BALDWIN COMPANY

SIM ID # C47555

Assignment Wk 5 Team Factpack Report # 1

Alok Kumar Lina Pitchford Paige Tuggle Anna VanDerbeck
Analysis of issues and support for year 1 business decisions

TABLE OF CONTENTS
i. ii.

Competitive Rivalry 3 Segment analysis Research & Development

a. b. c. d. e. a. b. c. a. b. c.

Traditional. Low End High End... Performance. Size Traditional. Low End High End... Traditional. Low End High End...

8 9 10 11 12 13 17 21 28 29 30

Marketing

Production

iii. MAPE... 31 iv. Finance 32 v. Human Resources 36 vi. Summary

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TEAM BALDWIN COMPETITIVE RIVALRY

The Perceptual map shows the competitive rivalry in all segments of the sensor industry. We continue to compete with market share with Andrews Team. Perceptual Map
1. Low End Circle: Acre( 3.0,17) Ebb(3.0,17) Bead (1.7,17) Feat(3.0,17) Cedar(3.0,17) Dell (3.0,17) High End Circle: Adam (8.4,11) Fist(8.4,11.5) Cid(8.8,11.5) Bid(8.9,11.1) Echo(7.6,12.4) Dixie(8.0,12.0) Traditional Circle: Able(5.7,14.3)Fast(5.7,14.3) Baker(5.5,15.0) Daze(5.8,14.2) Daze(5.8,14.2) Eat(5.5,15.0) Cake(5.5,14.5) Size Circle: Buddy(4.0,10.6) Cure(4.3,10.5) Agape(4.2,10.5) Dune(4.2,10.3) Fume(4.0, 11.0) Egg(4.0,11.0) Performance Circle: Aft(9.8,15.5) Foam(9.34,15.5) Coat(9.8,15.0) Bold(9.4,14.5) Dot(9.4,15.5) Edge(9.4,15.5)
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TEAM BALDWIN COMPETITIVE RIVALRY

Perceptual Map Analysis
Current HHI is 1755, increase of 21 points from last year. The market is becoming less concentrated. a. Low End: With exception of Bead all segment products are less than a point from ideal performance, all are less than a point of the ideal size. b. High End: Cid and Bid appear to be the only ones targeting the ideal spot. The other segments appear to be drifting towards more traditional. c. Traditional: Able and Fast are at the ideal spot. The other segments are gaining ground towards high end. d. Size: There are no segment products in this area that are in the ideal spot. They all appear to be moving down and slightly to the right towards high end. e. Performance: There are no segment products in this area that are in the ideal spot. They all appear to be moving towards high end.

Low End Ideal spot: High End Ideal Spot: Traditional Ideal Spot: Size Ideal Spot: Performance Ideal Spot:

(performance 2.2,size 17.8) (performance 9.8, size 10.2) (performance 5.7, size 14.3) (performance 4.7, size 9.6) (performance 10.4, size 15.3)

TEAM BALDWIN COMPETITIVE RIVALRY

Financial Statistics of all Teams at the end of the Year 1
Andrews ROS Asset Turnover ROA Leverage (Assets/Equity) ROE Emergency Loan Sales EBIT Profits Cumulative Profit SG&A / Sales Contrib. Margin %
4.3% 1.32 5.7% 1.8 10.0% $0 $160,012,716 $16,262,579 $6,846,208 $11,034,715 11.1% 26.1%

Baldwin
5.3% 1.08 5.8% 1.8 10.6% $0 $127,132,992 $16,516,068 $6,768,168 $10,956,675 11.7% 31.4%

Chester
0.8% 0.96 0.8% 2.2 1.7% $0 $99,933,388 $7,759,363 $801,578 $4,990,085 12.6% 29.4%

Digby
4.8% 0.86 4.1% 2.5 10.3% $0 $95,361,273 $14,407,803 $4,533,838 $8,722,346 13.1% 36.2%

Erie
-1.4% 0.70 -1.0% 2.1 -2.0% $0 $87,885,881 $5,563,562 ($1,234,115) $2,954,392 14.9% 32.3%

Ferris
5.6% 1.09 6.1% 2.2 13.7% $0 $146,537,754 $20,842,730 $8,237,512 $12,426,019 14.6% 35.3% 5

