1. CONFIDENTIAL
“Introductionof the ACMEBrandof Digital Consumer Electronic Products in
Latin America”
Presentedby:RicardoAdam
Complementof PowerPointpresentation “Preliminary fora BusinessPlan Proposal”,presented to
in Mexico City on February 6th
,2013 for the purposeof enabling discussions foran eventual
position asLatin America BusinessDevelopmentDirector.
Content:
1. ACME Brand and JUJIU Electronics – Strategicguidelines.
2. RevisionMarketSize Tablets inLatinAmerica.
3. Deployment:
a. Go to Market strategyChile:
i. Overall strategy,SWOTAnalysis.
ii. Channels,clients.
iii. Potential salesandcomprehensiveP&L.
iv. Start-upstructure and cost involved.
b. Go to Market strategyColombia:
i. Overall strategy,SWOTanalysis.
ii. DistributionCharacteristicsandGo-to-marketmodels.
iii. Potential revenues,start-upstructure andcomprehensive P&L.
c. Go to Market StrategyCentral America,Venezuela:
i. Overall strategy,SWOTanalysis.
4. Considerations

2. 1. ACME Brand and JUJUI Electronics – Strategic Guidelines.
The followingstrategicdirections asguidelinesforthe formal OperatingBusinessPlan:
a) A business demand-basedmodel,basedonthe principleof securingplacementswitha
fewselectedbusinesspartners andthenproducingthe goodsatthe shortestpossible time
withthe mostdirectsupply- chainstructure fromfactoryto store shelves,reducing
inventoryrisksandminimizingthe use of workingcapital withhighturnaroundsof the
latter.
b) For the initial Go-to-Marketinselectedcountries,generatelow fixed/highvariable Key
Accountand Trade Marketing teamswithlow overheads, focusedonassuringtimely
selling-outof placements.
c) For the product basket,speedof creation,time-to-marketandconsumer/channel profileis
a differential keycompetitiveadvantage toselectedbusinesspartners.
d) Sourcingplaysalsoa keycompetitive advantagerole,beingable toattendforspecific
regional trade agreementsandlocal forlocal assembly.
e) The properuse andpositioningof the ACMEbrand is necessary,inordertomaximize
profitmarginsand trade/end-consumervaluation.
f) Trade marketingandPOSinvestmentsare apriorityineverynegotiationmade, dedicating
a percentage of the marginof eachcategoryin enhancingthe visibilityof the
brand/productonthe shelves.
g) Strict adherence toa selling-outbasedpolicynegotiation agreement. The avoidance of the
use of price protection asa negotiationtool unlessextrememarketconditionsfora
particularSKU mustbe a well-definedpointinthe commercial policy.
h) After-salesservice policiesmustbe alsowell definedasakeysuccessfactors for the
eventual negotiationswiththe selectedbusinesspartners.
i) A professional,proactive, business-orientedteammustbe developedineachkeycountry,
consideringthatevenwiththe strategyof low fixed/highvariableincome operatives,an
initial investmentmustbe realizedinordertolure highlycompetitive personnel injoining
DiamondElectronics.
j) Focuson Latin Americaandsupportfromheadquartersisrequiredfromtop management
inorder to deployall of the above.The factthat Latin Americawill be embeddedwithin
the Mexicansales andmarketingorganizationandgeographicallyinMexicoCitycouldbe
an issue,basedonpastexperiences.Correctlydone andwiththe right topmanagement
attentionbalance,synergiescanbe developedandsuccessfullyusedforthe benefitof the
companyobjectivesasawhole.
k) Focuson keyconsumertrends; investinmarketdataresearchas to minimizetactical
decisionsinthe productcreationroadmaps.
2. Revision Market Size Tablets in Latin America.

