Report 2 3 Year Plan Subject International Business Simulator E Company – Industry 11.Pdf

UEH UNIVERSITY BUSINESS SCHOOL FACULTY OF INTERNATIONAL BUSINESS — MARKETING UEH UNIVERSITY REPORT 2" 3 YEAR PLAN Subject: International Business Simulator E Company — Industry 11

UEH UNIVERSITY BUSINESS SCHOOL FACULTY OF INTERNATIONAL BUSINESS — MARKETING

UEH

UNIVERSITY

REPORT 2" 3 YEAR PLAN

Subject: International Business Simulator

E Company — Industry 11

Instructor > Mr Ha Quang An

Student name : Hoang Le Bao Tran

Le Thanh Binh Nguyen Xuan Mai

Vo Ngoc Thy Ngan Lam Thanh Truc Class : IBCO6

Batch : 46

Ho Chi Minh city, March 20th, 2023

Step 1: Strategic Vision Statement

Answer: Benefiting from the accumulation from previous years, our goal for the last 3 years is 1st place which include driving the stock price to its optimistic point; taking market leadership position in UAV product in two regions North America and Europe - Africa; and employing a global best-cost strategy in AC product that offers

“extra value” to our customers in the form of great quality We need to have effective strategies for staking out a market position and striving for good performances by gaining the highest net profit; minimizing the costs of production and marketing As there’s no built-in bias that favors any one strategy, we keep our vision statement as our first 3-year plan

Step 2: Objectives/Performance Targets

Our overall performance goal is to achieve or above the goals defined by investors for EPS, ROE, Credit Rating, Image Rating, and year-end Stock Price In addition, we calculated that the company's aim would not be excessively high compared to the actual prediction to avoid system penalties

Table 1 E Company’s performance targets

Year 13

Stock Price 376,44 456 300 19

Year 14

Stock Price 456 507 330 18

Year 15

ROE 210,0 220,0 50 20

Stock Price 507 528 350 16

2.1 Earning per Share (EPS)

By either spending less on facilities and compensation, we want to enhance net income This will guarantee that the earnings per share figure satisfies requirements, which is crucial because it represents the profitability of the company

2.2 Return on Equity (ROE)

We aim for a higher ROE because it indicates that more profit was earned after taxes Similar to how we want to increase EPS, we may cut expenses while boosting the ROE percentage

2.3 Credit Rating

Up until Year 13, we intend to repurchase the maximum amount of shares per year, which will result in a very low credit rating this year But, after that, we aim to pay dividends to improve the stock price, EPS, ROE, and credit rating greatly

2.4 Image rating

To satisfy investor expectations, we put a lot of effort into keeping the image rating during the previous three years at an average of 80 points

2.5 Stock Price

Until Year 13, we continue to repurchase back as many shares as we can in order

to drive the stock price to its optimal point

Step 3: AC Camera Strategy

The company will employ a global best-cost or “more value for the money” strategy (e.g providing 5 star AC Cameras at lower prices than other 5 star brands) where the competitive advantage is an ability incorporate appealing attributes (higher P/Q, more models, longer warranties) at a lower cost than rivals

Here is our evidence that our company is offering “extra value” to buyers in the form of better styling/quality and/or wider product selection at “value” prices and “best costs” on a global basis:

Table 2 AC Camera Strategy

North America $428 $421 $+7 Wholesale Prices] Europe-Africa $430 $424 $+6

of AC Cameras

Latin America $393 $383 $+10

North America $5950 $6391 -6.9%

- i - 9 Advertising Europe-Africa $4675 $5652 17.3%

Budget ($000s) | Asia_pacific $4000 $4674 -14.4%

Latin America $3275 $4024 -18.6%

North America $44.77 $49.97 -10.4%

Marketing Costs ; °

($ per unit) Europe-Africa $43.90 $52.72 -16.7%

Asia-Pacific $40.41 $42.71 -5.4%

Latin America $45.63 $45.98 -0.8%

Step 4: UAV Drone Strategy

The company will employ a focus strategy for UAV Drones aimed at:

+ We will take a market leadership position in: North America and Europe- Africa

+ We expect to achieve this leadership based on differentiation of our UAV Drones from the offerings of rivals competing in the same segment(s)

Evidence that the company is on track to achieving market leadership in the target

segment(s):

Table 3 UAV Drone Strategy Industry Average Industry Leader’s

Market Share the Target Segment egment (from data in data in the Competitive arget Segment (from

Because this is a newly developed strategy that we plan to implement over the next three years, the data presented above does not indicate that we are successfully pursuing

a focus strategy

STEP 5: Operating Projections

Table 4 Forecast trend

References

UAV Drone Unit Growth Rate 5.60% | Journal

Wage Increase 3,00% | Compensation & Facilities

Forecast from previous yea

Increase in Average Net Revenue (Increase) 10,00% | data

We found that the sizes of the exchange rate adjustment each year are always equal

to 5 times the actual period-to-period percentage change in the real-world exchange rates for US$, €, Brazilian real, Sing$, and Taiwan$ After analyzing the exchange rate in Year 10, Year 11, we evaluated the revenue impact in Year 14, Year 15 as the table

below:

Table 5 Exchange rate prediction

Based on the below indexes, our company conducted some formulas to calculate

as below:

e Average Net Revenue’®*"" = Average Net Revenue’®*" ™ x (1+Revenue impact)

x (1+ Growth in Average Net Revenue)

e AC Camera Units Sold’*#"T = Units Sold’e#"™ x (1+5.2%)

e UAV Drone Units SoldY2rT = Units SoldYr "1 x (1+5.6%)

e Cost of Units SoldYsr" = (Units SoldY92r "1/ Units SoldY*ar) x Cost of Units soldYr T1 x (1+ Wage lncrease)

e Marketing ExpensesYrT = Marketing Expensesr T1 x (1+Marketing Growth

Rate)

e Administrative ExpensesY*r " = (Units SoldY* ™'/ Units Sold’e@" ") x

Administrative ExpensesYr T-1 The results we obtain in these tables below:

Table 6 Camera/Drone Operations in North America

NORTH AMERICA

North America

Company | Industry | Company Industry | Company | Industry Year Year Year

E Average E Average E Average 13 14 15

AC Cameras

Average Net

unit)

Cost of Units

Sold ($ per unit) 207.85 194.46 219.44 196.29 201.59 195.02 | 167,15] 163,65 | 160,23

Delivery

unit)

Marketing

unit)

UAV Drones

Average Net

Revenue (% per

Units Sold

(000s) 83.10 70.99 86.30 76.01 85.50 76.00 90,1 95,1 100,5

Cost of Units

Sold ($ per unit) 1,095.86 1,122.20 1,194.03 1,092.87 1,156.70 1,138.88 971,32 947,40 924,08

Delivery

Expenses ($ per

Marketing

Expenses ($ per

Expenses ($ per

Table 7 Camera/Drone Operations in Europe-Africa

EUROPE-AFRICA

Historical Operating Performance

Company E’s Projected

Operations in Year 10 Year 11 Year 12

Europe-Africa

Company | Industry | Company | Industry Company | Industry | Year 13} Year14 | Year 15

E Average E Average E Average

AC Cameras

Average Net

Revenue (% per} 402.20 360.90 433.95 389.11 424.11 418.78 | 398,77 | 449,13 | 488,07

unit)

(000s) 246.30 256.03 230.80 232.01 250.10 242.01 | 398,77 | 282,8 | 488,07

Costof Units | 50785 | 19414 | 219.45 | 196.41 | 20159 | 195.08 | 268/8 | 167,23 | 297,5

Sold ($ per unit)

Delivery

Expenses ($ per 22.60 20.83 23.68 22.02 22.20 22.07 170,8 | 22,28 | 163,73

unit)

Marketing

Expenses ($ per 43.34 49.96 51.45 55.73 43.90 53.96 22,28 | 42,15 22,28

Administrative

Expenses ($ per

UAV Drones

Average Net

Revenue (% per

Units Sold

(000s) 64.00 57.99 73.60 62.99 73.20 63.00 87,1 92,0 97,1

Cost of Units

Sold ($ per unit) 1,095.52 1,122.95 1,193.85 1,093.76 1,156.67 1,139.06 971,34 947,42 924,10

Delivery

Expenses ($ per

Marketing

Expenses ($ per

118,99 166,48

118,99 171,47

118,99 176,62

Expenses ($ per

Table 8 Camera/Drone Operations in Asia-Pacific

ASIA-PACIFIC

Historical Operating Performance

Company E’s Projected

Asia-Pacific

Company | Industry | Company | Industry Company | Industry Year Year Year

E Average E Average E Average 13 14 15

AC Cameras

Average Net

Revenue (% per} 387.46 330.68 390.44 347.76 383.69 372.86 | 360,73] 398,63 | 447,30

unit)

00s) 227.20 | 266.99 | 240.00 | 270.00 | 255.50 | 277.00] 3321| 3494 | 367,5 Costof Units | 557.84 | 188.30| 208.98 | 19289 | 191.81 | 191.02 | 161,01| 157,64 | 154,35

Sold ($ per unit)

Delivery

Expenses ($ per 29.90 26.20 30.50 27.81 28.70 28.08 28,64 | 28,64 28,64

Marketing

Expenses ($ per

Administrative

Expenses ($ per

UAV Drones

Average Net

Revenue (% per

Units Sold

(000s) 50.10 44.00 45.60 47.01 60.60 50.98 72,5 76,6 80,8

Cost of Units

Sold ($ per unit) 1,075.35 1,109.24 1,129.63 1,091.91 1,091.86 1,115.15 906,33 884,02 862,25

Delivery

Expenses ($ per

Marketing

Expenses ($ per

Administrative

Expenses ($ per

Table 9 Camera/Drone Operations in Latin America

LATIN AMERICA

Historical Operating Performance

Latin America

Company | Industry | Company | Industry | Company | Industry Year Year Year Average Average Average 13 14 15

AC Cameras

Average Net

Revenue (% per} 375.90 329.68 379.04 344.97 376.98 | 366.16 317,61] 209,76 | 245,21

unit)

(0008) 164.80 187.01 174.80 188.00 189.00 203.01 264,1 277,8 292,3

Costof Units | 55786 | 188.28} 208.96 | 193.10 | 191.79 | 191.19 | 157,35| 154,06 | 150,84

Sold ($ per unit)

Delivery

Expenses ($ per

Marketing

Expenses ($ per

Administrative

Expenses ($ per

UAV Drones

Average Net

Revenue (% per

Units Sold

(000s) 31.90 27.00 28.60 30.00 31.70 32.00 43,4 45,8 48,4

Cost of Units

Sold ($ per unit) 1,075.49 1,111.98 1,129.06 1,071.17 1,091.70 1,119.70 906,47 884,15 | 862,38

Delivery

Expenses ($ per

152,79 152,79 | 152,79

Marketing

Expenses ($ per

Expenses ($ per

Table 10 Income Statements

Historical Operating Performance

Cameras UAV 406,796 449 009 515.302 | $557,746 | $617,444 | $729,149

Delivery Costs 29.30 29.84 28.58 $39.767 | $59554| $62.786

Marketing Costs 44.45 5263 45.63 $63.175 | $98.579 | $107.033 Administrative Expenses 7.80 7.85 7.32 $9.523 $9.517 $9.517 Total Operating Profit 1,700.56 1,921.47 | 1,913.50] $415,016 | $432,849 | $603,705

Pre-Tax Profit 204,478 205,211 284,882 | $409,363 | $423,649| $595,517 Income Taxes 61,343 61,563 85,465 | $122,809] $127,095| $178,655 Net Profit 143,135 143,648 | 199.417] $286,554 | $296,554| $416,862

Earnings Per Share

Dividends Per Share

(ROE) on Average Equity 104.3% | 156.2% | 195.8% | 200% 210% | 220%

ods) Stock Outstanding | 47 935 16,520 15,829 | 15,000 | 15,000 | 15,000 Total Shareholder Equity 88,114 95,844 107,865| 121,000 | 342,376| 417,662