2 year plan

Two-Year Plan

Dr. Bo Li

World 24 Team 4

Peter Eugenio

Jocelyn Gallo

Puiyi Fanny Lo

Narek Navasart

Aaron Rodriguez

Maksim Rozkov

Table of Contents

Page No.

1. Introduction.................................................................................

2. Organization ................................................................................

3.

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1. Introduction

Purpose

The purpose of the plan is to review over the previous decisions and plan for the direction of the

future of the company.

History Godwyn n Goodwyn is a self care product established in January 17, 2019; which looks

to provide efficient products that satisfy customer needs at a modest price. The company was

started by Jocelyn Gallo, the founder and CEO. The story of the founding begins the week of her

birthday when she woke up and had acne all over her face. Immediately upon finding the acne

she went to every store in the city looking for a remedy to get rid of the problem before her big

night. Store by store and remedy by remedy none of the products on the market worked and she

began to cry because her special day was about to be ruined and she was about to cancel all her

plans. In a desperate attempt to find a solution to her problem she called her friend from college

Maksim. Maksim Rozkov was a chemistry genius from Russia who felt he could help with the

problem. Maksim spent the next 3 days non-stop trying to develop something to get rid of this

acne. Upon many hours of work he felt like he had the right product. He gave Jocelyn the

product the night before the event and she applied it to her skin and went to sleep. The next

morning Jocelyn was very sad thinking she had to go out with the acne all over her face. She

slothfully got out of bed and brushed her teeth once she looked in the mirror to her surprise the

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acne was gone and her skin was flawless. She was so happy that her acne was gone and spent the

rest of the day getting ready for her birthday celebration. After the celebration she called Maksim

and thanked him for making the cream, being the business savvy person she is she thought there

would be more people like her and she could make a business out of this experience. She made a

business proposition on January 13, 2017 after negotiations and plans being made the company

was established on January 17,2019. The company was split between the two of them Jocelyn

owned 60% of the company while Maksim owned 40%. Maksim would take care of all the

logistics of the company while Jocelyn took care of the business side of the company. Upon

founding they tried to distribute this new product to different neighborhoods and cities but was

having trouble building a following so they sought a person to help build this momentum for the

company. In an effort to find this person they sought out marketing consulting firms but couldn’t

find the person with the right vision. After 3 months of searching for this person they went to a

small firm, the owner was Aaron Rodriguez his firm had a total of 5 people including him but

their ideas for the campaign were perfect for what the company was looking for. Aaron wanted

to be a part of the company and became the VP of Marketing and for his services was awarded

12% of the company 6% coming from each of the other stakeholders. Due to the marketing plan

the company grew exponentially and expanded to 45 states and 7 countries. The company was

growing and the demand was high for the product in an effort to meet demand they looked to

create a plant overseas. The team did not know anything about finding real estate in other

countries so they reached out to international agents who could help them. They eventually

found Puiyi Fanny Lo a Hong Kong real estate tycoon who was looking to expand her business

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ventures. She was paid by commision for all her efforts.She knew of a place in Pandao which

would be a perfect spot for the business to start but at this time in the company they did not have

enough funds in order to build the plant so they took out bonds in order to make the initial

investment which affected the company for 3 quarters. The company was worried about this

initial drop so they looked for a CFO to handle the money and budget it. They found Narek

Navasart who was a CPA and IT specialist so he used accounting and computers in order to

make businesses the most efficient that they could be. The company began to improve and due

to the demand in product and managing of money they were able to sell enough to recover and

make enough money to cover the costs of the plant and had steady growth through the next 3

quarters after paying off the bonds. This growth in the company made them one of their leaders

in the industry. During the first 2 quarters of growth they were looking to maintain their success

and grow in the future. Peter Eugenio was a rising star who was working his way up through the

company. To help maintain this They made Peter the Executive VP and he was in charge of

maintaining growth. This maintenance of growth lead them to dominate the industry in almost

every measurable category. The company now had their board of directors and restructured the

company to where each board member had 16.66% of the company. The company has been

doing well even with minor squabbles for power they continue to see growth in the company.

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2. Organization

Table 1: GNG Goodwyn N Goodwyn Inc. - Organization Chart

● Jocelyn - Chief Executive Officer (CEO)

Jocelyn Gallo was born in Bellflower, CA and is pursuing her BS in Computer Information

Systems and Business Administration. Her first job was as a server which she has continued

through her college career. This job has helped her enhance her communication skills while

developing leadership skills. Other skills she hoped to improve while in college are her IT skills.

In an effort for this she worked as and IT ar a public company in Orange County,CA. In this time

she learned more about the IT world as well as a new style of customer service and providing it

in the industry of her choice. Jocelyn not only works at these two jobs but is also the Vice

President of a non-profit organization called Angels of Charity. She worked her was up from

being an assistant to being the Vice President. She has travelled to many parts of the world which

has set a strong foundation to help people reach their full potential because of seeing so much of

the world. Her leadership philosophy is to practice mindfulness because in order to succeed in

the workplace one must have a strong and clear mind. This has helped her in her role as the CEO

where she leads the group in our schedule and designs a plan in order for optimal success while

providing an environment which is advantageous for the maintenance of mental health.

● Narek Navasart - Chief Operating Officer (COO)

Narek was born in Yerevan, Armenia and moved to Burbank, California at the age of 5. He

entered the US public school system where he quickly learned English and once he graduated

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Burbank high school he went to Glendale Community College. After a short time at Glendale he

transferred to Cal State LA in 2016 to pursue a Bachelor of Science in Accounting and

Computer Information Systems and will be graduating this semester.For 3 years in college he

was working at the California Public Utilities Commision as an Information Technology Analyst

where he was in charge of the I.T. systems in the Los Angeles Satellite office of the PUC.

During this time he gained a lot of experience with technology where he learned SQL and Java

and the end users which it will help. He is a patient and hard working person which is how he

takes on the issues which he faces everyday and in school. These skills and determination help

with his role in the group of being one of the final deciders on where the company is going and

how it will improve.

● Maksim Rozkhov - Chief Financial Officer (CFO)

Maksim was born in Russia and had his education there till he went to community college at East

Los Angeles Community College during this time he was a student worker who assisted the

secretary and faculty by preparing paperwork and class schedules as well as making calls for

academic meetings, responding to administrative emails and listening to voicemail messages.

During his time here he completed an Associates degree in Business Administration. He

furthered his education at the California State University of Los Angeles in pursuit of a Business

Administration. While in at Cal State LA he worked as an administrative assistant at Quest

Company where his responsibilities were assisting daily in administrative management, logistics,

equipment and storage. Tasks of the job included determining staffing requirements, work

assignment and schedules for new projects. His job experience helped him to acquire strong

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leading and communication skills including translation of requirements to staff members and

management of operating services. His hobbies include watching soccer and exercising. His

greatest inspiration is Michael Jordan who once said “I can accept failure, but I can not accept

not trying.” and this is how he approaches his work. His job is assisting in preparing the

financial aspects of the project and providing information to the group to make informed

decisions for the project.

● Aaron Rodriguez - Vice President (VP) of Marketing

Aaron was born in Guam into a military family and then moved to San Diego at the age of two.

He spent his childhood here and then in middle school moved over to Italy. During this time he

was able to experience many different types of culture and different kinds of people. His hobbies

include different types of sports, trying new foods, and watching movies. Italy gave him the

opportunity to travel for sports which is where he started developing a love for sports. When he

got into high school he moved back to San Diego where he found out what he wanted to do with

his life, marketing in sports. From that point on he worked tirelessly at his craft and got into

California State University of Los Angeles. While in school he joined a non-profit organization

named Alpha Phi Omega. In this organization he was able to develop his leadership abilities by

being in the executive committee as the Public Relations Director and the Community Service

Coordinator. In these positions he was in charge of all community service events for over 50

members, recruitment of around 30 new members per semester and maintaining relationships

with non-profit and campus organizations. All of these experiences have prepared him for his

next step in life at the University of San Francisco in his Master of Arts Sports Management

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program. The leadership style that he uses is delegation, he will delegate tasks to others then

every week they will come back and figure out the next step. He tends to lead when needed but if

there is a definitive and clear leader established he will provide support for them. The jobs he

performs for the group is by giving ideas and providing creative input on the project and making

sure that the report is visually appealing and provides compelling content.