3. Basedon the inputsmade duringourmeetinglastWednesday plusmore IDCdataobtainedfrom
the Web,a newTablet-categorymarketSize andprojectionsshowsasfollows:
“Sales of tabletsare set to triple from2012 to 2013, with Brazil leading the way”i
.
2011 2012 2013 2014
TOTAL
LatAm 1,1 5,0 15,0 30,0
Brazil 0,3 30% 2,5 50% 7,5 50% 15,0 50%
RestLatam 0,8 70% 2,5 50% 7,5 50% 15,0 50%
Mexico 0,5 70% 1,8 70% 4,5 60% 7,5 50%
Chile/Peru 0,1 15% 0,4 15% 1,1 15% 3,0 20%
Colombia 0,1 10% 0,3 10% 1,1 15% 3,0 20%
Others 0,0 5% 0,1 5% 0,8 10% 1,5 10%
100% 100% 100% 100%
Figurescoloredingreenare actual IDC estimations.
“The middle class in Latin America looksto grow in the coming years. Evidence of this is the
positiveoutlookon the disposableincomegrowth ratesin Chile, Colombia and Brazil. Consumers’
disposableincomesin Chile, Colombia and Brazilare projected to postcompoundedannualgrowth
rates (CAGRs) in constanttermsof 5.01 percent, 4.45 percentand 4.43 percentrespectively
between 2011 and 2016. In comparison,theU.S.disposableincomelooksto posta CAGR of 2.6
percentin constanttermsoverthe sameperiod. The gap between the wealthy and thepoorin
Latin America is shrinking and will lead to additionalconsumersbeing ableto purchasehigh ticket
items like tablets.”ii

4. 3.a. Deployment & Go-to-Market Chile
Overall strategy,SWOTAnalysis:
Due to the characteristicof the Chileanopenmarketpolicyandthe concentrationof the
distributioninbothDepartmentStoresandHypermarkets,theyhave the leverage toimport
directly,therefore takingownershipof the stockdirectlyfromthe supplier. A SWOTanalysis
regardingACME as a newcomerintoChile isgivenbelow:
Strengths Weaknesses
 ACME brand – A differentiator.
 Business model adapted to the speed of
doingbusiness for retailers.
 Wal-Martconcentrates 40% of sharein
the super/hyper segment. – Network
connections.
 Sourcingfrom China – FTA.
 Product portfolio – smartphones,tablets
in very high demand.
 Distribution concentration in department
stores: many brands,fiercely competitive.
 No local presenceregardingspeed of
implementation.
 Brand recognition of ACME – a question
mark with Chilean consumers.
 Top level networking with the Big 3
(Falabella,Paris,Ripley)
Opportunities Threats
 Speed of growth of given categories
(smartphones, tablets),over 200% - 300%
 Establish rapidly brand in Wal-Martand
replicatepresence in department stores.
Use it as a leverage with product
differentiators (ex.: Wal-Mart7” tablet,
Falabella10”G3 tablet)
 Missingthesales seasonality.
 Rejection of the ACME brand by the part
of consumers.
 High costof qualified KAMS´s and
Promoters team. Initial start-up cost.
 Cost of enter a Big3 client: margins,
commercial conditions and subsequent
negotiations once you are in.
Channels, clients.
The mix of selectedclientstoentershould be:

5. Potential sales and comprehensive P&L for Chile
Chile RevenueMonthlyEstimation Tablets Smtphnes TV`s DVD`s Totals
NSPAverage $182 $165 $242 $30
Volume 4.000 4.000 2.500 1.300 11.800
Value $728.000 $660.000 $605.000 $39.000 $2.032.000
MonthlyEstimatedP&L(inUSD) Totals:
Revenues per Categories
Net Sales(1) $728.000 $660.000 $605.000 $39.000 $2.032.000
Costof Goods Sold (2) $380.000 $380.000 $572.500 $26.000 $1.358.500
Gross Profit $348.000 $280.000 $32.500 $13.000 $673.500 33,1%
Selling Expenses
KeyAccountManager: $5.000 0,2%
Trade MarketingSupervisor: $2.500 0,1%
PromotersTeam (3): 100 $800 $80.000 3,9%
OtherSales and Marketing Costs
(POPmaterial,SalesCatalogues) $10.000 0,5%
Service andAfterSalesManager $3.000 0,1%
Office Administrative Manager: $4.000 0,2%
Overheads(4) $20.000 1,0%
Total Start-UpExpenses: $124.500 18,5%
OperatingProfits: $549.000 27,0%
Notes:
(1) Revenuesbasedon20%+5% Margins
and Discounts
(2) Cost of Goods Soldbased onCIF Chile
Costs
(3) Direct Promoters basedon a third of
total POS
Falabella Promoters (37)
Almacenes Paris (40)
Ripley´s (40)
Wal-Mart (260)
Total POS= (377)
(4) Estimates on rent & utilities of a
local

6. 3. b. Deployment & Go-to-Market Colombia
Overall strategy,SWOTAnalysis:
The Colombianmarketneedstobe analyzed withrespecttoitsmarketdynamics.The factthat
there isstill a relativelylarge proportionof the marketsuppliedviathe informal-Panamáchannel
and that the principal formal departmentstoresare beingsuppliedlocallyandinColombianPesos,
callsfor a differentstrategywithrespectto brandcontrol, stockavailability andcommercial
policiesandprice control forboth formal and informal channels.
There are three alternativesforassuringsetstrategicguidelines:
1. Direct sales to key selected retailers:
Pros (if negotiationsare successful):
a) Full control of commercial variables.
b) Directsupplyfromfactoryto clientwarehouse.
c) Directpresence of the brandin selectedretailers.
Cons(hurdlestoreachdirectnegotiations):
a) Top tierbrandsdo not sell directly:local invoicinganddeliveries.
b) Needtosetup a full-fledgedcommercial operation.Highstart-upcosts.
c) ACME brand isnot knownandthere are past,negative experienceswith
newcomersnothavingagood businessplan.
2. Sales to both formal and informal channels via Panamá and local wholesalers:
Pros (highprobabilityof negotiationsoccurring):
a) No needtosetup local presence.
b) Riskof stockpassedonto wholesaler.
c) Selling-inassured.
Cons(risksof thingsgoingwrong):
a) Losingcomplete control of the commercial variables. Riskof hiddenstock
protectionsurprises.Nosell-outcontrol.
b) Difficultiesininterpretingwholesaler’stacticintents.
c) Many brands handledbywholesalers:how tointerestthem inPolaroid?

7. 3. Outsourcing a local logistical/commercial operator dedicated solely to the Brand:
Pros (highprobabilityof negotiationsoccurring):
a) Control of commercial,logistical variables.Size,reachandscope of business
designedaccordingtorisktolerance.
b) Local presence and know- how assured. Ease of settingupa legal,low-risk
presence.Full attentiontothe brand.
c) Start-upcost relativelylow ascomparedtoestablishfull-fledgedoperation.
Cons(issue issharingrisk):
a) Dedicationandattentionforthe start-upperiod,asoperatorlearnsthe fabricsof
the business.
b) Stock ownershipremainsonthe handsof JUJIJU Electronicsuntil sold.
c) Tyingup the brand to a local business/commercial operator, notraumaexit
modesif decisionlateronisgoon independently.
Strengths Weaknesses
 ACME brand – A differentiator.
 Versatility of operatinglean business
models.
 Capability of being in both formal and
informal channels.
 Sourcingfrom Mexico G-3
 Product portfolio – smartphones,tablets
in very high demand.
 No local presenceto safeguard brand
positioning,margins and commercial
negotiations (formal market).
 Local invoicingand order deliveries.
 Local warehousing.
Opportunities Threats
 Speed of growth of given categories
(smartphones, tablets),over 200% - 300%
 Enable local lean,versatile,lowprofile
business models thatfocus on speed,
portability and efficiency.
 Missingthesales seasonality.
 Rejection of the ACME brand by the part
of consumers.
i http://latinlink.usmediaconsulting.com/2012/09/5-top-trends-in-latin-americas-mobile-market/
ii http://www.latinbusinesschronicle.com/app/article.aspx?id=5593