The document discusses two aspects of customer value: economic value to the customer (EVC) and lifetime value of a customer (LTV). EVC is the total cost savings customers receive from purchasing a new product over their existing option. LTV is the net present value of all future profits generated by a customer over the duration of their relationship with a company. The document provides examples of how to calculate EVC and LTV and discusses their importance for marketing strategies like pricing, segmentation, and new product introduction.
This document provides an overview of segmentation, targeting, and positioning concepts from a marketing management course. It includes definitions and examples of segmentation bases and techniques. The benefits of segmentation for firms and customers are described. Good characteristics of segmentation are outlined. Target market selection factors are listed. Examples of segmentation methods and perceptual maps are presented. Positioning strategies like vertical and horizontal positioning are explained.
Key takeaways for service executives from the Oxford Economics report on manufacturing transformation.
The service opportunity is now. Transforming service is key to driving profitable growth and competitive advantage. That’s what executives from manufacturing companies told Oxford Economics in a recent study commissioned by PTC. Inside you’ll find other key takeaways from the survey, specifically for service leaders.
Monte Carl Simulation is a powerful and effective tool when used properly helps to navigate the expected Net Present Value NPV. This presentation helps to improve the pattern to ackowlege onthe Odessa Investment by Decision Dres.
This document summarizes research on lessons that can be learned from Australian service exporters in satisfying international customer needs. The research involved interviews and surveys of Australian service exporters. The key findings were that international competency, personnel advantages, strong brands, financial advantages, and strong customer orientation help service exporters better satisfy customer needs overseas. The implications discussed were how businesses can develop these capabilities and ways that policymakers can provide export assistance to support emerging service exporters.
Five innovations have changed the startup world:
1. Applying the scientific method to startups through experiments and iteration to learn about customers and business models.
2. Developing business models using the Business Model Canvas to validate assumptions with facts from experiments.
3. Conducting Customer Discovery to understand customer problems rather than focus on technology solutions.
4. Using the Lean Startup methodology to build minimum viable products to test learning hypotheses rather than fully developed products.
5. Defining metrics like the AARRR framework to measure acquisition, activation, retention, revenue, and referrals to guide business model optimization.
This document discusses customer lifetime value (CLV) and how it can be used to answer important marketing questions. CLV is calculated by estimating a customer's expected revenue over time, subtracting costs, applying an annual retention probability, and discounting future cash flows to get a present value. Calculating CLV allows companies to determine which customers to prioritize for acquisition and retention, how much to spend on these activities, and which marketing mix is most effective.
This document provides an overview of segmentation, targeting, and positioning concepts from a marketing management course. It includes definitions and examples of segmentation bases and techniques. The benefits of segmentation for firms and customers are described. Good characteristics of segmentation are outlined. Target market selection factors are listed. Examples of segmentation methods and perceptual maps are presented. Positioning strategies like vertical and horizontal positioning are explained.
Key takeaways for service executives from the Oxford Economics report on manufacturing transformation.
The service opportunity is now. Transforming service is key to driving profitable growth and competitive advantage. That’s what executives from manufacturing companies told Oxford Economics in a recent study commissioned by PTC. Inside you’ll find other key takeaways from the survey, specifically for service leaders.
Monte Carl Simulation is a powerful and effective tool when used properly helps to navigate the expected Net Present Value NPV. This presentation helps to improve the pattern to ackowlege onthe Odessa Investment by Decision Dres.
This document summarizes research on lessons that can be learned from Australian service exporters in satisfying international customer needs. The research involved interviews and surveys of Australian service exporters. The key findings were that international competency, personnel advantages, strong brands, financial advantages, and strong customer orientation help service exporters better satisfy customer needs overseas. The implications discussed were how businesses can develop these capabilities and ways that policymakers can provide export assistance to support emerging service exporters.
Five innovations have changed the startup world:
1. Applying the scientific method to startups through experiments and iteration to learn about customers and business models.
2. Developing business models using the Business Model Canvas to validate assumptions with facts from experiments.
3. Conducting Customer Discovery to understand customer problems rather than focus on technology solutions.
4. Using the Lean Startup methodology to build minimum viable products to test learning hypotheses rather than fully developed products.
5. Defining metrics like the AARRR framework to measure acquisition, activation, retention, revenue, and referrals to guide business model optimization.
This document discusses customer lifetime value (CLV) and how it can be used to answer important marketing questions. CLV is calculated by estimating a customer's expected revenue over time, subtracting costs, applying an annual retention probability, and discounting future cash flows to get a present value. Calculating CLV allows companies to determine which customers to prioritize for acquisition and retention, how much to spend on these activities, and which marketing mix is most effective.
This is a presentation I made at MIT in January 2016 on how to build an excel spreadsheet for your business plan. I also discuss equity distribution among founders, employees, and investors.
Making the business case for your intranetSam Marshall
How to make a winning business case for your intranet.
Slides from a workshop given for Ark Group. If you'd like a similar in-house session or help on this topic please contact sam@clearboxconsulting.co.uk
* What a business case looks like
* Understanding who you're trying to influence
* The benefits of an intranet
* Assessing options, priorities and costs
* Identifying risks
* ROI and why it can be a red herring
* Representing intangible benefits
* The case for re-launches or intranet consolidation
Business Canvas and SWOT Analysis For mo.docxhallettfaustina
Business Canvas and SWOT Analysis
*For more detailed information see TVP2.0*
Key Partners
Rhode Island Fight
Club direct
customer
information line:
(401)316-5779.
National Food
Truck Festival
information line:
(617)254-9500.
Owners and
master brewers. Ex.
Startline Brewery,
Wormtown
Brewery, and
Treehouse Brewery.
Key Activities
Providence Festival
contact.
Reach out to
brewery owners
and gain interest.
Value Proposition
Food Truck Festival
networking.
