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STRATEGIC PLAN JULY 1999 XYZ Electronics 1999-00 to 2003-04.

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Presentation on theme: "STRATEGIC PLAN JULY 1999 XYZ Electronics 1999-00 to 2003-04."— Presentation transcript:

1 STRATEGIC PLAN JULY 1999 XYZ Electronics 1999-00 to 2003-04

2 Page 2 This document has been prepared by Genesis Management Services Pty Ltd on behalf of XYZ ELECTRONICS. This document is tendered on the express condition (acknowledged by the recipient’s acceptance of the document) that the publishers authors and contributors in particular Genesis Mnnagement Services Pty Ltd, their employees, associates and agents are not responsible for any errors or omission actions or the results of any actions taken or omitted to be taken upon the basis of information in this document. The publishers authors and contributors expressly disclaim all and any liability (whether arising by reason of negligence or otherwise) to any person or corporation whether in receipt of this document or not in respect of anything and the consequence of anything done or omitted to be done in reliance whether whole or partial upon the whole or any part of the contents of this document. NOTE: The content and figures in this presentation have been disguised and are provided for evaluation purposes only. It is not to be copied or used for any other purpose than that approved by Genesis Mnnagement Services Pty Ltd. Disclaimer

3 Page 3 This five-year Business Plan was developed by the management team of XYZ Electronics Pty Ltd and facilitated by Genesis Management Services Pty Ltd. The purpose of the plan is to provide a strategic framework and direction to ensure focused decision-making by the management team. The business planning process comprised: oa three-day workshop involving the management team to: -identify key issues -establish key objectives -develop broad strategies omeetings with functional managers to develop detailed strategies, action plans and timetables oa final meeting to ‘sign-off’ the plan prior to presentation to the Board of Directors. The consultants would like to thank the executive management team for their frank and constructive contributions and assistance in preparing this Business Plan. 1.0INTRODUCTION

4 Page 4 This Business Plan sets out the Vision and Key Objectives for XYZ Electronics for the period 1999-00 to 2003- 04, and documents the Key Strategies and Action Plans to be implemented by Management over the next year or so to achieve these Objectives. In summary, by the Year 2003-04, XYZ Electronics will have consolidated its position as the global market leader for the consumer and health-care markets for its range of electronic products, and will be recognised as an emerging global force in industrial products. It will have a turnover of at least A$170 million, of which around 65% is earned from exports, generating group pre-tax earnings of at least A$55 million. Through effective tax structures and transfer pricing, the Group tax rate should be 20-25%, and distributions to shareholders of after- tax earnings in Australia should reach $27 million pa from 2002-03. The company will employ some 1000 people, with operations in Australia, the USA and Italy, and distributors in other key regions. XYZ Electronics will remain strongly research-focused, but will progressively develop a stronger focus on marketing and business development. In line with its international expansion and establishment of discrete business units, there will also be a stronger emphasis on information technology and systems to efficiently meet the information and communication needs of the organisation. Achievement of XYZ Electronics objectives will be measured by Key Indicators such as profitability, sales growth, international reputation, quality, customer perceptions and employee satisfaction. The key risks facing the business, such as loss of key people in critical roles, supply failures, breaches of IP and the Millenium Bug are addressed where possible in the Plan. 2.0EXECUTIVE SUMMARY

5 Page 5 2.0EXECUTIVE SUMMARY Sales A$ million Key Milestones REVENUE FORECAST

6 Page 6 2.0EXECUTIVE SUMMARY A$ million PROFIT & DIVIDEND FORECAST

7 Page 7 3.0CORPORATE DIRECTION

8 Page 8 The following senior executives participated in the business planning process: xxxxxxxxxxxChairman xxxxxxxxxCEO xxxxxxxxxDevelopment Director xxxxxxxxxxMarketing Manager xxxxxxxxxxProduct Manager xxxxxxxxSales Manager xxxxxxxxxAdministration Manager xxxxxxxxBusiness Manager, Health Products xxxxxxxxBusiness Manager, Industrial Products xxxxxxxxxProduction Manager The team worked as group during the planning workshops and individually or in smaller groups within their functional areas to develop their respective strategies and action plans. 3.1Planning Team

