Final Report

Final Corporate Report  

  Dr. Bo Li

World 24 Team 4

Peter Eugenio, Jocelyn Gallo, Maksim Rozhkov,

Puiyi Fanny Lo, Narek Navasart, Aaron Rodriguez

May 16, 2019

1. Introduction and Organization:

1.1 Introduction

Goodwyn N Goodwyn is a publicly traded for-profit company that manufactures and distributes acne cream for all genders and ethnicities. The company is inspired by the determination and will of the executive team to provide the highest quality and affordable product on the market. After six years of operation the Goodwyn N Goodwyn Corporation, has become the leader in the industry and  composed a final corporate report that will examine and illustrate the company’s performance over the course of the past two years ( years 5 and 6). The projected performance for years 5 and 6 of the company made in year 4 and the actual performance of the company will be contrasted. To visually illustrate these decisions the measurable performance of the company has been displayed through charts and graphs in the final report.

The Goodwyn N Goodwyn Company had success in the start of the company’s operation. However, in the beginning other company’s were stiff competition for them. As time went on for the company developed their assets worldwide and continued to grow their position in the industry. The strategy of the company was to provide the most innovative products on the market at the lowest prices.This strategy worked and by the fourth quarter in their fourth year of operation they became a dominant powerhouse in the industry beating out their competitors with substantial margins. Our company has pulled ahead of its competition since the beginning and will continue to maintain that success in the future.

1.2 History

Goodwyn n Goodwyn Inc is a self-care product company found by now CEO, Jocelyn Gallo, in January 2017. The story of how the company was found is a bit different than any other company’s founding story. The founding began during the week of Jocelyn’s birthday when she woke up one morning and noticed she suddenly had bad acne all over her face. Immediately upon finding this, it distressed her to the point that she went to every store in the city looking for a remedy to her problem. Jocelyn was even more distressed due to the fact that she planned a large event to celebrate her big day. Store by store and remedy by remedy, none of the products on the market seemed to work, so she began to get more worried. In desperate attempt to find a solution, she called her friend from college Maksim Rozkov. Maksim was a chemistry genius from Russia, who she felt could help her with a solution to the problem. Maksim spent the next 3 days non-stop trying to develop something to get rid of this acne. After many hours of work, he felt like he had the right product. He gave Jocelyn the product the night before the event and applied it before bed. The next morning, Jocelyn was very sad thinking she had to go out with 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 acne was gone and her skin was flawless. Jocelyn could not believe it! She was so content that her acne was gone and gracefully spent the rest of the day getting ready for her birthday celebration. Being the business savvy person she is she, she called Maksim the next morning to share her idea with him. Jocelyn knew that there would be more people like her who would need a product like the one Maksim created seeing an opportunity to start a company. Her vision was that everyone could have a quality self-care product in all households which is environmentally friendly so future generations have a clean world to live in. She made a business proposition to Maksim on January 13, 2017.After negotiations and plans being made the company was officially established on January 17, 2017. The company was split between 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. Jocelyn and Maksim tried to distribute their 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 mid sized  firm. The owner was Aaron Rodriguez, the firm was a regional sports marketing firm which had a total of 7 employees including him. Their ideas for the campaign as well as their regional connections for exposure were perfect for what the company was looking for. Aaron saw that this was a good opportunity so he sold his marketing firm and became 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 occupy become a major player in Merica 1. 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 ventures. She was paid by commission 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 debt so they looked for a CFO to manage the income and expenditures by budgeting funds. The company soon later recruited Narek Navasart, a CPA and IT specialist. His specialty is using accounting and computers in order to make businesses the most efficient they could be by using complex algorithms and computer generated tools. The company began to improve with the help of Narek increasing sales to the point they were able to sell enough to recover from their initial investment overseas and had steady growth through the next three quarters after paying off the bonds. The efficient money management  in the company made them lead to great success and becoming one of the leaders in the industry. After the first two 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 promoted Peter to Executive Vice President 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. They then restructured the company to where each board member had 12.14% of the company leaving 15% of the company to future investors. The company has minor squabbles for power within the company but despite this the company has found success such as controlling the highest market share at 25.5% and producing a return on sales of 19.12 and excelling in every measurable category of profit. They look to continue their success by using previous success and developing new strategies to increase assets and reduce liabilities to maximize the profitability of the company.