● Peter Eugenio - Executive Vice President

Peter was born in the philippines and travelled overseas to Los Angeles with his family at a

young age. His first business transaction was when he was a boy trying to earn money to buy

POGS. His parents will not buy them and insist on earning it like a working man. He washed

dishes, laundry, and other house chores which allowed him to experience “work” as a child.

This helped built his foundation as a business person. He started working part time at the age of

17 for a REIT as an administrative assistance. This transitioned into full time a few months later.

Working for this company helped decide to pursue a degree in business management. Since his

company was based in Santa Monica, he attended Santa Monica College and earned an

Associate’s Degree in Business Administrative. Then transferred to California State University -

Los Angeles to earn a degree in Business Management. While going to school, he worked full

time as an Administrative Assistance for five years. He was then promoted as an Analyst and

remained in this position for another five years. This led to a promotion as a manager. He

learned the skills of operating a business, how to adjust to the market, and made company

decisions which resulted in positive year end results. Eventually, Goodwyn N Goodwyn Inc.

recognized his work ethic and decided to hire him as an Executive VP. He accepted the

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opportunity with the knowledge of how tough it will be in the industry. Peter plans to bring the

same work ethic he created as a child and excellent work experience from his previous company

to lead the industry for Goodwyn N Goodwyn Inc..

● Puyi Fanny Lo - Senior Vice President

Fanny is from Hong Kong who came to the United States for her education. Her hobbies include

trying new restaurants and traveling. When she came to America her first job before her

education was in a real estate company working as a contract writer. She prepared e-contracts for

clients and would follow up on them to make sure that the contracts were agreeable on both

sides. She started her journey of school at Glendale Community College. During her time at this

college she worked as an assistant at the photo lab on campus. Her duties included maintaining

the inventory of the equipment and making sure that the rooms were up to college standards.

After her time at community college she moved to the university of Cal State LA. During this

time she obtained an associate degree in Business Administration while pursue her accounting

degree and after graduation will take the CMA. While in school she works at a bank where she

takes incoming calls and responds to customer inquiries. This job requires them to work as a

team because even though tasks are individual the team will be scored and evaluated together.

Her roles in the team include helping with any tasks which are struggling because she can be

more efficient when given guidance. She believes that everyone should have a say in what is

going on and this will lead to innovation.

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3. Industry Analysis

Industry analysis allows companies to evaluate and measure their businesses compared to

their competitors who are in the same industry allowing them to get a better understanding of

what trends are in the industry. For the purpose of this project, we will be comparing five

different companies as well as the industry average in areas including sales, net income, return

on assets, return on equity, and stock price followed by an analysis.

3.1 Sales

Table 3.1

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Figure 1: Sales - Years 3 and 4 with Industry Comparison

Sales is defined as the exchange of a product or service for money. Table 3.1 shows the

sales of five different companies respectively as well as the industry average in dollar value.

Figure 1 is a visualization of the data on Table 3.1. Figure 1 allows us to compare all five

companies separately with the industry average. In the beginning of Y3 Q1, all companies

seemed to be very close in sales besides Company 1. It is so close that the company average

overlaps the line of most of the other companies. The two companies who have been competing

in sales are our team, Company 4 with Company 5, but in Y4 Q3 and Y4 Q4, we have been able

to take the lead by a little over $1000. On the contrary, Company 1 seems to be struggling to

keep up throughout all eight quarters in sales. In Y4 Q4, the industry average is above Company

1 and Company 2, but below Company 3, Company 4, and Company 5. Our goal is to continue

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having the highest sales by selling our product with the right strategy that will be discussed later

in the report.

3.2 Net Income

Table 3.2

Figure 2: Net Income - Years 3 and 4 with Industry Comparison

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In business, net income is calculated by subtracting a company’s income from

the cost of goods sold, interest, depreciation, taxes, and other expenses. Table 3.2 has

the net income of five companies respectively as well as the industry average from Y3

Q1 to Y4 Q4 in dollar value. Figure 2 is a visualization of the data in Table 3.2. Figure 2

facilitates individuals to compare all five companies separately with the industry

average. In Y3 Q1, Company 5 was in last place, but by the end of Y4 Q4 they were

able to decrease their expenses and increase their income making them move up to

3rd. Our company began Y3 Q2 in 2nd and were gradually able to increase our net

income making us the company with the highest net income in Y4 Q3 and in Y4 Q4 we were still the company with the highest net income followed by Company 3. Company 1

was able to start the first quarter in 3rd place, but by the second quarter, their net

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income went to -$39 finishing quarter eight with a little over what they had in quarter 1.

Company 2 started the first quarter with the highest net income, but by the end of the

eighth quarter their net income went down making them 4th. The industry average

increased from $179.20 to $790 leaving Company 1 and Company 2 below the industry

average. Our goal is to continue limiting expenses while increasing our income in order

to allow us to have the highest net income compared to the other four companies.

3.3 Return on Assets

Table 3.3

Figure 3: Return on Assets - Years 3 and 4 with Industry Comparison

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Return on Asset(ROA) shows internal personnel as well as external individuals such as investors how profitable the company is in respect to the company’s total assets. ROA is calculated by dividing the company’s net income by the company’s total assets. Table 3.3 has the

ROA of all five companies respectively as well as the industry average in percentage since ROA

is set as a percentage. Figure 3 shows a visualization of the data on Table 3.3, which allows

individuals to compare the ROA of five companies separately, with the industry average.

Company 2 started the first quarter strong and seemed to be one of the companies with the

highest ROA all the way to quarter 4. After quarter 4, Company 2 slowly started to decrease in

ROA making them the company with the lowest ROA in the seventh quarter, but were able to

increase to 4th place by the eighth quarter. Company 3 moved from being 2nd to the last in the

first quarter and then moving up to 2nd in the eighth quarter. Company 5 started Y3 Q1 with the

lowest ROA, but moved above the industry average in Y4 Q4. Our company, Company 4, began

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Y3 Q1 with the 2nd highest ROA, but in Y3 Q3 we became the company with the lowest ROA

and fortunately by Y4 Q4 we became to company with the highest ROA. Again, Company 1 and

Company 2 stayed below the industry average in the last quarter.

3.4 Return on Equity

Table 3.4

Figure 4: Net Income - Years 3 and 4 with Industry Comparison

Return on Equity(ROE) shows how skillfully a business uses investments to increase

earnings growth. ROE also gives the rate of return for ownership interest of a typical stock

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owner. ROE is a ratio that is calculated by dividing the company’s net income by shareholders

equity excluding prefered dividends. Table 3.4 has the ROE of all five companies respectively,

as well as the industry average in percentage since ROE is set as a percentage. Figure 4 shows a

visualization of the data on Table 3.4, which allows individuals to compare the ROE of five

companies separately, with the industry average. Company 2 began the first quarter with the

highest ROE and struggled to stay in first place by the last quarter, making them second to the

last. On the other hand, Company 5 started the first quarter with the lowest ROE, but were able

to steadily increase making them the company with the highest ROE in Y4 Q1 and Y4 Q2 until

they started to decrease once ugan making them 3rd from 1st. Our company, Company 4, started

Y3 Q1 as the company with the 2nd highest ROE, but Y3 Q3 we ended up being the company

with the lowest ROE. From Y3 Q1 to Y4 Q4 it has been a battle between Company 4 and

Company 5 to be the company with the highest ROE, but on the most recent quarter Company 4

had the highest ROE followed by Company 3 and then Company 5. In almost all eight quarters,

more companies were above the industry average than below, but in Y4 Q1 and Y4 Q2, more

companies were below the industry average. Based on the most recent quarter, Company 1 and

Company 2 stayed below the industry average.