9 Page 9 Competitors reverse engineering Diminishing Australian market Mature consumer market Regional conflict - affecting market accessibility Downsizing trend of health institutions Internet - damage from propaganda International trade/tax legislation Legislation on health-care US economic situation GST in Australia Y2K Strong A$ 3.2External Environment Opportunities New technologies Joint technologies for industrial products Corporate joint ventures/teaming Industrial patents Rationalisation of distributors Legislation for industrial products Aging of target consumer market Internet marketing Conservative consumer competitors Government support for R&D and other incentives Weak A$ Threats

10 Page 10 Successfully commercialised in three core segments Successfully commercialised at least one other product internationally Sales turnover of $170m pa Net profit before tax of $55m (32% on Sales) No 1 in the world consumer and health-care markets A fully-developed presence in USA/EU for all products Joint-ventures with complementary technologies 1000 people employed worldwide A range of industrial systems licensed to international specialists A major force in the Australian industrial market Full global distribution for health products Strategic alliance in Israel New electronic control system Business Vision for 2003-04 Business Vision for 2003-04 3.35-Year Vision

11 Page 11 What are we especially good at right now? 4dedicated, performance-orientated people 4best product technology in the world 4international business (70% exports) 4financial control 4responsive to customer needs 4interface between marketing and research & development 4creating a dynamic culture 4achieving short concept-to-market lead time How will we win in the future? èinternational market presence/image èbeing proactive in rationalising consumer products industry ècontinued development of new technology ègreater degree of control of distribution channels èa modular approach to product technology & design èstronger marketing function èimproved product development processes èmore formalised but still flexible organisation structure & systems èjoint-ventures with other firms èproper resourcing of industrial division èidentifying another international product opportunity 3.4Key Questions

12 Page 12 World’s leading bio-tech electronics technology Consumer Health Industrial globally Research, design, development, production, marketing Products Markets Activities 3.5Business Mission

13 Page 13 STRENGTHS OPPORTUNITIES THREATS technology sustainable continuing advancement matching technology to customer needs ease of use good range of accessories ISO-9001 reliability wide product range customer service lack of repeatability in repair and servicing performance in air testing ergonomics mechanical quality repackaging of technology hybrid circuits legislation/limiting access new technology piracy of patents mature market ISO-9001 lower whole-of-life cost technology sustainable continuing advancement matching technology to customer needs ease of use reputation robustness & reliability relatively inexpensive to manufacture higher power consumption initial perception of difference product iterations servicing & training arrays joint-venture with other technologies discrimination piracy of patents new technology competitor propaganda ISO-9001 sensitivity innovative technology Ten satisfied customers no satisfactory product too heavy difficult to manufacture susceptible to vibration industrial products (huge market) new legislation re food, etc alliances with insurance companies expansion of world market market demand piracy of patents new technology product liability CONSUMERHEALTH-CAREINDUSTRIAL WEAKNESSES 3.6SWOT Analysis - Product

14 Page 14 STRENGTHS WEAKNESSES OPPORTUNITIES THREATS distributor margins (export) value-for-money perception of quality = higher prices high margins manufacturing options range of price points some products are low value-for-money (compared with competitive products) uncompetitive at lower end of market higher-performance product at high-price lower end of market (export) discounting exchange rates value-for-money perception of quality = higher prices high margins understanding of tendering process non-standard pricing (tendering) premium price for technology edge subject to bureaucratic purchasing processes (price) secret commissions equivalent machine at lower price differential pricing - customer collusion exchange rates premium price for technology high ROI for customer exchange rates CONSUMERHEALTH-CAREINDUSTRIAL 3.6SWOT Analysis - Price

