year 6 trial report international business simulation company g

UEH UNIVERSITY COLLEGE OF BUSINESS

SCHOOL OF INTERNATIONAL BUSINESS — MARKETING

UEH

UNIVERSITY YEAR 6 (TRIAL) REPORT

INTERNATIONAL BUSINESS SIMULATION COMPANY G

GROUP MEMBER

Member Student ID

Nguyễn Đỗ Thanh Nhàn 31211020968 Võ Lê Kiều My 31211023308 Lê Thị Yên Nhi 31211024333 Phùng Hữu Thiện 31211025601

TABLE OF CONTENTS

TL Industry V€TVCW co nọ cọ họ Họ h TH TH HH TH TH TH ti nen 1 II Company’s Decisions & Business Performance in Y €arr Ế sec c se 2 2.1 Company's D€CISIOTS «sọ họ nọ Họ Họ TH HH Thứ 2 2.1.1 Analyze The Product Desien and Marketing «5a se 2 2.1.2 Analyze The Assembly and Facility perafiOIS se 7 2.1.3 Analyze The Finance and Cash EFÏOwW dc cu nọ HH HH nh kh, 8

2.2.1 Performance Su «5c < sọ nh họ họ HH HP 00 t8 12 2.2.2 Mar ket Segment Pe€rÍOr'N4TICC 7 <5 5= < họ nh 14 2.2.3 Assembly and Facility OperafiODS - «Ăn SH S9 1n me 17 2.2.4 EFinancial SŠfaf€IT€TIÉS - «sọ HH Hi in HH gu ng 23 2.2.5 Overall Company Performance EvaluafTiOn - «csS S2 ỲY se 25 TH Company’s Strategy for Year 7 cọ họ Hư nh nh 25 3.1 Competfitor Analysis & Competifive ÁssumpfiOH co n9 Ỳ xe, 25 3.1.1 Noth Á TN€TFÏCiA 7G G- G5 b SH 9 9 2 2 HH HH 05005 56 28 26 khwẽM j7 n6 6 ố 27

3.1.4 Latin Á II€TICA «cọ họ ọỌ HH TH KH TH TH TH TH 29 3.2 Company’s Strategy Íor Y€arr 7 có cọ ch h H TH HH họ nh ng 29

I Industry Overview

Regarding the Action-Capture Camera, in year 6, all markets witnessed an outstanding increase in Average wholesale price with the overall price being 262 $/unit, and a rise of 16.4% compared to the price in year 5 The Latin America market had the largest percentage change from year 5, increasing by 16.9%, followed by the Europe- Africa market (16.4%), the remaining two markets mcluding Asia-Pacific and North America had equal proportion change, increasing by 16.0% compared to year 5 Due to high prices, there was a decrease in AC Camera Demand to 9757 units in year 6, 1.3% lower than forecast Unsatisfied Demand in the Latin America market signals that some companies had insufficient assembly capacity to fill retailer orders

In addition, 11 companies also adjusted their P/Q Rating and number of performance features Specifically, the all-company average P/Q Rating rose from 4.0* to 4.8*, and the number of performance features also increased from 3.0 to 3.8, which shows the companies’ effort to innovate the AC Camera product In the next year, the market is predicted to be more positive with demand for AC Cameras forecasted to increase by about 7.0% annually Therefore, companies must pay attention and adjust to balance production and market demand

(practice) Industry Overview

Action-Capture Camera Global Statistics (industry totals)

rom Year 5

some AC Camera producers

Figure 1.1: Action-Capture Camera Global Statistics

Turning to UAV Drone, Average wholesale prices in year 6 were much higher than in year 5, reaching 1,361$/unit, and the percentage change from year 5 was 26.6% Especially in the Latin America region, average wholesale prices in year 6 increased by 32% from year 5, holding the highest position The remaining three regions all had high growth, the North American region, Europe-Africa, and the Asia-Pacific region grew by 25.5%, 23.4%, and 25.6%, respectively

The average P/Q Rating of 11 companies increased from 4.0* to 4.8* The number of performance features was adjusted from 5.0 to 5.6 An improvement in P/Q rating and the number of features resulted in the high price of the UAV Drone in year 6, which ultimately led to a decline of 9.5% in demand compared to the forecast There were 2 unsatisfied demands in year 6, one was in the Asia-Pacific market, and the other was in the Latin America market, showing that some companies were in out-of-stock conditions However, demand for UAV drones is expected to increase by about 11% next year

