Final Presentation from Chester Group Rev 0
- 1. CHESTER SENSORS CAPSIM: STOCKHOLDERS BRIEFING PRESENTATION Monday, December 07, 2015 Presented by: Paul LaBarge Rickie Lieu Steven Quenzel BUSN464 Professor: Gene Davis
- 2. Strategy DIFFERENTIATOR WITH PRODUCT LIFECYCLE FOCUS Provide a range of products to meet the needs of all markets sectors. Gaining market advantage by supplying reliable cutting edge sensor at affordable prices. Staying ahead of the competition with a rigorous R & D program. Using automation in order to keep manufacturing costs in check.
- 3. Mission Statement Providing high quality, reliable sensor products for the electronics industry that will be ahead of our competition. The stakeholders are our stockholders, employees and customers, whom we strive to exceed their expectations at all times.
- 4. Today’s Agenda Financial Analysis Marketing Analysis Production Analysis The Future Competition Wrap up
- 5. Chester Sensors FINANCIAL ANALYSIS • Cumulative profits exceeded all other competitors in the market. (by 40%) • Last 2 years results in two highest sales in dollars and profit in dollars of all competitors in all rounds. • Our Stock Price has consistently tracked upward, highest of all. (by almost double) • Paid stock dividends since our 2nd year of operation, were the only one doing so. • Only 2 other teams paid any dividends and each for only a single year.
- 6. If you invested $10,000 in our stock in 2015. When we split! REINVESTED ALL DIVIDENDS IN STOCK EACH YEAR! YOUR STOCK WOULD BE WORTH: $111,163 TODAY FastTrack 0 - 8
- 7. Closing Stock Prices Chester’s stock price had an increase from $15.79 in 2016, to $119.57 in 2023 Total Market Cap. = $315,672,931 FastTrack 8
- 8. 2016-2023 Bond Ratings for Chester Year Bond Rating 2016 A 2017 AA 2018 AA 2019 AAA 2020 AA 2021 AA 2022 AAA 2023 AAA Bond Ratings • Chester’s bond rating slipped a bit in round 5 and 6 due to our underestimating ending inventory those years. • It is now the highest rating available. FastTrack 0 - 8
- 9. Emergency Loans • In 2020 and 2021 we required emergency loans due to unexpectedly high end of year inventory and under funded plant improvements. • 2020 the amount was $4.1 million, we were the last of our competitors to make use of an Emergency Loan. • 2021 the amount was $7.8 million, the under funded plant improvements resulted in top team profits the following year.
- 10. Profit and Loss 2016 vs. 2023 Profit/Loss Statement for Chester Sensors FastTrack 0 - 8 Total Cumulative Profit since 2015: $111,650,343 This is the highest of all of our competitor by 53% 2016 2023 Change CYA Sales $53,070,199 $169,898,910 27.5% Expenses $49,812,526 $141,557,140 23.0% Profits $3,257,673 $38,168,772 134.0%
- 11. Return On Assets • Return on Assets Ratio= Net Income/ AverageTotal Assets • Competitive ROA for period since split • Chester has highestAverage ROA among competitors since split. • 16.6% which is 43% higher than nearest competitor Andrews Baldwin Chester Digby Erie Ferris 2016 6.0% 13.8% 11.4% -0.7% 16.9% 4.4% 2017 1.4% 12.7% 12.3% 22.8% 5.8% 7.9% 2018 4.2% 11.2% 19.0% 24.2% 19.9% -14.2% 2019 4.0% -2.3% 11.4% -3.5% -0.1% -12.8% 2020 14.6% -2.4% 8.8% 11.2% 5.5% 16.7% 2021 15.0% -5.7% 18.9% 6.8% 4.1% 6.6% 2022 12.6% -12.9% 25.5% 12.3% 21.0% 6.1% 2023 14.4% 23.5% 25.6% 15.8% 19.3% 21.5% FastTrack 0 - 8
