1. Glo-Bus Industry 6 T3-2014

2. Scope Executive Team Strategic Plan Initial Strategy Mature Market Strategy Financial Results Investor Relations Into the Future Lessons Summary 3. Josese Turagava S95007912 Shivandhna Rani S02000886 Anil Senewiratne S11095516 Taniela Matakibau S83411330 Stuart Gow S11100919 4. Company Executive Structure Josese Turagava CEO Overall Strategy Coordination Stuart Gow COO Production HRM Factory Expansions Shivandhna Rani CIO Financials Data input Anil Senewiratne CMO Marketing Advertising Promotions Taniela Matakibau CFO Investor Relations Financial calculations 5. Where we started 6. Yr 5 Initial Market Share North America Market Share: 3.3% Units Demand: EL 16,000 MF 4,000 Latin America Market Share: 10% Units Demand: EL 32,000 MF 8,000 Europe/Africa Market Share: 13.3% Units Demand: EL 64,000 MF 16,000 Asia/Pacific Market Share: 10% Units Demand: EL 48,000 MF 12,000 7. Years 6 15 8. Vision To be the cameras of choice for professional & discerning photographers worldwide 9. FijiFoto The Professionals Camera of Choice 10. Mission To dominate the Multi- Featured (MF) high-end level camera market in all regions through excellent P/Q rating, competitive pricing & advertising in those regions Then utitlise this in final years to enter E/L for more growth 11. Market Strategy: 2 Phase Phase 1 (Yr 5-10) Aim initially @ Multi-Function (MF)Camera market Broad Differentiation Premium Product Premium Price 12. Market Strategy: 2 Phase Phase 2 (yr 11-15) Utilise cashflow in final years Best Production facility/low costs Enter Entry Level (EL) Camera market Aim for aggressive/rapid growth Maintain Higher PQ & Lower Price = BEST COST 13. Strategic Maps Entry Level Multi Function TARGET TARGET 14. Distribution Strategy WIDEST distribution Commit to ALL retailers Higher costs Offset by major profit margin of MF Majority of retailers Specialist Camera Shops who PREFER to sell MF 15. Advertising Strategy MAXIMISE Commit to above average In all regions Critical in MF Market 16. Production Strategy Invest in HR Pay 10% higher Invest in PAT training Invest in R&D Increase efficiency Increase productivity Minimise Factory Size Dont over-build Use overtime no outsourcing 17. What targets at what time? 18. Targets: Phase 1 (Yr 5-10) Rapid Growth Net Revenues Net Profit Maintain all IEs! Just maintain Image Rating Credit Rating 19. Targets: Phase 2 (Yr 11-15) Start to focus on growth: Image Rating Credit Rating EPS & ROE Maintain steady growth: Net Revenues Net Profit Exceed all IEs! 20. Years 5 - 10 21. Broad Differentiation - MF Aim initially @ Multi-Function (MF)Camera market Broad Differentiation All regions Just maintain Entry Level (EL) Camera market 22. Advantages Less units shipped lower delivery costs No-one else going for it low competition Aim 3.5 Star PQ Can raise price BIG without affecting sales keeps workforce smaller less units No one else will do it! 23. Entry level Maintain 2 Star PQ Accept some loss of Market Share Maintain Net Profit/Unit 24. After Year 11 25. Mature Market Characteristics Growth of market dropped to 6-8% Markets had stabilised Competition had shown their colours Discount Bids started 26. MF Camera Dominance By this stage: Clear market leader in MF on PQ Clear on Strategic map No one close to our niche Maximising Net Income per Unit FijiFoto 27. EL Camera Counter Attack Have best productivity Lowest production costs Drop rating to 2 Star reduce costs further Aggressive low-pricing Gain major market share increase Better PQ & lower price BEST COST 28. Market Strategy