1.3 Organization

Goodwyn N Goodwyn’s current executive board consists of seven former students at California State University of Los Angeles. Each of them is in pursuit of a specific field of study in business which is essential to the success of the company. The mission of the company is to develop a quality and reliable self-care product at the most affordable price.  We are a company who is dedicated to providing customers with the highest quality product at the most affordable price. The market is filled with competitors who emerge and fall from quarter to quarter and being the industry leader we plan to maintain being the best in the market.

1.4 Executive Team Profiles

Jocelyn Gallo  - Chief Executive Officer (CEO)

Jocelyn Gallo was born in Bellflower, CA, She went to college at the California State University of Los Angeles where she obtained a Bachelor of Science  in Computer Information Systems and Business Administration. Before becoming CEO she began as a server which was her job throughout her college career. This job helped her enhance her communication skills by providing optimal service to customers while developing leadership skills by encountering situations which she would later face as a CEO. Another key skill she developed while in college was her IT skills. In an effort for her development she worked in IT for a public company in Orange County, CA. During this time she learned more about the environment of  IT professionals as well as a developing new skills of customer service excelling in a new field. Jocelyn heightened her leadership skills in her two jobs in college while obtaining a position as the Vice President of a non-profit organization called Angels of Charity. She started as an assistant to the President of the organization but developed her skills to become the Vice President. During her time in school she has travelled to many parts of the world which has set a strong foundation for her passion to help people reach their full potential. This passion was cultivated from her experiences around the world developing a leadership philosophy to practice mindfulness because her belief is that 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 company  in developing schedules and designing a plan in order for optimal success while providing a prudent environment for mental health. Exercises she practices and encourages her employees to do is mindfulness in part of an effort to make the company efficient while helping employees reach peak performance. During board meetings she calls the meeting to order starts which starts with a recap of the previous week. After everyone is informed of the results of the previous week’s decision. Jocelyn provides guidance to develop conclusions for the decisions to accomplish goals during the following week and answer any questions and consider any ideas brought forward during the meeting by other board members. The days after the meeting she will check in with the other team members and make sure that they are achieving the goals established during the meeting and provide assistance if needed

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 Burbank high school he went to Glendale Community College. After a short time at Glendale he transferred to Cal State LA in 2016 where he obtained a Bachelor of  Science in Accounting and Computer Information Systems. During his 3 years in the university he was working at the California Public Utilities Commission as an Information Technology Analyst where he was responsible for 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 about the end users which the programs will help. His experience of college and work developed his qualities of patience and hard work which is how he takes on the issues which he faces every day. These skills help with his role on the board as Chief Operating Officer explains the direction the company is going and what actions he believes should be taken to have success.  His main duties include computing and producing excel sheets to ensure the company operations are running efficiently while producing the most profit for the company. During meetings he will provide the information found through financial, sales and production analysis to the board and listen to any suggestions that may help make decisions to increase revenue and decrease costs for the company

 Maksim Rozkhov - Chief Financial Officer (CFO)

Maksim  was born in Russia where he finished  his secondary education and developed a joy for soccer and exercising. These hobbies started his development of teamwork and self-determination. After high school he continued his education at East Los Angeles Community College. During his time in community college he got a job as a student worker where he 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. This experience provided opportunities for his skills of multitasking and prioritizing different tasks to mature which later helped in his success as CFO when he was faced with handling the financial aspects of the company. His community college years awarded him with an Associate’s degree in Business Administration. After acquiring an associate’s degree he continued  his education at the California State University of Los Angeles obtaining a Bachelors in Business Administration. While attending Cal State LA he worked as an administrative assistant at Quest Company, an American clinical laboratory, where his responsibilities were assisting in daily administrative management, logistics, equipment and storage. Tasks of the job included determining staffing requirements, work assignment and producing schedules for new projects. His job experience helped him to develop strong leadership and communication skills including the translating of requirements to staff members and managing operating services. His responsibilities at Goodwyn N Goodwyn Inc. are assisting in preparing the financial, production and sales reports of the project by going over regression analysis to ensure that the results produced are correct and the numbers reflect the best decision for the company. During meetings his duty is  providing information to the board and to assist in making informed decisions for the growth of the company and answer any questions during board meetings. His greatest inspiration is Michael Jordan who once said “I can accept failure, but I cannot accept not trying.” and this philosophy is how he approaches his work by always giving his best effort even if there is failure