- 12. Return On Sales • Competitive ROS 2016 through 2023 • Chester Group has the highest average ROS of all Groups at 11.5% Andrews Baldwin Chester Digby Erie Ferris Avg 2016 3.5% 7.1% 6.1% -0.5% 9.0% 3.4% 4.8% 2017 0.9% 7.9% 7.1% 11.5% 5.0% 6.3% 6.5% 2018 2.8% 6.3% 11.5% 12.9% 13.4% -67.6% -3.5% 2019 1.8% -1.8% 8.5% -3.5% -0.1% -15.3% -1.7% 2020 7.1% -2.2% 8.5% 8.7% 4.8% 12.7% 6.6% 2021 9.8% -8.7% 13.6% 5.9% 5.1% 6.8% 5.4% 2022 11.3% -19.0% 16.7% 9.0% 15.5% 7.6% 6.9% 2023 12.1% 9.5% 20.0% 9.9% 18.6% 26.3% 16.1% FastTrack 0 - 8
- 13. Return On Equity • Return on Equity Ratio= Net Income/Shareholder’s Equity • Competitive ROE 2016 through 2023 • Chester Group had the highest average ROE of all groups at 20.8% Andrews Baldwin Chester Digby Erie Ferris 2016 10.0% 20.6% 18.0% -1.0% 24.7% 6.9% 2017 3.1% 17.5% 18.3% 35.1% 7.7% 12.4% 2018 4.2% 11.2% 19.0% 24.2% 19.9% -14.2% 2019 9.3% -3.4% 15.5% -6.5% -0.2% -48.3% 2020 27.3% -4.1% 13.0% 12.0% 8.4% 35.3% 2021 24.1% -21.6% 25.7% 7.5% 9.2% 16.4% 2022 16.6% -51.6% 29.4% 13.3% 21.6% 15.3% 2023 19.5% 30.1% 27.4% 17.2% 20.0% 31.2% FastTrack 0 - 8
- 14. Sales Increase $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 Chester Inventory Issues FastTrack 0 - 8
- 15. Marketing • In our first year of operation (2016) we developed the Crete line of sensors that outperformed all of our competition’s products. • In our third year of operation 2019 we developed the Castle line of sensors that again trumped all other products, including our own. • We are currently developing the Cyclops line, which may easily be in a class by itself for years to come.
- 16. Market Share by Industry 2016 vs. 2023 20232016 FastTrack 1 and 8
- 17. Market Shares Low & High 2016 2022 We have strived to remain in both market sectors. Our Tradition of providing High quality products, have resulted in our excelling in the high tech sector. FastTrack 1 and 8
- 18. Chester’s Sensors Prices, Sales and Inventory • Chester’s Sensors market prices for 2016 through 2023 2016 2017 2018 2019 2020 2021 2022 2023 Cake Price $32.54 $33.65 $33.45 $33.25 $32.50 $29.50 $21.99 $20.99 Sales 1374 1352 1248 929 651 753 1393 1843 Inventory 0 35 25 185 623 860 259 0 Crete Price N/A $44.00 $44.00 $44.25 $44.25 $44.00 $42.99 $42.49 Sales N/A 248 673 812 990 990 1485 1485 Inventory N/A 0 20 0 0 0 0 0 Castle Price N/A N/A N/A N/A $45.00 $44.90 $44.80 $44.80 Sales N/A N/A N/A N/A 99 1089 1683 1980 Inventory N/A N/A N/A N/A 0 0 0 0 FastTrack 0 - 8
- 20. Presenting Production Analysis • Currently Highest production capacity at 3,200,000 unit per year • Our Plant Utilization is at 168% • Productivity Index consistently above 110% the last three years. • Consistently run 7% turnover rate. • Work force is currently at 477. FastTrack 8
- 21. Contribution Margins Chester’s Income Statements 2016 versus 2023 Round 1 Round 8 % Change Sales $53,070,199 $190,513,000 258.98% Direct Labor $17,142,000 $36,856,000 115.00% Direct Material $23,894,000 $69,744,000 191.89% Inventory Carry $0 $0 Variable Costs $41,036,000 $106,600,000 159.77% Contribution Margin $12,034,199 $83,913,000 597.29% Contribution Margin % 22.7% 44.0% 230.6% FastTrack 1 and 8
- 22. ProductionVs. Capacity • In 2016 Chester operated it’s manufacturing plant efficiently running 2nd shift at 86% of all it’s products FastTrack 1 2016
- 23. This year 2nd Shift ran 68% of our products. ProductionVs. Capacity FastTrack 8 2023
