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

XYZ Electronics STRATEGIC PLAN to JULY 1999 1 1 1 1

Disclaimer 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 . 2

1.0 INTRODUCTION 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: a three-day workshop involving the management team to: - identify key issues - establish key objectives - develop broad strategies meetings with functional managers to develop detailed strategies, action plans and timetables a 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. 2 2 2 4

2.0 EXECUTIVE SUMMARY This Business Plan sets out the Vision and Key Objectives for XYZ Electronics for the period to , 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 , 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 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. 5

2.0 EXECUTIVE SUMMARY REVENUE FORECAST Sales A$ million Key Milestones

2.0 EXECUTIVE SUMMARY PROFIT & DIVIDEND FORECAST A$ million

3.0 CORPORATE DIRECTION 3 3 3 10

3.1 Planning Team The following senior executives participated in the business planning process: xxxxxxxxxxx Chairman xxxxxxxxx CEO xxxxxxxxx Development Director xxxxxxxxxx Marketing Manager xxxxxxxxxx Product Manager xxxxxxxx Sales Manager xxxxxxxxx Administration Manager xxxxxxxx Business Manager, Health Products xxxxxxxx Business Manager, Industrial Products xxxxxxxxx Production 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. 11

3.2 External Environment Opportunities Threats 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$ 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$

3.3 5-Year Vision Business Vision for 2003-04
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 13

3.4 Key Questions What are we especially good at right now?
dedicated, performance-orientated people best product technology in the world international business (70% exports) financial control responsive to customer needs interface between marketing and research & development creating a dynamic culture achieving short concept-to-market lead time How will we win in the future? international market presence/image being proactive in rationalising consumer products industry continued development of new technology greater degree of control of distribution channels a modular approach to product technology & design stronger marketing function improved product development processes more formalised but still flexible organisation structure & systems joint-ventures with other firms proper resourcing of industrial division identifying another international product opportunity 14

3.5 Business Mission Activities Products Markets
Research, design, development, production, marketing World’s leading bio-tech electronics technology Consumer Health Industrial globally 15

3.6 SWOT Analysis - Product
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 lower whole-of-life cost 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 competitor propaganda 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 product liability CONSUMER HEALTH-CARE INDUSTRIAL WEAKNESSES 17

3.6 SWOT Analysis - Price 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 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 premium price for technology high ROI for customer CONSUMER HEALTH-CARE INDUSTRIAL 18

3.6 SWOT Analysis - Promotion
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 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-CARE INDUSTRIAL 19

3.6 SWOT Analysis - Place 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 franchising, licensing HEALTH-CARE INDUSTRIAL 20

3.6 SWOT Analysis - People STRENGTHS multi-skilled workforce
self motivation opportunity for growth recognition of performance comprehensive range of skills loyalty highly-skilled team spirit management depth succession plan WEAKNESSES functional boundaries lack of HR policies reliance on R&D Director for innovation general awareness of OH&S OPPORTUNITIES can attract the best people THREATS key people headhunted potential for overwork due to high growth rate of company 21

3.6 SWOT Analysis - Processes
STRENGTHS use of contractors to reduce process management/ complexity measurement of performance ability to change process technologies ISO-9001 adequate MIS communication infrastructure not constrained by capital investment in plant and equipment WEAKNESSES unrealistic deadlines (focus) MIS needs to be improved for future growth some processes too subjective and labour intensive high unit manufacturing costs OPPORTUNITIES electronic commerce (supply chain from customers to suppliers) ability to change manufacturing capacity quickly (use of contractors) THREATS single-source contractors loss of key contractors 22

3.6 SWOT Analysis - Physicals
STRENGTHS new corporate facilities (Adelaide and Italy) own leased facility in USA internal communication corporate high-tech image manufacturing hedge against disaster (outsourced product) everyone together room to expand minimal investment in manufacturing modern computer system WEAKNESSES need objective test equipment and procedures distance from main markets (cost, travel) OPPORTUNITIES flexibility in manufacturing electronic data interchange with suppliers offshore manufacturing/assembly new modules in MIS THREATS security loss of data fire theft 23

3.6 SWOT Analysis - Partnerships
STRENGTHS good distributors for consumer products good and improving suppliers in Australia strong contractual agreements with minimum performance criteria for dealers (except Australia) WEAKNESSES no partnerships (industrial products) suppliers volatile reliant on few powerful individuals inconsistent product/service support with distributors OPPORTUNITIES industrial equipment suppliers technology specialist/suppliers acquire competitors’ partners joint ventures THREATS failure of partnerships 24

