Decision making on the 8th Rollover for mountain and Road bikes 8th year rollover on 24th September, 2017
ANNUAL REPORT 2024
YEAR ENDED 31 DECEMBER 2024
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Contents
FINANCIAL HIGHLIGHTS ………………………………………………………………………………………………………………………………………. 3
MARKETING HIGHLIGHTS …………………………………………………………………………………………………………………………………….. 4
FINANCIAL REVIEWS …………………………………………………………………………………………………………………………………………… 5
FINANCIAL STATEMENTS……………………………………………………………………………………………………………………………………… 6
INCOME STATEMENT ………………………………………………………………………………………………………………………………………. 6
Statement of Comprehensive Income ……………………………………………………………………………………………………………….. 7
Statement of Financial Position ………………………………………………………………………………………………………………………… 8
Statement of Changes in Equity ………………………………………………………………………………………………………………………… 9
Statement of Cash Flow …………………………………………………………………………………………………………………………………. 10
Meeting Minutes – 1 ………………………………………………………………………………………………………………………………………….. 11
Meeting Minutes – 2 ………………………………………………………………………………………………………………………………………….. 12
Meeting Minutes – 3 ………………………………………………………………………………………………………………………………………….. 14
Meeting Minutes – 4 ………………………………………………………………………………………………………………………………………….. 17
Meeting Minutes – 5 ………………………………………………………………………………………………………………………………………….. 20
Meeting Minutes – 6 ………………………………………………………………………………………………………………………………………….. 24
Meeting Minutes – 7 ………………………………………………………………………………………………………………………………………….. 28
Meeting Minutes – 8 ………………………………………………………………………………………………………………………………………….. 32
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FINANCIAL HIGHLIGHTS
$58.97 $67.25
$95.87
$131.09
$-
$20
$40
$60
$80
$100
$120
$140
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2021 2022 2023 2024
Growth Net Income & SHV
2,491,197
6,823,119
8,585,233
11,518,576
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2021 2022 2023 2024
FY 2024 – NET INCOME UP 1.34% FROM 2023
47,376,430
41,458,500
37,111,500
28,660,478
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
2021 2022 2023 2024
FY 2024 – SALES REVENUE DOWN 1.30% FROM 2023
$2.942
$8.529
$10.732
$14.398
$-
$2
$4
$6
$8
$10
$12
$14
$16
2021 2022 2023 2024
FY 2024 – EPS UP 1.34% FROM 2023
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MARKETING HIGHLIGHTS
FY2024 Road Bike Sales and Market Share
FY2024 Mountain Bike Sales and Market Share
FY2024 Road Bike Sales and Market Share
17.50 %
ROAD BIKE
11.70%
MOUNTAIN BIKE
10.70 %
YOUTH BIKE
UNITS SOLD 7,055
MARKET SHARE 17.50%
GROSS MARGIN 66%
UNITS 22,722
MARKET SHARE 11.70%
GROSS MARGIN 73%
UNITS 22,388
MARKET SHARE 10.70%
GROSS MARGIN 56%
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FINANCIAL REVIEWS
The Shareholder Value is the highest over past 8 years at value of $131.09. According the financial strategy has been
used for this year especially focusing on reduction of operating cost and lower overhead cost which it leads EPSs has
increased significantly from previous year at $14.398 as same as Net Income has increased up to 1.34% compared to last
year, however, the Sales Revenues has dropped down 1.3% as advertisement and PR has been reduced the expenditure
scale.
We have paid dividend to our shareholders at amount of $12.10 and reflecting our share prices is now cost at $96.98 per
share.
We continued focusing on delivering overall strategic plan and targets. We also expects to continue growing revenues
and operational earning for future year.
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FINANCIAL STATEMENTS
INCOME STATEMENT
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Statement of Cash Flow
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Meeting Minutes – 1
Meeting Title: 1st Rollover – Determine sale price and marketing strategy for Pop Up Ltd.
Meeting Date 3rd August, 2017
Meeting Time 13:30 – 16:30
Meeting Location: KOI Library
Attendees Present Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Absent: None
Agenda Topics: Price setting, forecast sales units and marketing strategies for mountain bikes year 1st year rollover on 06th August, 2017 (23:59pm)
Discussion:
Decision making for 1st year rollover (2017): Discussed about price settings, sales forecasting, production level, marketing strategies including budgeting an advertisement and public relations into different channels for the first year. According to the average selling price telling us that in the market recommended at $700 per unit. Based on the provided market information and the research from previous year stimulations, we found that mostly they were spent more than $3 millions in marketing, therefore, their brand awareness are better than teams who spent less. So we would gain attentions and awareness in the market position as well if we have spent similar amount. Hence our sales target and sales profits will be reached as planned.
