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oard Meeting resentation # 1
eam 3
introducing
ubin &Software
.Hardware Inc
ubin Guo rant Ingval
lex Kim
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Introduction
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orporate Mission and
is ion
Statement
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orpora e ss on an s onStatement
Vision Statement To lead the
computerindustry inproductinnovation andquality.
Mission Statement To serve
individuals andbusinessaround theglobe with themostinnovative andhighest quality
products.
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urrent CorporateStrategy
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# :BU 1 ardwareCompany
# :BU 2 oftware ompany
# :BU 3 ystemsCompany
urrent Corporate Strategy
Generic StrategyBroad Differentiation
Diversification StrategyBreadth Diversification
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Diversification Strategy Relatedness
SBU #3 - 50% related to SBU#1 and #2
SBU #1 and #2 - virtuallyunrelated to each other
urrent Corporate Strategy
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Diversification Strategy Strategic Fit
SBU #1 and #3 R&D and Technology Supply Chain Activities Distribution Service
urrent Corporate Strategy
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Diversification Strategy Strategic Fit
SBU #2 and #3 R&D and Technology Distribution Marketing and sales Service
urrent Corporate Strategy
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Diversification Strategy Strategic Fit
SBU #1 and #2 Distribution Marketing and sales Service
urrent Corporate Strategy
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Diversification Strategy Funding
Book Value (000) SBU 1- $3,709 SBU 2- $4,554 SBU 3- $5,827
urrent Corporate Strategy
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Scope of Operation
urrent Corporate Strategy
#BU 1#BU 2#BU 3
NAFTA ASEAN EUROPEA
N UNION
MERCOS
URE
CHINA
SBU #1 58.6%SBU #2 16.5% 22.3%SBU #3 17.5% 14.7%
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resent Corporate bjectives with
erformance Results
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Strategic Objectives
Broad Differentiation
We aim to offer high quality andhighly innovative products
Beat rivals on differentiating featuresand quality
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Strategic Objectives
Hold 20% market share
Costs to 40% of sales
Export to all major areas
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Financial Objectives
Total sales to $7,320,000 from$6,320,000
Profit margin to 7% of sales from2.2%
Net profit after tax from $142,000 to$512,400
< <
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Demand Generating Objectives
High quality products/programs
Product innovation index > 80 Export to all major areas
Market more to countries with higherforecast
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Objectives Cont.
HR development .4% of sales Provide fair or above average wages
Safe work environment Maintain good image globally Conduct ethical business, beyond
what is legal
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Stockholder objectives
Provide consistent year to yeargrowth in stock value
Performance-Stock price one year ago $6.25-Current price $33.44 (535% annual
return)
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Performance Results
Highest quality programs- (SBU1) 70, (SBU2) 150, (SBU 3) 150
Product innovation index > 80- (SBU 1) 86, (SBU 2) 100, (SBU 3)84
Export to all major areas- NAFTA, ASEAN, MERCOSUR, EU, andChina
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Performance Results
Hold 20% market share Current market share 15.30%
Costs to 40% of sales Current COS (SBU 1) 44%, (SBU 2)
41%, (SBU 3) 42%
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uture t tractiveness of resent Industries
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Future Attractiveness of Present
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Future Attractiveness of PresentIndustries
IndustryAttractiveness
Measure
Importance Weight Industry A/ SBU 1Rating
Industry B/ SBU 2Rating
Industry C/ SBU 3Rating
Market size & projected growthrate
0.15 7/1.05 8/1.2 9/1.35
Intensity of Competition
0.25 5/1.25 5/1.25 5/1.25
Opportunities &Threats 0.15 5/.75 7/1.05 7/1.05IndustryProfitability
0.10 6/.6 7/.7 8/.8
Cross IndustryStrategic Fit
0.20 8/1.6 8/1.6 10/2
ResourceRequirement 0.10 7/.7 9/.9 6/.6Regulations andFactors
0.05 8/.4 6/.3 7/.35
Overall WeightedScore
6.35 7 7.4
Future Attractiveness of Present
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Future Attractiveness of PresentIndustries
Most attractive industry ranked: 1. Industry C/SBU #3 2. Industry B/SBU #2
3. Industry A/SBU #1
Attractiveness of Industries as aGroup
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ompetit ive&osit ion trategic Quali ty
f SBUs
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Quality of SBUs
S t r e n g t h s
T h r e a t s
W e a k n e sse s
O p p o rtu n itie s
Competitive Position & Strategic
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Competitive Position & StrategicQuality of SBUsCompetitive StrengthMeasure
Importance Weight SBU 1 Rating SBU 2 Rating SBU 3 Rating
Relative market share 0.15 6.5/0.98 6.5/0.98 7/1.05
Costs relative tocompetitors costs
0.15 6.5/0.98 6/0.9 6.5/0.98
Ability to match or beat rivals on key product attributes
0.15 8.5/1.28 10/1.5 8.5/1.28
Ability to benefit fromstrategic fits with sister
business
0.10 5/0.5 5/0.5 7/0.7
Brand image andreputation
0.15 8/1.2 8.5/1.2 8.5/1.2
Competitivelyvaluable capabilities 0.20 6/1.2 8/1.6 9/1.8
Profitability relative tocompetitors
0.10 6.5/0.65 7/0.7 9/0.9
Overall WeightedScore
6.79 7.38 7.91
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nvestment Priori tyAnalysis
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Investment Priority Analysis
Industry
Attractiveness
Medium
High
Low
WeakAverage
Strong/ompeti t ive Strength Market Posi t ion
. 7
. 37
. 3
High priority for resource allocat
Medium priority for resource alloLow priority for resource allocatNote : Circle size are scaled to reflect the
percentage of companywide revenues
. 3
. 35
7
BU 1
BU 3 SBU 2
. 91. 38
. 79
Future Attractiveness of Present
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Future Attractiveness of PresentIndustries
Most attractive SBU ranked: 1. SBU #3 2. SBU #2
3. SBU #1
Attractiveness of SBUs as a Group
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djustments to orporate Mission nd Strategy
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Changes in International Sales
International sales to 50%-Currently 43%
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Recommended actions
Move productions cite to off-shorelow cost labor country
significantly help us reach out 30%cost of sales goal
Add sales representative for SBU2 & 3 this
Add China as export area to SBU 1 Next two period forecasts for China:
112, 114
Purchase Venture #5 fourth quarter
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Long-term recommendations
Begin dividend ratio of 10% startingin year three
Begin paying off debt starting yearthree
Invest in corporate notes and CD
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ew and Continuing orporateObjectives
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New Objectives
Cost of sales to 30% from 40% ineach SBU
-Increase operations technology 25%next quarter
NPAT to $800,000 by end of next year- 57,500 per quarter Increase HR Dev . to 1.2% of sales in
order to lower employee turnover-Higher than industry average wages and
benefits
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Continuing Objectives
Hold 20% market share- Drop price of products $25 in each
SBU
- 1.18% per quarter onto 15.3%- 74,441,000 x 16.48% = $12,268,000sales
Profit margin to 7%
.29% increase each quarter 6.12% X 12,268,000 = 751,802 NPAT Export to all major areas Product innovation index > 80
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Conclusion
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R aised sha reh o ld er va lu e
%53 5 ann ua l re tu rn
,Pro fits $ 1 4 2 0 0 0 to,$ 5 7 0 0 0 0
S tra teg y is w o rkin g
C on tin u e p u rsu in g h ig h er
N PAT an d h ig h er sh a reh o ld erw ea lth
W illin g to m ake ch an g es in
Conclusion
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& .ubin Software Hardware Inc
Questions andAnswers
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