Microbrewery
sponsorship event.
Logo exposure via
Rhode Island Food
Fight Coupons.
3rd Annual
Providence Food
Truck & Craft Beer
Festival in
Providence, RI on
August 5th, 2018.
Customer
Relationships
Entrepreneurial
Partnerships.
Target market
focuses on
transparent
professional
environments.
Customer Segments
Local college
students.
New restaurants in
the region.
Brewery’s and
Food Truck owners.
Commercial
Customers.
Immigration heavy
regions for focus
on building kitchen
staff database.
Key Resources
Respect for brand.
Strong virtual
infrastructure for
potential
consumers.
Leverage existing
entrepreneurial
relationships.
Channels
Communication
Channel: Web and
Application based.
Public Relations
Channels: Social
Media presence.
Create a hashtag
targeted towards
worker base.
Cost Structure
Highest Key Activity Cost – Rhode Island Food Fight logo
exposure via purchased space on their coupons.
The Food and Craft Beer Festival and Microbrewery’s requires
minimal costs and focus on a mutually beneficial agreement
based on the benefit of brand exposure.
Revenue Streams
Increased revenue can be seen via networking exposure.
Becoming involved in popular events for the target market is a
low cost, high profit venture.
Results could be measured with the App with a small
modification to the software.
Business Canvas and SWOT Analysis
*For more detailed information see TVP2.0*
Strengths
Affordable and convenient
Current northeast American culture
(Immediate Satisfaction)
Dual benefits for employees and employers
Experience in the restaurant industry
Knowledge of the needs
First-Mover Advantage
Weaknesses
Customer retention: Restaurant owners are
continuously cancelling and reinstating their
subscriptions
Low employee/worker database
Low consumer awareness
Little social media presence
S.W.O.T. Analysis
Opportunities
Microbrewery’s are popular among the target
market
College campuses (population of 2 million)
Social Media movements
Food Truck Festivals are an ideal way of
connecting with possible employers and food
lovers.
Threats
Loss of Momentum
Piggy backers
Economic fluctuations
As of now, SpinGig does not have any immediate ...
Question 1(5 points)Rate of return (ROR) can be described as.docxhildredzr1di
Question 1
(5 points)
Rate of return (ROR) can be described as the rate earned on the ___________________ of an investment.
Question 2
(5 points)
What does a rate of return of –100% mean?
Question 3
(5 points)
A-1 Mortgage makes loans with the interest paid on the loan principal rather than on the unpaid balance. For a 4-year loan of $10,000 at 10% per year, what annual payment would be required to repay the loan in 4 years if interest is charged on (a) the principal and (b) the unrecovered balance?
Question 4
(5 points)
What rate of return per month will an entrepreneur make over a 2½-year project period if he invested $150,000 to produce portable 12-volt air compressors? His estimated monthly costs are $27,000 with income of $33,000 per month.
Question 5
(5 points)
PPG manufactures an epoxy amine that is used to protect the contents of polyethylene terephthalate (PET) containers from reacting with oxygen. The cash flow (in millions) associated with the process is shown below. Determine the rate of return.
Year
Cost, $
Revenue, $
0
–10
—
1
–4
2
2
–4
3
3
–4
9
4
–3
9
5
–3
9
6
–3
9
Question 6
(5 points)
What is the difference between a conventional and a nonconventional cash flow series?
Question 7
(5 points)
Five years ago, a company made a $5 million investment in a new high-temperature material. The product was not well accepted after the first year on the market. However, when it was reintroduced 4 years later, it did sell well during the year. Major research funding to broaden the applications has cost $15 million in year 5. Determine the rate of return for these cash flows (shown below in $1000s).
Year
Net Cash Flow, $
0
–5,000
1
4,000
2
0
3
0
4
20,000
5
–15,000
Question 8
(5 points)
___________________ refers to the interest rate that is used for funds that are released from a project before the project is over.
Question 9
(5 points)
What is the overall rate of return on a $100,000 investment that returns 20% on the first $30,000 and 14% on the remaining $70,000?
Question 10
(5 points)
If all of the incremental cash flows are negative, what is known about the rate of return on the incremental investment?
Question 11
(5 points)
A plastics company is considering two injection molding processes. Process X will have a first cost of $600,000, annual costs of $200,000, and a salvage value of $100,000 after 5 years. Process Y will have a first cost of $800,000, annual costs of $150,000, and a salvage value of $230,000 after 5 years. Which process should the company select on the basis of a rate of return analysis, if the MARR is 20% per year?
Question 12
(5 points)
The manager of a canned food processing plant is trying to decide between two labeling machines. Determine which machine should be selected on the basis of rate of return with a MARR of 20% per year.
Machine A
Machine B
First cost, $
–15,000
–25,000
Annual operating cost, $/year
–1,600
–400
Salvage value, $
3,000
4,000
Life, years
2
4
Question 13
(5 points.
The document provides instructions for collecting and stamping name cards for a marketing class. It instructs students to only stamp their own card with the correct date and box. It lists the weeks and provides an alphabetical ordering of last names. It emphasizes that students should collect and stamp only their own card and not stamp the lower box.
Doug Baker, prominent chairman and CEO of Ecolab, shares the story of Ecolab and a provides a formula for Minnesota to achieve a successful environment for Businesses to thrive.
Jim Halter Sustainability Presentation 2011Jim Halter
The document discusses the need for sustainability given the depletion of natural resources and increasing population and waste. It outlines how Waste Management responded by creating sustainability teams to transform operations and culture. The teams focused on optimizing material value, efficient transportation, sustainability practices, and municipal partnerships. This led Waste Management to implement metrics and benchmarks to track progress, and establish a vision of meeting environmental responsibilities while driving business opportunities and shareholder return through sustainability.
How to create value for your organization? Why TSR is the best metric for value creation? Why is it difficult to create sustainable value? How to build sustainable value creation strategy & create value for a longer period of time? Why CSR & brand value change not consider as a part of TSR? Why multiple compressions are so difficult to beat? Why investors & analyst discounts valuation multiple? How to transit majority investors without eroding TSR? How to create value in low growth economy? How to play your strategy with sustainable TSR matrix as per investors eye? Why investors communication is so important for value creation? Which strategy you should use for value creation? How to use value creation scenarios? Why cash strategy is so important in low growth economy?
If all these question bothers you before developing your company’s corporate strategy/value creation strategy then you must see your New Year’s
complimentary gift presentation
“A handy e-book on how to create sustainable shareholders value”
Problem 1 (30 marks)Review enough information about .docxChantellPantoja184
Problem 1 (30 marks)
Review enough information about Trinidad Drilling Ltd. to propose a vision and strategic objectives for the company. Develop a balanced scorecard that will help the company achieve this vision and monitor how well it is accomplishing its strategic objectives. Include a strategy map in table format that shows objectives and performance measures, with arrows illustrating hypothesized cause-and -effect relationships. Provide rationale for your strategy map. The body of your report should not exceed 1,000 words. Cite material you used to prepare the response and provide references in an appendix.
Problem 2 (20 marks)
Ajax Auto Upholstery Ltd. manufactures upholstered products for automobiles, vans, and trucks. Among the various Ajax plants around Canada is the Owlseye plant located in rural Alberta.
The chief financial officer has just received a report indicating that Ajax could purchase the entire annual output of the Owlseye plant from a foreign supplier for $37 million per year.
The budgeted operating costs (in thousands) for the Owlseye plant’s for the coming year is as follows:
Materials $15,000
Labor
Direct $12,000
Supervision 4,000
Indirect plant 5,000 19,000
Overhead
Depreciation – plant 6,000
Utilities, property tax, maintenance 2,000
Pension expense 4,500
Plant manager and staff 2,500
Corporate headquarters overhead allocation 3,000 18,000
Total budgeted costs $52,000
If material purchase orders are cancelled as a consequence of the plant closing, termination charges would amount to 10 percent of the annual cost of direct materials in the first year (zero thereafter).
A clause in the Ajax union contract requires the company to provide employment assistance to its former employees for 12 months after a plant closes. The estimated cost to administer this service if the Owlseye plant closes would be $2 million. $3.6 million of next year’s pension expense would continue indefinitely whether or not the plant remains open. About $900,000 of labour would still be required in the first year after closure to decommission the plant. After that, the plant would be sold for an estimated $1 million. Utilities, property taxes, and maintenance costs would remain unchanged in the first year after closure, but disappear when the plant is sold.
The plant manager and her staff would be somewhat affected by the closing of the Owlseye plant. Some managers would still be responsible for managing three other plants. As a result, total management salaries would be about 50% of the current level, starting at closure and remaining into the future.
Required:
Assume you are the company’s chief financial officer. Perform a five-year financial analysis and make a recommendation whether to close the Owlseye plant on this basis. Provide support for and cautions about your recommendation with organized, clearly-labeled data. Use bullet points where appropriate.
Problem 3 (16 marks)
Br.
The document provides an overview of a marketing simulation game that allows participants to manage the marketing strategy for a voice recognition device company. It outlines the key elements to consider like product features, pricing, distribution channels, advertising, salesforce, and market research reports. The simulation requires integrating decisions across these elements to satisfy customer needs and earn profits while considering the competitive environment.
Cleveland Research Company 2016 Stock Pitch Competition- Tempur Selay Finalist Alexander Liscum
One of 5 finalists chosen out of 25 competitive teams to present to equity research professionals in the 2016 CRC Stock Pitch Competition at Miami University.
Here are the key points regarding value added marketing with respect to Blue Jet Airways:
1. Tangible value - Features and benefits of the core product/service such as on-time flights, comfort, safety, etc. This helps meet basic customer needs.
2. Intangible value - Non-core offerings that enhance the customer experience. For Blue Jet, this could include loyalty programs, lounge access, priority boarding, extra baggage allowance, etc. This helps build emotional connections.
3. Value is defined not just by the firm but also from the customer's perspective. Blue Jet needs to understand what truly matters to its target flyers and tailor its offerings accordingly.
4. Value is also co
Guy Delahay, Owner and Managing Partner at Mainnovation Inc., discusses building a winning maintenance strategy through the use of the Value Driven Maintenance methodology, a state of the art framework that calculates economic added value of maintenance using Net Present Value techniques and industry specific maintenance benchmarks. Organizations that have embraced this practice have been able to achieve impressive results including:
30% Uptime Improvement
50% Cost Reduction
40% lower MRO stock value
View the slides to understand the steps invloved in building a winning maintenance strategy, such as understanding your Dominant Value Driver, utilizing KPI's and benchmarking, implementing Maintenance Best Practices, and exploring Value Drive Maintenance.
Sourcing talent is an important part of the recruitment process and involves finding the right candidate through evaluations, references, and work history analysis. During the sourcing process, human resource agents identify and locate potential internal or external recruits by analyzing sourcing tools to find those best able to meet the company's needs. Perhaps the most important part of sourcing talent is creating a source plan to identify desirable employees and devise a strategy to reach them.
New Product Detailed Cost Analysis PowerPoint Presentation SlidesSlideTeam
It covers all the important concepts and has relevant templates which cater to your business needs. This complete deck has PPT slides on New Product Detailed Cost Analysis PowerPoint Presentation Slides with well suited graphics and subject driven content. This deck consists of total of twenty one slides. All templates are completely editable for your convenience. You can change the colour, text and font size of these slides. You can add or delete the content as per your requirement. Get access to this professionally designed complete deck presentation by clicking the download button below. http://bit.ly/378evIR
This document provides information about obtaining help with assignments from an assignment assistance service. It gives a mail ID and phone number to contact for help with MBA assignments. It provides 8 sample questions on various operations management and quality control topics, along with partial or full answers for each question. Students are encouraged to send their semester and specialization details to the mail ID or call the phone number for help with assignments.