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 in San Diego where grew to love many different types of sports, trying new foods, and watching movies. In  junior high school the military relocated his family to Italy. During this time he was able to experience many different types of culture and different kinds of people while traveling all over Europe. This helped him gain a global perspective of his environment and prepared him in developing skills to help the company expand internationally. Italy gave him the opportunity to travel for sports which increased his love for sports because of the unique experience it gave him. During his high school years  he moved back to San Diego where he realized that his his experiences in Europe and San Diego 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 as well as finding solutions for the organization when faced with issues either internal or external. All of these experiences prepared him for the University of San Francisco in his Master of Arts Sports Management program where upon graduation he started his own sports management firm and later was recruited by Goodwin n Goodwin inc. His global and business  experiences helped him develop social and professional skills which helps him establish relationships and provide insights which are essential to the success of the company. During meetings he will lead when needed, this is rarely needed however, since there is a definitive and clear leader established in the company so he provides support for them and complete any tasks required to continue success and growth of the company. The tasks which he normally performs for the group is giving ideas on the direction of the company such as different marketing strategies which have been successful for him in the past which the company can pursue to increase profitability and providing creative input on the reports which makes it more visually appealing while providing compelling and concise 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. When he was a boy his first introduction to business was to earn money to buy POGS.  His parents refused to buy them and insisted he would earn it like a working man. He washed dishes, laundry, and performed other household chores which allowed him to experience “work” as a child and develop a good work ethic. This assisted building his foundations in business. He began by working part time at the age of 17 at a REIT as an administrative assistant. After securing the position he transitioned to full time position a few months later.  Working for this company influenced his decision to pursue a degree in Business Management. Since his employer was based in Santa Monica, he attended Santa Monica College because of convenience and earned an Associate’s Degree in Business Administration. After obtaining an associate’s degree he transferred to California State University - Los Angeles to earn a Bachelor of Science in Business Management. While going to school, he worked full time as an Administrative Assistant. After five years as an Administrative Assistant he was promoted to an analyst and remained in this position for another five years which lead to a promotion as a manager. During his position as a manager he learned key skills for operating a business such as  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 promote him to Executive VP. He accepted the opportunity with the knowledge of how tough the industry is. Peter brings the same work ethic he created as a child and excellent work experience from his previous company for Goodwyn N Goodwyn Inc. to propel the company to be an industry leader. During board meetings his duties include discussing results from financial, sales and production analysis presented during board meeting while providing input for future decisions to ensure the success of the company.

Fanny Lo - Senior Vice President

Fanny was born in Hong Kong who later moved to the United States for her education. Her hobbies include trying new restaurants and traveling because of her sense of curiosity. When she came to America her first job 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. This was beneficial for the company when they decided to expand overseas she was able to bring her experience of contracts and property management to get the lot of land for building the production plant at the best location and lowest price. She started her journey to Senior Vice President 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. This experience helped her develop a system for efficient inventory management which she would later master while working for Goodwyn N Goodwyn.  After her time at community college she continued her education at the university of Cal State LA where she was accredited with an associate degree in Business Administration. While in school she worked at a bank where she took incoming calls and responded to customer inquiries. This job required all the employees to work as a team. Although tasks were completed individually the team would be scored and evaluated together. This developed a strong sense of teamwork within her; which she continued when she joined Goodwyn N Goodwyn. Her studies continued at Cal State LA resulting in her obtaining a Bachelor’s of Science in Accounting. After graduation she passed the CMA exam which assists her in her duties as Senior Vice President. Her work style is most efficient when given guidance, she has taken on the responsibilities on the board by assisting in any tasks which are struggling or falling behind schedule. During meetings she believes that everyone should have a say in what is going on and this will lead to innovation, to help push this philosophy to the company she makes sure that everyone in the meeting  can give their opinion before any decision is made. Other contributions she provides include discussing results when information is presented, providing input on future decisions, as well as documenting the meeting minutes so the group can go back and see what decisions were made to make more informed future decisions.

1.5 Organizational Structure

Figure 1: GNG Goodwyn N Goodwyn Inc. -

2. Objectives and Industry Analysis

2.1 Company Objectives (AARON)

Goodwyn N Goodwyn’s objectives for years five and six were to increase cash flow to expand the company, increase market share and stock price.  At the end of year 4 our company saw that we were prominent in the market and if we continued the strategies we were implementing as well as develop new strategies that eliminated lack in efficiency or profitability we would continue our dominance in the market and increase the disparity between us and the rest of the companies.

Forecasted:

Actual:

2.2 Return on Assets

Our main goal was to increase total net income and because of this getting a high return on assets was vital to success. Our actual return on assets was almost 2 times the forecasted amount in total and exceed each quarters expectations by at least more than double the expected return on assets.

Forecasted:

Actual:

2.3 Return on Equity

Our return on equity was also higher than forecasted which shows that we were able to reach our goal of achieving a high net income which was higher than expected.

Forecasted:

Actual:

2.4 Market Share

Our actual market share was also higher than forecasted which was mostly due to the fact that we had the highest quality of products at the lowest prices.

Forecasted:

Actual:

2.5 Stock Price

Since we were able to control a significant part of the market which is show by our high market share we were able to beat our stock price expectations by astronomical numbers.

Forecasted Stock Price

Actual Stock Price

2.6 Unit Production Cost

Despite having a high quality product we were still able to keep our production costs low which was even lower than the forecasted numbers.

Forecasted

Actual

2.7 Total Net Income

Since we were able to keep our costs of production low and our net income high by controlling the market, our net income was able to surpass the expectations of the forecasted numbers.

Forecasted Net Income

Actual Net Income

4.1 Unit Production Cost

Forecasted Unit Production Cost

Year 5: $4.86    Year 6: $5.44

Actual Unit Production Cost

4.2 Return on Assets

Forecasted

Actual Return on Assets

4.3 Return on Equity

Forecasted Return on Equity

Actual Return on Equity

4.4 Unit Production Cost

Forecasted

Year 5: $4.86     Year 6: $5.44

Actual

4.5 Total Net Income

Forecasted

Year 5: 3400    Year 6: 4000

Actual

4.6 Market Share

Forecasted Market Share

Year 5: 24% Year 6: 27%

Actual Market Share

4. Industry Analysis (Jocelyn)

The industry analysis illustrates, evaluates, and measures the businesses in the industry by  comparing each company to their competitors to provide a better understanding of trends 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. The analysis will be for Year 5 and Year 6.  

4.1.1 Sales

Table 4.1.1

Figure 10: Sales - Years 5 and 6 with Industry Comparison

The success of an exchange of a product or service for money can be quantified through sales. Table 4.1.1 compares the sales of five different companies respectively and correlates their sales performance with the industry average measuring the difference in dollars. Figure 10 presents a visual representation of the data shown on Table 4.1.1. Figure 10 depicts a comparison of  all five companies individually against the industry average. From the beginning of year 5 to the end of year 6, it is clear to say that the two companies in competition with the highest sales are company 4 and company 5. By the end of year 6 though, our company, company 4 had the highest sales. The industry average was below company 4 and company 5 for all of year 5 and year 6. Company 1, company 2, and company 3 were all so close in sales for year 5 and year 6.