15 Page 15 STRENGTHS WEAKNESSES OPPORTUNITIES THREATS niche industry local market presence (Aust, USA, EU) customer data base (Aust) technology is promotional strength good quality promotional materials (some) company image good success stories marketing resources/budget (USA, EU) build up image and credibility differentiated marketing strategies USA/EU build database in new markets use Internet trade shows & exhibitions new market segments (eg Baby Boomers) disinformation industry feeds on rumours CONSUMER UN endorsement endorsement by international research community promotional materials poor representation (reliant on distributors) not recognised as a supplier of hospital equipment low profile more proactive worldwide disinformation industry feeds on rumours competitor propaganda notable success perceived technological advantage no international profile not recognised as a supplier of industrial equipment joint-venture with existing providers market expansion HEALTH-CAREINDUSTRIAL 3.6SWOT Analysis - Promotion

16 Page 16 CONSUMER STRENGTHS OPPORTUNITIES WEAKNESSES THREATS Australian distribution network good EU distribution presence in Italy & USA distribution tailored to each market East-Coast USA distributor good general distribution strategy/system dealers in Eastern Europe, etc franchises Internet sales poor-performing West-Coast USA distributor diminishing dealers lack of contracts with dealers in Australia retailing poses conflict with wholesalers competitors develop innovative distribution network presence in USA and Italy for consumer products (not exploited) distance from major markets no physical presence in major markets only Australian local manufacturer distance from major markets franchising, licensing HEALTH-CAREINDUSTRIAL 3.6SWOT Analysis - Place

17 Page 17 STRENGTHS WEAKNESSES OPPORTUNITIES THREATS multi-skilled workforce self motivation opportunity for growth recognition of performance comprehensive range of skills functional boundaries lack of HR policies reliance on R&D Director for innovation general awareness of OH&S can attract the best people key people headhunted potential for overwork due to high growth rate of company loyalty highly-skilled team spirit management depth succession plan 3.6SWOT Analysis - People

18 Page 18 STRENGTHS WEAKNESSES OPPORTUNITIES THREATS use of contractors to reduce process management/ complexity measurement of performance ability to change process technologies ISO-9001 unrealistic deadlines (focus) MIS needs to be improved for future growth some processes too subjective and labour intensive high unit manufacturing costs electronic commerce (supply chain from customers to suppliers) ability to change manufacturing capacity quickly (use of contractors) single-source contractors loss of key contractors adequate MIS communication infrastructure not constrained by capital investment in plant and equipment 3.6SWOT Analysis - Processes

19 Page 19 STRENGTHS WEAKNESSES OPPORTUNITIES THREATS new corporate facilities (Adelaide and Italy) own leased facility in USA internal communication corporate high-tech image manufacturing hedge against disaster (outsourced product) need objective test equipment and procedures distance from main markets (cost, travel) flexibility in manufacturing electronic data interchange with suppliers offshore manufacturing/assembly new modules in MIS security loss of data fire theft everyone together room to expand minimal investment in manufacturing modern computer system 3.6SWOT Analysis - Physicals

20 Page 20 STRENGTHS WEAKNESSES OPPORTUNITIES THREATS good distributors for consumer products good and improving suppliers in Australia strong contractual agreements with minimum performance criteria for dealers (except Australia) no partnerships (industrial products) suppliers volatile reliant on few powerful individuals inconsistent product/service support with distributors industrial equipment suppliers technology specialist/suppliers acquire competitors’ partners joint ventures failure of partnerships 3.6SWOT Analysis - Partnerships

21 Page 21 3.7Basis for Growth AUSTRALIA NORTH AMERICA EUROPE/ OTHER ConsumerHealth-careIndustrialNew Product PRODUCTS MARKETS Mature market; Sales levelling off new product launched in 2000- 01 to extend market life Steady growth in market share to reach 30% by 2003-04 Steady growth in market share to reach $10 mill by 2003-04 Minimal sales in Australia Baseline market steady at 1998-99 levels Baseline market steady at 1998-99 levels; Unknown opportunities from other products New Industrial products launched in 2000; steady growth by 2003-04 Industrial technology licensed in USA in 2003-04 Industrial technology licensed in Europe in 2003-04 New product launched in 2002-03; revenue $2 mill in Year 1, $3 mill in Year 2