The 5 Commodores plan to start a shuttle service called U T Transport to transport college students around Indiana. They will operate as a limited partnership and target college students with affordable fares and a fun atmosphere. Their strengths include low cost and safety, while weaknesses are reliance on gas prices and need to establish reputation. They project $77,000 in operating expenses and $85,000 in total funding needs for the first year.
The document discusses employee welfare, which refers to benefits and facilities provided by employers to employees. It outlines the objectives of employee welfare such as enabling richer lives for workers, improving health, promoting belongingness, and deterring issues like drinking. It then describes the various agencies that provide welfare like central/state governments, employers, and trade unions. It categorizes welfare facilities as intramural (within establishments) or extramural (outside) and gives examples of each type. Finally, it briefly outlines some Indian employer measures, relevant labor statutes, and the role of labor welfare officers.
The document discusses communication, including its nature, principles, types, processes, barriers, and achieving effectiveness. Some key points:
- Communication is the exchange of information between two parties and requires both a sender and receiver. It aims to share information, ideas, and feelings.
- The communication process involves encoding a message, transmitting it through a channel, receiving it, decoding it, and providing feedback.
- Barriers like semantic issues, noise, physical barriers, and rumors can interfere with effective communication.
- Two-way communication, clarity of ideas, empathy, appropriate language, and credibility can help achieve more effective communication.
This is a presentation I made at MIT in January 2016 on how to build an excel spreadsheet for your business plan. I also discuss equity distribution among founders, employees, and investors.
Making the business case for your intranetSam Marshall
How to make a winning business case for your intranet.
Slides from a workshop given for Ark Group. If you'd like a similar in-house session or help on this topic please contact sam@clearboxconsulting.co.uk
* What a business case looks like
* Understanding who you're trying to influence
* The benefits of an intranet
* Assessing options, priorities and costs
* Identifying risks
* ROI and why it can be a red herring
* Representing intangible benefits
* The case for re-launches or intranet consolidation
Business Canvas and SWOT Analysis For mo.docxhallettfaustina
Business Canvas and SWOT Analysis
*For more detailed information see TVP2.0*
Key Partners
Rhode Island Fight
Club direct
customer
information line:
(401)316-5779.
National Food
Truck Festival
information line:
(617)254-9500.
Owners and
master brewers. Ex.
Startline Brewery,
Wormtown
Brewery, and
Treehouse Brewery.
Key Activities
Providence Festival
contact.
Reach out to
brewery owners
and gain interest.
Value Proposition
Food Truck Festival
networking.
Microbrewery
sponsorship event.
Logo exposure via
Rhode Island Food
Fight Coupons.
3rd Annual
Providence Food
Truck & Craft Beer
Festival in
Providence, RI on
August 5th, 2018.
Customer
Relationships
Entrepreneurial
Partnerships.
Target market
focuses on
transparent
professional
environments.
Customer Segments
Local college
students.
New restaurants in
the region.
Brewery’s and
Food Truck owners.
Commercial
Customers.
Immigration heavy
regions for focus
on building kitchen
staff database.
Key Resources
Respect for brand.
Strong virtual
infrastructure for
potential
consumers.
Leverage existing
entrepreneurial
relationships.
Channels
Communication
Channel: Web and
Application based.
Public Relations
Channels: Social
Media presence.
Create a hashtag
targeted towards
worker base.
Cost Structure
Highest Key Activity Cost – Rhode Island Food Fight logo
exposure via purchased space on their coupons.
The Food and Craft Beer Festival and Microbrewery’s requires
minimal costs and focus on a mutually beneficial agreement
based on the benefit of brand exposure.
Revenue Streams
Increased revenue can be seen via networking exposure.
Becoming involved in popular events for the target market is a
low cost, high profit venture.
Results could be measured with the App with a small
modification to the software.
Business Canvas and SWOT Analysis
*For more detailed information see TVP2.0*
Strengths
Affordable and convenient
Current northeast American culture
(Immediate Satisfaction)
Dual benefits for employees and employers
Experience in the restaurant industry
Knowledge of the needs
First-Mover Advantage
Weaknesses
Customer retention: Restaurant owners are
continuously cancelling and reinstating their
subscriptions
Low employee/worker database
Low consumer awareness
Little social media presence
S.W.O.T. Analysis
Opportunities
Microbrewery’s are popular among the target
market
College campuses (population of 2 million)
Social Media movements
Food Truck Festivals are an ideal way of
connecting with possible employers and food
lovers.
Threats
Loss of Momentum
Piggy backers
Economic fluctuations
As of now, SpinGig does not have any immediate ...
Question 1(5 points)Rate of return (ROR) can be described as.docxhildredzr1di
Question 1
(5 points)
Rate of return (ROR) can be described as the rate earned on the ___________________ of an investment.
Question 2
(5 points)
What does a rate of return of –100% mean?
Question 3
(5 points)
A-1 Mortgage makes loans with the interest paid on the loan principal rather than on the unpaid balance. For a 4-year loan of $10,000 at 10% per year, what annual payment would be required to repay the loan in 4 years if interest is charged on (a) the principal and (b) the unrecovered balance?
Question 4
(5 points)
What rate of return per month will an entrepreneur make over a 2½-year project period if he invested $150,000 to produce portable 12-volt air compressors? His estimated monthly costs are $27,000 with income of $33,000 per month.
Question 5
(5 points)
PPG manufactures an epoxy amine that is used to protect the contents of polyethylene terephthalate (PET) containers from reacting with oxygen. The cash flow (in millions) associated with the process is shown below. Determine the rate of return.