UAV Drone Global Statistics (industry totals)

was adequate to satisfy Year 6 demand

UAV Drone Global Trends industry average price, P/Q Rating, and number of performance features)

II Company’s Decisions & Business Performance in Year 6 2.1 Company's Decisions

2.1.1 Analyze The Product Design and Marketing ACTION-CAPTURE CAMERA

Product Design

In the 6th year, the company decided to improve the product AC camera’s P/Q index to 4.8* with a reasonable price for employing the “more value for the money” strategy and competing with other competitors as well as gaining market share Regarding the specific price, the company has listed the product price in both North America and Europe-Africa markets as 260$ Meanwhile, in Asia-Pacific and Latin America, the product price is slightly reduced to 245$

To meet the product quality and price requirements, the company has slightly increased the R&D investment for this product line to 24,000,000$, an increase of 4,000,000$ compared to the 5th year

The total cost of camera components and features after improving and enhancing was 90.00$ per unit, which is lower than the industry average (92.183)

AcTION-CAPTURE CAMERA DESIGN

Image Sensor Size | 44mm vj

LCD Display Screen | 1040k v] pixels

Image Quality (maximum resolution) [3840x2160 v} pix Number of Photo Modes (video / still) 8/3 >| modes

Product Enhancements

Camera Housing $| 8 | percar

Editing / Sharing Capabilities $[ 10 vị ar -¢ Included Accessories $| "Na ar Extra Performance Features 4 vị tur Number of AC Camera Models 3 vị mod

Product R&D Expenditures (Y6 was $24,000) $ { 24000 vị $000s

Figure 2.1: Specifications of the Action-Capture Camera Design Marketing Strategies

With a mid-range P/Q rating of 4.8* and a fairly low price, the company did not invest too much in marketing campaigns to ensure profits

In the 6th year, the company still increased its budget to support retailers because of the vital of retailers in gaining market share Advertising and Website Displays/Info budgets were also increased by a small amount in all markets All these three budgets are mostly lower than the industry average in all four markets

In terms of Sales Promotions, all markets were promoted with promotions to attract customers, 15% in market North America and Europe-Africa and 20% in Asia- Pacific and Latin America respectively, relatively high compared to the industry average in all four markets This difference is to promote consumption and focus on two potential

markets including Europe-Africa and Latin America that are price-sensitive to achieve the highest possible sales The product warranty period is also extended to 90 days

North America Europe-Africa Asia-Pacific Latin America

Figure 2.2: Marketing costs of AC Camera

After applying and implementing product and marketing strategies, the company has achieved positive results as shown in the following table:

Figure 2.3: AC Cameras - Market Segment Performance

According to the table, the company has achieved market share rates of 9.8% of the AC Camera product line, surpassing the industry average market share with 11 businesses (9.09%) Total revenue and profit achieved were 241,488,000$ and 240,698,000$ respectively

UNMANNED AERIAL VIEW DRONE Product Design

Like the strategy applied to the camera product, the company has improved the quality as well as the P/Q index of the UAV Drone product line up to 5.0* with a selling price not too high With a P/Q 5.0* ranking 3rd in the entire market, the company sold products for 1,400$ in both the North America market and the Europe-Africa market Product selling prices in both market Asia-Pacific and Latin America decreased to 1,250$

The R&D investment for this product was also adjusted to 27,000,000$, an increase of 8,000,000$ compared to the Sth year

The total cost of UAV Drone components and features after improvement and enhancement was 688.14$ per unit, which is higher than the industry average (659.66$)

UAV Drone DESIGN

Built-In Camera Minor Upgrade v

Camera Stabilization Device Advanced Extra Performance Features

Number of UAV Drone Models

Product R&D Expenditures (Y6 was $27,000) $ | 27000 +

Figure 2.4: Specifications of the UAV Drone Design Marketing Strategies

To boost sales and expand the sales scale, the company increased the discount rate for 3rd-Party Online Retailers The discount rate in all markets was adjusted to 17% higher than the industry average It was the highest discount rate in the industry in two markets North America and Europe-Affrica having high P/Q rating sensitivity, which was expected to maximize revenue for the company