22 Page 22 XYZ Electronics has identified the following Critical Success Factors which will need to be addressed for it to achieve its Vision: XMarket leadership in product quality and performance XIncreased emphasis on product development rather than research XContinual product innovation XDevelopment of new markets in health-care and industrial segments XRecruitment and motivation of top quality staff XEffective focus and management of R&D time XEffective MIS XEffective distribution channels for each product group. 3.8Critical Success Factors

23 Page 23 4.0FINANCIAL PROJECTIONS

24 Page 24 4.1Revenue and Profit Projections Australia USA Europe/Others Total Consumer Total Health-care Total Industrial TOTAL REVENUE Gross Margin Gross Profit Overheads NPBT NPAT Capital Expenditure 2002-032003-041999-002000-012001-02 Revenue Consumer Products New Product Inventory A$ million Figures removed in this illustration copy

25 Page 25 Consumer Products Australia-Decline in overall market demand due to saturation of market USA-Steady growth in market until 30% market share achieved Europe/other-Steady growth in market until 40% share achieved Health-care-Market expected to peak at around 3,000 units in 2001-02 and 2002-03 Industrial-$10m in year 5 is a preliminary estimate, including $4m from exports Gross margin-Marginal increase in Gross Margin from 62% to 64% with increased Health-care and Industrial revenue contribution; Cost of Goods Sold includes 0.25% royalty Overhead expenses-Increases in sales/marketing staff (USA/Europe), overseas operations, systems & administration to cope with growth Capital expenditure-Steady investment in tooling, equipment & computer infrastructure at $1,000,000 pa; New building for Industrial in 2000-01 at $2 mill financed by 20-year mortgage Inventory-Stockturn maintained at 3x throughout forecast period Debtors-One month of Revenue Trade Creditors-Two months of Cost of Goods Sold 4.2Revenue, Profit & Investment Assumptions

26 Page 26 The Cashflow projections are based on the following assumptions: Stock Increase-change in value of stock based on average of 4 months’ stock valued at COGS, assuming forecast Gross Margin Depreciation-based on 20% of capital expenditure for year added back as non-cash Building Loan Repayments-repayment of $90,000 pa for 20 years for new building Royalties-based on 4.0% of sales, included in Cost of Goods Sold Tax-36% tax rate in Australia for local Consumer Products profits, all health-care profits and local Industrial Products profits; minimal profits generated in US Dividends-full distribution of after-tax profits generated in Australia 4.3Cashflow Assumptions

27 Page 27 4.4Cashflow Projection 2002-032003-041999-002000-012001-02 CASH IN Gross Profit Total Cash Inflow CASH OUT Overhead Expenses Stock Increase Capital Expenditure Depreciation Add Back Tax Total Cash Outflow Dividends Net Cashflow Building Loan Repayments Debtors Increase Creditors Increase Figures removed in this illustration copy

28 Page 28 The forecast cashflow indicates that, within current overdraft limits, XYZ Electronics is capable of funding its growth and working capital from internally-generated funds and that positive net cashflows are achievable beyond 1999-00. Assuming that inventory can be reduced to more acceptable levels in 1999-00, the only new debt funding required will be to finance a new building for the Industrial Products Division in 2000/01. XYZ Electronics should achieve zero net debt within 2001-02. Profits generated in overseas markets by XYZ Electronics internationally will be retained in Italy to fund the company’s working capital requirements. 4.5Funding