3.7 Basis for Growth PRODUCTS MARKETS Consumer Health-care Industrial
New Product Mature market; Sales levelling off new product launched in to extend market life New product launched in ; revenue $2 mill in Year 1, $3 mill in Year 2 New Industrial products launched in 2000; steady growth by Minimal sales in Australia AUSTRALIA Steady growth in market share to reach 30% by Industrial technology licensed in USA in NORTH AMERICA Baseline market steady at levels MARKETS Baseline market steady at levels; Unknown opportunities from other products Steady growth in market share to reach $10 mill by Industrial technology licensed in Europe in EUROPE/ OTHER 25

3.8 Critical Success Factors
XYZ Electronics has identified the following Critical Success Factors which will need to be addressed for it to achieve its Vision: Market leadership in product quality and performance Increased emphasis on product development rather than research Continual product innovation Development of new markets in health-care and industrial segments Recruitment and motivation of top quality staff Effective focus and management of R&D time Effective MIS Effective distribution channels for each product group. 26

4.0 FINANCIAL PROJECTIONS
27

4.1 Revenue and Profit Projections
A$ million Revenue Consumer Products Australia USA Europe/Others Total Consumer Total Health-care Total Industrial New Product TOTAL REVENUE Gross Margin Gross Profit Overheads NPBT NPAT Capital Expenditure Inventory Figures removed in this illustration copy 28

4.2 Revenue, Profit & Investment Assumptions
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 and 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 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 29

4.3 Cashflow Assumptions 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 31

Figures removed in this illustration copy
4.4 Cashflow Projection CASH IN Gross Profit Creditors Increase Depreciation Add Back Total Cash Inflow CASH OUT Overhead Expenses Stock Increase Debtors Increase Capital Expenditure Building Loan Repayments Tax Total Cash Outflow Dividends Net Cashflow Figures removed in this illustration copy 30

4.5 Funding 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 Assuming that inventory can be reduced to more acceptable levels in , 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 Profits generated in overseas markets by XYZ Electronics internationally will be retained in Italy to fund the company’s working capital requirements. 32

5.0 RESEARCH & DEVELOPMENT
33

KEY PERFORMANCE INDICATORS
5.1 Key Objectives KEY PERFORMANCE INDICATORS KEY OBJECTIVES Continue to Develop Innovative Products in Response to Customer Needs Sales Market Share Products launched on time Overruns x $ Revenue Lost Meet Product Launch Dates Achievement of Project Milestones Reduced “damage control” Low staff turnover in R&D Optimise use of R&D Resources Market Intelligence Patents Competitor Benchmarking Maintain Technology Edge over Competitors 34

Continue to Develop Innovative Products in Response to Customer Needs
5.2 Strategies Strategies Obtain regular, comprehensive market feedback Key Objective Continue to Develop Innovative Products in Response to Customer Needs Respond to market feedback Introduce New Product Evaluation phase 35

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

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

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

6.0 MARKETING 64

6.1 Key Objectives KEY PERFORMANCE INDICATORS KEY OBJECTIVES Maintain High Margins Gross Margins Capitalise on Presence in Australia, USA and Italy Seamless service/support infrastructure Build and Leverage XYZ Electronics Brand as Global Leader Brand recognition Unsolicited enquiries Market share Become No 1 in Consumer Products Worldwide Unsolicited enquiries Market share Become Recognised as No 1 Worldwide Extend the Market for Consumer Products Proportion of First Time Buyers Achieve Greater Control over Consumer Products Distribution Channels Proportion of direct sales Sales margin 66

6.1 Key Objectives KEY PERFORMANCE INDICATORS KEY OBJECTIVES Achieve Recognition as a Worldwide Centre of Excellence Market share Unsolicited enquiries Establish Effective Control over Distribution Channels Commission expenses as % of revenue Product launched Sales revenue for new product Identify and Commercialise a New Product Maintain our Excellent Reputation for Ethics and Service Customer perceptions

6.2 Strategies Strategies Key Objective Develop brand promotion
Develop existing products/technologies into new market segments Key Objective Maintain High Margins Develop recognition as market leader in innovation of product design Maintain market leading position Maintain pricing structure with high margins 67

Capitalise on Presence in Australia, USA and Italy
6.2 Strategies Strategies Establish corporate marketing plan/program Key Objective Control all XYZ Electronics communications directly Capitalise on Presence in Australia, USA and Italy Fully develop and use database Coordinate promotions between zones 67

Build and Leverage XYZ Electronics Brand as Global Leader
6.2 Strategies Strategies Key Objective Corporate promotional activity Build and Leverage XYZ Electronics Brand as Global Leader Corporate public relations programme 67

Become No 1 in Consumer Products Worldwide
6.2 Strategies Strategies Key Objective Improve product line Aggressive marketing program Become No 1 in Consumer Products Worldwide Develop international marketing program Aggressive attack on competitors and competitive products 67

Become Recognised as No 1 Worldwide
6.2 Strategies Strategies Establish presence in key target markets Key Objective Build linkages with Consumer Products distributors and service agents Become Recognised as No 1 Worldwide Build alliances in health-care Collaborate with relevant research facilities in Australia, US, UK and Europe Widely promote XYZ Electronics technology 67

Extend the Market for Consumer Products
6.2 Strategies Strategies Extend promotion beyond existing media segments Key Objective Extend the Market for Consumer Products Review the use of existing technology in alternative applications & markets Review bio-technology and other market potential 67

Achieve Greater Control over Consumer Products Distribution Channels
6.2 Strategies Strategies Define consumer product distribution channels Key Objective Develop direct communications between dealers and consumers Achieve Greater Control over Consumer Products Distribution Channels Develop tight control and communications with non-English speaking distributors Review product pricing Establish contracts with Australian dealers 67

Achieve Recognition as a Worldwide Centre
6.2 Strategies Strategies Research Australian market Develop marketing strategy for Australian Food Industry Key Objective Achieve Recognition as a Worldwide Centre Achieve accreditation by internationally-recognised authority Research Industrial market internationally License technology overseas 67

Establish Effective Control over Distribution Channels
6.2 Strategies Strategies Prepare Business Plan Key Objective Establish Effective Control over Distribution Channels Conduct joint market visits Review Agreement 67

Identify and Commercialise a New Product
6.2 Strategies Strategies Key Objective Establish alliances with Universities Identify and Commercialise a New Product Evaluate new product opportunities 67

Maintain our Excellent Reputation for Ethics and Service
6.2 Strategies Strategies Develop affirmative ethics and service policies Key Objective Develop service policies and procedures Maintain our Excellent Reputation for Ethics and Service Improve communications with customers Employ people with the same values In foreign markets, use locals for “local business customs” 67

7.0 OPERATIONS 81

7.1 Key Objectives KEY PERFORMANCE INDICATORS KEY OBJECTIVES Establish and Maintain a Safe Working Environment Lost time accidents Near misses Successfully Integrate Product Development within Operations On-time product release dates Accelerate Industrial Product Development Product launched Integrate procedures to meet Customer Requirements Customer feedback Warranty costs Product returns Complaints Progress towards Zero Defect Quality Status Warranty costs Product returns Complaints Develop Objective Diagnostic Test Procedures Eliminate Crisis Management in Production Start-ups On time product launches 83

7.1 Key Objectives KEY PERFORMANCE INDICATORS KEY OBJECTIVES Gross margins Reductions in standard costs Continue to Reduce Manufacturing Cost Establish Production Facilities in Italy Facilities established Stockturn Stockouts Stock write-offs Maintain Inventory at Optimum Levels 83

Establish and Maintain a Safe Working Environment
7.2 Strategies Strategies Engage external expert to guide and provide advice on OH&S on regular basis Key Objective Establish and Maintain a Safe Working Environment Educate staff in safe working procedures Maintain and support OH&S Committee 83

Successfully Integrate Product Development within Operations
7.2 Strategies Strategies Define the scope of Product Development Key Objective Establish Product Development facilities Successfully Integrate Product Development within Operations Establish goals for Consumer product development Develop information collection systems 83

Accelerate Industrial Product Development
7.2 Strategies Strategies Prepare detailed 3-year Business Plan for Industrial Key Objective Accelerate Industrial Product Development Prepare and submit IR&D Grant application Establish Industrial R&D project team 83

Integrate procedures to meet Customer Requirements
7.2 Strategies Strategies Coordinated reporting, tracking and analysis of customer complaints company-wide Key Objective Integrate procedures to meet Customer Requirements Customer follow-up post rework to ensure satisfaction 83

Progress towards Zero Defect Quality Status
7.2 Strategies Strategies Establish clear specifications for product performance and test protocols 100% finished product testing in-house Key Objective Progress towards Zero Defect Quality Status Encourage XYZ Electronics suppliers to use designed test procedures Standardise where possible on components Train staff in quality requirements 83

Develop Objective Diagnostic Test Procedures
7.2 Strategies Strategies Key Objective Review and list requirements Develop Objective Diagnostic Test Procedures Establish test facilities 83

Eliminate Crisis Management in Production Start-ups
7.2 Strategies Strategies Key Objective Improve estimation of production lead-times Eliminate Crisis Management in Production Start-ups Review policies and practices for new product launches 83