TEAM BALDWIN COMPETITIVE RIVALRY

Financial Statistics of all Teams at the end of the Year 1

TEAM BALDWIN COMPETITIVE RIVALRY

Financial Statistics of all Teams at the end of the Year 1

TEAM BALDWIN TRADITIONAL R & D

We are the 3rd in the market share for traditional segment, holding at 16%. Digby Team is not far behind at 15%. We will need to make R&D changes to keep ahead of our closest competitors.
 Baker is 3rd in market share in this segment. R&D will change this Traditional Customer Buying Criteria Year 1 product to meet buyer expectations, pfmn from 5.5 to 5.7,maintain Expectations Importance size at 14.3 and change our MTBF from 16500 to 17000. This should help us to hit better market share for year 2. Price $19.50 - 29.50 23%  Our MTBF change to 17000 and pfmn to 5.7 will increase our customer awareness score, to target of 80%.  We are projecting our MTBF to increase to 19000 in the next 2 years, this will place our product in the ideal spot. Most companies were below 17000, this increase in our MTBF should be great for market share. Age Ideal Position Reliability Ideal Age = 2.0 Pfmn 5.7 Size 14.3 MTBF 1400019000 47% 21% 9%

TEAM BALDWIN LOW END R & D

The adjustment made in year 0 where not enough to increase market share for Bead. We will adjust performance and size to increase our market share.
 Bead needs more focus. So R&D will keep MTBF at 16500 to keep material cost down. We will change pfmn from 1.7 to 2.2 and change size to 16.0 for year 2.  The R&D changes will change our age from 1.8 to 2.83. We will keep costs down and continue to increase market share.  Our MTBF was right in the middle at 16500 for year 1. This decision to maintain 16500 will keep us at a good market share. Acre was at 13000, Ebb at 13500, and Able with the highest at 19000.

Low End Customer Buying Criteria Year 1

Expectations Price Age Ideal Position Reliability $14.50 - 24.50 Ideal Age = 7.0 Pfmn 2.2 Size 17.8 MTBF 1200017000 Importance 53% 24% 16% 7%

TEAM BALDWIN HIGH END R & D

We are 4th in the market share for the high end segment, holding at 14%. Andrews Team is holding the highest percent at 22%, Baldwin team will need to increase our market share by 8% to share in the top but by at least 9% to take lead in market share. High End Customer Buying Criteria Year 1 We will keep Bid price at $38.00 for year 2. This should help
Bid to take an increase in the high end market share just over Cid. Also at this price we will be able to maintain our profits. R&D will change Bid to meet buyer expectations, pfmn from 8.9 to 9.5 for year 2 to increase market share. Also will change size from 11.1 to 10.2. closer to buyer criteria. Our MTBF will be maintained at 23000, this will keep in line with the performance levels. Our MTBF is right in the middle of our competitors. Most other companies were at 25000, just above ours. We are looking to hit the ideal spot next year. Price Age Ideal Position Reliability Expectations $29.50 39.50 Ideal Age = 0.0 Pfmn 9.8 Size 10.2 MTBF 20000 25000 Importance 9% 29% 43% 7%

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TEAM BALDWIN PERFORMANCE R & D

We are 4th in the market share in this segment. Bold is holding at 17%. We are close to the bottom in market share for this segment and will need to make changes to gain more market share.
We are at the low end of the market share in this segment. Bold will need to have some R&D changes made. R&D will change pfmn from 9.4 to 9.5, size from 14.5 to 13.5 and MTBF from 25000 to 22000. These changes should help us decrease our cost to $33.00. We will increase our pfmn from 9.5 to 10.00, size from 13.5 to 15.0, and MTBF from 22000 to 25500 next year, in year 2. With our price decreased to $33.00 and the R&D changes above we will be in a better position to increase our market share by 3-6%.