29 Page 29 5.0RESEARCH & DEVELOPMENT

30 Page 30 Continue to Develop Innovative Products in Response to Customer Needs Meet Product Launch Dates Optimise use of R&D Resources Maintain Technology Edge over Competitors ÔSales ÔMarket Share ÔProducts launched on time ÔOverruns x $ Revenue Lost ÔAchievement of Project Milestones ÔReduced “damage control” ÔLow staff turnover in R&D ÔMarket Intelligence ÔPatents ÔCompetitor Benchmarking KEY OBJECTIVES KEY PERFORMANCE INDICATORS 5.1Key Objectives

31 Page 31 Key Objective Continue to Develop Innovative Products in Response to Customer Needs Strategies 5.2Strategies Obtain regular, comprehensive market feedback Respond to market feedback Introduce New Product Evaluation phase

32 Page 32 Key Objective Meet Product Launch Dates Strategies 5.2Strategies Improve product development planning Improve project planning Improve usage of consultants Improve ease of manufacture - reduce manufacturing cost

33 Page 33 Key Objective Optimise use of R&D Resources Strategies 5.2Strategies Review current resource mix Improve use of resources across multiple projects Protect key R&D resources

34 Page 34 Key Objective Maintain Technology Edge over Competitors Strategies 5.2Strategies Increase frequency of technology advances Forecast future trends in customer requirements and technology advances Investigate other imaging technologies Protect innovations with patents

35 Page 35 6.0MARKETING

36 Page 36 6.1Key Objectives Maintain High Margins Capitalise on Presence in Australia, USA and Italy Build and Leverage XYZ Electronics Brand as Global Leader Become No 1 in Consumer Products Worldwide Become Recognised as No 1 Worldwide Extend the Market for Consumer Products ÔGross Margins ÔSeamless service/support infrastructure ÔBrand recognition ÔUnsolicited enquiries ÔMarket share ÔProportion of First Time Buyers ÔUnsolicited enquiries ÔMarket share ÔProportion of direct sales ÔSales margin KEY OBJECTIVES KEY PERFORMANCE INDICATORS Achieve Greater Control over Consumer Products Distribution Channels

37 Page 37 6.1Key Objectives Achieve Recognition as a Worldwide Centre of Excellence Establish Effective Control over Distribution Channels Identify and Commercialise a New Product Maintain our Excellent Reputation for Ethics and Service ÔMarket share ÔUnsolicited enquiries ÔCommission expenses as % of revenue ÔProduct launched ÔSales revenue for new product ÔCustomer perceptions KEY OBJECTIVES KEY PERFORMANCE INDICATORS

38 Page 38 6.2Strategies Key Objective Maintain High Margins Strategies Develop brand promotion Develop existing products/technologies into new market segments Develop recognition as market leader in innovation of product design Maintain market leading position Maintain pricing structure with high margins

39 Page 39 6.2Strategies Key Objective Capitalise on Presence in Australia, USA and Italy Strategies Establish corporate marketing plan/program Control all XYZ Electronics communications directly Fully develop and use database Coordinate promotions between zones

40 Page 40 6.2Strategies Key Objective Build and Leverage XYZ Electronics Brand as Global Leader Strategies Corporate promotional activity Corporate public relations programme

41 Page 41 6.2Strategies Key Objective Become No 1 in Consumer Products Worldwide Strategies Improve product line Aggressive marketing program Develop international marketing program Aggressive attack on competitors and competitive products

42 Page 42 6.2Strategies Key Objective Become Recognised as No 1 Worldwide Strategies Establish presence in key target markets Build linkages with Consumer Products distributors and service agents Collaborate with relevant research facilities in Australia, US, UK and Europe Widely promote XYZ Electronics technology Build alliances in health-care

43 Page 43 6.2Strategies Key Objective Extend the Market for Consumer Products Strategies Extend promotion beyond existing media segments Review the use of existing technology in alternative applications & markets Review bio-technology and other market potential

44 Page 44 6.2Strategies Key Objective Achieve Greater Control over Consumer Products Distribution Channels Strategies Define consumer product distribution channels Develop direct communications between dealers and consumers Develop tight control and communications with non-English speaking distributors Review product pricing Establish contracts with Australian dealers

