1) highlight to the Board why your Management Team should be re-appointed. This will require you to highlight and analyse areas of performance over Years 1-6 that support re-appointment 200 words?

Our sales in the first round hit our target of + $100,000. In round two we had a target of at least +$150,000. In round three we came close to our target of $180,000 for sales. These targets were formulated by looking at industry standards and using our marketing sales forecasting formula. Figure 1 shows a consistent increase across all three rounds for Baldwins sales.

Our ROS saw a gradual increase across the first three rounds in addition to our net profits and contribution margin. See figure 2. The reason our ROS was in the negatives after round 1 can be attributed to our implementation of our strategy and the fact that we were just starting off our company and required large investments to take place. A low ROS indicated that our profit being produced per dollar of sales was low. This can be shown through looking at our profit figures. Figure 3 shows a direct correlation between net profit, ROS, and contribution margin for the three rounds. Once our sales and profit numbers increased so too did our ROS because our efficiency to make and sell products was improving. The increase in efficiency can be attributed to the early investment in new plant improvements, shown in figure 4.

Garrett was our main competitor during the first three rounds. They had a higher ROS in the first two rounds; however, we managed to steadily increase and eventually overtake them in round three. See figure 5.

Our success can be credited by our strategy to invest early on in our plant and equipment which increased our automation. This led to an increased efficiency to produce our products and resulted in increased profits. It also helps our competitive advantage of being a cost leader because we can sell our products for cheaper later on.

We hit our market share targets of 12% in the first round, 14% in the second round, and 16% in the third round. The increase in market share is due to the new products we introduced at the end of rounds 1 and 3. In round 1 there was only one other team (Erie) which had introduced a new product, therefore we gained further market. We introduced two more products which would continue to increase our market share in future rounds. Our main competitor, Garrett, had beaten us in market share despite our strategy of introducing new products, see figure 6. Our inventory levels stayed on target by not increasing past 700 units across all our products from rounds 1-3. We had the best turnover rate of in the competition, refer to figure 7 for results comparing Baldwin and Garrett. This meant that we were able to keep our employees which saved us money. At the end of round 3 we only employed 34 new workers (the lowest in the competition). See figure 4 for round 1 to 3 results for new employees. The reason for such a low turnover rate was because of our high levels of automation. High levels of automation meant that high quantities of products were being produced. This decreased employees workload and increased our workforce productivity index, see figure 9.

Our traditional product baker sold 1461 units. Our competitors did better because they had lowered their price from the previous round; we, by accident did not. We differentiated our product by altering our age to 1.6.

Bead and Bat performed strongly and sold 2634 units between them. Our competitive strategy was cost leadership in this segment; however, we didnt quite hit the performance or size target for Bead and missed out on reducing our price by 50 cents which cost us. Bat was ahead of the game in terms of size and performance, but our introductory price let us down. Our customer accessibility and customer awareness set us apart from the competition.

In the high-end segment we sold the second most products; 800 units. Our competitive strategy for Bid was to be a cost leader and we achieved this by selling it for $38 against competitors who sold their products for $38.50.

Our competitive advantage for the performance segment focussed on the service life buying criteria, however, many of our competitors did the same. It was our pricing which was actually higher than most which enticed more buyers. This was because price was not a high importance (19%) but it differentiated our product.

Our size segment strategy was to meet the customer buying criteria. We had a high customer awareness (100%) which helped us sell more products than we probably should have and gave us a differentiation in the segment.

I think we should have considered placing more focus on introducing new products in certain segments such as size because no other team did this early on. The size segment is something we could have considered in round three which would have resulted in significant increase in market share. Minor details to buying requirements and pricing adjustments let us down and meant that we couldnt capitalise on the market as we would have liked. Our capacity needed attention because we were constantly stocking out for some products and losing sales and profits as a result.

Round 4 Summary:

ROS: 7.4% to 2.7% = Highest average compared to competitors. Garrett second with 1.2%

Asset Turnover: Decrease from 1.01 to 0.91 = Highest being Erie with 1.59 and lowest being Andrews 0.10. Currently 3/8.

ROA: 7.5% decrease to 2.4% = Highest second being Garrett with 1.4%

Leverage: 1.99 to 2.02 = 3/8 highest being Digby with 2.22.

ROE: 14.9% to 4.4%. Massive decrease highest being Andrews with 106.9%.

Sales: Increase from 178,372 to 224,815. Highest sales compared to others.

EBIT: 30,790 to 23,494. Currently highest by a long shot

Profit: 13,227 to 24,255. Second highest profit to Garrett.

Contribution Margin: Decrease from 44.25% to 41.88%. Currently highest margin compared to competitors.

No emergency loan. Garrett had on.

Marketshare:

Highest market share of 19.7% second being Garrett 18.6%. We increased from 17.2% in Year 3. Overtaking Garrett.

Share price:

Highest share price of 49.78 2.66 increase.

Second being Garrett 47.11 which decrease by $13

Cash Position:

Increase from (24,487) to about 3240. Second highest cash position.

Balance Sheet:

Showing our total liabilities and owners equity the highest.

Year 5 Summary:

ROS: 2% increase from 2.70% to 4.70% - Erie Highest of 8.3% second Garret 8.2%

Asset Turnover: Decrease of 9% from 0.91 to 0.82 Very blow average

ROA: Increase of 1.5% to 3.90% - Mid range

Leverage: Decrease of 9% from 2.02 to 1.93 Slightly above average

ROE: Increase of 2.6% from 4.90% to 7.5% - Below average

Sales: Sales increased $35,316 Second highest to Garrett of $264,514

EBIT: EBIT increased $14,580 Second Highest to Garrett of $42,997

Profit: Profit increased $6,579 Second Highest to Garrett of $55,366

Contribution Margin: Increase of 3.19% - Highest

Taken an emergency loan of $24,631

Market share:

Lost highest Market Share to Garrett of 21% ours being 20.7%. Although increasing 1%.

Closest competitor being Erie of 17.4%

Share price:

Second highest share price of $47.16 decreasing ($2.62) from previous year.

Highest being Garrett of $75.65

Cash Position:

$3240 in previous year to a massive decline to (16,698). Lowest Cash position for year 5.

Year 6 Summary:

ROS: 8% increase from 4.7% to 12.7% - Highest - Garrett Second with 10.7%

Asset Turnover: Increase of 10% from 0.82 to 0.92 Below average of 1.15

ROA: Increase of 7.8% from 3.9 to 11.7% - Second highest Garrett highest with 13.2%

Leverage: Decrease of -29% from 1.93 to 1.64 At average highest Ferris with 3.05

ROE: Increase of 11.7% from 7.5% to 19.2% - Third highest Andrews 42.2%, Garrett 21.9%

Sales: Sales increased $36,589 Second highest Garrett with 274,955

EBIT: EBIT increased $35,034 Highest second to Garrett with 55,139

Profit: Profit increased $25,264 Second Highest to Garrett of 84,803

Contribution Margin: Increase of 2.93% - Highest

No Loan taken out

Market share:

Market share increased to 21.7% taking over highest share in the market over Garrett of 19.9%

Share price:

Second highest share price of $83 increasing ($35.84) from previous year.

Highest being Garrett of $110.78

Cash Position:

From (16,698) to $44,239. Highest cash position in Year 6.

Year 4 saw a concerning decrease in key financial instruments and overall profit for the year. Both return on Sales and Return on Assets had roughly a 5% decrease in comparison to Year 3. However, in comparison to industry averages we maintained a strong position leading in these statistics. A decrease in Asset Turnover saw our figures well below industry average which can be attributed to the investment we made in furthering automation. Despite a negative outcome on these instruments, it can be noted that we were able to maintain a clear advantage in Net Sales and EBIT maintaining well above industry averages. Garrett is our clear competitor within the industry, achieving a higher profit in Year 4. Year 4 saw the company maintain the highest Market Share with Garrett close second of 18.6% of the industry proving the two main competitors. A growth in our share price saw it increase to $49.78 an increase of $2.66 in comparison to the previous year, second to Garrett priced at $47.11.An increase in our Cash position from the previous year from ($24,487) to $3240 showed positive growth in the company's liquidity.

Product Summary for Year 4:

Boat - Joined the Market in Year 4 generating $13,717 in Sales and ($639) Net margin (lowest of all products)

Best - Joined the Market in Year 4 generating $18,015 in Sales and ($203) Net Margin (Second Lowest Sales and Second Lowest Margin)

Bat - Been in the Market since year X, third lowest sales, however second lowest Net margin. A $4,954 increase in Sales from previous year however still a poor seller considering being in the market for longer.

Bead - Most profitable of $17,916 generating $43,445 of Sales. However, $3055 decrease from Year 3 in Net Margin and a slight decrease in Sales of $555

Baker - Highest Sales, however second highest Net Margin. Increase in Sales, however a decrease in Net Margin.

Bid - Increase in Sales, increase in Net Margin (Promising)

Bold - Increase in Sales, increase in Net Margin (Promising)

Buddy - Increase in Sales, increase in Net Margin (Promising)

Year 5 saw some promising improvements within the finance of the company. Return on Sales saw an increase of 2% however Erie and Garrett were able to increase this metric maintaining the highest return of 8.2%. Asset Turnover was seen to further decrease another 9% continuing to be a main issue of the company. This year saw an exponential growth in three key areas being our Sales of $35,316, EBIT of $14,580 and Net Profit of $6,579 compared to Year 4. Despite an increase in these areas, Garrett was seen to excel this year taking the lead in these three areas and hence able to control the highest percentage of market share. The company was forced to withdraw an emergency loan due to our cash position and needing additional liquidity to fund further investment for the next year in an attempt to take over market share. Our share price dropped $2.62 maintaining second to Garrett with a hefty increase of $28.54 sitting at a closing price of $75.65. Our cash position was heavily affected this year closing at ($19,938). Despite taking out a loan our spending was far too high to maintain a positive cash balance.

Product Summary:

Boat - Joined the Market in Year 4 generating $21,974 in Sales and $3128 Net margin (increase from year 4) - Lowest Net Margin however.

Best - Joined the Market in Year 4 generating $26,042 in Sales and $4749 Net Margin (Third Lowest Margin) - Could have been better however overproduced. $488 stock on hand

Bat - Generated $33,929 in Sales and $13,997 in Net Margin (Big increase from the previous year)

Bead - Still the most profitable going from $22,144 to $27,588 generating $51,939 to $60,873. Up in both departments from last year.

Baker - Second highest Sales and second highest Net margin both increased from previous year. (Way too much inventory on hand at $2887)

Bid - Decreased Sales however, net margin increased. (wway too much inventory on hand (1456)

Bold - Increased both Sales and Net Margin (Sales by a lot)

Buddy - Increase in Sales, increase in Net Margin (Good) - $129 stock on hand