Year
Cost, $
Revenue, $
0
–10
—
1
–4
2
2
–4
3
3
–4
9
4
–3
9
5
–3
9
6
–3
9
Question 6
(5 points)
What is the difference between a conventional and a nonconventional cash flow series?
Question 7
(5 points)
Five years ago, a company made a $5 million investment in a new high-temperature material. The product was not well accepted after the first year on the market. However, when it was reintroduced 4 years later, it did sell well during the year. Major research funding to broaden the applications has cost $15 million in year 5. Determine the rate of return for these cash flows (shown below in $1000s).
Year
Net Cash Flow, $
0
–5,000
1
4,000
2
0
3
0
4
20,000
5
–15,000
Question 8
(5 points)
___________________ refers to the interest rate that is used for funds that are released from a project before the project is over.
Question 9
(5 points)
What is the overall rate of return on a $100,000 investment that returns 20% on the first $30,000 and 14% on the remaining $70,000?
Question 10
(5 points)
If all of the incremental cash flows are negative, what is known about the rate of return on the incremental investment?
Question 11
(5 points)
A plastics company is considering two injection molding processes. Process X will have a first cost of $600,000, annual costs of $200,000, and a salvage value of $100,000 after 5 years. Process Y will have a first cost of $800,000, annual costs of $150,000, and a salvage value of $230,000 after 5 years. Which process should the company select on the basis of a rate of return analysis, if the MARR is 20% per year?
Question 12
(5 points)
The manager of a canned food processing plant is trying to decide between two labeling machines. Determine which machine should be selected on the basis of rate of return with a MARR of 20% per year.
Machine A
Machine B
First cost, $
–15,000
–25,000
Annual operating cost, $/year
–1,600
–400
Salvage value, $
3,000
4,000
Life, years
2
4
Question 13
(5 points.
The document provides instructions for collecting and stamping name cards for a marketing class. It instructs students to only stamp their own card with the correct date and box. It lists the weeks and provides an alphabetical ordering of last names. It emphasizes that students should collect and stamp only their own card and not stamp the lower box.
Doug Baker, prominent chairman and CEO of Ecolab, shares the story of Ecolab and a provides a formula for Minnesota to achieve a successful environment for Businesses to thrive.
Jim Halter Sustainability Presentation 2011Jim Halter
The document discusses the need for sustainability given the depletion of natural resources and increasing population and waste. It outlines how Waste Management responded by creating sustainability teams to transform operations and culture. The teams focused on optimizing material value, efficient transportation, sustainability practices, and municipal partnerships. This led Waste Management to implement metrics and benchmarks to track progress, and establish a vision of meeting environmental responsibilities while driving business opportunities and shareholder return through sustainability.
How to create value for your organization? Why TSR is the best metric for value creation? Why is it difficult to create sustainable value? How to build sustainable value creation strategy & create value for a longer period of time? Why CSR & brand value change not consider as a part of TSR? Why multiple compressions are so difficult to beat? Why investors & analyst discounts valuation multiple? How to transit majority investors without eroding TSR? How to create value in low growth economy? How to play your strategy with sustainable TSR matrix as per investors eye? Why investors communication is so important for value creation? Which strategy you should use for value creation? How to use value creation scenarios? Why cash strategy is so important in low growth economy?
If all these question bothers you before developing your company’s corporate strategy/value creation strategy then you must see your New Year’s
complimentary gift presentation
“A handy e-book on how to create sustainable shareholders value”
Problem 1 (30 marks)Review enough information about .docxChantellPantoja184
Problem 1 (30 marks)
Review enough information about Trinidad Drilling Ltd. to propose a vision and strategic objectives for the company. Develop a balanced scorecard that will help the company achieve this vision and monitor how well it is accomplishing its strategic objectives. Include a strategy map in table format that shows objectives and performance measures, with arrows illustrating hypothesized cause-and -effect relationships. Provide rationale for your strategy map. The body of your report should not exceed 1,000 words. Cite material you used to prepare the response and provide references in an appendix.
Problem 2 (20 marks)
Ajax Auto Upholstery Ltd. manufactures upholstered products for automobiles, vans, and trucks. Among the various Ajax plants around Canada is the Owlseye plant located in rural Alberta.
The chief financial officer has just received a report indicating that Ajax could purchase the entire annual output of the Owlseye plant from a foreign supplier for $37 million per year.
The budgeted operating costs (in thousands) for the Owlseye plant’s for the coming year is as follows:
Materials $15,000
Labor
Direct $12,000
Supervision 4,000
Indirect plant 5,000 19,000
Overhead
Depreciation – plant 6,000
Utilities, property tax, maintenance 2,000
Pension expense 4,500
Plant manager and staff 2,500
Corporate headquarters overhead allocation 3,000 18,000
Total budgeted costs $52,000
If material purchase orders are cancelled as a consequence of the plant closing, termination charges would amount to 10 percent of the annual cost of direct materials in the first year (zero thereafter).
A clause in the Ajax union contract requires the company to provide employment assistance to its former employees for 12 months after a plant closes. The estimated cost to administer this service if the Owlseye plant closes would be $2 million. $3.6 million of next year’s pension expense would continue indefinitely whether or not the plant remains open. About $900,000 of labour would still be required in the first year after closure to decommission the plant. After that, the plant would be sold for an estimated $1 million. Utilities, property taxes, and maintenance costs would remain unchanged in the first year after closure, but disappear when the plant is sold.
The plant manager and her staff would be somewhat affected by the closing of the Owlseye plant. Some managers would still be responsible for managing three other plants. As a result, total management salaries would be about 50% of the current level, starting at closure and remaining into the future.
Required:
Assume you are the company’s chief financial officer. Perform a five-year financial analysis and make a recommendation whether to close the Owlseye plant on this basis. Provide support for and cautions about your recommendation with organized, clearly-labeled data. Use bullet points where appropriate.