Conclusions:
Selling price set at $720. Forecasting sales units is 27,000 Production plan set at 27,000 (as same as forecasting) Advertising : TV $1,100,000 Internet $1,000,000 Magazines $1,400,000 Total $3,500,000
Public Relations: TV $0 Internet $0 Magazines $700,000 Total $700,000
Action items: Enter the agreed number in the system.
Person Responsible: Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Deadline: 06th August, 2017 at 18:00
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Meeting Minutes – 2
Meeting Title: 2ND Rollover – Determine sale price, marketing strategy, Distribution and Brand for Pop Up Ltd.
Meeting Date 10th August, 2017
Meeting Time 11:00 – 14:30
Meeting Location: KOI Library
Attendees Present Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Absent: None
Agenda Topics: Price setting, forecast sales units, marketing strategies, Distribution and Brand for mountain bikes year 2ND year rollover on 13th August, 2017 (23:59pm)
Discussion:
Results from 1st Rollover: World 1 ranking #2, Class Ranking #2 After the first rollover, results show that we are ranking #2 in world 1 and our SHV is $15.09 which is slightly behind the first ranking only by $0.06.
We gained 0.35 in brand awareness and 0.14 in PR because we have spent in advertising $3,500,000 and PR $700,000. Compared to the first ranking where they have spent for advertising at $3,815,000 and PR $725,000.
Also our selling price was set at $720 whereas the first ranking set at $715.
Decision making for 2nd year rollover (2018): 1. Retail Price and Productions
At the stage of deciding selling price, we had different views. But finally we have reached an agreement of increasing price by $10 since mountain bikes are medium sensitive to price change. And as sales price goes up, we will develop the advertising to raise our brand awareness in order to raise our sales and also be prepared for the release of new products in next couple of years. Turning to production, we plan to produce full capacity of 30,000 units because we are expecting to sell more units than last year due to stronger advertising and distribution strategy for retails support.
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2. Market strategies 1st ranking company NATURES FIESTA has spent $3.8million for advertisement, so that, we should increased
advertising budget from $3.5million to $4 million to improve our awareness in order to be the leader of market.
3. Distributions Base on the Information, the major supports for Mountain bike segment is Sports Stores, so we have decided to offer extra supports of $200,000 to sports stores and $50,000 to bike shop and discount
stores, respectively. Moreover, we want to get good margin of product and cash flow, we have determined to offer retail margin for Sports stores to 27% and equally margin at 25% for Bike Shops and Discount Stores.
4. Brand Expenditure We want to raise our brand awareness because we want to win over our competitors. In addition, higher brand awareness will help to boost the sales of our current product and upcoming products as well. Therefore, our decision is to increase to $1 million dollars for branding expenditures.
Conclusions:
Selling price set at $730. Forecasting sales units is 30,000 Production plan set at 30,000 (as same as forecasting)
Advertising : TV $1,2500,000 Internet $1,150,000 Magazines $1,600,000 Total $4,000,000 Public Relations: TV $0 Internet $0 Magazines $700,000 Total $700,000
Distribution: Bike Shop: Support $50,000, Margin 25% Sports Stores: Support $200,000, Margin 27% Discount Stores: Support$50,000, Margin 25% Total $300,000
Branding Expenditure: $1,000,000
Action items: Enter the agreed number in the system.
Person Responsible: Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Deadline: 13th August, 2017 at 18:00
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Meeting Minutes – 3
Meeting Title: 3RD Rollover – Determine sale price and marketing strategy for Pop Up Ltd.
Meeting Date 15th August, 2017
Meeting Time 11:00 – 14:30
Meeting Location: KOI Library
Attendees Present Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Absent: None
Agenda Topics: Decision making on the 3rd Rollover for mountain bikes year 3RD year rollover on 20th August, 2017 (23:59pm)
Discussion:
Results from 2nd Rollover: World 1 ranking #2, Class Ranking #2 We are still in the 2nd position in the world with SHV at $19.05 where the main competitor’s SHV arose to $21.85. The reason we had left behind because we lost in sales up to 886 units. This losing is affected in SHV direct.
Our brand awareness has increased to 47% compared to last year at 35%, also our PR has increased to 17%.
We have had pumped up our advertising budget in total of $4m which allocated into TV $1.25m, Magazine $1.6m and Internet $1.15m and also we decided to increase our branding expenditure to $1m.
