Download Year 12 Year 13 Year 114

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B Picture Perfect
By: Tiffany Lu, Brittany Koper, and Natalie
Lokker-Johns
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Net Revenue
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Earnings Per Share
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Return on Equity
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Credit Rating
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Year End Stock Price
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Image Rating
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Strategic Vision
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The strategic vision for B Picture Perfect is to keep
manufacturing costs as low as possible (while still
maintaining at least a 2.5 PQ rating). This will also allow our
company to keep our prices low. We wish to provide a quality
camera at an affordable price in order to grow our market
shares. Once our company has a comparable market share in
each market we would like to increase the quality of the
camera and, likewise, increase the price of our cameras in
order to capitalize on a larger profit margin per camera.
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Performance Targets
Year 12
Year 13
Year 114
Earnings Per
Share
$6.33
$6.75
$7.25
Return on
Equity
53.0%
53.0%
53.0%
Credit Rating
A-
A
A
Image Rating
89
92
95
Stock Price
$73.10
$75.00
$77.00
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Entry-Level Camera Strategy
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Our Company Strategy for our entry-level cameras was to
offer a mid range quality product for a price lower than our
competitors. We kept our PQ rating at a 2.5 but offered a
longer warranty period (1 year) and had 5 models to choose
from.
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In the later years we were able to bump our entry level
cameras up to a PQ rating of 3 and were able to raise our
prices without losing much of our market share. This helped
our revenues grow which allowed us to give higher dividends
(which ultimately lead to a 49.3% ROE in year 10).
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Multi-Feature Camera Strategy
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Our strategy for our Multi-Featured camera was to offer 5
models with a PQ rating of 3 (or try to keep up with the
industry average). We wanted to keep our costs as low as
possible and offer a mid range quality product at a price
lower than our competitors. This helped us increase our
market share in each of the four global markets.
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Basically our strategy was to keep up with our competitors in
terms of models, warranty, promotions, and PQ rating but
offer the product at a much lower price to the consumer.
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Production Strategy
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Our production Strategy was to keep out laborers well
trained while slightly increasing their compensation
(whether it was Wages, Bonuses, or Fringes) each year.
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We would also max out the number of cameras that we could
produce at overtime instead of outsourcing. We felt that this
would help increase the base wages of our employees while
keeping in-house productivity as high as possible.
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We never really had the opportunity to increase our work
stations but we did keep them 100% full during the entire
simulation.
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Finance Strategy
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Dividends: Our strategy in regard to dividends was to issue
larger dividends as the years progressed. Near the end of the
game we issued the largest dividends that the system would
allow to try and up our position in the market.
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Debt vs. Equity: It was our goal to always repay any draw on
our credit line that was taken in the 3rd quarter plus some in
the 4th quarter. We wanted to stay out of the “red” as much as
our company’s performance would allow.
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Stock Repurchases: During the first 6 years of the simulation
we repurchased as many issues of stock as our company’s
financials would allow. In the end, we ended up repurchasing
125 issues of stock.
North America
Europe-Africa
Asia - Pacific
Latin America
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Entry Level Competitors
North America
Europe-Africa
Asia-Pacific
Latin America
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Multi-Feature Competitors
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Competitive Strategy
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Our biggest problem was our low Best in Industry score. We
feel that maybe we were too conservative in this part of the
game because we were trying to keep our prices and
manufacturing costs as low as possible. In the end, we think
that this could have been the thing that hurt us the most. We
were always the “follower” in the industry. If another
company would raise their warranty to 3 years then we would
do the same but we were never the first to do any of this.
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With that being said, if the game were to continue we would
definitely take more risks and be more aggressive in regard
to the quality of the camera and the different promotions,
warranties, marketing budget, etc.
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Lessons Learned
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We learned that in order for a company to be successful in an industry
they have to be willing to take risks and learn from mistakes made. In
the first three years of the simulation we were very reserved and very
hesitant to make any drastic moves or decisions. Our performance in
the game was also the lowest during these three years. After the initial
shock of the game wore off we were able to put together a successful
strategy which involved taking many risks.
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It is also important to study your competition and see what they are
doing. In order to compete against other company’s you need to be well
informed of the product that they are offering and how it compares to
yours. Keep yourself informed!
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Lastly, it is important to never take a risk that is outside of your financial
means. Stay in the black as much as your strategy will allow. If you take
risks in the black the end result (if they fail) is much less disastrous than
if you take a financial risk with money from your credit line. Keep your
investors happy!