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Figure 5: Stock Price - Years 3 and 4 with Industry Comparison

Stock price is the cost of purchasing surety on an exchange. Different factors can affect

stock prices including volatility in the market, the favor of the company, and contemporary

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3.5 Stock Price

Table 3.5

economic conditions. Table 3.5 has the stock price data, in dollar value, for five companies,

respectively, along with the industry average. Figure 5 shows a visualization of the data on

Table 3.5, which allows individuals to compare the stock prices of five companies,

independently, with the industry average. When it came to stock price, all the companies were so

close, a few cents away, all the way until Y4 Q2. Beginning Y4 Q2, both Company 4 and

Company 5, increased their stock price separating themselves from the other three companies.

Our company, Company 4, did finish the last two quarters with the highest stock price. In the

first two quarters, Company 2 was the company with the highest stock price, but instead of their

stock price increasing, it decreased making them the company with the second to the last stock

price by the latest quarter. The stock price industry average started at $1.10 decreasing to 93¢ in

Y3 Q4, but it began to increase once again making the industry average $1.90 in Y4 Q4. During

the last three quarters only two companies, Company 4 and Company 5, stayed above the

industry average.

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4. Goals and Objectives

Table 4.1

Preliminary Weighting Factor Points Total %

Return on Assets (ROA) 6 30

Return on Equity (ROE) 2 10

Market Share (MS) 4 20

Stock Price (SP) 3 15

Unit Production Cost (UPC) 0 0

Total Net Income (TNI) 5 25

Total Points 20 100

By looking on the weighting factor, we can know more about the goals and objectives of our

company. At the beginning on the first quarter, we are more focus on Return on Assets (ROA),

Total Net Income (TNI) and Market Share (MS). Weighting factors help us to know which areas

we should focus on.

We put Return on Assets to be the highest percentage. We can reduce our operational cost and

increase our revenue. Moreover, by building a new asset, we can reduce the overtime of

employees and lower the shipping cost.

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We put Total Net Income five points. We need to increase the sale and lower the expense to

archive higher net income.

Table 4.2

Final Weighting Factor Points Total %

Return on Assets (ROA) 0 0

Return on Equity (ROE) 0 0

Market Share (MS) 0 0

Stock Price (SP) 3 60

Unit Production Cost (UPC) 0 0

Total Net Income (TNI) 2 40

Total Points 5 100

Since we keep our Return on Assets and Market Share consistency, we change our strategies to

focus more on Stock Price (SP) and Total Net Income (TNI). Our main goal is to bring up sales

revenue.

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5. Strategy

At Goodwyn N Goodwyn Inc. we believe that providing our employees with competitive salaries encourages the team to work hard and remain loyal to our company. We plan to increase our workforce for the upcoming years. This should provide an increase in Sales which will negate overhead costs for the additional sales team.

Sales Forecasting

Sales play an important role in the game and affect market share, net income, and stock

price. Our main goal was to have highest sales in our simulated world because it will bring the

highest revenue. With the highest revenue, our company will have enough cash flow to cover

expenses such as operating costs and invest more in marketing, R&D, Training, hiring more

salespeople, and on construction such as building a plant and opening more lines. With a good

investment plan our company would increase our sales and bring higher returns of profit. In

forecasting sales, we identified factors that affect sales in our world. Factors that affect sales in

our world are the general level of economic activity GDP (Gross domestic product), average

pricing of the product calculated based on all competitors pricing in a given area, advertising,

seasonal index, and introduction of a new model (R&D investment). To calculate expected sales

in a given quarter and to have sufficient inventory on hand, we used a regression analysis tool.

Regression analysis helps to identify the best model with most accurate forecast for future sales

and production, where Future sales = Previous sales + Incremental sales. Where incremental

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sales are determined by GDP, seasonal index, price advertising, new model introduction, and

competitor’s activities.

Regression analysis tool analyses the past industry sales (the dependent factor Seasonally

Adjusted), Time factor (trend index that measures the impact of the social and demographic

trends on product demand), Real GDP (reflection of the economy’s effect on product sales), and

Average price (the industry’s average product price in the respective market area). The

dependent factor was calculated by the following formula, SA Industry Sales = Actual

Industry Sales ÷ Seasonal Index. Additionally, to determine which predictor variable(s) to

include in the final model that fits the data best, alternative forecasting equations were evaluated

as follows.

Model #1 : SA Sales = β 0 + β 1 × Real GDP + β 2 × Av g Price

Model #2 : SA Sales = β 0 + β 1 × Time ( Used as a best model most of the time In Merica 1,

Merica 2, and Merica 3)

Model #3 : SA Sales = β 0 + β 1 × Time + β 2 × Real GDP (Used as a best model often in

Pandau).

Model #4 : SA Sales = β 0 + β 1 × Time + β 2 × Real GDP + β 3 × Avg Price

Best model is figured out based on assumption of coefficients gathered GDP, AVG Price, and

Time. Assumption on Real GDP is that if GDP increases – sales increase too (GDP has to be

>0). Time assumption is that if there is a change in customer demand due to change in Time

(demographic and social trends) there will be an increase in sales (Time has to be >0). Average

price assumption is that as the average price increases than customer demand decreases (law of

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demand) meaning that the AVG price coefficient has to be < 0. Last but not the least, after

general assumptions are met and there are a few best model present, the adjusted R coefficient

assumption plays the final role in choosing the best model. The higher the adjusted R coefficient

the less error is present in forecasted variables.

As the economy evolves, the forecasting equation was changed and be re -estimated when new

quarterly data are available. To add seasonality back to sales demand, the final forecast for

industry sales is obtained as follows:

Industry Sales Forecast = Regression Forecast of SA Sales × Seasonal Index

The company’s forecasted unit sales in the respective market area is then given by

Company Sales Forecast = Industry Sales Forecast × Expected Market Share

These steps of regression analysis are done after each simulated quarter (presents new data to all

variable series) for each market area in our world. According to our plan new model should be

introduced year 5 Quarter 2 and year 6 quarter 2. Our sales increase after a new model is

introduced based on the assumption of that new model introduction is likely to increase our sales with an 80 percent chance and 20 percent it may decline. However, a decline would not exceed 5

percent of current sales.

To find out the quarterly exchange rate forecasts from Pandau’s currency to Merica Dollars

Year 6, simple trend line projections were used Listed below: the dependent variable Y

(exchange rate) and the independent variable X (time).

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Based on the statistical measures of the regression analysis, the best forecasting model for each

of the market areas was one in which the Time variable was used as the sole explanatory variable

for Merica 1, 2, and 3.For Pandau Time, Real GDP, and Avg. Price were used as explanatory

variables. As evidenced by the coefficients of determination demonstrated above, the selected

forecasting models exhibit a strong association between variation in sales and changes in demand

due to social/demographic trends. In each of the models, a coefficient of determination above

90% is observed.

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Production Forecast

Production Scheduling (For Y5Q1 - Y6Q4)

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Production plays an essential role in meeting sales volume. We based our assumptions on

the regression analysis. Our goal was to produce enough so we don’t stock out in inventory, but

not to overproduce to avoid storage costs with overpoduction. To meet sales volume and

increases our production we opened a 6 line plant in Pandau. After our plant was ready we

opened 2 lines per quarter until our plant was fully operating. Producing under this assumption

was so far effective for our company. However, we stock out in Merica 1 during year 4 quarter 4.

Due to this issue we decided to open 2 more lines in Merica 1 in year 5 quarter 1 and year 5

quarter 2 to avoid miscalculations. In case of an emergency we will open second-shift lines either

in Merica 1 plant or Pandau plant.

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Production and Inventory Management (000s units)

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Financial Statements

Balance Sheet - Year 3

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Income Statement - Year 4

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Net Income - Year 3

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Net Income - Year 4

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Cash Balance - Year 3

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Cash Balance - Year 4

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