Problem 3 (16 marks)
Br.
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Here are the key points regarding value added marketing with respect to Blue Jet Airways:
1. Tangible value - Features and benefits of the core product/service such as on-time flights, comfort, safety, etc. This helps meet basic customer needs.
2. Intangible value - Non-core offerings that enhance the customer experience. For Blue Jet, this could include loyalty programs, lounge access, priority boarding, extra baggage allowance, etc. This helps build emotional connections.
3. Value is defined not just by the firm but also from the customer's perspective. Blue Jet needs to understand what truly matters to its target flyers and tailor its offerings accordingly.
4. Value is also co
Guy Delahay, Owner and Managing Partner at Mainnovation Inc., discusses building a winning maintenance strategy through the use of the Value Driven Maintenance methodology, a state of the art framework that calculates economic added value of maintenance using Net Present Value techniques and industry specific maintenance benchmarks. Organizations that have embraced this practice have been able to achieve impressive results including:
30% Uptime Improvement
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The document provides information about new employee benefits at UW Madison, including health insurance, dental, vision, flexible spending accounts, and retirement plans. It discusses who should review the benefits information, including short term academic staff, grad assistants, fellows, scholars, and post-docs. It also outlines the various benefits options and resources for enrolling and making changes, such as the deadline to enroll being within 30 days of the appointment start date.
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The document discusses the business environment and its importance for strategic decision making. It defines the business environment as the aggregate of political, economic, social, technological, legal and other factors that influence organizational operations. It then classifies the business environment into internal and external factors, and discusses various components of the external environment like suppliers, customers, competitors, and socio-cultural, demographic, technological, political and economic conditions. The document emphasizes that regular environmental scanning and analysis is crucial to identify opportunities and threats and enable organizations to adapt proactively.
Technology transfer is the process of sharing skills, knowledge, technologies, and manufacturing methods between governments, institutions, and companies. In India, many companies obtain updated technologies through joint ventures with companies in more advanced countries like Japan. For example, Tata Telecom has a joint venture with DOCOMO of Japan for technology and services. International businesses facilitate technology transfer between developed and developing countries through foreign subsidiaries, joint ventures, acquisitions, and alliances. This benefits developing countries by bringing in newer products and processes.
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This document provides an overview of the South Asian Association for Regional Cooperation (SAARC). It discusses that SAARC was established in 1985 and currently has 8 member countries. The objectives of SAARC include promoting economic and social development in South Asia. It also outlines the structure and history of SAARC, describes the SAARC summits that have been held, and summarizes the goals and functions of the organization.
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1. Two Sides of Customer Value:
Economic Value to the Customer
(EVC)
and
Life Time Value of a Customer (LTV)
Session 4
Marketing Management
Prof. Natalie Mizik
2. Marketing Management:
The Big Picture
I. Situation
Analysis
(5Cs)
II. Set Strategy SE
(STP)
III. Formulate
Marketing
Programs
(4Ps)
COMPETITION
COMPANY CONTEXT
COLLABORATORS
GMENTATION TARGETING POSITIONING
ACQUISITION-
RETENTION
PLACE
PRODUCT PRICE PROMOTION
CUSTOMERS
Prof. Natalie Mizik – 2010 MIT 15.810
3. Sources of Customer Value
Psychological
Psychological
Economic Functional
Prof. Natalie Mizik – 2010 MIT 15.810
4. 1. Economic Value to
Customers
EVC is the total (life-cycle) cost savings from using a
new product in place of a current product.
EVC = (Total ownership cost of existing product)
– (Total ownership cost of new product)
Maximum Willingness to Pay = Total
lifecycle savings from new product compared
with old product
Prof. Natalie Mizik – 2010 MIT 15.810
5. $1,000
$0
$500
Maximum value
(at a zero price)
Economic value
of $125
Total
cost
of
purchase
$375 Price
$100 Installation
$400 Usage and
maintenance
$300 Price
$200 Installation
$500 Usage and
maintenance
$400 Usage and
maintenance
$100 Installation
Benchmark Value drivers of Economic value
comparison new solution and price position
Example: New Telecom
Switch
Image by MIT OpenCourseWare.
Prof. Natalie Mizik – 2010 MIT 15.810
6. Price paid
Acquisition costs
Usage costs
Maintenance costs
Ownership costs
Disposal costs
Total
cost
of
purchase
Amazon.com lower purchase price with the on-line purchase of
books.
American Hospital Supply reduces a hospital's cost with a
computerized customer order program.
Sealed Air reduces labor cost in packaging with AirCap.
Saturn lowers the cost of repair and insurance through module
product design.
GE Capital works with customers to create affordable
ownership.
Rohm-Haas's Kathon MWX cuts cost of disposal of
machine fluid waste in half.
Sources of EVC
Image by MIT OpenCourseWare.
Prof. Natalie Mizik – 2010 MIT 15.810
8. A new synthetic motor oil is about to be
introduced with the primary benefit that it needs
to be changed less frequently, specifically once
every year regardless of the mileage. Assuming
current oils need to be changed every 3,000
miles at a cost of $30 per change (oil at a dollar
a quart or a total of $5 per car, labor $20,
disposal of oil $5) for an average car. What is
the EVC of the new oil to a car driver who drives
15,000 miles per year?
Example
Prof. Natalie Mizik – 2010 MIT 15.810
9. New
Product
Old Product
Low Mileage
(3,000)
Average
Mileage
(15,000)
High Mileage
(45,000)
Product Price ??? 1 x 5 = 5 25 15x 5 = 75
Labor Costs 20 1 x 20 = 20 100 15 x 20 = 300
Other Costs
(disposal fee)
5 1x 5 = 5 25 15 x 5 = 75
TOTAL COST 25 + price 30 150 450
EVC 5 125 425
EVC/Quart 1 25 85
EVC by Customer
Prof. Natalie Mizik – 2010 MIT 15.810
10. Issues in Using EVC
Customer differences
High vs. low mileage drivers.
