The document analyzes the business strategy of M/S Digby, focusing on its operations from 2012 to 2016 in the sensor market. Key areas discussed include production, sales and marketing, research and development, finance, and total quality management, highlighting learnings and challenges faced by the company. It provides insights into market shares, financial performance, and strategies for improvement in product positioning and cash management.

1. M/s Digby’s Business Strategy AnalysisBusiness Avenue, 4214,
Postal code 80.250-210 / Singapore
+65 3836 55 55
+65 9685 55 55| | www.SOS.com
M/s Digby’s Business Strategy
Analysis

2. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Agenda
Digby Company Profile
Sensor Market in 2012
Current Scenario - 2016
Production – Learnings
Sales & Marketing – Learnings
Research & Development– Learnings
Finance – Learnings
TQM & HR– Learnings

3. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Digby Company Profile

4. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
DIGBY
Research
& Devp
(R&D)
Production
Sales &
Marketing
Human
Resources
(HR)
Total
Quality
Mgmt
(TQM)
Finance
Sidd Ravishankar
Head – R&D
Varun Mahajan
Head – Production
Robin Agarwal
Head – Sales & Mktg
Shashank Shinde
Head – TQM & HR
Shirish Bansal
CEO & Head – Finance

5. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Sensor Market in 2012

6. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Sensor
Manufacturers in
Market
Market Share Market Cap
No. of
Products
Markets Served
Andrew 16.67 % $ 69M 5
Low, Trad, High,
Prmn, Size
Baldwin 16.67 % $ 69M 5
Low, Trad, High,
Prmn, Size
Chester 16.67 % $ 69M 5
Low, Trad, High,
Prmn, Size
Digby 16.67 % $ 69M 5
Low, Trad, High,
Prmn, Size
Erie 16.67 % $ 69M 5
Low, Trad, High,
Prmn, Size
Ferris 16.67 % $ 69M 5
Low, Trad, High,
Prmn, Size
Market Scenario - 2012

7. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Current Scenario - 2016

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Andrews
14%
Baldwin
15%
Chester
20%Digby
13%
Erie
15%
Ferris
23%
Market ShareFinancial Statistics
Sales Breakup
34.25
26.15
14.48
30.88
12.12
0
5
10
15
20
25
30
35
40
2010 2012 2014 2016 2018
Share Price
Shar…

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• DazeTraditional Segment
• DellLow Segment
• DaveHigh Segment
• DotPerformance Segment
• DuneSize Segment
Digby Products

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Production – Learnings

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Mr. Varun Mahajan
Production Head
“We are looking at maximum
market share after 4 years
and we shall go full steam to
increase capacity in the
initial years.”
“Hopefully we shall be able to
take advantage of a growing
market !”

12. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
FY 2012
FY 2013
Production - Learning # 1
Capacity should be increased only considering short term market growth
and not long term market growth as it also carries depreciation cost
Add fixed capacity in small increments as the demand grows !

13. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Production - Learning # 1
All other players sold off capacity and hence had more cash at hand for
investments.
FY 2013

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FY 2013
Production - Learning # 2
• Conservative approach followed in selling off excess capacity
FY 2014
Correct your errors in the first shot !

15. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Production - Learning # 3
Due to cash crunch owing to excess spending on increasing
capacity, Digby fell short of cash to Automate their plants resulting in
lower contribution margin and higher costs in years to come
FY 2012
FY 2013
Cost control is extremely important !

16. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Production - Learning # 4
Poor Plant Utilization
• Ideal plant utilization
- 198% of the plant capacity
• Digby’s Plant utilization
level was 72% in 2013 and
increased to 160% in 2016
• This showed Digby’s over spending on plant expansion in the first
years resulted in poor Asset Turnover Ratio
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
2013 2014 2015 2016
Optimum Capacity
Utilization
Industry Average
Utilization
Digby Average
Utilization

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Production - Learning # 5
Poor Forecasting led to unsold inventory. Tradeoff between Stock Out
and Inventory carrying cost was not calculated
FY 2013

18. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Poor Forecasting led to unmet market demand as all companies had
stock out
Production - Learning # 6
FY 2015
Market Demand > 1.8
Total Capacity

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Sales & Marketing –
Learnings

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Sales & Marketing - Learning # 1
Higher Customer visibility comes at a
price !
100% Customer
Awareness & 100%
Accessibility
75% Customer
Awareness & 75%
Accessibility
Less than 50% Customer
Awareness & Less than
50% Accessibility

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Sales & Marketing - Learning # 2
• The product with a higher Customer Survey Score (CSS) tends to
outsell the others which have a lower CSS
CSS
Promotion
Budget
AR Policy
Customer
Buying
Criteria
Sales
Budget

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• Pricing needs to be done carefully within a band that attracts the
customer
• Market will not accept your product if it is priced beyond a certain limit
Sales & Marketing - Learning # 3
FY 2015

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Research & Development
– Learnings

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Research & Development - Learning # 1
• Timely release of product is CRITICAL
in gaining market share and competitive
advantage
FY 2013

25. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Research & Development - Learning # 2
• Product positioning must be as per
the needs/wants of the target segment
FY 2013

26. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Research & Development - Learning # 3
• Failed product transitioning in Dixie
• No R&D was conducted on Dixie
under the expectation that it would
drift into the Traditional market
segment
• It ended up as an abandoned product
which was a misfit everywhere
Product Transitioning needs to be
PLANNED in advance

27. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Research & Development - Learning # 4
• R&D time depends on R&D being
conducted on various products
simultaneously
• Continuous improvements should be
done on products every year
FY 2016

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Finance – Learnings

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Finance - Learning # 1
• Higher the Cash at hand, Lower is
the Risk to the organization!
• Poor prediction of cash at hand
resulted in an Emergency Loan to
Digby and Andrews
Finance should not drive business, business should drive finance!
- Prof Manish Agarwal
However, business should also hear out Finance..

30. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Finance - Learning # 2
• Inventory Carrying Cost needs to
be looked at as poor sales results
in a high inventory carrying cost
• Also, inventory at hand results in a
conservative forecasting often
resulting in a STOCK OUT and lost
market potential in the following
year

31. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Mr. Shirish Bansal
CEO & Finance Head
“We should follow our
tradition of issuing dividends
to our shareholders”
“I’m optimistic of an
increased market share and
increased stock price in the
coming year”

32. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Finance - Learning # 3
• Digby paid 4 million as dividend and the same year Digby faced an
emergency loan of 4.9 million
• Digby should have reinvested to increase the value of the firm as it did
not have excess cash.
FY 2013
Customer is my CEO, who pays my salary; but I am not a Slave !
Mr. Boman Moradian

33. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Finance - Learning # 4
• Debt/Equity ratio should always be
between 1.8 and 2.8
• If the ratio is high one should go for
equity and if the ratio is low one
should go for loan
• A company with a high D/E ratio is
seen as a risky company
Debt is not necessarily bad !

34. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Finance - Learning # 5
• Long term loan should be used for
plant & equipment
purchase, capacity increase etc. for
long term use
• Current loan should be taken to
pay to suppliers or for short term
use
• Wrong selection will lead to
unnecessary interest
Debt should be taken according to
requirement

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TQM & HR – Learning’s

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Human Resource – Learning # 1
Productivity can be increased by:
• Continuous Manpower training
• Spending on recruiting to hire
high caliber workers
FY 2016

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Total Quality Management – Learning # 1
No money spent on TQM initiatives in round 3 whereas the competitors
in the industry invested heavily
FY 2015

38. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
Total Quality Management – Learning # 1
In spite of spending on TQM in 2016, the demand for other companies
products increased
FY 2016

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#2.
#1.

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#3.
#4.

41. M/s Digby’s Business Strategy AnalysisM/s Digby’s Business Strategy Analysis
#5.
#6.

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Lets now go to the Boardroom

43. M/s Digby’s Business Strategy Analysis
Thank You
Team D – Industry C51962
- Shirish Bansal
- Siddharth Ravishankar
- Shashank Shinde
- Robin Agarwal
- Varun Mahajan