Step 2: Objectives / Performance Targets Our target objectives should be at least as high as investor expectations and have sustainable development year by year: The Company targets key
Overview of the results of year 9, 10, 11
AC Cameras
* The company considers marketing budget to reduce costs, in order to increase net profit
* Will consider increasing the model to make a difference in the market ¢ The number of discount weeks and discount percentage in the more focused market will be more than the rest
* The company considers marketing budget to reduce costs, in order to increase net profit
* Will consider increasing the model to make a difference in the market
* The company will also support 3rd retailers in key markets to push more products
II Competitors analysis Y9 —- Y11 1 AC Camera:
In the past 3 years, there have been many changes, most of the factors have an increasing trend and may continue to increase in the following years However, the increases in Y9 were not too high but remained at stable levels such as Price, P/Q Rating, Retail Outlets, This shows a trend saturated and unlikely to have many changes and slow growth in the future But in Y11, some companies made disruptive decisions that caused the average value of many factors to increase sharply from 5% to 8% for each factor
This has made the market more volatile but there are a few factors that have almost peaked in Y10 and are unlikely to rise sharply in Y11.
UAV Drone
The elements of UAV Drone have also changed a lot in the past 3 years In Y9, Y10, companies are still quite cautious according to their own strategies without too much change and promotion of companies but still keep quite balanced and close to the average value some factors such as Price, P/Q Rating, Brand Reputation, Number of
Models, Online Retailers, etc However, in Y11, some of the above factors also experienced strong growth Some other factors have a very strong increase in Y9, Y10 such as Search Engine Advertising, Retailer Recruitment, and a slight increase in Y11
Some factors are also close to peaking and are unlikely to raise too much in the future HH Analysis of the Company's Y9 — Y11 results
Year 6 Year 7 Year 8 Year9 Year10 Year 11
Image Sensor Size 11mm 11mm 11mm 11mm 11mm 11mm
Number of Photo Modes (video / still) 8/3 8/3 8/3 8/3 8/3 8/3
Enhancements Editing / Sharing 10 11 13 16 13 14 © spent percamera) Included Access 14 14 15 19 17 13
Number of AC Camera Models 3 3 4 4 5 5
From year 9 to year 11, the company encountered many difficulties leading to failure to meet investors’ expectations and only changed the product design slightly in the Product Enhancements sections Because in order to focus a lot on improving products and production, the company has invested in R/D to the maximum from Y10 So our P/Q from Y9 to YI1 are 6.4, 6.1, 6.0
At the same time, the company has a desire to increase market shares leading to an increase in image, so it has launched 1 more model in the market, since then the number of models of the company has become 5
Results: Our cost didn't reduce much, and our profit still lost a lot But from Y11, our prediction for year 12 is much better
Year 6 Year 7 Year 8 Year9 Year10 Year 11
Built-In Camera (company's best model +) Min Upgrd Sig Upgrd Sig Upgrd Sig Upgrd Sig Upgrd Sig Upgrd
GPS / WiFi / Bluetooth Enhanced Advanced Advanced BestAvail BestAvail Advanced
Battery Pack (max flight time in minutes) 15 18 21 21 21 21
Rotor Performance Enhanced Advanced Advanced BestAvail BestAvail Advanced
Body Frame Construction Figlass CarbonFi Carboni CarbonFi CarbonFi Fi-glass
Obstacle Sensors Fr/Rr 360°Bas 360°Enh 360°Enh 360°Enh-~—= 360°Enh
Camera Stabilization Device Enhanced Advanced bBestAvail BestAvail BestAvail Advanced
Number of UAV Drone Models 2 2 2 3 4 4
Year 9 - 11 is an unfavorable process for the company and the management tries to find a way to overcome it every year
Regarding product design of UAV Drones, the company cut a lot of product designs because it thought it would improve production costs and increase one model to the market
Result: It was not favorable in the first 2 years because the market's product quality was too diverse and the costs and profits of competitors were reasonably balanced
Base Wage: In the early years of the strategy, the salary percentage increase for employees continued to be 1-2%, but in Y11, the salary remained the same for the drone assembler and reduced by 1% for the assembler Assemble AC Camera, This helps employees perform better in the early years and keep costs stable in later years Bringing money to concerns larger than the above is also quite consistent with the strategy proposed
Assembly Quality Incentive: Like Based Wage in years like Y9, Y10 had a large increase with the level of 2.5-5$/product of AC Camera, 4.8-5$/product of UAV Drone, but these levels started to stop and without much change by Y11 Costs will remain at a level appropriate to the market and strategy
Attendance Bonus: The increase in attendance is also considered, for AC Camera, the money usually decreases year by year with $800-$650-$600 per employee and stays the same at Y11, for UAV Drone it increases year by year at $1000-$1200 per employee and also stay the same on Y11 This shows that the numbers are consistent with the current strategic situation and no longer change too much
Fringe Benefit Package: Quite similar to the Attendance Bonus, for AC Camera, the money gradually decreases with $2000-$1800-$1400/employee and stays the same until Y11, UAV Drone increases at $4000-$4400-$4600/employee and stays the same at Y11 This contributes to creating a working style, maintaining an effective working environment but keeping costs at a stable and appropriate level