45 Page 45 6.2Strategies Key Objective Achieve Recognition as a Worldwide Centre Strategies Research Australian market Develop marketing strategy for Australian Food Industry Achieve accreditation by internationally- recognised authority License technology overseas Research Industrial market internationally

46 Page 46 6.2Strategies Key Objective Establish Effective Control over Distribution Channels Strategies Prepare Business Plan Conduct joint market visits Review Agreement

47 Page 47 6.2Strategies Key Objective Identify and Commercialise a New Product Strategies Establish alliances with Universities Evaluate new product opportunities

48 Page 48 6.2Strategies Key Objective Maintain our Excellent Reputation for Ethics and Service Strategies Develop affirmative ethics and service policies Develop service policies and procedures Improve communications with customers Employ people with the same values In foreign markets, use locals for “local business customs”

49 Page 49 7.0OPERATIONS

50 Page 50 7.1Key Objectives Establish and Maintain a Safe Working Environment Successfully Integrate Product Development within Operations Accelerate Industrial Product Development Integrate procedures to meet Customer Requirements Progress towards Zero Defect Quality Status ÔLost time accidents ÔNear misses ÔOn-time product release dates ÔProduct launched ÔWarranty costs ÔProduct returns ÔComplaints KEY OBJECTIVES KEY PERFORMANCE INDICATORS Develop Objective Diagnostic Test Procedures Eliminate Crisis Management in Production Start-ups ÔWarranty costs ÔProduct returns ÔComplaints ÔCustomer feedback ÔOn time product launches

51 Page 51 7.1Key Objectives Continue to Reduce Manufacturing Cost Establish Production Facilities in Italy Maintain Inventory at Optimum Levels ÔGross margins ÔReductions in standard costs ÔFacilities established KEY OBJECTIVES KEY PERFORMANCE INDICATORS ÔStockturn ÔStockouts ÔStock write-offs

52 Page 52 7.2Strategies Key Objective Establish and Maintain a Safe Working Environment Strategies Engage external expert to guide and provide advice on OH&S on regular basis Educate staff in safe working procedures Maintain and support OH&S Committee

53 Page 53 7.2Strategies Key Objective Successfully Integrate Product Development within Operations Strategies Develop information collection systems Establish goals for Consumer product development Establish Product Development facilities Define the scope of Product Development

54 Page 54 7.2Strategies Key Objective Accelerate Industrial Product Development Strategies Establish Industrial R&D project team Prepare and submit IR&D Grant application Prepare detailed 3-year Business Plan for Industrial

55 Page 55 7.2Strategies Key Objective Integrate procedures to meet Customer Requirements Strategies Customer follow-up post rework to ensure satisfaction Coordinated reporting, tracking and analysis of customer complaints company-wide

56 Page 56 7.2Strategies Key Objective Progress towards Zero Defect Quality Status Strategies Encourage XYZ Electronics suppliers to use designed test procedures 100% finished product testing in-house Establish clear specifications for product performance and test protocols Standardise where possible on components Train staff in quality requirements

57 Page 57 7.2Strategies Key Objective Develop Objective Diagnostic Test Procedures Strategies Review and list requirements Establish test facilities

58 Page 58 7.2Strategies Key Objective Eliminate Crisis Management in Production Start-ups Strategies Improve estimation of production lead-times Review policies and practices for new product launches

59 Page 59 7.2Strategies Key Objective Continue to Reduce Manufacturing Cost Strategies Bring in-house/automate production of mechanical components where cost justified Establish dual sourcing for key components Standardise on components where possible Design for procurability manufacturability Conduct Value Analysis for all product components

60 Page 60 7.2Strategies Key Objective Establish Production Facilities in Italy Strategies Develop manufacture of solid-state circuitry Set guidelines for authority and responsibility Implement business operating system

61 Page 61 7.2Strategies Key Objective Maintain Inventory at Optimum Levels Strategies Evaluate Economic Order Quantity (EOQ) optimisation Improve sales forecasting Enforce supplier delivery schedules Conduct supply chain review

