MARVEL BIKES

BIKES

WORLD 3 FIRM 7

Board of DirectorsJessica Parmar (124)Sukriti Sinha (143)Tanuj Nabar (36)Mihir Anand (3)Virendra Singh Shekhawat (Rural - 24)Bhakti Doshi (96)Ameya Rege (51)Varun Walvekar (76)

Note to ShareholdersBuilt for riders, by ridersUnderstand the need for new technology How to best design bikes for customers satisfaction Customer is the most important part of businessOur bikes are tough, resilient and long lastingDedication to the customer and community, environment and stakeholdersCompany of great ethics and standards Customers comes firstQuality and customers service are our #1 policyThank you for being a proud and loyal customer of MARVEL

VisionTo be the global promoters, developers & marketers of quality cycling products.

Long Term Objectives

To become the market leader and sustain its positionDuring first 2 years of business we managed to be just behind market leaderManaging board aimed to increase the share holder value (SHV) of the company more than 60% and market share of 70% within the taken timeframeDecision to capture 70% market share was impracticalFailed to consider or under estimated the competitionAimed to develop and maintain highly skilled and efficient employees and increase employee skill index by 15 20%

MissionTo be a profitable provider of bicycles that provide value to our customers through constant quality & innovation admired for performance & consistency while delivering an exceptional customer experience.

Note to Buyers

Provide product on-time, on-quality and on-costMeet customer's needs Keep production costs down to return customers savings Create a small community of employees to conduct business Make an environment of admiration, trust, and dignity Train employees and sell a high enough volume of products Keep as many jobs available as possibleCreate strong relations with distribution and supplier partnersGet our products into more storesReduce operating costsAid the community by supporting other businesses through supplier relations Operate in a manner that supports the citizens and environment in which we work.

Goal Setting

One of a kind Mountain Bike that includes style, quality and affordabilityFeatures full suspension, wide tires, good traction and disc brakesOur ProductsAdv7

Our ProductsQuicksilver:Leisure segmentNamed after Pietro Maximoff, the villain turned goodFastest mutant Represents the fitness freaks who comprise our leisure segment.

Our ProductsDoraemon:Kids segmentNamed after most popular cartoon today for kidsAppeal to that segment

Our ProductsUltron:Racer bike Named after a mutant with the ability to wield Aluminum. Bike frame is made up of aluminum, with high weight advantages, enabling high speed.

Our ProductsSentinel:Commuters Named after a breed of intelligent, adaptive mutantsIn line with value for money seeking commuters segment.

Our ProductsBaymax:Kids SegmentNamed after the health robot in Big Hero 6Named so to communicate the health benefits of the bike to be relatable to kids

Our ProductsStark:Adventure SegmentNamed after the flamboyant and brave Iron Man Tony StarkAlso means strong in GermanLaunched in order to overcome shortcomings of earlier Adv7 and meet changing market expectations

Environmental AnalysisKey points emerging from the analysis:Significant strength: product design.Significant opportunity: segment of kids, leisure & commutersNeed to address weakness of reducing idle time & low capacity utilizationThreats: demand fluctuation & predatory pricing by competitors

2009

Objectives and StrategiesFocus: Building a reputable and trusted brand image amidst consumers Focus on marketing Compared the preset advertising expenditures to the market research on consumer habits and accordingly made adjustmentsBasic objective: Attracting a high volume of customers, increasing sales and minimizing expenditures

Decision Making: 2009MARKETING DECISIONSKey focus: Attract a high volume of customersMedium pricing strategy, so that our bikes were affordable and provided a reasonable profit margin for both retailers and our businessConsumers are moderately sensitive to the pricing of adventure bikes. Hence, kept a product price of $2,250Increased total advertising expenditure to $4,000,000Increase in price would decrease demand while increased advertising should increase salesDid not expand advertising budget by a huge amount mainly due to a limited market demandFocus: Magazine and television advertising Maintain consistency by using the carry-over effectConsistent advertising through one medium to continually attract customersBased on consumer viewing habits, television and magazine advertising were $1,000,000 and $2,000,000, respectivelyInternet advertising: $1,000,000Public relations: $3,600,000 because of minimal impact on adventure bike customers.Public relations expenditures on television and magazines were $2,000,000 and $900,000, respectively and Internet expenditures were $700,000Analyzing the market and conducting extensive research led to the changes made aboveDecreased retailers margin, averaging at 25%

Decision Making: 2009OPERATING DECISIONSPlanned production: 23,800 unitsTo not miss any prospective clients

FINANCING DECISIONSDecided to pay off the initially raised loan of $1,800,000 entirelyOffered no dividend

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Decision Making: 2009RESULTS:Shareholder Value: 21.45Sales: $28,527,188Capacity Utilization: 69.7%Gross Margin: 62%Assets: $7,797,662Equity: $6,224,432

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2010

Objectives and StrategiesDistribution and branding decisionsAllocate cash efficiently towards advertising and branding to create market awarenessAim at a conservative marketing strategyReceive optimum market awareness at lowest possible expenseContinuing to sell at medium priceIncrease sales and use funding efficientlyLaunch products in Leisure and Kids segments

Decision Making: 2010MARKETING DECISIONSLaunched Quicksilver and Doraemon in Leisure and Kids Categories respectively priced at $450 at $350 respectivelyIncreased awareness levels of our adventure bike by increasing branding to $2,000,000 from $1,000,000Increased the market price of our adventure bike to $2,300Advertising expenditures were decreased to $3,100,000, towards magazines and television advertisingDecreased our public relations costs to $3,000,000Distribution support to retailers worth $800,000Provide support to various retailers to better promote our bikes by displaying it across their storesEstablish a high market awareness and brand image in the industry.

Decision Making: 2010OPERATING DECISIONSPlanned Production: 30,000 units (Adv7)60,000 units (Quicksilver)40,000 units (Doraemon)

FINANCING DECISIONSInvestor Relations increased from 600,000 to 1,000,000Dividend of $1 per share

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Decision Making: 2010RESULTS:Shareholder Value: 37.93Sales: $63,835,800Capacity Utilization: 67.6%Gross Margin: 65% (Adv7), 69% (Quicksilver), 65% (Doraemon)Assets: $18,655,785Equity: $13,956,241

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2011

Objectives and StrategiesMaintain performance and position in the capital markets in 2011Aimed to sustain advertising budgets and market awareness levels to increase salesLaunch new products in Racer and Commuter Segments

MARKETING DECISIONSMaintain a relatively similar budget Kept our prices at $2,100/bike (Adv7), $450 (Quicksilver), $350 (Doraemon), $3,700 (Ultron), $310 (Sentinel)Distribution support was maintained from 2010Distribution support was an even split between sports, discount and bike shops at $800,000 each.Decision Making: 2011

Decision Making: 2011OPERATING DECISIONSPlanned production:40,000 units (Adv7)90,000 units (Quicksilver)80,000 units (Doraemon)14,000 units (Ultron)40,000 units (Sentinel)Maintain quality of 77%

FINANCING DECISIONSInvestor relations were $2,000,000Gave the same dividend as 2010 (i.e. $1 per share)

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Decision Making: 2011RESULTS:Shareholder Value: 63.57Sales: $100,357,965Capacity Utilization: 59.5%Gross Margin: 63% (Adv7), 60% (Quicksilver), 42% (Doraemon), 73% (Ultron), 47% (Sentinel)Assets: $36,275,383Equity: $28,312,869

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2012

MARKETING DECISIONSMaintained adventure bike price at $2,100, Quicksilver at $400, Doraemon was $350, Ultron was $3,700 and Sentinel was $320Kept our advertising at $12,900,000 (TV: $5,000,000, Magazine: $4,500,000, Internet: $3,400,000)PR: $11,300,000Allocated money towards new bikesDecision Making: 2012

Decision Making: 2012OPERATING DECISIONSPlanned production:50,000 units (Adv7)90,000 units (Quicksilver)120,000 units (Doraemon)28,000 units (Ultron)60,000 units (Sentinel)

Kept our quality expenditure at $12,361,970, to save inspection costResulted in a huge decrease in quality, a drop from 77% to 61%.

FINANCING DECISIONSDecreased investor relations to $1,000,000

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Decision Making: 2012RESULTS: (After Recession Shock)Shareholder Value: 51.40Sales: $63,436,500Capacity Utilization: 41%Gross Margin: 67% (Adv7), 60% (Quicksilver), 49% (Doraemon), 74% (Ultron), 53% (Sentinel)Assets: $33,096,278Equity: $30,056,171

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2013

MARKETING DECISIONSKept our prices at $2,100/bike (Adv7), $380 (Quicksilver), $350 (Doraemon), $3,500 (Ultron), $300 (Sentinel)Kept our advertising at $15,000,000PR: $6,400,000Did not change distribution supportDecision Making: 2013

Decision Making: 2013OPERATING DECISIONSPlanned production:63,000 units (Adv7)70,000 units (Quicksilver)120,000 units (Doraemon)2,000 units (Ultron)45,000 units (Sentinel)

Decreased quality expenditure to $10,855,860Redevelop our kids bike, naming it BAYMAX, costing $2,000,000Improved bike style and technology attracted more buyers

FINANCING DECISIONSRepurchased shares worth $1,787,262Issued the same value of shares

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Decision Making: 2013

RESULTS: Shareholder Value: 47Sales: $77,019,968Capacity Utilization: 47.6%Gross Margin: 69% (Adv7), 62% (Quicksilver), 53% (Doraemon), 75% (Ultron), 53% (Sentinel)Assets: $45,244,179Equity: $49,293,828

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2014

Decision Making: 2014MARKETING DECISIONSFollowed a Cost Leadership StrategyLaunched Baymax at $190 in the Kids segmentKept our prices at $1,300/bike (Adv7), $280 (Quicksilver), $180 (Doraemon), $2,500 (Ultron), $190 (Sentinel)Lowered television advertising by to $6,400,000, internet to $2,350,000 and magazine advertising to $3,300,000Reduced PR expenditure to $6,800,000These decisions were taken to achieve low awareness for Adv7 and Doraemon which were to be discontinued

OPERATING DECISIONSPlanned production:4,000 units (Adv7)80,000 units (Quicksilver)80,000 units (Baymax)5,000 units (Ultron)90,000 units (Sentinel)Developed a new adventure bike StarkDecreased quality expenditure to $10,136,526.

FINANCING DECISIONSDecreased investor relations to $500,000, in order to save cashCommon objective of increasing shareholders value, while maintaining a stable cash balance.

Decision Making: 2014RESULTS: Shareholder Value: 26.13Sales: $63,978,945Capacity Utilization: 49.5%Gross Margin: 52% (Adv7), 39% (Quicksilver), 11% (Doraemon), 44% (Baymax), 65% (Ultron), 18% (Sentinel)Assets: $49,727,147Equity: $ 49,727,147

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Summary of results: 2015-18YearKey DecisionsSHVSalesCapacity UtilizationRemarks2015Launched Stark at $1,700 with heavy advertising & PRExtra support to dept storeSold plant capacityRaised debt at $50,000,000Discontinued Adv7, Doraemon7.44$69,349,96590.4%Due to sold plants and lesser employees2016Increased product prices, advertising, plant size, quality and process expenditure & inspection3.39$72,262,20092%Due to higher spend on quality and process2017Increased branding and prices (avg.), advertising, retailer margin (28%), quality spends3.73$82,215,57677.2%2018Reduced FG inventory, increase production of Ultron and Stark (Higher GM), advertising4.10$98,835,62492.7%Due to increased production

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LearningsGeneral:Do not take decisions without reading all the reports first, at every stage. A detailed knowledge of Market Scenario helps in winning half the battleBe one of the early entrants in each segments to have a first mover advantage.Better spend time on offline rollovers and simulations than risk it all in the online mode. Strategize keeping the target segment in mind (purchasing power, requirements etc.)Calculations in terms of unit costs, lost sales, plant utilization and efficiency are a must which facilitates proper allocation of resources.Opinions of all team members matter and proper attention has to be paid towards every team mates suggestions so team dynamics is a key take away

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LearningsMarketingKeep retail margins at a minimumPrice according to the recommendations onlyEven if cash Is negative, do not compromise on advertising as sales can help recover cashDistribution is key aspect in long run. Advertising has a prolonged effect but it decays over the years.

FinancePay off the debt entirely for better shareholder sentiment but can also maintain a healthy debt equity ratio.Raise capital by selling shares earlySpending on investor relations and repurchasing shares also helps raise SHV

OperationsNever compromise on quality: Spend more on quality, prevention type expenditures and lower the inspectionsDepreciation is a great expense so be careful while purchasing SCUsReduce idle time by more training, fewer employees and just the right amount of plant capacityJIT can be achieved by lower batch sizes and higher supplier relations.

New Product DevelopmentFollow the perceptual map for product specs and demand from consumersKeep redeveloping to avoid becoming an old brand with outdated product specs

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Thank You