Performance Customer Buying Criteria Year 1

Expectations Price Age Ideal Position Reliability $24.50 34.50 Ideal Age = 1.0 Pfmn 10.4 Size 15.3 MTBF 22000 27000 Importance 19% 9% 43% 7%

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TEAM BALDWIN SIZE R & D

We are the top in the market share in this segment. Buddy is holding at 19% with Cure from Chester Team close behind. We will need to make changes to gain more market share. Size Customer Buying Criteria Year 1 Buddy is the leader in this market for year 1. With this
price we are able to be profitable, and continue to increase our market share. R&D will change pfmn from 4.0 to 4.5, size from 10.6 to 9.6, and maintain MTBF at 19000. These changes will get us closer to the ideal spot, just being short with our size at 4.5. We project to increase size to 4.7, next year. This will place us in the ideal spot. We will maintain our MTBF at 19000 as the major of companies are right around 19000 or just below.
Price Age Ideal Position Reliability Expectations $29.50 39.50 Ideal Age = 0.0 Pfmn 9.8 Size 10.2 MTBF 20000 25000 Importance 9% 29% 43% 7%

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TEAM BALDWIN TRADITIONAL MARKETING

Baker is 4th in market share for this segment. Adjustments made in year 1 were not enough to increase market share for Baker.
 Baker is 4th with 16% of the market share in year 1. We will make adjustment to change the age of Baker product from 2.83 to the closer ideal age of 2.0. We project Baker s age to be 2.0 by year 4.  Able with 23% market share and Fast at 22% market share have an advantage over Baker as the age of both Able and Fast are closer to the ideal 2.0 age. We can expect that both these products will also continue to gain market share.  As we make adjustments to Baker s age according to Customer Buying Criteria this will increase our awareness and accessibility budgets.  Baker s Customer Survey Score is behind both Able and Fast with a score of 32. We will increase our awareness and accessibility budgets to counter our disadvantage and improve our survey score by year 4. Traditional Customer Buying Criteria Year 1 Market share Baker Able Fast 16% 23% 22% Age 2.83 2.0 2.0

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TEAM BALDWIN TRADITIONAL MARKETING

Bakers awareness score is 65%. Able and Fast are both head of Baker in this segment. Adjustments made in year 1 were not enough to increase customer awareness for Baker. Will we increase awareness budget in year 2 to target 70-75% awareness. Promo Budget Baket
 Baker is trailing both Able and Fast in customer awareness by 21% behind Able and 18% behind Fast. To increase Baker s awareness we will increase its awareness budget from 1200 to 1680 by year 2, this will increase Baker to the targeted 70-75% awareness goal. This increase will help Baker to be more competitive in this segment.  The promotional budget for Baker will be allocated between print media, web media, trade shows, direct mail and email. The majority of the promotional budget will be used for print media and direct mail, and trade shows, these are most effective for this product.  The use of web media and email will be used to reach those customers that internet is the main channel used for those customers. Print Media Direct Mail Trade Shows Web Media Email Budget $500 $400 $350 $230 $200 $1680

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TEAM BALDWIN TRADITIONAL MARKETING

Baker accessibility budget is $1400, trailing behind both Able at $2500 and Fast at $2000. Bakers accessibility budget will increase in year 3 to help increase our customer accessibility percentage in this market segment.  Baker s customer accessibility score is 58%. With the projected changes we anticipate Baker s accessibility rating to increase to 65% which will keep us competitive with other products.  Both Able and Fast had higher accessibility budgets for year 1. We will increase Baker s accessibility budget to $1900 to help increase its accessibility score in comparison to our rivals. Our target is 65% accessibility by year 3.
Sales Budget Out side Sales Inside Sales Distribution Baker $200000 $700000 $1000000

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TEAM BALDWIN TRADITIONAL MARKETING

Bakers price is currently at $29.00. We will need to lower Bakers price in year 2. Price is an important criteria in this segment and we need to lower our price to stay competitive. Bakers price will be lowered to $28.00 by year 2 in order to stay competitive with Able.  Baker s price will be lowered to $28.00 in year 2. The traditional customer buying criteria listed price expected price range for year 2 is $19.50-$29.50. Baker s priced at $28.00, a bit lower than rival Able, this will put our product at a price advantage.

