Report on the company's activities for year 6

Company strategy overview Our company chooses the top-of-the-line quality and performance strategy, focusing on the high-end market segment.. We realize that North America and Europe-Afr

UEH UNIVERSITY

COLLEGE OF BUSINESS

FACULTY OF INTERNATIONAL BUSINESS — MARKETING

OOO

UNIVERSIT

COMPANY A — INDUSTRY 6

REPORT YEAR 6 - PRACTISE

Instructor: Ha Quang An Class: 23G19BUS50326301

Students_ID:

Tran Thu Phuong 31233570038

Mai Tuyet Ngan_ 31201023249

Nguyen Thi Thao Nhien 31201021729

Kieu Tan Nguyen 31201023659

TABLE OF CONTENTS

I Industry overview report

1 AC Camera

2 UAV Drone

3 Companies in the mdustry

II Report on the company's activities for year 6

1 Company strategy overview

Our company chooses the top-of-the-line quality and performance strategy, focusing on the high-end market segment We realize that North America and Europe-Africa markets are willing to pay to adopt advanced and premium technologies Therefore, we choose the top-of-the-line quality and performance strategy with outstanding technological improvements to meet the needs of this high-end customer segment

2 Compensation and facilities

2.1 AC Camera

In year 6, the HR department decided to increase the total compensation with $25,304 and maintain the base wage per PAT member at 1% Besides, because of our limitation in finance, our company did not change much compared to year 5

From the table above, our productivity is 3,094 units per PAT This figure indicates a redundant quantity in the production process since the consumption result is below assembly capability both without overtime and at maximum overtime Moreover, the Expected ACC Unit Shortfall equals 0 and we don't expand our company's volume Although we have installed the Workstation Table, our company still has the lowest workstation spaces and installed workstation, respectively 300 and 280

2.2 UAV Drone

UAV Drone WorkForce ComPENSATION

Compensation Decisions Comreny In 3 : Avg

Base Wage (per PAT member) { +1% s hang: $ 20,604 $ 20,400

Assembly Quality Incentive s[480 ‡} er unit 1,800 00

Attendance Bonus $| 950 $ | por worker 950

Fringe Benefit Package ${ 2000 ¢] per

Total Compensation ( ¢ worke Sean $ 25,354 $ 25,000

Best Practices / Productivity Improvement Training s 1750 $ ]

Projected PAT Productivity (UAV Drone t PAT pe ) 1,562

UAV Drone AssemB_y Facitity

Workstation Spaces Installed Workstation Table

At the End of Y5 110 paces At the End of Y 400 workatation

Expansion (new) [ 9 s] ¿00k ea Installed for Y6 _ 5 176k

Available for Y6 110 pace Available for Y6 100

Additional Workstations Needed to Avoid Overtime Assembly 3

Expected UAV Unit Shortfa ki So nang 1.0

About the compensation and facilities decisions that companies make in year 6, the same

as for AC cameras, the HR department decided to slightly increase the total compensation and maintain this feature with $25,000 Also, we have remained the base wage at 1% similar to year 5

Our productivity has increased 250 units per PAT ($1,650 units) in year 6 compared to year 5 ($1,500 units) Furthermore, the total drone production cost in year 6 ($145.109) is much higher than the previous year due to the adjusting of product attributes to increase the P/Q rating of the product (from 4* to 5.0*) We did not expand any workstation spaces or install workstation In addition, we also did not invest in the robotics upgrade in this year because the Robotics Upgrade requires a huge amount of money for initial investment and our current finance situation did not allow us to do so

3 Product design

3.1 AC Camera

ACTION-CAPTURE CAMERA DEsIGN

Image Sensor Size [ 13mr ‡] diagonal

LCD Display Screen [ 1230 5 pixels

Image Quality (maximum resolution) 2704x202 ‡$ | pix

Number of Photo Modes (video / still) 8/3 $| modes

reset nents Camera Housing $|9 $ | per camera

Included Accessories $| 11 $ | per camera

Extra Performance Features 5 > | features

Number of AC Camera Models 4 + | models

Product R&D Expenditures (yY6 was $20,000) $| 2000 + | ($000s

Cumulative R&D Expenditures (all years $ 85.000 ($000s)