Convincing customers
Other (fuzzy) benefits ignored
BUT, EVC can be useful in
Pricing
Segmentation
New product introduction
Prof. Natalie Mizik – 2010 MIT 15.810
11. What is Customer Lifetime
Value (CLV aka LTV)?
• Customer Lifetime Value
is the net present value of all
future streams of profits that a
customer generates over the life
of his/her business with the firm
Prof. Natalie Mizik – 2010 MIT 15.810
12. Creating or Destroying
Value?
“In the United States, top executives
lose their jobs when their companies
sell too little. In Britain, it can happen
when their companies sell too much.”
—The New York Times, March 31, 1993
Prof. Natalie Mizik – 2010 MIT 15.810
13. The Two Sides of Customer
Value
Appropriating
Value
High
Value
of
Customers
Low X
Vulnerable
Customers
Lost
Cause
Star
Customers
Free Riders
Low High
Value to Customers
Creating Value
Prof. Natalie Mizik – 2010 MIT 15.810
14. Value of Tennis Club
Member
You own a tennis club where the annual membership
fee is $300. The average club member spends about
$100 dollars a year at the club (in balls, drinks, snacks,
etc.). The annual cost of these miscellaneous goods
(the balls, drinks, snacks, etc.) to you is $40 per
player. On average people who join a tennis club have
a playing career of 7 years. Historically, 65% of the
members in a given year rejoin the following year.
Investing capital at the going rate would earn a return
of 8% a year. Based on this information, what is the
long-term value of a customer?
Prof. Natalie Mizik – 2010 MIT 15.810
17. Measuring Customer Value
Lifetime value of a customer assuming
infinite horizon:
LV m
r
AC
1 i r
m = margin
i = discount rate
r = retention rate
AC = acquisition cost
Prof. Natalie Mizik – 2010 MIT 15.810
18
18
18. Economics of Customer
Acquisition for FedEx
140 accounts in advertising industry use
2,285 Courier Paks (CP) per month
CP price is $12.50 and variable cost is
$4.25
Retention rate = 0.9, discount rate = 12%
What is the maximum FedEx should be
willing to spend to acquire a new account
in this industry?
Prof. Natalie Mizik – 2010 MIT 15.810
19. Retention Discount Rate
Rate 10% 12% 14% 16%
60% 1.20 1.15 1.11 1.07
70% 1.75 1.67 1.59 1.52
80% 2.67 2.50 2.35 2.22
90% 4.50 4.09 3.75 3.46
Margin Multiple
Constant Margins
r
1 i r
Prof. Natalie Mizik – 2010 MIT 15.810
21. Increasing Customer
Equity:
Three strategies:
I. Customer acquisition (gain new customers)
II. Customer expansion
r
LV m AC
1 i r
III. Customer retention
Prof. Natalie Mizik – 2010 MIT 15.810
23. I. Customer Acquisition
Strategies
Marketing E*Trade
Affiliations amazon.com
Merges and Acquisitions AT&T
Prof. Natalie Mizik – 2010 MIT 15.810
24. Customer Acquisition Costs
by Marketing Activity
Source: Customer acquisition cost--a key marketing metric. Justin Zohn. NPN, Nationa
Petroleum News, April 2003.
Prof. Natalie Mizik – 2010 MIT 15.810
l
25. Mergers & Acquisitions in the
Wireless Industry (1999-2000)
Mergers & Acquisitions in the Wireless Industry (1999-2000)
$4,110
$6,741 $7,462 $8,306 $8,550
$21,639
$-
$5,000
$10,000
$15,000
$20,000
$25,000
V
o
d
a
f
o
n
e
-
A
i
r
t
o
u
c
h
F
r
a
n
c
e
T
e
l
e
c
o
m
-
O
r
a
n
g
e
V
o
i
c
e
s
t
r
e
a
m
-
O
m
n
i
p
o
i
n
t
V
o
i
c
e
s
t
r
e
a
m
-
A
e
r
i
a
l
M
a
n
n
e
s
m
a
n
n
-
O
r
a
n
g
e
D
u
e
s
t
c
h
e
T
e
l
e
k
o
m
-
V
o
i
c
e
s
t
r
e
a
m
Cost
Per
Subscriber
($)
Source: Based on data from The Industry Standard, Aug 7, 2000 and Business Week, August 7, 2000
26. 10
10
All Customers are Important, but…
Cumulative Profits
0
50
100
150
200
250
0 1 5 10 15 20 30 40 50 60 70 80 90 95 99 100
Cumulative % of Customers
Profits:
%
of
Total
…some are More Important than Others
Customer Profitability
500
400
Profit
(SEK)
300
200
100
0
-100
-200
1
2
5
10
20
40
60
80
100
120
140
160
180
190
195
198
199
200
Customer Number
Source: Kanthal (A), HBS Case 9-190-002
Kanthal is a Swedish B2B selling hearing wires
Prof. Natalie Mizik – 2010 MIT 15.810
27. Mergers & Acquisitions in the
Wireless Industry (1999-2000)
Mergers & Acquisitions in the Wireless Industry (1999-2000)
$4,110
$6,741 $7,462 $8,306 $8,550
$21,639
$-
$5,000
$10,000
$15,000
$20,000
$25,000
V
o
d
a
f
o
n
e
-
A
i
r
t
o
u
c
h
F
r
a
n
c
e
T
e
l
e
c
o
m
-
O
r
a
n
g
e
V
o
i
c
e
s
t
r
e
a
m
-
O
m
n
i
p
o
i
n
t
V
o
i
c
e
s
t
r
e
a
m
-
A
e
r
i
a
l
M
a
n
n
e
s
m
a
n
n
-
O
r
a
n
g
e
D
u
e
s
t
c
h
e
T
e
l
e
k
o
m
-
V
o
i
c
e
s
t
r
e
a
m
Cost
Per
Subscriber
($)
Source: Based on data from The Industry Standard, Aug 7, 2000 and Business Week, August 7, 2000
Prof. Natalie Mizik – 2010 MIT 15.810
31. CUSTOMER RETENTION & LOYALTY
Experience
Loyalty Programs
Cross-selling
…
What Drives Retention and Loyalty?