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TEAM BALDWIN LOW END MARKETING

We placed Beads MTBF a bit high for this segment. Bead is a primary focus in this market and adjustment will need to be made in order to stay competitive. Bead is very close in market share with Acre and Ebb.
 The low-end segment is a focus of our corporate strategy. We need to take better advantage in this segment. Bead s current market share is 19% and both Acre and Ebb are at 22%. Bead is only 4% away from gaining market share in this segment.  Both Acre and Ebb are at 5.6 in age with Bead at 2.83. We have an opportunity to increase our age with some flexibility were both Acre and Ebb will be closing in on the customer s buying criteria for age. We have a chance to obtain more market share.  We will project our market share to increase by 20% by year 3. Our product will be marketed to be more appealing to customers.  Bead s customer survey is currently at 13, with Acre at 21. We will expect to increase our survey score by 20 points by year 3 also.

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TEAM BALDWIN LOW END MARKETING

Beads current customer survey rating is at 59%. Both Acre and Ebb are at 71%. Bead needs to increase product awareness which could increase our market share in this segment. Beads promotional budget will increase to $1600 to gain more market share. Promo Budget Baket
 Acre is in the lead with 71% in this segment. We plan to increase Bead s budget from $1100 to $1600 in year 2. This increase in budget will help to obtain a greater market share.  The promotional budget for Bead will be allocated between print media, web media, trade shows, direct mail and email. The majority of the promotional budget will be used for print media and direct mail, and trade shows, these are most effective for this product.  The use of web media and email will be used to reach those customers that internet is the main channel used for those customers. Print Media Direct Mail Trade Shows Web Media Email Budget $500 $400 $350 $200 $150 $1600

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TEAM BALDWIN LOW END MARKETING

Bead s accessibility budget is currently at $1300, while Acre is at $1500 and Ebb not far behind at $1400. We will increase Bead s accessibility budget to $1500 in year 2 to help stay competitive in this market and gain market more market share.  Both Acre and Ebb had slightly higher accessibility budgets for year 1. We will increase Bead s accessibility budget to $1500 to help increase its accessibility score in comparison to our rivals. Our target is 50% accessibility by year 2.  Bead s customer accessibility score is 39%. With the projected changes we anticipate Bead s accessibility rating to increase to 50% which will keep us competitive with other products.
Sales Budget Out side Sales Inside Sales Distribution Bead $150000 $350000 $1000000

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TEAM BALDWIN LOW END MARKETING

Beads price is currently at $20.50. We will need to lower Beads price in year 2. Price is an important criteria in this segment and we need to lower our price to stay competitive. Beads price will be lowered to $19.00 by year 2 in order to stay competitive with Acre.  Bead s price will be lowered to $19.00 in year 2. The traditional customer buying criteria listed price expected price range for year 2 is $14.50-$24.50. Baker s priced at $19.00, a bit lower than rival Arce, this will put our product at a price advantage.

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TEAM BALDWIN HIGH END MARKETING

Bid is currently at 14% of market share for this segment. Adam is in the lead with 22%. This market is not a major concern for us, as our strategy is price more price driven.
 The high-end segment is not the focus of our corporate strategy. Bid s current market share is 14% and both Adam at 22% and Fist at 21%.  Both Adam is at 1.66 and Fist at 1.68 in age with Bid at 1.49. We have an opportunity to increase our age with some flexibility were both Acre and Ebb are beyond the customers buying criteria for age. We have a chance to obtain more market share.  We will project our market share to increase by 5% by year 3. Our product will be marketed to be more appealing to customers.  Bids customer survey is currently at 23, with Adam at 25. We will expect to increase our survey score by 5 by year 2.  This segment is not our focus but we will continue to review for ways to increase potential market share.

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TEAM BALDWIN HIGH END MARKETING

Bids awareness score is 54%. Adam is at 76% and Fist is at 60% and both head of Bid in this segment. Adjustments made in year 1 were not enough to increase customer awareness for Bid. Will we increase awareness budget in year 2 to target 65% awareness.
Promo Budget  Bid is trailing both Adam and Fist in customer awareness by 22% behind Adam and 23% behind Fist. We will maintain Bid s awareness budget at 1000 for year 2.  The promotional budget for Bid will be allocated between print media, web media, trade shows, direct mail and email. The majority of the promotional budget will be used for print media and direct mail, and trade shows, these are most effective for this product.  The use of web media and email will be used to reach those customers that internet is the main channel used for those customers. Print Media Direct Mail Trade Shows Web Media Email Budget Bid $400 $200 $200 $100 $100 $1000