Performance / Quality Rating (P/Q Rating ranges from 1-10 stars) 5.0

Our company decided to once again raise the P/Q rating of AC Camera Although not as much money was put into R&D in comparison to the Year 6 trial, we managed to increase the rating to 5 stars Instead, we invested in Camera Housing, Editing/Sharing Capabilities, Included Accessories, $9, $10, $11 per camera respectively At the same time, Image Sensor Size went up to 13mm LCD Display was updated to 1230k pixels Number of Photo Models was 8 modes for video and 3 modes for still Extra features also got increased to 5 features And the number of AC Camera Models was limited to 4

This amounted to a total cost of components and features of $86,164 or $112.81 per unit camera Meanwhile, total camera production/assembly cost sat at $156,531 or roughly $204.94 per unit

3.2 UAV Drone

We continue the strategy of increasing the P/Q rating of drones as mentioned and also spend as much money as investing in R&D As a result, our cost is become very high, reaching $1,233.49 to make a drone

UAV Drone DEsiGn

Built-In Camera Minor Upgrade $

GPS / WiFi / Bluetooth Advanced $

Battery Pack (maximum flight time) [12 :) minutes

Number of Rotors [ 4 $ ) rotors

Rotor Performance / Flight Controller { Aavancea a

Body Frame Construction | gtorR4 Fiberglass +)

Obstacle Sensors FronVRear $

Camera Stabilization Device { Enhancea 5 |

Extra Performance Features [ 5 $ J features

Number of UAV Drone Models [> +} mode's

Cumulative R&D Expenditures all years) $ 66,000 ($000s)

Built-In Camera 41,447 224.28

GPS / WiFi / Bluetooth 13,860 75.00

Rotors / Performance / Controller 10,164 55.00

Body Frame Construction | 3,142 | 17.00

Obstacle Sensors 8,316 45.00

Camera Stabilization Device | 3,326 | 18.00

Extra Performance Features 16,632 90.00

Total Cost of Components and Features | 109,823 594.28

Product R&D Expenditures 18,000 97.40

Allowance for Warranty Repairs | 8,700 | 47.08

Maintenance of Plant and Equipment 9,685 52.41

Depreciation of Plant and Equipment | 5,088 2753

Total Drone Production/Assembly Cost 163,802 886.37

Projected Unit Assembly | Regular Overtime Total

UAV Drone Unit Assembly (000s) | 156.0 28.8 184.8

However, in the beginning, we would retain the high investment for R&D and increase of P/Q rating, because the UAV drone could be seen as a high-end product, so the high P/Q rating could help increase the revenue

4 Marketing

4.1 AC Camera

For Year 6 official, we significantly lowered our selling price for the AC Camera despite a higher P/Q rating when compared to Year 6 Trial This time we decided to sell our AC Cameras at $350, $345,$250, $245 respectively across all 4 markets As we aimed for the top of the line quality and performance strategy, we tried to standardize our marketing focus on North America and Europe- Africa Therefore, sales promotions were different for the markers The promotional campaigns lasted 1 week with a 10% discount Another aspect that changed the time of different markets was the warranty period Because of the high rating of 5 stars, we felt that it was justified to set the duration of warranty to 180 days for this particular product, 1.e AC Camera

Average Wholesale Price to Retailers (¢/nit $| 350 $| us $| 250 $| 25

les G

Retailer Support Budget ($000 $| 1710 $| 1440 §| 10 $| 780

port Expe 5 iinia Sacto $5 $

Advertising Budget (8200s) $ 200 $Í am ] $} 1000 $| 750

Website Displays/Info ($000s $1500 $| 1200 $ 90 § œ0

Sales Promotions (number dĩ weeks | % dscourt 1Wk ‡|| 10% ‡| | 1wk ?|| 10% +| | fwk ‡|| 10% ‘| 1w ¡| 10% ‡