4.1.2 Net Income

Table 4.1.2

Figure 11: Net Income - Years 5 and 6 with Industry Comparison

In business, net income show the amount of money that the company has to run operations to function which is calculated by subtracting a company’s income from the cost of goods sold, interest, depreciation, taxes, and other expenses. Table 4.1.2 has the net income of the five competing companies in the industry respectively as well as the industry average from Y5 Q1 to Y6 Q4 in dollar value. Figure 11 is a visual of the data in Table 4.1.2. Figure 12 simplifies the comparison of all five companies separately with the industry average. Our company, company 4, did well all 8 quarters setting the bar high for the other companies. Company 5 was the most inconsistent compared to the other companies. In Y5 Q1 they were the company with the most net income, but by Y6 Q1, the plummeted significantly into the negative numbers, although, by the next quarter the increase their net income once again making them the company with the second largest net income by the end of year 6. The industry average stayed below company 4 and company 5 in the beginning of year 5 to the end of year 6.

4.1.3 Return on Assets (ROA)

Table 4.1.3

Figure 12: Return on Assets(ROA) - Years 5 and 6 with Industry Comparison

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 4.1.3 has the ROA of all five companies respectively as well as the industry average in percentage since ROA is calculated as a percentage. Figure 13 shows a visual of the data on Table 4.1.3, which allows individuals to compare the ROA of five companies separately, with the industry average. Throughout all of year 5 and year 6, our company, company 4, was the company with the highest ROA. Company 5 began year 5 right below company 4, but by the beginning of year 6, they went far below the industry average. Y6 Q2 company 5 was able to increase their ROA above the industry average all the way until the end of year 6. Company 1 was the only company from the 5 who were always below the industry average for all of year 5 and year 6. Company 2 and company 3 were both either below or above the industry average in year 5 and year 6. Comapny 1 and company 5 were the only companies who went into the negative numbers at one point of year 5 or year 6.

4.1.4 Return on Equity(ROE)

Table 4.1.4

Figure 13: Return on Equity(ROE) - Years 5 and 6 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 owner. ROE is a ratio that is calculated by dividing the company’s net income by shareholders equity excluding prefered dividends. Table 4.1.4 has the ROE in percentages of all five companies respectively, as well as the industry average as percentage. Figure 13 shows a visual of the data on Table 4.1.4, which allows individuals to compare the ROE of five companies separately, against the industry average. Our company, company 4, was well above the industry average throughout year 5 and year 6. Our company was also the company with the highest return on equity for both year 5 and 6 besides during Y6 Q2 company 5 surpassed us by a few cents. On the contrary, company 1 was the only company who stayed below the industry average throughout both year 5 and year 6. Again, company 2 and company 3 were either below or above the industry average for both years 5 and 6.

4.1.5 Stock Price

Table 4.1.5

Figure 14: Stock Price - Years 5 and 6 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 economic conditions. Table 4.1.5 has the stock price data, in dollar value, for five companies, respectively, along with the industry average.  Figure 14 shows a visual of the data on Table 4.1.5, which allows individuals to compare the stock prices of five companies, independently, with the industry average. Our company, company 4, was the company with the highest stock price. From Y5 Q2 to Y6 Q4, we were the only company above the industry average. Company 5 was a little bit about the industry average for Y5 Q1, but by the next quarter, they went below the industry average with all of the other companies. Company 1, 2, and 3 stayed below the industry average when it came to stock price for all of year 5 and year 6.

4.7 Weighting Factors (Fanny)

Preliminary Weighting Factor	Points	Total %
Return on Assets	6	30
Return on Equity	2	10
Market Share	4	20
Stock Price	3	15
Unit Production Cost	0	0
Total Net Income	5	25
Total Points	20	100

Final Weighting Factor	Points	Total %
Return on Assets	6	30
Return on Equity	2	10
Market Share	4	20
Stock Price	3	15
Unit Production Cost	0	0
Total Net Income	5	25
Total Points	20	100

We didn’t make any changes on the final weighting factor because we would like to keep our company consistent. Our main goal is to have high sales revenue and we meet our goal to be the top performance among the industry.

We decided to give 30% in ROA. We invested a lot of money to build the plants and lines to reduce our operational cost. To have a good rate on ROA, it can show the healthiness of company and it helps to attract investors. Total Net Income was our second highest weighting factor at  25% . Net income tell investors if the company is profitable or not. Our total net income is $2348k in Y6Q4 which is 10 times more than Y3Q1. Market Shares were 20% of our weighting factor because the higher percentage of the market share the higher profit potential. When we have more investors, we will have higher cash flow to expend our company. We can have more money do the advertisements, provide trainings to employees, increase the commission to employees to reduce the turnover rate and  R&D and these are the factors to increase our sales revenue.

Share Price were 15% of our weighting factor because as we gain more and more customers, the share price will increase too. We put Stock Price on 15 % because it is dependent on supply and demand. We believe that if our sales revenue increase, we will attract more investors and the stock price will raise up. We put 10% on Return On Equity because we are more focusing on the assets and we put  0% on Unit Production Cost because low production cost is not our main goal in our two year plan.

5. Strategies (PETER)

5.1 Salesforce Management Strategy

There were some changes in Year 5 Quarter 1 due to inaccurate information from our two year plan.  This ultimately affected our future predictions for Year 5 Quarter 2 through Year 6 Quarter 4. Due to these reasons, our predictions were not as accurate compared to actual numbers.  However, our numbers did not deviate too much from our goals. In Year 5 Quarter 2 through Quarter 4, we had multiple people resigned. This was a wakening call that our sales employees felt they were under appreciated.  We also hired additional employees in Year 5 Quarter 4 to boost sales to meet our year end revenue goals.

We changed our base salary effective Year 6 Quarter 1.  This made our sales staff gratified and fortunately they were obligated within their own rights to stay with GNG Inc.  We also kept increasing our sales staff each quarter in Year 6 with the exception to Quarter 4. The increase in sales staff produced positive results in our sales.  

5.2 Salary and Commission Strategy

In Year 5, we stayed with our goals for commision and base salary.  This resulted in people resigning by the end of Year 5. We knew that we had to make a change with either salary or commission.    

In year 6, we decided to increase our base salary for our sales force.  This resulted in zero resignations for the remainder of the year. By focusing on retaining our employees, we were able to use our resources to focus on other aspects of the company besides the hiring process.  We also increased the commission rate for Year 6 Quarter 3 and Quarter 4. This encouraged our employees to make their sales.

5.3 Research and Development Strategy

We were able to accurately forecast the research and development expenses which helped us be able to predict what models and features of our product would be produced. This knowledge gave us more time to produce marketing strategies to sell our product since we knew we always had the highest quality product on the market.

The first quarter we were able to accurately forecast the research and development. However, for Year 5 Quarters 2 through 4 the actual results exceeded expectations by large margins.

5.3.1 Quality and Feature

We were able to forecast the right qualities and features for all Quarters in Year 5 in all areas.  This helped tremendously in managing our inventory because we were able to deliver the right parts for each area to meet the demand of each level for Quality and Feature.

For Year 6, the first 2 quarters we were able to accurately forecast the quality and feature levels of all areas.  However, in Quarters 3 and 4 in Pandau we forecasted lower qualities and features than what the consumers wanted. In Merica 1 we projected that they would want higher feature levels and in Merica 2 they would want higher quality levels than what actually happened.  

5.4 New Product Production Strategy

5.4.1 Production Schedule and Capacity Adjustment

In Year 5 Quarter 1 we were able to accurately forecast production scheduling. However, in Quarter 2 we were unable to forecast 1st-shift hours in Merica 1 and Pandau and in Quarter 3 we were unable to forecast 1st shift lines in Merica 1 under forecasting in both instances.

In Year 6 we were able to accurately forecast Quarter 1 but in the rest of the quarters, we forecasted lower numbers in 1st-shift hours in Merica 1 and Pandau.  We decided to increase shift hours for both Merica and Pandua because wanted to meet your year-end goals. We gladly reached it by the end of Year 6 Quarter 4.

5.5 Investment Strategy

5.5.1 Redemption of Bonds

In Year 5 Quarter 1 we repurchased fewer bonds than what we anticipated.  In Year 5 Quarter 2, we re-focused our funds towards other operations in our company.  We still continued to re-purchased our bonds for Year 5 Quarter 3 and Quarter 4. We repurchased more than what we forecasted to make up for not re-purchasing our bonds in Year 5 Quarter 2.  

In Year 6 Quarter 1, we decided to not repurchase bonds to focus on increasing our shift hours in Year 6 Quarter 2 through Quarter 4 for both Merica 1 and Pandau.  However, we still wanted to repurchase our bonds so that we can lower our interest payments. We repurchased bonds in Year 6 Quarter 2 and Year 6 Quarter 4 more than our quarterly forecast so that we can meet our Year 6 Quarter 4 Bonds Outstanding at the end of Year 6.  

5.5.2 Certificate of Deposit

We continued to have enough cash to invest in Certificates of Deposit.  The interested earned were allocated towards salary, commission , and other small office expenses.  This helped with funding towards recurring expenses.

5.5.3 Bank Loans

We remained with our plans of not investing in any bank loans for Year 5 and Year 6.  The issuances of bonds were enough to sustain our expenses for building a plant in Pandau and for the hiring of our staff.  Additionally, bank loans had higher interests compared to the interests we paid through our bonds.

5.6 Stock Management Strategy

5.6.1 Stock Shares

We decided to not issue or repurchase any of our stocks.  We are still considered a small company within our industry.  Therefore, there is still room for growth as a company. We may decide to issue additional shares to increase our equity in year 7 but our safest route will be to issue bonds.  

5.7 Sales Strategy

5.7.1 Advertising Strategy

For Year 5 Quarter 1 and Quarter, we closely matched advertisement expenses with actuals.  However, we decided to increase advertising effective Year 5 Quarter 3 throughout the end of Year 6 Quarter 4.  We wanted to increase our brand awareness and increase our sales as well. For Year 6 Quarter 3 and Year 6 Quarter 4, dramatically increased advertising due to the introduction of Model 5.  This, in turn, increased our brand awareness and the consumers reacted in return.

5.7.2 Pricing Strategy

Our goals did not match the actual pricing because GDP and CPI inflation were fluctuating throughout this two year period.  Additionally, it was based on the industry average price. Our actual pricing was either plus or minus than the forecasted. Ultimately, we were still able to progress on a positive note with these pricing strategies.  

5.8 Did the strategies succeed?

Yes, the strategies we implemented for both Year 5 and Year 6 were successful.  We lead in Net Income, Assets, Equity, Return on Sales, Return on Assets, Earnings Per Share, Share Price, Investor’s ROI, and surpassed other companies in Market Capitalization.  In conclusion, we dominated the industry. Please refer to the two graphs below for justification.

6. Group Decision Making Process (jocelyn and aaron)

Each decision was made at the in-person weekly meeting, the meeting day was determined the week before over our group chat. The objectives of each meeting were to make decisions for the game based on forecasted data from the previous quarter. As a group we would talk over the information which we gathered over the week then everyone would give their opinion on what decision should be made and based on the discussion we would make that decision. One of the technologies we used for the project was Group Me. This group chat application allows easy access to the discussion through your phone. This was an effective tool because it allowed us to be able to relay important information to each other about the game and answer any questions about the class immediately. Another technology we used was Google Docs, This application was very useful because it allowed all members to put down any information they needed to put for the reports and all other members had access to that information instantly.

What we learned about making decisions as a group is that getting along with others is essential. If you get along with one another, it makes the job easier. Another thing we learned is that sometimes the more people giving input can confuse the logic of the strategy. During some points in the decision process, we had to let two people work together in order to keep a consistent strategy and finish the game strong.

7. Financial Statements and Analysis (narek)

7.1 Quarterly Income Statement for Year 5

7.2 Quarterly Cash Flow for Year 5

7.3 Quarterly Balance Sheet for Year 5

7.4 Quarterly Income Statement for Year 6

7.5 Quarterly Cash Flow for Year 6

7.6 Quarterly Balance Sheet for Year 6

  7.7 Comparison of Pro Forma vs Actual Income Statement for Year 6

        7.7.1 Brief Analysis of Variances of Year 6

7.8 Comparison of Forecasted vs Actual Balance Sheet for Year 6

        7.8.1 Brief Analysis of Percentage Variances in Balance Sheet for Year 6

8.Future Plans (Maks)

Goodwyn N Goodwyn’s plans include continuing to work with our team of experts to provide the highest quality products at the lowest prices.

        8.1 Strategy

In order to achieve our goals and continue our success in the industry we will focus on 4 main fields they are; corporate strategies, marketing strategies, operational strategies, and financial strategies. As soon as we began to show signs of success in the industry we made gradual increases to improve sales, increase market share, and reduce costs.

8.2 Corporate Strategy

Our Corporate strategy would focus on maximizing the value of our company by investing in its people, processes, and governance. We will make sure to invest in our people so that with time their talents and skills will appreciate and they will become leaders in their field.  Our goal would be to fill positions in our organizational departments with the right leaders that will help our employees to maximize efficient and effective performance. Our governance structure would have a management hierarchy, but our decision making would follow the collective board model. Our administrative, organizational, and financial operations would be done as a team, and information is shared freely between the leaders without restriction, thus working within a consensus model. Responsibility is divided proportionally between our board of directors, thus to make sure everyone feels that they are valuable leaders for our company.  Processes within our company would follow policies and procedures that comply with the state laws such as safety standards and environmental standards. We as a company want to show that we participate in corporate social responsibility through providing environmentally sustainable products, fair labor practices and provide to charitable causes. Our company has emerged as the industry leader in the market, this success has been due to our sales numbers that generate high revenue for the company to allow the company to follow our the highest quality products at the lowest prices.

8.3 Marketing Strategy

The marketing strategy that we will apply in the future is based on understanding what our customers demand by conducting consumer preference studies and attracting more customers through advertising to gain a competitive advantage in the industry. By conducting consumer preference studies we will be able to distinguish what specifications of products consumers demand in each market area such as the quality level and model features. The results will help us to produce products that have qualities and features that attract the most consumers in a given area. After identifying what consumers are looking for we will execute a competitive pricing strategy by looking at the average industry prices to adjust to a price that consumers will most likely to pay for our product. Last but not the least, we will increase or decrease our advertising proportionally to our production capacity and future forecasted sales volume to avoid  stock outs and unnecessary selling expenses.

8.4 Operational Strategy

At the end of year 6, our company owned two production  plants in a simulated world: home plant in Merica 1 with  8 production lines that at normal working hourly rate (40 hours) is able to  produce 416, 000 units and overseas plant in Pandau with 6 lines that at normal working hourly rate (40 hours) is able to produce 312, 000 units. Forecasted Real GDP, Industry Sales Forecast, and Company Sales Forecast suggest that there will be growth. At year 6, our company used overtime working hours to match production output more closely to sales volume and to not stock out, thus our future operational strategy will be to produce second shift production lines in the home plant and if required in the overseas plant.

8.5 Financial Strategy

In the future, we plan to get a positive growth in our net income because we need a sufficient budget to cover our future investments and expenses.  In order to do that, we will have to increase our net sales and decrease our expenses, and make investments with a positive return. These positive returns include investments in Research and Development which will enhance sales and bring substantial savings in production costs.  In order to increase our sales we would conduct a consumer preference study to identify what products consumers demand in each market area, create a sufficient production plan to meet consumer demand, adjust pricing compared to industry average, invest in advertising to attract more consumers, and make sure to have enough salespeople in each market area. To decrease our expenses we can invest in production employee training that will help to upgrade the skills of the workers, increase productivity that will lead to savings in unit labor cost and savings in unit materials cost. In addition, we can decrease our storage costs by adjusting production to reduce residual inventory from the previous quarter. These are a few financial strategies that we plan to apply in the future that will help us increase our quarterly as well as annual net income.