BUSI 400 Board Meeting #1

8/8/2019 BUSI 400 Board Meeting #1

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oard Meeting resentation # 1

eam 3

introducing

ubin &Software

.Hardware Inc

ubin Guo rant Ingval

lex Kim


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Introduction

& .ubin Software Hardware Inc


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orporate Mission and

is ion

Statement



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orpora e ss on an s onStatement

Vision Statement To lead the

computerindustry inproductinnovation andquality.

Mission Statement To serve

individuals andbusinessaround theglobe with themostinnovative andhighest quality

products.


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urrent CorporateStrategy



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# :BU 1 ardwareCompany

# :BU 2 oftware ompany

# :BU 3 ystemsCompany

urrent Corporate Strategy

Generic StrategyBroad Differentiation

Diversification StrategyBreadth Diversification


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Diversification Strategy Relatedness

SBU #3 - 50% related to SBU#1 and #2

SBU #1 and #2 - virtuallyunrelated to each other



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Diversification Strategy Strategic Fit

SBU #1 and #3 R&D and Technology Supply Chain Activities Distribution Service



9/41


SBU #2 and #3 R&D and Technology Distribution Marketing and sales Service



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SBU #1 and #2 Distribution Marketing and sales Service



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Diversification Strategy Funding

Book Value (000) SBU 1- $3,709 SBU 2- $4,554 SBU 3- $5,827



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Scope of Operation


#BU 1#BU 2#BU 3

NAFTA ASEAN EUROPEA

N UNION

MERCOS

URE

CHINA

SBU #1 58.6%SBU #2 16.5% 22.3%SBU #3 17.5% 14.7%


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resent Corporate bjectives with

erformance Results



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Strategic Objectives

Broad Differentiation

We aim to offer high quality andhighly innovative products

Beat rivals on differentiating featuresand quality


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Strategic Objectives

Hold 20% market share

Costs to 40% of sales

Export to all major areas


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Financial Objectives

Total sales to $7,320,000 from$6,320,000

Profit margin to 7% of sales from2.2%

Net profit after tax from $142,000 to$512,400

< <


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Demand Generating Objectives

High quality products/programs

Product innovation index > 80 Export to all major areas

Market more to countries with higherforecast


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Objectives Cont.

HR development .4% of sales Provide fair or above average wages

Safe work environment Maintain good image globally Conduct ethical business, beyond

what is legal


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Stockholder objectives

Provide consistent year to yeargrowth in stock value

Performance-Stock price one year ago $6.25-Current price $33.44 (535% annual

return)


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Performance Results

Highest quality programs- (SBU1) 70, (SBU2) 150, (SBU 3) 150

Product innovation index > 80- (SBU 1) 86, (SBU 2) 100, (SBU 3)84

Export to all major areas- NAFTA, ASEAN, MERCOSUR, EU, andChina


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Performance Results

Hold 20% market share Current market share 15.30%

Costs to 40% of sales Current COS (SBU 1) 44%, (SBU 2)

41%, (SBU 3) 42%


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uture t tractiveness of resent Industries


Future Attractiveness of Present


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Future Attractiveness of PresentIndustries

IndustryAttractiveness

Measure

Importance Weight Industry A/ SBU 1Rating

Industry B/ SBU 2Rating

Industry C/ SBU 3Rating

Market size & projected growthrate

0.15 7/1.05 8/1.2 9/1.35

Intensity of Competition

0.25 5/1.25 5/1.25 5/1.25

Opportunities &Threats 0.15 5/.75 7/1.05 7/1.05IndustryProfitability

0.10 6/.6 7/.7 8/.8

Cross IndustryStrategic Fit

0.20 8/1.6 8/1.6 10/2

ResourceRequirement 0.10 7/.7 9/.9 6/.6Regulations andFactors

0.05 8/.4 6/.3 7/.35

Overall WeightedScore

6.35 7 7.4



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Most attractive industry ranked: 1. Industry C/SBU #3 2. Industry B/SBU #2

3. Industry A/SBU #1

Attractiveness of Industries as aGroup


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ompetit ive&osit ion trategic Quali ty

f SBUs



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Quality of SBUs

S t r e n g t h s

T h r e a t s

W e a k n e sse s

O p p o rtu n itie s

Competitive Position & Strategic


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Competitive Position & StrategicQuality of SBUsCompetitive StrengthMeasure

Importance Weight SBU 1 Rating SBU 2 Rating SBU 3 Rating

Relative market share 0.15 6.5/0.98 6.5/0.98 7/1.05

Costs relative tocompetitors costs

0.15 6.5/0.98 6/0.9 6.5/0.98

Ability to match or beat rivals on key product attributes

0.15 8.5/1.28 10/1.5 8.5/1.28

Ability to benefit fromstrategic fits with sister

business

0.10 5/0.5 5/0.5 7/0.7

Brand image andreputation

0.15 8/1.2 8.5/1.2 8.5/1.2

Competitivelyvaluable capabilities 0.20 6/1.2 8/1.6 9/1.8

Profitability relative tocompetitors

0.10 6.5/0.65 7/0.7 9/0.9

Overall WeightedScore

6.79 7.38 7.91


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nvestment Priori tyAnalysis



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Investment Priority Analysis

Industry

Attractiveness

Medium

High

Low

WeakAverage

Strong/ompeti t ive Strength Market Posi t ion

. 7

. 37

. 3

High priority for resource allocat

Medium priority for resource alloLow priority for resource allocatNote : Circle size are scaled to reflect the

percentage of companywide revenues

. 3

. 35

7

BU 1

BU 3 SBU 2

. 91. 38

. 79



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Most attractive SBU ranked: 1. SBU #3 2. SBU #2

3. SBU #1

Attractiveness of SBUs as a Group


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djustments to orporate Mission nd Strategy



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Changes in International Sales

International sales to 50%-Currently 43%


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Recommended actions

Move productions cite to off-shorelow cost labor country

significantly help us reach out 30%cost of sales goal

Add sales representative for SBU2 & 3 this

Add China as export area to SBU 1 Next two period forecasts for China:

112, 114

Purchase Venture #5 fourth quarter


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Long-term recommendations

Begin dividend ratio of 10% startingin year three

Begin paying off debt starting yearthree

Invest in corporate notes and CD


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ew and Continuing orporateObjectives



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New Objectives

Cost of sales to 30% from 40% ineach SBU

-Increase operations technology 25%next quarter

NPAT to $800,000 by end of next year- 57,500 per quarter Increase HR Dev . to 1.2% of sales in

order to lower employee turnover-Higher than industry average wages and

benefits


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Continuing Objectives

Hold 20% market share- Drop price of products $25 in each

SBU

- 1.18% per quarter onto 15.3%- 74,441,000 x 16.48% = $12,268,000sales

Profit margin to 7%

.29% increase each quarter 6.12% X 12,268,000 = 751,802 NPAT Export to all major areas Product innovation index > 80


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Conclusion



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R aised sha reh o ld er va lu e

%53 5 ann ua l re tu rn

,Pro fits $ 1 4 2 0 0 0 to,$ 5 7 0 0 0 0

S tra teg y is w o rkin g

C on tin u e p u rsu in g h ig h er

N PAT an d h ig h er sh a reh o ld erw ea lth

W illin g to m ake ch an g es in

Conclusion


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Questions andAnswers

?

BUSI 400 Board Meeting #1

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