Warranty Period (60 days, 90 days, 120 days, 180 days, 1 year) 120 day ?| 180 day + 60 days +] 60 days +

We also tried to set the support expenditures per unit sold at the main markets of North America and Europe Africa higher than Asia Pacific and Latin America at around

$7 and $5 However, North America was undoubtedly the most heavily invested with retailer support budget racking up to $2,500, Advertising Budget at another $2,500, and Website Displays/Info at $1,500

4.2 UAV Drone

This year, we do not retain the high price as we did, instead, we level up the P/Q rating while remaining the price at $1,300 ~ $1,250 in North America and Europe-Africa, and $1,050 in both Latin America and Asia Pacific as these two markets are price sensitive

North America Europe-Africa Asia-Pacific Latin America

Average Retail Price (S/unit to direct oniine customers} $) 1300 | $| 1250 $} 1050 | $| 1050

Discount Offered to Srd-Party Online Retailers §[ø ¡| $[mw (| $[5% 4] $S[x :

Website Product Displays / Info 0s) 9|øo| $| œm $} wo | $ mm

Retailer Recruitment / Support Budget is) lúa] - $[ s § 6 | §Ì zm

Warranty Period (60 days, 90 days, 120 days, 180 days, 1 year) | 180 day $ 120 day †| | e0 days tÌ 60daJs ‡

However, we keep the discount for third parties at 15% for all markets, and this makes our revenue become lower than other rivals On the other hand, we now have high market shares in Asia-Pacific and Latin America markets, and retain the same portion of that in the others This year also, we invested a lot of money in activities volving marketing and supporting third parties, these things are also the reasons to help us not to lose the market shares However, it also brought some negative results and affected the

company’s finances And the solving directions for this problem would be mentioned in the strategy for year 7 section

5 Report on Finance and Cash Flow

A Company FINANCIAL STATEMENTS Year 6

(edusty 13)

AC Camera Revenues 81,184 | 69,178 | 4723 38,831 | 236,427 | 1 Revenues listed here have been ad-

UAV Drone Revenues ĐẠI _ 5636 _ #Ự2Đ _ 2iãU _HE/M6 | |amliromlml dưoma mu

Total Revenues’ Ts048t | ~ 126097 | 81963 | 8U3i2 4990 the eoh trenh

Cost of Goods Sold 100,183 | 85518 | 69,106 | 51,289 | 306,096 | %_ promotional dscount and ex-

Marketing Costs 98 | TẦM 5126| 3406 | 25770 Income (Expense) wil incude

Administrative Expenses : 2821} | a 2432} ae | 3470| 1,732} ae | ast | Imposed fines fanpeating 9165| Phê cđibưểmm phước as naga

Operating Profit (Loss) 33,890 22,514 1,905 1465 53,034 ins and nae ae! refunds

ying as positive)

Interest Income (Expense) 10,300 | The income tax rate is 30% If @ net Profitabiily and Payout Yer§ Year6 Other Income (Expense}* 41,061 =) ded in Year 5, nbs

and

Earnings Per Share $075 $1.46 ——_~Pre-TaxProfit Loss) Hạ Ki cata ae 6 ee tr

Dividends Per Share $0.0) $005 — l0eomeTaes Net Profit (Loss) 12.502 | educe the company’s tax laity in 29,171 | Year6

Our earnings per share in year 6 increased dramatically from $0.75 to $1.46 The operating profit can cover the interest income expense (10,300) Our company, therefore, has incurred a positive net profit

