UEH UNIVERSITY

BUSINESS SCHOOL
FACULTY OF INTERNATIONAL BUSINESS – MARKETING

REPORT 2nd 3 YEAR PLAN

Subject: International Business Simulator
E Company – Industry 11

Instructor : Mr. Ha Quang An

Student name : Hoang Le Bao Tran
Le Thanh Binh
Nguyen Xuan Mai
Vo Ngoc Thy Ngan
Lam Thanh Truc
Class : IBC06
Batch : 46

Ho Chi Minh city, March 20th, 2023

Step 1: Strategic Vision Statement
Answer: Benefiting from the accumulation from previous years, our goal for the
last 3 years is 1st place which include driving the stock price to its optimistic point;
taking market leadership position in UAV product in two regions North America and
Europe - Africa; and employing a global best-cost strategy in AC product that offers
“extra value” to our customers in the form of great quality. We need to have effective
strategies for staking out a market position and striving for good performances by
gaining the highest net profit; minimizing the costs of production and marketing. As
there’s no built-in bias that favors any one strategy, we keep our vision statement as
our first 3-year plan.
Step 2: Objectives/Performance Targets

Our overall performance goal is to achieve or above the goals defined by

investors for EPS, ROE, Credit Rating, Image Rating, and year-end Stock Price. In
addition, we calculated that the company's aim would not be excessively high
compared to the actual prediction to avoid system penalties.
Table 1. E Company’s performance targets

Year 13

IE
Year 12 Actual Target Point Goal
(Investor Expect)
EPS 12,6 14 10,5 18

ROE 195,8 200,0 45 20

Credit Rating B A- A 18

Image Rating 81 80 80 16

Stock Price 376,44 456 300 19

Year 14

Year 13 Target IE
Target Point Goal
(Actual) (Investor Expect)
EPS 14 14,5 12,5 16
ROE 200,0 210,0 47,5 20
Credit Rating A- A A 19

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Image Rating 80 80 80 16
Stock Price 456 507 330 18

Year 15

Year 14 Target IE
Target Point Goal
(Actual) (Investor Expect)
EPS 14,5 15,1 14,5 16

ROE 210,0 220,0 50 20

Credit Rating A A+ A 20

Image Rating 80 80 80 16

Stock Price 507 528 350 16

Total point goal 89

2.1 Earning per Share (EPS)

By either spending less on facilities and compensation, we want to enhance net
income. This will guarantee that the earnings per share figure satisfies requirements,
which is crucial because it represents the profitability of the company.
2.2 Return on Equity (ROE)
We aim for a higher ROE because it indicates that more profit was earned after
taxes. Similar to how we want to increase EPS, we may cut expenses while boosting the
ROE percentage.
2.3 Credit Rating
Up until Year 13, we intend to repurchase the maximum amount of shares per year,
which will result in a very low credit rating this year. But, after that, we aim to pay
dividends to improve the stock price, EPS, ROE, and credit rating greatly.
2.4 Image rating
To satisfy investor expectations, we put a lot of effort into keeping the image rating
during the previous three years at an average of 80 points.
2.5 Stock Price
Until Year 13, we continue to repurchase back as many shares as we can in order
to drive the stock price to its optimal point.
Step 3: AC Camera Strategy

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 The company will employ a global best-cost or “more value for the money”
strategy (e.g providing 5 star AC Cameras at lower prices than other 5 star brands) where
the competitive advantage is an ability incorporate appealing attributes (higher P/Q,
more models, longer warranties) at a lower cost than rivals.
Here is our evidence that our company is offering “extra value” to buyers in the
form of better styling/quality and/or wider product selection at “value” prices and “best
costs” on a global basis:
Table 2. AC Camera Strategy

Our Company’s
Amount Above
Costs Costs and Year 12
Areas of “Extra Value” Product or Below Year
Product Industry
Attributes or “Best Cost” 12 Industry
Attributes in Average
Average
Y12

North America $428 $421 $+7

Wholesale Prices Europe-Africa $430 $424 $+6

of AC Cameras
($ per unit) Asia-Pacific $395 $386 $+6

Latin America $393 $383 $+10

P/Q Rating (stars) 6.5 star 6.7 star -0.2 star

Number of Models 5 models 4.4 models +0.6 models

North America $5950 $6391 -6.9%

Advertising Europe-Africa $4675 $5652 -17.3%

Budget ($000s) Asia-Pacific $4000 $4674 -14.4%

Latin America $3275 $4024 -18.6%

North America 360 days 248 days +112 days

Europe-Africa 360 days 248 days +112 days

Warranty Period
(days) Asia-Pacific 180 days 180 days 0 days

Latin America 180 days 180 days 0 days

Total Production
$197.18 star $193.59 star +1.9%
Costs ($ per units

North America $44.77 $49.97 -10.4%

Marketing Costs
Europe-Africa $43.90 $52.72 -16.7%
($ per unit)
Asia-Pacific $40.41 $42.71 -5.4%

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 Latin America $45.63 $45.98 -0.8%

Step 4: UAV Drone Strategy

The company will employ a focus strategy for UAV Drones aimed at:
+ We will take a market leadership position in: North America and Europe-
Africa.
+ We expect to achieve this leadership based on differentiation of our UAV
Drones from the offerings of rivals competing in the same segment(s).
Evidence that the company is on track to achieving market leadership in the target
segment(s):
Table 3. UAV Drone Strategy

Industry Average Industry Leader’s

Market Share in Target Market Share in
Our Market Share in
Market Share Segment (from data in Target Segment (from
the Target Segment
the Competitive data in the Competitive
(% of units sold)
Intelligence Reports) Intelligence Reports)

Year 11 Year 12 Year 11 Year 12 Year 11 Year 12

North America 14.2% 14.1% 12.5% 12.5% 14.2% 14.1%

Europe-Africa 14.6% 14.5% 12.5% 12.5% 14.6% 14.5%

Asia-Pacific 12.1% 14.9% 12.5% 12.5% 16.2% 15.2%

Latin America 11.9% 12.4% 12.5% 12.5% 15.6% 15.4%

Worldwide 13.2% 14.0% 12.5% 12.5% 15.2% 14.8%

Because this is a newly developed strategy that we plan to implement over the next
three years, the data presented above does not indicate that we are successfully pursuing
a focus strategy.

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STEP 5: Operating Projections
Table 4. Forecast trend

References

AC Camera Unit Growth Rate 5,20%

Page 4 Camera and Drone
UAV Drone Unit Growth Rate Journal
5,60%

Wage Increase 3,00% Compensation & Facilities

Marketing growth rate 3,00%

Forecast from previous years
Increase in Average Net Revenue (Increase) 10,00% data

We found that the sizes of the exchange rate adjustment each year are always equal
to 5 times the actual period-to-period percentage change in the real-world exchange rates
for US$, €, Brazilian real, Sing$, and Taiwan$. After analyzing the exchange rate in
Year 10, Year 11, we evaluated the revenue impact in Year 14, Year 15 as the table
below:
Table 5. Exchange rate prediction

Year 13 Year 14 Year 15

U.S. $ -3,09% -0,87% 3,09%

Euro 0,00% 2,39% -1,21%

Brazilian real -9,16% -39,96% 6,27%

Singapore $ -1,14% 0,46% 2,01%

Based on the below indexes, our company conducted some formulas to calculate
as below:

● Average Net RevenueYear T = Average Net RevenueYear T-1 × (1+Revenue impact)

× (1+ Growth in Average Net Revenue)
● AC Camera Units SoldYear T = Units SoldYear T-1 × (1+5.2%)
● UAV Drone Units SoldYear T = Units SoldYear T-1 × (1+5.6%)
● Cost of Units SoldYear T = (Units SoldYear T-1/ Units SoldYear T) × Cost of Units
soldYear T-1 × (1+ Wage Increase)

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 ● Marketing ExpensesYear T = Marketing ExpensesYear T-1 × (1+Marketing Growth
Rate)

● Administrative ExpensesYear T
= (Units SoldYear T-1
/ Units SoldYear T) ×
Administrative ExpensesYear T-1
The results we obtain in these tables below:
Table 6. Camera/Drone Operations in North America

NORTH AMERICA

Historical Operating Performance Company E’s Projected

Camera/Drone Operating Performance
Operations in Year 10 Year 11 Year 12
North America
Company Industry Company Industry Company Industry Year Year Year
E Average E Average E Average 13 14 15

AC Cameras
Average Net
Revenue (% per 417.79 380.45 423.34 374.18 420.56 413.87 371,57 405,17 459,46
unit)

Units Sold
297 302.99 265.30 275.01 293.60 285.99 350,9 369,1 388,3
(000s)

Cost of Units
207.85 194.46 219.44 196.29 201.59 195.02 167,15 163,65 160,23
Sold ($ per unit)

Delivery
Expenses ($ per 5.00 5.12 5.00 5.26 5.00 5.12 5,00 5,00 5,00
unit)