Like AC Camera, the company’s marketing investment budget for UAV Drone was also increased by a small amount and mostly lower than the industry average The product warranty period is extended to 120 days

North America Europe-Africa Asia-Pacific Latin America

Website Product Displays / Info ($000s) $[ 1850 ${ 1350 | $/ 1000 | ${ 700

tailer Recruitment / Support , 966.67 œ S%( $625

Expected ‘ Rer st i 154% $2.46 1 : Trea

Figure 2.5: Marketing costs of UAV Drone

After applying and implementing product and marketing strategies, the company has achieved positive results as shown in the following table:

Figure 2.6: UAV Drone Segment Performance

According to the table, the company has achieved market share rates of 9.9% of the UAV Drone segment, surpassing the industry average market share with 11 businesses (9.09%) Total revenue and profit achieved were 211,211,000$ and 9,159,000$ respectively

2.1.2 Analyze The Assembly and Facility Operations

In the 6th year, the company implemented the “more value for the money” strategy with products possessing a mid-range P/Q index (4.8* for AC Camera and 5.0* for UAV Drone) and the price not too high to gain competitive advantage The company forecasted that market demand for these products will increase Nevertheless, to ensure costs, instead of improving assembly facilities, the company decided to raise the budget for training employees from 1000$ in the 5th year to 1250$ in the 6th year in both product segments to support PATs with knowledge, skills, and expertise, aiming to increase productivity as well as product quality

Figure 2.7: AC Camera and UAV Drone Work Force Statistics

The total number of workers employed for AC Camera and UAV Drone 1s 1,124 and 404 respectively With the number of workers and facilities unchanged compared to the 5th year, the company’s productivity has reached 2,996 units per PAT for the AC Camera segment and 1,495 units per PAT for the UAV Drone segment, both were lower than the industry average The total AC Camera production and assembly cost was 176.79$ per unit, lower than the industry average while the cost of the UAV Drone segment was 1,054.59, higher than the industry average This shows that the company has had difficulty allocating resources appropriately for the UAV segment and this problem needs to be improved next year

Figure 2.8: Workforce and Assembly Facility Statistic of AC Camera

Figure 2.9: Workforce and Assembly Facility Statistic of UAV Camera 2.1.3 Analyze The Finance and Cash Flow

2.1.3.1 EPS, ROE, Stock Price

Earnings Per Share (S)

Earnings Per Share scores are based on a 20% or 20 point weighting Bolded numbers indicate achievement of the investor expected EPS

shown below each yearly column head Highlighted numbers indicate best-in-industry performances for each year Game-To-Date scores are

based on a weighted average of the annual EPS performances For more information, click the Help button (above-right)

In the 6th year, besides business operations, the company conducted a repurchasing of 200,000 shares for 12.12$ per share The total amount received for the stock repurchasing activity amounted to 2,424,000$, contributing to the increase in Earmings Per Share (EPS) and Return On Equity (ROE) According to data recorded on the Financial Statement and Balance Sheet the company’s earnings per share reached 1.24$, an increase of 65% compared to the 5th year However, this EPS level still did not meet investor expectations and ranked 7th in the industry, leading to a competitive

Figure 2.11: Return On Equity of 11 companies in the industry

According to statistics, most companies have achieved investor expectation regarding ROE, in which two companies K and D reached outstanding ROE rates of 35.7% and 31.1% respectively For company G, the ROE achieved is 19.5% with an LE score of 21 anda B.L score of 11

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Stock Price scores are based on a 20% or 20 point weighting Bold numbers indicate achievement of the investor expected stock price shown below each yearly column head Highlighted numbers indicate best-in-industry performance for each year Gamo-To-Date scores aro based

solely on the most recent year's stock pice For more information, click the Help button (above-right)

Figure 2.12: Stock Price of 11 companies in the industry

Most stock price indices of companies in the industry have improved and met investor expectations for the 6th year, led by company K, whose stock price has increased to 81.62$ This year, company G’s stock price reached 29.50$ with relative growth in the industry