Best Practices / Productivity Improvement Training: Both AC Camera and UAV Drones have increased in recent years and kept the decision to enter Y11 at $9000/PAT for both AC Camera and UAV Drone
G Company ASSEMBLY AND FACILITY OPERATIONS Year 11
Action-Capture Cameras UAV Drones
IAC Camera Production IUAV Drone Production
Units Assembled (000s) Product Attributes Units Assembled (000s) Product Attributes
Regular-Time 1,428.0 Extra Performance 4 Regular-Time 264.2 Extra Performance 5
Overtime 0.7 Number of Models 5 Overtime 0.0 Number of Models 4
Product R&D Expenditures in Year 11 (so00s) $ 50,000 Product R&D Expenditures in Year 11 ($(00sj $ 50,000 Cumulative Product R&D Expenditures ($0005) $ 269,000 Cumulative Product R&D Expenditures sooo.) $ 235,000
IAC Camera Assembly Facility UAV Drone Assembly Facility
Space Available for Workstations {at end cf Year 10) 400 spaces Space Available for Workstations (at end of Year 10) 180 spaces New Spaces Added (racility expansion at begin of ¥11| 0 paces Added facility expansion at begin of 11) _ 0 Space Available for ACC Workstations {nm Yee 11) 400 spaces Space Available for Drone Workstations (in Year 11) 180 spaces Installed Workstations {at endof Year 10) 398 workstations Installed Workstations (atend of Yoar 10) 124 workstations New workstations Added (atbegiming of Y11) 0 New workstations Added (at ceginring of Y11) 7 Total Installed Workstations {avaiable tor usẽ In Y1!) 398 workstations Total Installed Workstations aavaliavie tor use In Y11) 131 workstations in AC Camera Facility ($0003) it in UAV Drone Facility (000s)
Beginning New +1 Beginning New Year 11
Gross Year 11 Facilities Gross Year 11 Facilities
Total (Gross) Investment in AC Camera Facilities $ 268,450 Total (Gross) Investment in UAV Drone Facilities $ 158,075 - Accumulated Depreciation (et the end of Year 10, 94,878 - Accumulated Depreciation (at the end of Year 10) 4
~ Current-Year Depreciation (5% of arcss investment) 13,423 -Current-Year Depreciation (5% of gross investmert) 7,904 Net Investment in AC Camera Facilities $ 160,149 Net Investment in UAV Drone Facilities $ 105,617 IAC Camera Work Force Statistii IUAV Drone Work Force Statisti
Base Wage Per PAT Member -1% $ 25,040 Base Wage Per PAT Member 0% $ 25,541
Incentive Bonus (to reduce warranty claims) $2.40/ unit 2,894 Incentive Bonus {to reduce warranty claims) $4.80 / unit 3,211 Attendance Bonus (or perfect attendance) $600 / worker 600 Attendance Bonus {ter perfect attendance) $1,200 / worker 1,200 Fringe Benefit Package $1,400 / worker 1,400 Fringe Benefit Package $4,600 / worker 4,600 Total Compensation (ennual pay per worker) $ 29,934 Total Compensation {annual pay per worker) $ 34,552 Best Practices / Productivity Improvement Training gps) $ 9,000 Best Practices / Productivity Improvement Training ôpan $ 9,000 PAT Productivity (units assembled per PAT per year} 3,587 PAT Productivity (units assembled per PAT per year) 2,098 Number of PATs Employed (ior AC camera assembly) 399 Number of PATs Employed (icr AC camera assembly) 126 x Number of Workers Per PATS with robotics upgrade} x 3 ằ Number of Workers Per PATS (with rovotics upgrede) x 3
Total Number of Workers Employed 1,197 Total Number of Workers Empl d 378
(AC Camera Production and Assembly Costs UAV Drone Production and Assembly Costs
AC Camera Image Sensor 12,001 8.40 UAV Drone Built-In Camera 58,621 221.88
Components LCD Display Screen 18,002 12.60 Compone GPS / WiFi / Bluetooth 17,834 67.50 andFeatures Image Quality 15,601 10.92 and F#S Battery Pack 35,667 135.00
Photo Modes 10,801 7.56 Rotors / Performance / Controller 16,645 63.00
Camera Housing 18,573 13.00 Body Frame Construction 4,042 15.30
Included Accessories 18,573 13.00 Camera Stabilization Device 9,036 34.20
Extra Performance Features 14,113 9.88 Extra Performance Features 19,260 72.90 Total Cost of Components and Features 127,666 89.36 Total Cost of Components and Features 182,981 692.59
Assembly Regular-Time Labor 35,794 25.05 Assembly Regular-Time Labor 10,855 41.09
Labor Overtime Labor 0.02 Labor Overtime Labor 0.00
Costs PAT Training 3,591 2.51 Costs PAT Training 1,134 4.29
Total Cost of Labor and Training 39,409 27.58 Total Cost of Labor and Training 11,989 45.38 Product R&D Expenditures 50,000 35.00 Product R&D Expenditures 50,000 189.25 Allowance for Warranty Repairs (16.7% claims) 11,955 8.37 Allowance for Warranty Repairs (20.6% ciains) 16,320 61.77 Plant Operations and Maintenance 17,967 12.58 Plant Operations and Maintenance 11,692 44.25 Depreciation of Plant and Equipment 13,423 9.40 Depreciation of Plant and Equipment 7,904 29.92 Total Camera Production/Assembly Cost 260,420 182.28 Total Drone Production/Assembly Cost 280,886 1,063.16
Image 31: Assembly & Facility Operations Assembly: To increase productivity, the company decided to invest in Plant Facility and Workstations for both product lines This upgrade saves the cost of hiring labor to assemble AC Camera and UAV Drone
Facility: The workstation space still remains 400 space to accommodate the installation of workstations for AC Camera (no shortage) For UAV Drone, the amount of space still remains 180 with the aim of maintaining the assembly process to be able to meet
26 the increasing demand of the market Accordingly, the total investment cost to expand the facility is $183,484 million for AC Camera and $106,161 million for UAV Drone