Whiskey Blue Destination Bars
Whatever/Whenever Service
“Business travelers with a sense
of style can't get enough of the
W Hotel chain”
- Entrepreneur Magazine
Prof. Natalie Mizik – 2010 MIT 15.810
32. III. Customer Expansion:
Strategies to Increase Margin
Pricing
Share of Wallet
Redefining your
business
Cross-Selling
Prof. Natalie Mizik – 2010 MIT 15.810
33. Impact of Cross-Selling at
Cox
Average Monthly Customer Churn
3.0%
2.3% 2.2%
1.9%
1.4%
Video Only Video + Internet Video + Phone Internet +Phone Video +Internet +
Phone
Source : www.cox.com
Prof. Natalie Mizik – 2010 MIT 15.810
34. Easier Said Than Done
AOL’s Vision or Pipe Dream?
Monthly
$159 Revenue
$24
$30
$20
$15
$30
$20
$20
$24.37
(includes
advertising)
Monthly
Revenue
Average revenue
per user
AOL
subscription
Broadband
access
Family
plan
(multiple devices on
one subscription)
Music
Mobile
services
Voice services
Games &
entertainment
Now Projected
Source: Fortune, Feb 4, 2002
Prof. Natalie Mizik – 2010 MIT 15.810
35. Retention
Rate
Margin
Discount
Rate
Acquisition
Cost
4.9
1.1
0.9
0.1
0 2 4 6
What Drives Firm Value?
… creates % improvement in
1% improvement in ... firm value of
February, 7-18.
Gupta, Sunil, Donald R. Lehmann, and Jennifer Stuart (2004), “Valuing Customers,” Journal of Marketing Research,
Prof. Natalie Mizik – 2010 MIT 15.810
37. Conclusion
Customers are assets
Lifetime value of a customer can be
approximated as
r
LV
m
AC
1ir
Three key levers of growth
customer acquisition (AC)
customer retention (r)
customer expansion (m)
“Success is getting the right
customers … and keeping them.”
Prof. Natalie Mizik – 2010 MIT 15.810
Charles Cawley, Founder MBNA 38
38
38. . . . . . .
n0
t0
n
1
(1 i) t1
mt rt
(1 i)t
n0c0
n1
mt1rt1
t1
n1c1
t1 (1 i)
m t1
t1r n
1c1
(1 i)t1
(1 i)
Prof. Natalie Mizik – 2010 MIT 15.810
Appendix:
Modeling Customer Value
Time 0 n0
1 n0r n1
2 n0r2 n1r n2
3 n r3 2
0 n1r n2r n3
4 n 3
0r4 n 2
1r n2r n3r n4
39. Value of Customer Base
In discrete time
tk
Value
nk
mtk r
nkck
k
k0 (1 i) tk (1 i)tk
k0 (1 i)k
In continuous time
1ir
tk
Value n m eik
e r
k tk dtdk nkckeik
dk
k0 tk k0
Gupta, Sunil, Donald R. Lehmann, and Jennifer Stuart (2004), “Valuing Customers,” Journal of Marketing Research,
February, 7-18.
Prof. Natalie Mizik – 2010 MIT 15.810
40. If you enjoyed Behavioral Econ Lecture last week
this mktg elective is for YOU:
Consumer Behavior
Time is
running 15.847
out! Professor Joshua Ackerman
Act
NOW!
How do we know what to buy? What information captures our attention? When
are we most susceptible to being persuaded? What shapes our decisions?
This class will help you develop a basic understanding of cognition and
decision making as they apply to marketing contexts, and become familiar
with the major research methods for analyzing consumer behavior
Topics include:
Influence techniques, Self‐control, Behavioral decision theory, Nonconscious
processing, Cognitive biases, Social consumption
Prof. Natalie Mizik – 2010 MIT 15.810
41. If you enjoyed LTV Lecture today
this mktg elective is for YOU:
15.840: Customer Analytics Using Probability Models
Professor Michael Braun.
Most of what drives customer behavior is unobservable
Still, there are regular patterns in activity that managers can exploit, even
when we know nothing about specific customers
“Probability” lets us incorporate what we know, and don’t know, about
these patterns, in a rigorous, systematic way
Goal of this class: mastery of cutting-edge quantitative methods
that enable you to analyze customer data correctly
Structured thinking, not wild, assumptions
Decision-making under uncertainty: doing it well
Build models from the ground up (going “under the hood”), so you
understand exactly what’s going on.
Full disclosure: it’s hard-core quant.
Designed to be accessible to any Sloan MBA who did well in DMD.
Still, it’s not for everyone. See Prof. Braun if you have question
Prof. Natalie Mizik – 2010 MIT 15.810
s.
42. 15.840: Customer Analytics Using
Probability Models
Selection of topics covered
Modeling customer lifetimes and customer retention
Estimating customer lifetime value
Forecasting adoption of new products
Modeling repeat purchases
Measuring and forecasting media exposures
The “80/20” rule: what is it really?
Using test marketing data to segment and target customers
What was the effect of 9-11 on the online travel industry?
“Buy Until Dead” models: will your previous customers ever
return?
Understanding and exploiting metrics of brand effectiveness
(and why most of them are useless)
Prof. Natalie Mizik – 2010 MIT 15.810