Phase 2 ENTRY LEVEL MULTI FUNCTION 29. Discount Bids Concern due to our late entry into EL Market Team A & D dominant But they could only win 2 bids each! Aimed at #3 and #4 in all markets instead Maintained higher price Won the #3 & #4 bids! 30. Net Sales-Revenues Steady growth Dips are where we aggressively gained market share 31. Return on Equity 32. Earnings per Share 33. Share Price 34. Credit rating Ran on debt for initial growth yr 5-10 Cleared debt completely by Year 11 35. Image Rating Maintained minimum Carefully managed R&D vs CSR Expenses 36. Production Cost Comparison M/F above industry average, and decreasing E/L below industry average, and increasing 37. Production Costs Invested heavily in R&D to start with Long term investment Productivity soared over average Kept PAT #s low Kept factory/workstation size low 71% 75% 74% 68% 58% 50% 52% 45% 47% 47% 0% 10% 20% 30% 40% 50% 60% 70% 80% 6 7 8 9 10 11 12 13 14 15 38. Returns to shareholders 39. Share Holder Value Proposition Initial Returns Mature Returns Maintain level dividends Returns in Share Buy Backs Increased dividend payments upon mature market share 40. Share Buy Back Shares Bought Outstanding Shares of Stock 0 100 216 327 0 612 0 400 100 160 50 0 100 200 300 400 500 600 700 5 6 7 8 9 10 11 12 13 14 15 10000 9900 9684 9357 9357 8745 8745 8345 8245 8085 8035 5 6 7 8 9 10 11 12 13 14 15 41. Annual Dividends $1.00$1.00$1.40$1.60 $2.98 $4.00 $10.70 $14.00 $15.00 $18.00 0.442 0.307 0.449 0.305 0.337 0.321 0.701 0.668 0.89 0.896 $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 6 7 8 9 10 11 12 13 14 15 Annual Div. ($/share) Payout Ratio (%) 42. Looking forward to Year 16-17 43. Yr 16 Future Market Share North America (3.3%) Market Share: EL 19% MF 7% Latin America (10%) Market Share: EL 20% MF 7% Europe/Africa (13.3%) Market Share: EL 21% MF 6% Asia/Pacific (10%) Market Share: EL 22% MF 7% 44. Future Year 16-17 Strategy Entry level Grow Market Share Maintain Lead Position Reduce costs Multi Function Maintain Market Share Increase Net Profit/Unit Reduce Warranty Claims 45. What went right!!!! 46. What Went Right? No Competition Sector Not Chasing Lowest Price MF Segment had NO competition! MF sector NOT price driven Higher profit margins 47. What Went Right? cont. Debt Management Long Term Thinking Not averse to debt Not scared of it Managed it with cashflow Only used Emergency Funds once Not being tempted to chase everyone into EL market 48. What Went Right? cont. Share Repurchase Long Term Thinking Early repurchase Share price low Planning for all aspects long term Design Production Marketing Market position 49. What went NOT so well??? 50. What went not so well? Year 9 EL Pricing Error Enter EL Sooner Lowered EL Price by mistake Made a LOSS in 3 out of 4 regions on each camera! Enter EL sooner Could have got better Year 15 results 51. Group F, FijiFoto, Industry 6 52. How Did We Win? Maintained all IEs throughout Steady growth Concentrated on internal excellence R&D Human resources Long Term Thinking! 53. What Would We do Different? Top 3 things: 1. Control production costs tighter 2. Aggressively enter EL sooner 3. Tighten Warranty Costs 54. References Concepts and Cases, Global Edition, (Crafting and Executing Strategy; Thompson/ Peteraf/ Strickland/ Gamble, 19E, McGraw Hill GLO-BUS Software Participant's Guide 2013 Edition; Thompson, Stappenbeck, Reidenbach , Thrasher, Harms 55. Josese Turagava S95007912 Shivandhna Rani S02000886 Anil Senewiratne S11095516 Taniela Matakibau S83411330 Stuart Gow S11100919 56. Glo-Bus Industry 6 T3-2014