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TEAM BALDWIN HIGH END MARKETING

Bid s accessibility budget is currently at $1100, while Adam is at $1900 and Fist not far behind at $2000. We will maintain Bid s accessibility budget at $1100 in year 2, this is market is not a high priority in relation to our strategy.  Both Adam and Fist had considerable higher accessibility budgets for year 1. We will maintain Bid s budget at $110. Our target is 50% accessibility by year 2.  Bid s customer accessibility score is 47%. Maintaining Bid s current accessibility budget we will still anticipate accessibility rating to increase to 50% which will keep us competitive with other products.
Sales Budget Out side Sales Inside Sales Distribution Bead $50000 $50000 $1000000

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TEAM BALDWIN HIGH END MARKETING

Bid s price is currently at $39.00. We will need to lower Baker s price in year 2. Price is an important criteria in this segment and we need to lower our price to stay competitive. Bid s price will be lowered to $38.00 by year 2 in order to stay competitive with Adam, Fist and Cid.  Bid s price will be lowered to $38.00 in year 2. The traditional customer buying criteria listed price expected price range for year 2 is $29.50-$39.50. Baker s priced at $38.00, a bit lower than rival Adam, this will put our product at a price advantage.

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TEAM BALDWIN TRADITIONAL PRODUCTION

Supply and Demand

Baker is so far our leader in production. We are selling way over capacity with low inventory left. We will schedule to increase production in the following year.

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TEAM BALDWIN PRODUCTION

Material And Labor Cost

The material costs for Baker is our lowest costs with Bid being our highest. We need to decrease material cost so we can profit more from production.

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TEAM BALDWIN PRODUCTION

Projected Supply
Capacity Baker Bead Bid Bold Buddy Total 1800 1400 900 600 600 Utilization 72% 141% 50% 74% 66% Projected units 1296 1974 450 444 396 4560
Available for sale- 4867 Demand- 5300 Shortage/surplus- 433
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Inventory OH 202 7 59 27 12 307

TEAM BALDWIN TRADITIONAL PRODUCTION

Baker is the leader in our traditional production. We are in 3rd compared to the rest of the industry. We need to make this better by increasing production and cutting our costs.

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TEAM BALDWIN LOW END PRODUCTION

Bead is the leader in our Low End production and falls 2nd in the industry. We the utilization is at 141% though so we are right on track with this production.

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TEAM BALDWIN HIGH END PRODUCTION

Bid is the leader in our High End production but falls into 4th compared to the rest of the industry. We need to increase production and also maximize the utilization percentage which is only at 50%.

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TEAM BALDWIN MEAN AVERAGE PERCENT ERROR

A. We will continue to use the same forecasting methods as in 2013 we did not stock out of any products. B. We will continue to have minimal inventory left at the end of each year to keep carrying costs low. Segment Traditional Low End High End Size Product Baker Bead Bid Buddy Projected units _ _ _ _ _ Actual Units 1274 2012 427 496 447 4656 % of Error -100 -100 -100 -100 -100

Performance Bold Total MAPE for 2013

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TEAM BALDWIN FINANCE

Observations
Our closing stock price was $43.18 for 2013 We will increase our stock price by an additional 20 % in 2014 Our stock price increased by 26% or $8.93 Our EPS is $3.99 We paid a dividend of $2.00. Our EPS has raised by 40.5%, we will continue to pay out 50% of our EPS as allowed after meeting the reduction of long term debt goals.

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TEAM BALDWIN FINANCE

Observations
Our net income came in 3rd out of our 6 competitors, we must continue to increase profits to remain competitive. Our net income will continue to rise as our profits rise This will increase our Bond Rating

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TEAM BALDWIN FINANCE

Observations
Our ROS is within the normal range of 2 8 percent and will go up as we decrease costs Our ROA is 5.8%. Our ROA is in line with our competitors and will continue to increase by 35% in 2014 as our profits rise. Current Ratio is 3.74, this means we have $3.74 in short term assets to cover each dollar of current debt. ROE is 10.6 %, this number will increase as our net income and profits increase.