Continue to Reduce Manufacturing Cost
7.2 Strategies Strategies Bring in-house/automate production of mechanical components where cost justified Key Objective Establish dual sourcing for key components Continue to Reduce Manufacturing Cost Standardise on components where possible Design for procurability manufacturability Conduct Value Analysis for all product components 83

Establish Production Facilities in Italy
7.2 Strategies Strategies Develop manufacture of solid-state circuitry Key Objective Establish Production Facilities in Italy Set guidelines for authority and responsibility Implement business operating system 83

Maintain Inventory at Optimum Levels
7.2 Strategies Strategies Evaluate Economic Order Quantity (EOQ) optimisation Key Objective Maintain Inventory at Optimum Levels Improve sales forecasting Enforce supplier delivery schedules Conduct supply chain review 83

8.0 HUMAN RESOURCES 98

8.1 Key Objectives KEY PERFORMANCE INDICATORS KEY OBJECTIVES Reduce Stress Levels Achieve Effective Communication & Understanding throughout the Organisation Create and Maintain a Contented, Well-Motivated Workforce Staff turnover Staff perceptions Achievement of deadlines Continue to Develop OH&S Processes Eliminate Key Resource Risk Accidents Near misses Absenteeism Growth Profitability 99

Create and Maintain a Contented, Well-Motivated Workforce
8.2 Strategies Strategies Maintain competitive salary structure Key Objective Provide challenging jobs Create and Maintain a Contented, Well-Motivated Workforce Provide a conducive work “environment” Maintain flat management structure Provide opportunities for career development Establish HR policies and practices 100

8.2 Strategies Strategies Key Objective
Monitor workloads and skill requirements, and compare with staff capabilities Key Objective Reduce Stress Levels Set realistic timelines/ deadlines Enforce Annual Leave Monitor stress indicators Establish corporate fitness programme 100

8.2 Strategies Strategies Key Objective
Keep everyone informed on company direction and progress Achieve Effective Communication & Understanding throughout the Organisation Establish effective inter-office communication processes 100

Continue to Develop OH&S Processes
8.2 Strategies Strategies Develop Company policy document Key Objective Implement HACCP Continue to Develop OH&S Processes Report quarterly to Management Conduct independent audits Italy and USA to implement OH&S systems, adapted to local conditions/regulations 100

Eliminate Key Resource Risk
8.2 Strategies Strategies Determine appropriate strategies for critical personnel Key Objective Eliminate Key Resource Risk Pay market salaries or better Establish profit-sharing for all employees Establish incentive programme for Managers based on KPIs 100

9.0 FINANCE & SYSTEMS 100

9.1 Key Objectives KEY PERFORMANCE INDICATORS KEY OBJECTIVES Improve Project Expenditure Tracking & Reporting Systems On budget projects Implement System for Allocation of R&D Costs to Business Units Perception of value for money by Business Units Achievement of budgets Ability to answer questions Implement Effective MIS for Business Units Systems in place On time reporting Standardise Systems in Australia, USA & Italy Maintain Conservative Gearing Debt to equity ratio 100

Improve Project Expenditure Tracking & Reporting Systems
9.2 Strategies Strategies Implement time recording for R&D and Production in Australia and Italy Key Objective Improve Project Expenditure Tracking & Reporting Systems Establish standard times for production Train staff in manufacturing management information systems 100

Implement System for Allocation of R&D Costs to Business Units
9.2 Strategies Strategies Business Units to define R&D requirements and budgets in consultation with R&D Dept Key Objective Implement System for Allocation of R&D Costs to Business Units Establish policies and systems for cost allocation Introduce ROI evaluation for investment in R&D and product development 100

Implement Effective MIS for Business Units
9.2 Strategies Strategies Strengthen Administrative/Finance resources Key Objective Implement Effective MIS for Business Units Establish information requirements at Board and Business Unit Manager level Install new systems in USA and Italy 100

Standardise Systems in Australia, USA & Italy
9.2 Strategies Strategies Implement new systems Key Objective Standardise Systems in Australia, USA & Italy Implement Virtual Private Network Investigate on-line business process 100

Maintain Conservative Gearing
9.2 Strategies Strategies Reduce stock levels and retire debt Key Objective Retain 50% net earnings for working capital Maintain Conservative Gearing 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 100

10.1 Key Risks Loss of key people Breach of security
Infringement of Patents Product liability Millennium Bug Failure of key suppliers/critical components Bad debts New technologies Legislation Loss of data 117

11.0 ACTION PLAN

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

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