Through financial indicators recorded, company G has been at a competitive disadvantage in attracting investment The company will need to implement better financial strategies in the coming years while adjusting business strategies to be appropriate for consumption trends in each market area

2.1.3.2 Credit Rating, Image, CSRC

Credit Rating

Credit Rating scores are based on a 20% or 20 point weighting Bolded credit ratings indicate achieving or exceeding the investor expected EPS shown below each yearly column head For Best-In-Industry scoring, an A+ credit rating earns a score of 20 points (lesser credit ratings earn lower scores) Game-To-Date scores are based solely on the most recent year’s credit rating

In the 6th year, company G and company C both achieved a B+ credit rating, meeting investor expectations but lower than most companies in the industry with an A- credit rating

Figure 2.14: Image Rating of 11 companies in the industry

Regarding the Image Rating index, most companies, except for companies A and F, met investor expectations This has reflected the efforts and focus of companies in enhancing and maintaining their corporate image Company G’s image rating index in the 6th year reached 75, ranking fifth in the entire industry

Regarding the CSRC (Corporate Social Responsibility and Communication), it has been observed that the company’s business activities have still not been stable Therefore, the company decided not to invest in CSRC in the 6th year and to reserve the funds for the business operations

With a Credit Rating of B+ and an Image Rating of 75, company G has maintained a competitive advantage in the brand image within the industry The company should continue improving its corporate image in the coming years to enhance its competitive edge through improvements in working conditions, customer service, fulfilling social responsibilities (environmental, labor, etc ), or contributing to social activities

2.1.3.3 Financial Statistic

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Figure 2.15: Income Statement of 11 companies in the industry

The income statement for the 6th year indicates that company G achieved a total revenue of 451,909,000$, ranking second in the industry However, the net profit was only 24,261,000$, ranking sixth This suggests that the pricing of products and allocation of finances for business activities were not optimal, leading to a higher cost of goods sold which reached up to 342,466,000$, ranking second in the industry Therefore, in the next year, company G needs to carefully consider financial allocation decisions to maximize profit, achieve desired business efficiency, and maintain competitive advantage across the entire market

Balance Sheet Data

Shareholder Equity

Figure 2.16: Balance Sheet Data

According to the Balance Sheet, Cash On Hand, Total Assets, and Total Liabilities all increased Despite stock repurchasing, the Ending Equity still increased compared to the previous year, reaching 136,571$ This result indicates that the financial activities of

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company G have remained The company needs to continue maintaining and making efforts for breakthroughs in the coming years to gain a competitive edge in the market

2.2 Business Performance

2.2.1 Performance Summary

Figure 2.17: Company Financial Performance (Year 5 - Year 6)

In general, the company’s financial performance is better than the previous year including higher EPS ($1.24), ROE (19.5%), Stock Price ($29.50), Credit Rating (B+), and Image Rating (75) Compared to the investor expectation, the company has reached the expectation with ROE, Credit Rating, and Image Rating equal and higher, but EPS is slightly lower than the investor expected Therefore, the overall performance of the company is quite good and could improve more in the next years

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AC Camera — North America 285.0 304.6 ee Tung Market Share 9.1% 9.4 %

Europe-Africa 240.0 250.1

Market Share 9.1% 9.2%

Asia-Pacific 185.0 230.5

Market Share 9.1% 10.4 % Latin America 130.0 166.5 Market Share 9.1% 10.5 %

Total Market Share 840.0 9.1% 9.8% 951.7

UAV Drone — North America 52.0 59.3

Market Share 9.1% 9.4% Asia-Pacific 28.0 36.6 Market Share 9.1% 10.7 % Latin America 17.0 22.0 Market Share 9.1% 10.5 %

Total 140.0 165.2

Market Share 9.1% 9.9 % Figure 2.18: Company Market Share (Year 5 - Year 6)

In general, the company’s strategy is doing well with the actual market share in 4 markets all higher than the previous year Remarkably, both the AC Camera market share and the UAV Drone market share in Asia-Pacific and Latin America increased by more than 1.0%, respectively 1.3%, 1.4%, 1.6%, 1.4% Therefore, this performance shows that our company’s strategy which is mainly focused on gaming market share, especially in two price-sensitive markets (Asia-Pacific and Latin America) is working well

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