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TEAM BALDWIN FINANCE

a. Our cash policy is to increase dividends and payoff long term debt to reduce interest expense. b. Our ending cash was $27,814,000 and will increase as profits go up. c. We had no emergency loans. We will issue common stock for $20,000 to fund our activities for 2014 d. $6,950 of our long term debt will become current debt in 2014. This will leave $34,750 left in long term debt. e. We will pay off an additional $10,000 in 2014 to reduce our long term debt by 42 %. This is inline with our original goals to decrease long term debt by 50% in four years.

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TEAM BALDWIN HUMAN RESOURCE

Right now we are running workers at the needed complement of 757, with 671 on 1st shift and 86 on 2nd shift. Our Recruiting cost is $133, we need to decrease this cost while making sure we dont have any overtime workers. Currently our overtime is at 0%. This keeps costs down for our company.

Compared to the rest of the company we are running in the middle of the pack and need to work on decrease in need costs.
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TEAM BALDWIN SUMMARY

Research and Development
We are the top in the market share in this segment. Buddy is holding at 19% with Cure from Chester Team close behind. We will need to make changes to gain more market share. The adjustment made in year 0 was not enough to increase market share for Bead. We will adjust performance and size to increase our market share. We are 4th in the market share for the high end segment, holding at 14%. Andrews Team is holding the highest percent at 22%; Baldwin team will need to increase our market share by 8% to share in the top but by at least 9% to take lead in market share. We are 4th in the market share in this segment. Bold is holding at 17%. We are close to the bottom in market share for this segment and will need to make changes to gain more market share. We are the top in the market share in this segment. Buddy is holding at 19% with Cure from Chester Team close behind. We will need to make changes to gain more market share. Marketing Baker is 4th in market share for this segment. Adjustments made in year 1 were not enough to increase market share for Baker. Bakers awareness score is 65%. Able and fast are both head of Baker in this segment. Adjustments made in year 1 were not enough to increase customer awareness for Baker. Will we increase awareness budget in year 2 to target 70-75% awareness. We placed Beads MTBF a bit high for this segment. Bead is a primary focus in this market and adjustment will need to be made in order to stay competitive. Bead is very close in market share with Acre and Ebb. Beads accessibility budget is currently at $1300, while Acre is at $1500 and Ebb not far behind at $1400. We will increase Beads accessibility budget to $1500 in year 2 to help stay competitive in this market and gain market more market share. Bids accessibility budget is currently at $1100, while Adam is at $1900 and Fist not far behind at $2000. We will maintain Bids accessibility budget at $1100 in year 2, this is market is not a high priority in relation to our strategy. Bids price is currently at $39.00. We will need to lower Bakers price in year 2. Price is an important criterion in this segment and we need to lower our price to stay competitive. Bids price will be lowered to $38.00 by year 2 in order to stay competitive with Adam, Fist, and Cid. 37

TEAM BALDWIN SUMMARY

Production Baker is so far our leader in production. We are selling way over capacity with low inventory left. We will schedule to increase production in the following year. The material costs for Baker is our lowest costs with Bid being our highest. We need to decrease material cost so we can profit more from production. Baker is the leader in our traditional production. We are in 3rd compared to the rest of the industry. We need to make this better by increasing production and cutting our costs. Bead is the leader in our Low End production and falls 2nd in the industry. We the utilization is at 141% though so we are right on track with this production. Bid is the leader in our High End production but falls into 4th compared to the rest of the industry. We need to increase production and also maximize the utilization percentage which is only at 50%. Finance Our cash policy is to increase dividends and payoff long term debt to reduce interest expense. Our ending cash was $27,814,000 and will increase as profits go up. We had no emergency loans. We will issue common stock for $20,000 to fund our activities for 2014. $6,950 of our long term debt will become current debt in 2014. This will leave $34,750 left in long term debt. We will pay off an additional $10,000 in 2014 to reduce our long term debt by 42 %. This is in line with our original goals to decrease long term debt by 50% in four years.

Human Resource Right now we are running workers at the needed complement of 757, with 671 on 1st shift and 86 on 2nd shift. Our Recruiting cost is $133, we need to decrease this cost while making sure we dont have any overtime workers. Currently our overtime is at 0%. This keeps costs down for our company.

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