shareholder debriefing executive directors presenting: guergana anguelova moritz broelz irina...

Baldwin Shareholder Debriefing

Executive Directors presenting:Guergana Anguelova

Moritz BroelzIrina Hubytska

Richard Williamson

AgendaReview of Mission and Vision StatementInitial StrategyEvaluation of StrategyDecision Making ProcessFive Year Strategic PlanQuestions and Discussion

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Initial Strategy

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Mission StatementBaldwin Co. focuses on a broad-based differentiation

strategy, providing products in all segments of the electronic sensor market. By creating increasingly higher levels of brand recognition and reputation, Baldwin will create a competitive advantage as the largest e-sensor producer.

Baldwin Co. strives to become a market leader in the electronic sensor industry. As a result, the combination of large sales with healthy margins will ensure a long-term competitive advantage in earnings volume and the success of the firm’s strategy. 

Vision Statement

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Marketing Substantial expenses to build customer

loyalty and awareness Create higher demand for products

High-traditional-low segment overlaps Introduction of new products in the high-end

R&D

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Production Expected low contribution marginsContinuous plant automationPurchase of additional capacity

Prepared for low earnings Priority: high efficiencyDividend policy

Finance

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Evaluation of Strategy

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Unexpected EventsRound 2:

Erie became a Niche Player in Low-End & Traditional.

Round 5:Andrews created a sellers-markets in Low-End,

Traditional, Performance & Size segments by under producing.

Round 7:Ferris created a sellers-markets in Low-End &

Traditional segments by exiting these segments.

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Round 2What went wrong?

Marketing Expenses reduced – loss of competitive advantage

Needed Complement unadjusted – Overtime of 6.8% - loss in productivity increase of ≈ 3.9%

Dividend issuedLarge unsold inventory in Traditional due to Erie

Corrective Actions:Marketing Expenses realigned with Corporate

StrategyNeeded Complement adjustedDividend policy aligned with corporate strategy

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Market Share & Contribution Margin

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Marketing & Product Performance

2011 2012 2013 2014 2015 2016 2017Tradtional 1 2 6 1 2 1 1Low End 1 2 4 & 8 4 & 5 1 & 6 1 & 3 1 & 3High End 4 5 1 2 6 & 7 1, 6 & 8 1, 3 & 6Performance 3 5 4 2 1 2 1Size 3 2 4 1 1 1 1

Product Raking by Unit Sales

Baja

Bzum

Bully

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Financial Performance 2010-2017

Emergency Loan

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Financing & Capex. 2010-2017

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Capital Expenditures & Financing

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Decision Making Process

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Product placement graphed against demand:

Positioned so that demand curves overlappedBest: one high, one low and if possible one catchment

Where it started: R&D

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Marketing

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Price, Sales and Advertising budgetsBased on products in sectorWhen they peakedHow long they were desirable Competition

Finance: Pessimistic/Weak sales forecastProduction: Actual/Expected sales forecast

Production

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Schedule determined based on Expected sales

Automation levels adjusted, if possible/necessary

Headcount levels adjusted, where necessary

If production schedule unable to meet Expected salesReturn to Marketing

HR/TQM

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Amount budgeted based on need

Assumed that all funds required would be available

If not, adjusted based on consensus

Finance

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Working capital sourced from Sales, Bonds and SharesIf sufficient capital available: Plan executedIf insufficient working capital available

Capital requirements lowered where possible Incremental reductions in Marketing/Sales Incremental reductions in HR/TQM Product line additions held off until following year

Restriction goal: Do not cause long term disruption

Visually

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Five Year Strategic Plan

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Five Year Strategic PlanOverview – Business Life Cycle

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Five Year Strategic PlanOverview – Financial Life Cycle

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Five Year Strategic PlanFinance

Levered Buyout of company Digby ($58ml) and/or Ferris ($89ml)

Merger with company Erie – complements our strategy

ProductionMaximum AutomationBuild capacity

Marketing100% Awareness100% Accessibility

R&D

Baja

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Five Year Strategic PlanCorporate Strategy

Continue broad differentiation strategyContinue being a market share leaderContinue being the most profitable company by

transforming more revenues into net profitContinue increase of company value

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Questions and Discussion

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