Our selling price was set at $730 which is lower than our main competitor which they sold at $750 per unit.
Because of our brand awareness is stronger also our selling price is lower than the main competitor, it made us gained the highest market shares amongst others.
Decision making for 3rd year rollover (2019):
1. Retail Price and Productions We decided to increase our selling price by 5% from $730 to $765 and we have forecasted our sales units from 30,000 to 36,500 units as we are confident that we can gain at least 23% market shares for the next year rollover.
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2. Marketing strategies Because we decided to increase the selling price and want to increase our market share, our decision on
marketing is spend more on advertising. So this year, the total advertising budget is increased more $550,000 from $4m last year to $4.55m this year.
3. Capacity Plan We increased our SCU to 21,800 to hit our forecast sales. As increased SCU, the idle is too high. Therefore, we have invested more on efficiency at $750,000 with 84%. Turning to quality index, mountain bikes are medium sensitive to quality. That tells us that we should have same or higher level of quality than our main competitor. We decided to increase it to $700,000 and have 77.8% of quality index.
4. Distributions Since sports stores are powerful retailers of mountain bikes, we want to give extra support for them only by $50,000. But remove any support to bikes shops and discount stores. In addition, retailer margin is not an important factor to increase our sales. so we decided to give the lowest margin to all channels which is 25%.
5. Brand Expenditure Regarding branding index, we aim to reach at least 50% this year, therefore we have decided to spend $1,200,000 on branding.
6. Debt Expenditure Result from last year shown our D/E ratio standing at 14%. To gain higher amount of SHV we have decided to decrease our debt by repay $1m in debt.
Conclusions:
Selling price set at $765. Forecasting sales units is 36,500 Production plan set at 36,585
Advertising : TV $1,4000,000 Internet $1,350,000 Magazines $1,800,000 Total $4,550,000 Public Relations: TV $0 Internet $0 Magazines $700,000 Total $700,000
Capacity Planner Capacity(SCU) 21,800 Efficiency $750,000 Quality $700,000
Distribution:
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Bike Shop: Support $0 Margin 25% Sports Stores: Support $50,000, Margin 25% Discount Stores: Support$0 Margin 25% Total $50,000
Branding Expenditure: $1,200,000
Debt Repayment: $1,000,000
Action items: Enter the agreed number in the system.
Person Responsible: Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Deadline: 20th August, 2017 at 18:00
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Meeting Minutes – 4
Meeting Title: 4th Rollover – Determine sale price and marketing strategy for Pop Up Ltd.
Meeting Date 23th August, 2017
Meeting Time 17:00 – 18:30
Meeting Location: Mihyun’s house
Attendees Present Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Absent: None
Agenda Topics: Decision making on the 4th Rollover for mountain and Road bikes 4th year rollover on 27th August, 2017 (23:59pm)
Discussion:
Results from 3rd Rollover: World 1 ranking #2, Class Ranking #2
We still in the second place in the market even though our SHV increased to $22.18, while our main competitor ‘Natures Fiesta’ has reached $25.33. This is mainly due to the relatively higher price. However, we still achieved high market share with 20.3%, which is just 1.4% below than ‘Natures Fiesta’.
With regards to sales price, we had the highest price in the industry and ‘Natures Fiestas’ reduced the price by $15 and the market has responded to this change. Nevertheless, we still have high sales revenue due to high brand awareness and good quality index.
We have achieved brand awareness of 55% that soared 20% from the last year, leaving behind ‘Natures Fiesta’.
Our quality index was in the middle of ranking and we should think about increasing it if we wish to enter ‘road bike’ segment.
Decision making for 4th year rollover (2020):
1. Mountain bike (Retail Price, Productions and Marketing strategies) The price for our mountain bike was the highest last year because others increased by small percentage or even decreased it. Therefore, we decided to set the price same as last year and we expect others
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increase price so we are much more competitive. As a result of this, we forecast to sell more units this year due to competitive price and improved quality. Regarding marketing strategies, we reduced our advertising budget by $550,000 because we already achieved high awareness. PR remains same.
2. Road bike (Launch new product) This year, we decide to launch Road bike, named Fazz Bike, because our factory currently has one of the highest quality index in the market and road bikes are highly sensitive to quality. Regarding price, Road bike sales are barely influenced by price, we set high price which is $2399. Turning to quantity, we expect that 2 or 3 more companies launch road bikes as well. And we aim to get 35%-40% of market share with higher quality index and PR. