize
re a  Exited the performance Realized
Un
segment  Market
 Automated the higher-end leadership in the
 Market leadership in
Emergent segments to 5.0
size and performance high-end
 Low-balled in the second
 Increase in labour  Staggered TQM
round of labour negotiations
productivity  Debt-free

6. Competitive Advantages
Sales forecasting Bond rating Cash flow Top management
competencies
leading to sustainable profits

7. Competitor Analysis
 Significant Threat
Baldwin (late)
Erie (early)
Moderate Threat
Ferris
Keeping our competitors in line

8. Competition by Market Segment
Low and Traditional High Performance and Size
•Flooded with multiple •Dominated by •Largely ignored by Low
offerings from leaders positioning and & Traditional focused
marketing
•We underestimated •Intended to be our key
Analysis the margin potential •Initially controlled by segments but lacked
which Baldwin Erie profit potential
exploited in later
rounds •Introduction of our
2nd high end product
•Rumours of Price allowed us to capture
Fixing largest share
Presentation_ID © 2009 Cisco Systems, Inc. All rights reserved. Cisco Public 8

9. Management •Became leader of High-End segment
Review
•Accurate sales forecasting
•Monitoring competitors and reacted quickly
•Completely eliminated debt
What we did well
•Low volatility

10. Management What we could improve on
Review
•Invest more in TQM at earlier stages
•Invest in Sales and Promo earlier
•Invest more heavily in product
development

11. Digby performed well in cumulative
profits after factoring out Baldwin
Wild upswing in stock price and profits of
Chester and Erie are unsustainable
Digby is in optimal shape for
Relative
Performance
management transition

12. Moving Forward…

13. Digby Enterprises
Presentation_ID © 2009 Cisco Systems, Inc. All rights reserved. Cisco Public 13