- 24. Inventory Levels • Production schedule was below the demand for all of our product lines in 2023. Zero inventory left! • With 4,852,000 unit left in inventory at the end of 2022, most competitors were very conservative with their production scheduling. • This amount to a reduction of over 80% of last years inventory. Considering that total demand for both sectors was 20,092,000 units this year, most competitors did their estimating of production scheduling surprisingly well. Inventory Levels Andrews Baldwin Chester Digby Erie Ferris Average 257.9 562.1 250.9 159.6 751.4 702.9 Maximum 604 1887 860 920 2990 1787 FastTrack 0 - 8
- 25. 2023 Market Share, Promo & Awareness Sector Product Unit Sales Market Share Promotion Budget Cust. Awareness Sales Budget Cust. Accessibility Cost/unit Rank in Sector Low Cake 1464000 14% $2,200,000 100% $2,275,000 70% $2.428 1 High 379000 4% 9 Crete 1466000 16% $2,350,000 100% $2,350,000 100% $3.206 2 Castle 1980000 21% $2,100,000 100% $2,100,000 100% $2.121 1 Sector Product Unit Sales Market Share Promotion Budget Cust. Awareness Sales Budget Cust. Accessibility Cost/unit Rank in Sector Low Cake 1021000 20% $1,100,000 61% $1,500,000 42% $1.654 1 High 551000 23% 1 2016 FastTrack 1 and 8
- 26. TQM investment • TQM has reduced material , labor and administrative costs. Shortened the length of time required for R & D projects and increased product demand. • Invested every sector of theTQM program at the recommended level of optimum efficiency, Cumulative Impacts Material Cost Reductions 11.8% Labor Cost Reduction 13.97% Reduction R&D cycle Time 40.01% Reduction Admin Cost 60.02% Demand Increase 14.22% FastTrack 8
- 27. CYCLOPS WHAT IS IN STORE FOR NEXTYEAR • We are designing a new line to better compete in the Ultra-High tech sector: • Line will be fully (10) automated in order to keep labor costs as low as possible. • Performance rating of 14.2, Size of 5.9, and MTBF of 23,000. This will allow for our sensors to be used in advanced ultra miniature electronic devices. • The expected cost of production is $22.67, and we intend to sell for $47.99. This should net a profit margin of 45%. • Once the new Cyclops line is up and running, we intend to phase out the Cake line and shift the Crete line towards the lower sector. • This will allow for some of the work force to move to the new line. • This is why we are still running the Cake line at a break even margin, we wish to retain those quality employees until the new line is operational. • Automation of the Crete and Castle lines will increase to 9 thus reducing labor costs in the future. THE FUTURE
- 28. Balanced Scorecard Chester 50 47 58 61 57 71 80 73 177 Poss. Points 82 89 89 100 100 100 100 100 240 Scored 674 out of a total of 1000 points Final Score Relative
- 29. Poorest Round (2) Best Round (8) Balanced Scorecard Final Score Relative
- 30. Final Results Team Chester achieved a score of 97.3 point out of a possible 100 2nd Place received 69.5 3rd Place received 67.2 Final Score Relative
- 31. Grading Rubric
- 32. Summary • Success was achieved by only one team member making official decisions, as instructed at beginning of competition. • Screen shots were circulated among team members for suggestions. • Spreadsheet were created to look at how all other teams were doing things, best idea were adapted into our game plans. • We looked at this as it were an actual business model and looked out for all stakeholders.
- 33. References CAPSIM Final Score Relative: Industry Results – Debrief – Final Score Relative. http://new.capsim.com/student/portal/index.cfm?template=repo rts.debrief.finalscore_relative_2004 CAPSIM FastTrack Reports: Generated Rounds0 through 8 http://new.capsim.com/student/portal/index.cfm?template=repo rts.reports.annualNewspaper_2004 •
- 34. Questions?