Marketing
Expenses ($ per 43.01 47.36 50.98 52.83 44.77 51.04 36,46 37,55 38,68
unit)

Administrative
Expenses ($ per 7.80 7.66 7.86 7.91 7.32 7.56 5,79 5,50 5,23
unit)

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 UAV Drones
Average Net
Revenue (% per 1,819.19 1,913.08 1,924.91 1,870.97 2,135.10 2,115.22 1982,38 2161,65 2451,29
unit)

Units Sold
83.10 70.99 86.30 76.01 85.50 76.00 90,1 95,1 100,5
(000s)

Cost of Units
1,095.86 1,122.20 1,194.03 1,092.87 1,156.70 1,138.88 971,32 947,40 924,08
Sold ($ per unit)

Delivery
Expenses ($ per 42.49 43.44 44.01 43.68 42.22 43.25 41,52 41,52 41,52
unit)

Marketing
Expenses ($ per 140.79 164.04 137.89 157.89 157.68 163.17 161,49 166,33 171,32
unit)

Administrative
Expenses ($ per 9.04 9.91 8.99 9.93 8.39 9.50 7,27 6,88 6,52
unit)

Table 7. Camera/Drone Operations in Europe-Africa

EUROPE-AFRICA

Historical Operating Performance Company E’s Projected

Camera/Drone Operating Performance
Operations in Year 10 Year 11 Year 12
Europe-Africa
Company Industry Company Industry Company Industry Year 13 Year 14 Year 15
E Average E Average E Average

AC Cameras
Average Net
Revenue (% per 402.20 360.90 433.95 389.11 424.11 418.78 398,77 449,13 488,07
unit)

Units Sold
246.30 256.03 230.80 232.01 250.10 242.01 398,77 282,8 488,07
(000s)

Cost of Units
207.85 194.14 219.45 196.41 201.59 195.08 268,8 167,23 297,5
Sold ($ per unit)

Delivery
Expenses ($ per 22.60 20.83 23.68 22.02 22.20 22.07 170,8 22,28 163,73
unit)

Marketing
Expenses ($ per 43.34 49.96 51.45 55.73 43.90 53.96 22,28 42,15 22,28
unit)

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Administrative
Expenses ($ per 7.80 7.65 7.86 7.91 7.32 7.57 40,92 6,06 43,41
unit)

UAV Drones
Average Net
Revenue (% per 1,810.73 1,822.06 1,931.63 1,926.98 2,099.43 2,113.42 1962,77 2210,65 2402,29
unit)

Units Sold
64.00 57.99 73.60 62.99 73.20 63.00 87,1 92,0 97,1
(000s)

Cost of Units
1,095.52 1,122.95 1,193.85 1,093.76 1,156.67 1,139.06 971,34 947,42 924,10
Sold ($ per unit)

Delivery
Expenses ($ per 117.14 117.83 120.29 120.59 121.84 122.86 118,99 118,99 118,99
unit)

Marketing
Expenses ($ per 156.25 177.37 149.46 171.66 168.03 177.27 166,48 171,47 176,62
unit)

Administrative
Expenses ($ per 9.03 9.92 8.99 9.92 8.39 9.50 7,27 6,88 6,52
unit)

Table 8. Camera/Drone Operations in Asia-Pacific

ASIA-PACIFIC

Historical Operating Performance Company E’s Projected

Camera/Drone Operating Performance
Operations in Year 10 Year 11 Year 12
Asia-Pacific
Company Industry Company Industry Company Industry Year Year Year
E Average E Average E Average 13 14 15

AC Cameras
Average Net
Revenue (% per 387.46 330.68 390.44 347.76 383.69 372.86 360,73 398,63 447,30
unit)

Units Sold 332,1 349,4 367,5

227.20 266.99 240.00 270.00 255.50 277.00
(000s)

Cost of Units 161,01 157,64 154,35

207.84 188.30 208.98 192.89 191.81 191.02
Sold ($ per unit)

Delivery
Expenses ($ per 29.90 26.20 30.50 27.81 28.70 28.08 28,64 28,64 28,64
unit)

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Marketing
Expenses ($ per 42.91 41.55 52.40 43.66 40.41 42.10 31,24 32,18 33,14
unit)

Administrative
Expenses ($ per 7.80 7.62 7.86 7.88 7.32 7.52 6,36 6,05 5,75
unit)

UAV Drones
Average Net
Revenue (% per 1,706.31 1,752.23 1,880.86 1,825.71 1,954.04 1,972.90 1858,25 2053,48 2304,23
unit)

Units Sold 72,5 76,6 80,8

50.10 44.00 45.60 47.01 60.60 50.98
(000s)

Cost of Units 906,33 884,02 862,25

1,075.35 1,109.24 1,129.63 1,091.91 1,091.86 1,115.15
Sold ($ per unit)

Delivery
Expenses ($ per 146.11 149.25 158.90 155.21 152.94 156.67 154,79 154,79 154,79
unit)

Marketing
Expenses ($ per 143.71 173.11 163.38 173.27 163.37 166.85 155,86 160,54 165,35
unit)

Administrative
Expenses ($ per 9.02 9.88 8.99 9.93 8.40 9.49 7,28 6,89 6,53
unit)

Table 9. Camera/Drone Operations in Latin America

LATIN AMERICA

Historical Operating Performance Company E’s Projected

Camera/Drone Operating Performance
Operations in Year 10 Year 11 Year 12
Latin America
Company Industry Company Industry Company Industry Year Year Year
E Average E Average E Average 13 14 15

AC Cameras
Average Net
Revenue (% per 375.90 329.68 379.04 344.97 376.98 366.16 317,61 209,76 245,21
unit)

Units Sold
164.80 187.01 174.80 188.00 189.00 203.01 264,1 277,8 292,3
(000s)

Cost of Units
207.86 188.28 208.96 193.10 191.79 191.19 157,35 154,06 150,84
Sold ($ per unit)

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Delivery
Expenses ($ per 29.30 26.24 29.84 27.66 28.58 27.92 27,55 27,55 27,55
unit)

Marketing
Expenses ($ per 44.45 47.01 52.63 48.79 45.63 45.98 30,76 31,68 32,63
unit)

Administrative
Expenses ($ per 7.80 7.63 7.85 7.87 7.32 7.52 5,79 5,50 5,23
unit)

UAV Drones
Average Net
Revenue (% per 1,700.56 1,736.97 1,921.47 1,804.81 1,913.50 1,930.66 1692,47 1117,77 1306,65
unit)

Units Sold 43,4 45,8 48,4

31.90 27.00 28.60 30.00 31.70 32.00
(000s)

Cost of Units 906,47 884,15 862,38

1,075.49 1,111.98 1,129.06 1,071.17 1,091.70 1,119.70
Sold ($ per unit)

Delivery
Expenses ($ per 147.12 149.22 161.82 153.80 152.43 155.96 152,79 152,79 152,79
unit)

Marketing
Expenses ($ per 181.19 211.45 213.29 195.76 227.13 192.57 187,79 193,42 199,23
unit)

Administrative
Expenses ($ per 9.03 9.85 8.99 9.94 8.39 9.55 7,28 6,89 6,53
unit)

Table 10. Income Statements

Historical Operating Performance Company E’s Projected Income
Income Statements Performance

Year 10 Year 11 Year 12

Year 13 Year 14 Year 15

Net Revenues AC $395,860 $474,119 $559,688

373,127 372,430 398,829
Cameras

UAV $557,746 $617,444 $729,149

406,796 449,009 515,302
Drones

Total 779,923 821,439 914,131 $953,606 $1,091,563 $1,288,837

Cost of Units Sold 443,766 470,260 479,199 $426,125 $491,064 $505,796

Delivery Costs 29.30 29.84 28.58 $39.767 $59.554 $62.786

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Marketing Costs 44.45 52.63 45.63 $63.175 $98.579 $107.033

Administrative Expenses 7.80 7.85 7.32 $9.523 $9.517 $9.517

Total Operating Profit 1,700.56 1,921.47 1,913.50 $415,016 $432,849 $603,705

Interest Costs 5,392 9,229 8,154 $5,653 $9,200 $8,188

Pre-Tax Profit 204,478 205,211 284,882 $409,363 $423,649 $595,517

Income Taxes 61,343 61,563 85,465 $122,809 $127,095 $178,655

Net Profit 143,135 143,648 199,417 $286,554 $296,554 $416,862

Earnings Per Share

$8.40 $8.70 $12.60 $ 17.31 $ 16.16 $ 22.77
($/share)

Dividends Per Share $ 0.81 $ 5.12

$0.00 $0.00 $0.00 $0.00
($/share)

Return on Average Equity

104.3% 156.2% 195.8% 200% 210% 220%
(ROE)

Share of Stock Outstanding

17,035 16,520 15,829 15,000 15,000 15,000
(000s)

Total Shareholder Equity 88,114 95,844 107,865 121,000 342,376 417,662

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