Balance Sheet

Accounts Receivable (see Note 1) 70,250

Component Inventories (see Note 2) 18,452

Total Current Assets 110,608

Gross Investment in Plant and Equipment 253,000

Less Accumulated Depreciation 60,150

Total Fixed Asset Investment (see Note 3) 192,850

Accounts Payable (see Note 4) 50,744

Overdraft Loan Payable (ee Note 5) 0

1-Year Bank Loan Payable (ee Note 6) 2

Current Portion of Long-Term Loans (ee Note 7) 16,000

Total Current Liabilities 66,746

Long-Term Bank Loans (see Note 8) 94,002

Total Liabilities 160,748

Common Stock ee Note 9) 10,000 0 10,000

Additional Capital (see Note 10) 80,000 0 80,001

Retained Earnings 24538 +28,171 52,709

Total Shareholder Equity 114538 +28,172 142,710

Return on Average Equity (see Note 11) 22.7%

Our return on equity was 22.7% with $303.458 million of total assets, $160.748 million dollars of total liabilities, and $142.710 of total shareholder equity

Financial Performance Summary

Income Statement Data (y›oo:

Net Sales Revenues

236,427

205,559

242,383

229,151

210,989

229,021

227,736

Most of the rivals in the industry chase the strategy of high P/Q rating with low cost, which is not in line with our company's expectations Therefore, AC camera net sales revenues are above average with 236.427 and the opposite site is true with UAV Drone at 182.486, respectively This indicates that the marketing of both products is really effective, which causes our sales of both products to be as high as we expected

We decided to pay 0.05 dividends in year 6.Our Debt/Equity 1s 53:47, which has quite the same proportion of debt compared to some companies Besides, our net profit margin is 7.0% which is under average and shows that our operations in year 6 are not as good as others

53,034

52992 56,209 72,560

58,196 18,378

14,292 41,735 33,347

Selected Financial and Operating Statistics

7 S

13,156

Shareholder Equity

Cash Current Fixed Total Current Long-Term Total © Beginning StockSdes Eamings Ending

OnHand Assets Assets Assets Liabilities Loans Liabilities Equity Purchases) Retained Equity

A 21,906 110,608 19280 303,458 66/74 94,002 160,748 114,538 0 142,710 A

B 49,694 144,683 250087 394/771 85,085 175000 260,085 114538 0 134,68 B

c 30,677 109,660 190,000 260 61,156 9400 155,156 114538 0 1450 C

D 33,537 118,317 192374 310,691 66789 94000 160/789 114538 0 149902 D

E 24,741 113,739 190000 303,739 630604 94000 157064 114536 0 146675 E

F 28,160 111,383 195224 306607 65040 934000 159040 114538 -2424 14887 F

6 31,158 106,131 200925 307,056 5544 94000 149,44 114,538 1,194 157,610 G

H 72,881 157,093 208524 365617 67,165 154,500 221,665 114,538 ~2,424 143,952 4H

36,594 121452 202,498 32280 = 66,311 1116688 17799 1144536 0 46,951

Our cash on hand was $21.906 million which is quite smaller above the industry average

We can consider that it might be safe for us to borrow many of the new loans Due to our quite good performance in the financial statement, we may be allowed to borrow new loan categories with low-interest rates

6 Corporate Social Responsibility and Citizenship (CSRC)

CSRC Inmanives Charitable Contributions $9 + or| 20% +/of operating profit vows °

"Green" Initiatives to Promole (\„.) y„-

Environmental Sustainability `

Renewable Energy Program $|500 :| Involves ong

expenditure

Cafeteria and On-Sit Benen Energy Program —

Care Facilities for Plant Continue ‡

improved Employees

Conditions Additional and Improved Lighting Safety Equipment — Discontinu + 7

Ventilation 1

Institution of a Supplier Code

of Conduct and Compliance | Ye +

Monitoring of Suppliers

In year 6, we invested money in one field of Improved Working Conditions in order to help enhance the company productivity in AC camera production and this also boosted the Image Rating Points Generated of our firm Besides, we also mvested in the Institution of a Supplier Code of Conduct and Compliance Monitoring of Suppliers to promote employment practice and safe working conditions

III Competitive Intelligence Reports

1 AC Camera

1.1 North America: