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Erie Sensors Company<br />Stockholders’ Meeting<br />Q1, 2020<br />Executive Officers<br />Jessica Archer, Meredith Curry,...
Company StrategySensor Differentiation with Lifecycle Focus<br />Product lifecycle focus<br />Aggressively market : High, ...
CEOWill Woods<br />Total Balanced Scorecard<br />Each year ≥ 90<br />Cumulative ≥ 216<br />International Management Rankin...
Company PerformanceBalanced Scorecard Scores<br />Cumulative Point Goal<br />216 out of 240<br />Cumulative Point Total<br...
Company PerformanceBalanced Scorecard Percentiles<br />Overall cumulative percentile placed Erie’s management in the 99th ...
R&D and Forecasting<br />Customer Buying Criteria<br />
R&D and Forecasting<br />Key Success Factors<br />Building forecast spreadsheet for best-case, worst-case, and average-cas...
R&D and Forecasting PerformanceCustomer Buying Criteria (Customer Survey)<br /><ul><li>Problem:“Edge” sensor line not in l...
Solution: Reposition to High segment</li></li></ul><li>VP, Customer AcquisitionMeredith Curry<br />Customer Awareness≥ 90%...
Customer Acquisition<br />Key Success Factors<br />First-to-Market with Multiple High-Profit Sensors in Segments<br />2012...
Customer Acquisition PerformanceAwareness, Accessibility, Sensor Count, SG&A Expense<br />
Customer Acquisition PerformanceTarget Segment Market Share ($)<br />
Customer Acquisition PerformanceTarget Market Share ($)<br />8-year Average, Sales Weighted: 20.61% (Highest in Industry)<...
VP,Internal Business ProcessesVeronica Dang<br />Contribution Margin ≥ 36%<br />Plant Utilization ≥ 100% & ≤ 180%<br />Day...
Internal  Business Processes<br />Key Success Factors<br />Automation: Determine Maximum Possible Automation<br />Producti...
Internal Business Process PerformanceContribution Margin, Plant Utilization, Days of Working Capital, Stock-out Costs, Inv...
VP, Learning and GrowthJessica Archer<br />
Learning and GrowthHuman Resources<br />Train Employees – two weeks each year<br />Recruit – best employees possible<br />...
Learning and GrowthTotal Quality Management<br />Heavy spending, as Finance dept. goals permit<br />Up to $4M for each ini...
Learning and Growth PerformanceEmployee Turnover, Employee Productivity, and TQM Initiatives<br />
VP, FinanceMuhammad Soomar<br />Market Capitalization<br />≥ 30% of the sensor industry<br />Sales<br />≥ $181M annually, ...
Finance <br />Key Success Factors<br />Raise Capital  <br />Policy for Working Capital & Cash Flow<br />Dividend Policy: W...
Profit per Year ($M)<br />
Cumulative Profit ($M)<br />
Stock Price<br />
Market Capitalization, ($M)<br />
Efficiency MetricsReturn on Sales<br />
Efficiency MetricsReturn on Equity<br />
Efficiency MetricsReturn on Assets<br />
The Future<br />Maintain competitive advantage through excellent forecasting and financial planning<br />Expand sensor lin...
Why Invest In Erie<br /><ul><li>Effectiveness
Excellent Financial Performance
1st Place in Market Share ($)
Highest stock price, market cap. and cumulative profit
Stability
Never an emergency loan
Profitable every year
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Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011

Final presentation for CSULB FEMBA capstone course competition

August 2011

Team Erie: Industry C43894
Jessica Archer
Meredith Curry
Muhammad Soomar
Veronica Mimi Ta
William James Woods

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Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011

  1. 1. Erie Sensors Company<br />Stockholders’ Meeting<br />Q1, 2020<br />Executive Officers<br />Jessica Archer, Meredith Curry, Veronica Dang, Muhammad Soomar, Will Woods<br /> Edition - Capstone<br />Industry C43894 CSU Long Beach, FEMBA XI; Jul.-Aug. 2011, Dr. Lohman Course Level - Graduate<br />
  2. 2. Company StrategySensor Differentiation with Lifecycle Focus<br />Product lifecycle focus<br />Aggressively market : High, Low, Traditional segments<br />Expand capacity as needed<br />Increase automation to reduce labor cost<br />Finance, as needed (issuance of Stock and then Bonds)<br />Maximize recruitment spending and training<br />Maximize TQM investments to streamline operations<br />
  3. 3. CEOWill Woods<br />Total Balanced Scorecard<br />Each year ≥ 90<br />Cumulative ≥ 216<br />International Management Ranking<br />≥ 95th percentile, per year and cumulative<br />
  4. 4. Company PerformanceBalanced Scorecard Scores<br />Cumulative Point Goal<br />216 out of 240<br />Cumulative Point Total<br />236 out of 240<br />
  5. 5. Company PerformanceBalanced Scorecard Percentiles<br />Overall cumulative percentile placed Erie’s management in the 99th percentile – among the top 15 companies out of 1486 internationally!<br />
  6. 6. R&D and Forecasting<br />Customer Buying Criteria<br />
  7. 7. R&D and Forecasting<br />Key Success Factors<br />Building forecast spreadsheet for best-case, worst-case, and average-case sales scenarios<br />Continual review of competitor decisions<br />Assuming each competitor would make best possible R&D moves<br />Best-case scenario: Production<br />Worst-case scenario: All other departments<br />
  8. 8. R&D and Forecasting PerformanceCustomer Buying Criteria (Customer Survey)<br /><ul><li>Problem:“Edge” sensor line not in line with strategy
  9. 9. Solution: Reposition to High segment</li></li></ul><li>VP, Customer AcquisitionMeredith Curry<br />Customer Awareness≥ 90%<br />Customer Accessibility≥ 90%<br />Product Count≥ 8<br />SG&A Expense<br />≥ 7% & ≤ 17% of total sales<br />Market Share<br />≥ 22% of total sensor market<br />Highest Market Share in the Traditional, High end, and Low end segments<br />
  10. 10. Customer Acquisition<br />Key Success Factors<br />First-to-Market with Multiple High-Profit Sensors in Segments<br />2012 - Two highly-demanded sensors in Traditional Segment <br />2013 - Two highly-demanded sensors in Low end segment and two in the High end segment<br />Consistent Promotion and Sales up to or slightly above diminishing returns<br />Efficient Sales spending during Advanced Marketing<br />Sensor-cost/Customer-benefit analysis (MTBF cost vs. benefit)<br />
  11. 11. Customer Acquisition PerformanceAwareness, Accessibility, Sensor Count, SG&A Expense<br />
  12. 12. Customer Acquisition PerformanceTarget Segment Market Share ($)<br />
  13. 13. Customer Acquisition PerformanceTarget Market Share ($)<br />8-year Average, Sales Weighted: 20.61% (Highest in Industry)<br />
  14. 14. VP,Internal Business ProcessesVeronica Dang<br />Contribution Margin ≥ 36%<br />Plant Utilization ≥ 100% & ≤ 180%<br />Days of Working Capital <br /> ≥ 30 days & ≤ 90 days<br />No Stock-out costs<br />Inventory Carrying Costs ≤ 0.5%<br />Operating Profit<br />Cumulative Profit ≥ $135M<br />
  15. 15. Internal Business Processes<br />Key Success Factors<br />Automation: Determine Maximum Possible Automation<br />Production & Capacity: Forecast based on worst-case scenario to prevent high inventory carryover and low plant utilization<br />A/P: Work with Finance department and suppliers to control leverage<br />
  16. 16. Internal Business Process PerformanceContribution Margin, Plant Utilization, Days of Working Capital, Stock-out Costs, Inventory Carryover<br />
  17. 17. VP, Learning and GrowthJessica Archer<br />
  18. 18. Learning and GrowthHuman Resources<br />Train Employees – two weeks each year<br />Recruit – best employees possible<br />Negotiate Fairly – aim for wages, raises & benefits between current contract and labor-demanded value<br />Offer - comparable wage, benefits, profit sharing, and raise rates until complement is below 300 employees<br />Overtime – aim for zero, to maintain high productivity and low turnover<br />