62 Page 62 8.0HUMAN RESOURCES

63 Page 63 8.1Key Objectives KEY OBJECTIVES KEY PERFORMANCE INDICATORS Reduce Stress Levels Achieve Effective Communication & Understanding throughout the Organisation Create and Maintain a Contented, Well- Motivated Workforce ÔStaff turnover ÔStaff perceptions ÔAchievement of deadlines ÔStaff perceptions Continue to Develop OH&S Processes Eliminate Key Resource Risk ÔAccidents ÔNear misses ÔStaff perceptions ÔStaff turnover ÔAbsenteeism ÔGrowth ÔProfitability

64 Page 64 8.2Strategies Key Objective Create and Maintain a Contented, Well- Motivated Workforce Strategies Maintain competitive salary structure Provide challenging jobs Provide a conducive work “environment” Maintain flat management structure Provide opportunities for career development Establish HR policies and practices

65 Page 65 8.2Strategies Key Objective Reduce Stress Levels Strategies Monitor workloads and skill requirements, and compare with staff capabilities Set realistic timelines/ deadlines Enforce Annual Leave Monitor stress indicators Establish corporate fitness programme

66 Page 66 8.2Strategies Key Objective Achieve Effective Communication & Understanding throughout the Organisation Strategies Keep everyone informed on company direction and progress Establish effective inter- office communication processes

67 Page 67 8.2Strategies Key Objective Continue to Develop OH&S Processes Strategies Develop Company policy document Implement HACCP Report quarterly to Management Conduct independent audits Italy and USA to implement OH&S systems, adapted to local conditions/regulations

68 Page 68 8.2Strategies Key Objective Eliminate Key Resource Risk Strategies Determine appropriate strategies for critical personnel Pay market salaries or better Establish profit-sharing for all employees Establish incentive programme for Managers based on KPIs

69 Page 69 9.0FINANCE & SYSTEMS

70 Page 70 9.1Key Objectives Improve Project Expenditure Tracking & Reporting Systems Implement System for Allocation of R&D Costs to Business Units Implement Effective MIS for Business Units Standardise Systems in Australia, USA & Italy Maintain Conservative Gearing ÔOn budget projects ÔPerception of value for money by Business Units ÔAchievement of budgets ÔAbility to answer questions ÔSystems in place ÔOn time reporting ÔDebt to equity ratio KEY OBJECTIVES KEY PERFORMANCE INDICATORS

71 Page 71 9.2Strategies Key Objective Improve Project Expenditure Tracking & Reporting Systems Strategies Implement time recording for R&D and Production in Australia and Italy Establish standard times for production Train staff in manufacturing management information systems

72 Page 72 9.2Strategies Key Objective Implement System for Allocation of R&D Costs to Business Units Strategies Business Units to define R&D requirements and budgets in consultation with R&D Dept Establish policies and systems for cost allocation Introduce ROI evaluation for investment in R&D and product development

73 Page 73 9.2Strategies Key Objective Implement Effective MIS for Business Units Strategies Strengthen Administrative/Finance resources Establish information requirements at Board and Business Unit Manager level Install new systems in USA and Italy

74 Page 74 9.2Strategies Key Objective Standardise Systems in Australia, USA & Italy Strategies Implement new systems Implement Virtual Private Network Investigate on-line business process

75 Page 75 9.2Strategies Key Objective Maintain Conservative Gearing Strategies Reduce stock levels and retire debt Retain 50% net earnings for working capital Retain XYZ Electronics International profits in Italy for growth and working capital needs If necessary, borrow for Australian working capital requirements Maximise R&D grants

76 Page 76 9Loss of key people 9Breach of security 9Infringement of Patents 9Product liability 9Millennium Bug 9Failure of key suppliers/critical components 9Bad debts 9New technologies 9Legislation 9Loss of data 10.1Key Risks

77 Page 77 11.0ACTION PLAN


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