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Global Management Studies
GMS 200
Bamidele Adekunle

GLO-BUS Annual Report Company H: HD Imaging By: David Georges Olisya Green Alfie Sol Thajeerthan Ganesalingam Cameron Galea-Andrews Submitted To: Professor Bamidele Adekunle Ted Rogers School of Management For GMS 200- Introduction to Global Management Submithed on: April 8 2014 RYERSON UNIVERSITY 11d1211111 2014 Introduction 3 TABLE OF CONTENTS Review of Financial Performance 3-5 Strategic Vision 6 Performance Target Forecasting 6-7 Company’s Competitive Strategy in Entry-Level Camera8-9 Company’s Competitive Strategy in Multi-Featured Cameras 8-9 Competitors’Analysis 10-12 2 | P a g e Strategy to ‘Out-Compete; Closest Competitors 13-14 Lessons Learned 14-15 2014 3 | P a g e 4 | P a g e Introduction This report attempts to demystify the performance of HD Imaging and strategies undertaken during the stimulation. This report illustrates financial performance that focuses on the annual revenue, earnings per share and return on equity investment. Target performance is the other element, which addresses EPS, ROE, credit rating, image rating and year-end stock price. Strategic vision of the industry is another factor discussed in the report followed by company’s competitive strategy for entry and multi-featured cameras and how it has evolved throughout the past years. It also analyses competitors’performance on both featured cameras and provides a structured strategic plan based on the analysis in order for HD Imaging to remain competitive and potentially increase its market share. Financial performance overview HD’s financial performance has improved slightly year by year and has become attractive to investors. Starting with year 8, HD Imaging received anA+ credit rating which continued on through all the following years. Earnings per share had a continually increasing trend and the image rating varied year by year but it has always remained above average. Net sales revenue also had a continuous trend around the $200,000 mark, return on equity was always above the expectation of investors and finally, the stock prices continued to increase which shows development in the industry. Based on its financial performance, HD Imaging has made profit covering its costs of goods and was the 5 highest rated camera company in the market. 5 | P a g e Financial Performance Charts CHART 1 6 | P a g e CHART 2 CHART 3 7 | P a g e CHART 4 8 | P a g e CHART 5 CHART 6 9 | P a g e Strategic Vision HD Imaging has shown progress throughout the years. The main factor that separated HD from competitors is its well structured strategic plan. HD focused precisely on a focused differentiation strategy and implemented it on both Entry-level and Multi-featured cameras. While the majority of the other competitors in the market focused on a low cost strategy, HD differentiated its products and provided a high quality service. HD’s strategic vision of becoming successful in the market is shown in its high performance/quality rating in both entry level and multi featured cameras. Hence, HD Imaging has managed to achieve its vision and its strategic goals by laying out a plan and implementing it in order to increase its market share. Performance Target Forecasting Return of Equity (ROE) Due to the investments made by HD imaging during the seventh year, there was a critical loss in the return on equity in year eight.As there was a gain in the return on equity in the prior years, there was also a slight loss when HD Imaging entered their tenth year. We try to keep our ROE consistent and between 20% to 25%. Year eight was known to be the lowest ROE with a score of 17.8%. During the tenth year, the first priority was to attain a high imaging rating but also lower the prices for the camera. By focusing on these two top priorities, year ten was successful in terms of Return of Equity with a score of 24.8%. The goal is to keep our ROE between 20% to 25% within the next two years of operations. Chart 5 shows the Return of Equity throughout the years. 10 | P a g e Credit Rating In the beginning years, all companies began with a credit rating of a “B+”. The following year, HD dropped to a B- and were struggling to achieve a higher credit rating. Through analysis, HD realized that when the company was in debt, it tends to spend more on interest rate. It was concluded that our credit rating was low due to this cause. In year six, HD made a significant adjustments which boosted the credit rating to an “A-”. From year six HD escalated very quickly and maintain an “A+” credit rating four years in a row (beginning of year 8 to end of year 11). The company’s future goal is to maintain the high credit rating for the years to come. Chart 1 shows the credit rating throughout the years. Image rating The image rating has been the most important rating for HD Imaging throughout the years. The image rating is an important factor to this company because it was initially very difficult to keep up with the average expectation.Acamera with poor image quality would not attract any customers; this is the problem that HD was facing. Even though the performance did not meet the expectations, the rating has remained to be above average in the overall market. HD’s strategic goals are to improve the image quality for a low price and this can potentially increase the image rating. Chart 3 demonstrates the cycle of our image rating throughout the years. Earnings per shares (EPS) Throughout the years, the company’s initial idea was to get its earnings per share above and over the average rate. In the primitive years, HD was struggling to get it over the call of duty. After consistently improving the strategy and making sure that the earnings per share were met, HD successfully went beyond the average expectation. Since HD has successfully achieved its 11 | P a g e expectation, the next goal will be to add on to the earnings per share and get it to increase in comparison to the previous years. Chart 2 shows the progress throughout the years. Year End The company’s year end plans are to slowly increase your stock prices from $80.17 per share to about 83 in year 12 and 85 in year 13. By doing this, HD will keep the investors interested because they will anticipate the prices continuing to rise and hopefully chose to invest further giving them the opportunity to buy more and sell higher. Looking back at the company’s history, there are some improvements that must be made to continue growth and operations in the coming years. Image rating has a huge effect on the company and is the reason for some of the poor results. For this reason, it will be a main focus to improve over the next few years. Competitive strategies HD’s strategy to compete has varied throughout the years. The initial plan was to utilize a low cost strategy and to secure a significant portion of the market share. However, it was quickly discovered that the majority of the other companies in the industry had the same idea. In an attempt to adapt to the fierce competition, a decision was made to take a chance with a focused differentiation strategy. The goal was to produce the highest quality of cameras possible and zone in on professional photographers as our target market. This change took place in year eight. The strategy was very consistent among all regions and the top quality concept was similar between multi featured and entry level cameras. There was a significant price increase from year to year which directly resulted in higher performance/quality rating as our products improved. From the very beginning, HD has had one of the highest performance/quality ratings and decided it was in the best interest of both the customers and the company to continue to 12 | P a g e produce a product of the highest possible quality. The strategy to establish themselves as a high end production company has allowed HD to remain competitive although their portion of the market share for both multi featured and entry level cameras was very low. In the Europe-Africa andAsia-Pacific regions, HD Imaging was operating with the lowest percentage of the market share and was among the smallest market share holders in Latin and NorthAmerica. As HD Imaging began to mature, it became much easier to identify and capitalize on its strengths. The graph below depicts that HD was strategically able to separate itself from the rest of the competition.Although the products were high end, the company could still compete with the lower costing products in the market and HD is still among the top 5 companies in the industry. The above diagram illustrates the positioning of each company in terms of retail coverage and price and P/Q ratings. This is the LatinAmerican market and our company is represented by the highest blue dot on the graph. This trend only varies slightly from region to region. The left diagram represents the multi fe
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