  19. 19. Learning and GrowthTotal Quality Management<br />Heavy spending, as Finance dept. goals permit<br />Up to $4M for each initiative, optimally split evenly over three years to maximize impact<br />Material cost reduction, Labor Cost reduction and Demand Increase benefit every product line<br />R&D cycle time reduction benefit product lines targeted at High end and Traditional segments<br />Admin. Cost reduction is lowest<br /> priority, but TQM brings down<br /> total Admin cost by net ~$4M<br /> over 5 years<br />
  20. 20. Learning and Growth PerformanceEmployee Turnover, Employee Productivity, and TQM Initiatives<br />
  21. 21. VP, FinanceMuhammad Soomar<br />Market Capitalization<br />≥ 30% of the sensor industry<br />Sales<br />≥ $181M annually, on average<br />No Emergency Loans<br />
  22. 22. Finance <br />Key Success Factors<br />Raise Capital <br />Policy for Working Capital & Cash Flow<br />Dividend Policy: When no additional debt is needed to fund operations dividend policy is set to achieve desired 1.8 leverage and to assist Internal Business Processes department achieve Days of Working Capital goal<br />
  23. 23. Profit per Year ($M)<br />
  24. 24. Cumulative Profit ($M)<br />
  25. 25. Stock Price<br />
  26. 26. Market Capitalization, ($M)<br />
  27. 27. Efficiency MetricsReturn on Sales<br />
  28. 28. Efficiency MetricsReturn on Equity<br />
  29. 29. Efficiency MetricsReturn on Assets<br />
  30. 30. The Future<br />Maintain competitive advantage through excellent forecasting and financial planning<br />Expand sensor line as we retire aged sensors<br />
  31. 31. Why Invest In Erie<br /><ul><li>Effectiveness
  32. 32. Excellent Financial Performance
  33. 33. 1st Place in Market Share ($)
  34. 34. Highest stock price, market cap. and cumulative profit
  35. 35. Stability
  36. 36. Never an emergency loan
  37. 37. Profitable every year
  38. 38. Growth
  39. 39. Continued consistent growth in sensor industry</li></li></ul><li>What we learned<br />Classroom Setting<br />End of Stockholder’s Meeting<br />
  40. 40. What We Have LearnedWhat We Would Have Done Differently and Will Apply to CompXM<br />Calculate inter-segmental sales<br />Rebuild forecast to calculate sales each month rather than relying on averaging monthly sales each year<br />Focus on the goals set forth by the Board of Directors<br />Capsim<br />50% importance: Balanced Scorecard<br />25% importance: Analyst goals<br />25% importance: Our own Measures<br />CompXM<br />100% importance: Balanced Scorecard<br />(STOCKHOLDER’S MEETING IS COMPLETE) (CLASSROOM SETTING)<br />
  41. 41. Break-even analysis<br />Forecasting<br />Evaluation of company financials<br />Balancing goals to maintain consistent and successful performance<br />What We Have LearnedReal World Applications<br />(STOCKHOLDER’S MEETING IS COMPLETE) (CLASSROOM SETTING)<br />
  42. 42. What We Have LearnedWhat We Could Have Done Better<br />Never completely trust a computer forecast - qualitative analysis is important!<br />Capsim never consistently forecasts.<br />Never over-rely on human intuition – if it is measurable, then measure it and control it!<br />Stock outs due to strikes<br />Never underestimate a competitor’s capacity to upset their overall performance to achieve a few goals<br />Boosting market share by cutting prices at the expense of profit, stock price, contribution margin<br />Boosting stock price at the expense of leverage and days of working capital<br />(STOCKHOLDER’S MEETING IS COMPLETE) (CLASSROOM SETTING)<br />
  43. 43. Wrap Up<br />Agenda<br />Goals, Strategies and Policies, and Performance<br />Future Plans<br />What We Have Learned<br />
  44. 44. International Sensor Conference 2011<br />Though Andrews, Baldwin, Digby and Erie have challenged each other for eight years, their executives continue to be close after the breakup of the monopoly in 2011. Management of Chester and Ferris could not be reached for comments.<br />

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    Nov. 24, 2019

Final presentation for CSULB FEMBA capstone course competition August 2011 Team Erie: Industry C43894 Jessica Archer Meredith Curry Muhammad Soomar Veronica Mimi Ta William James Woods

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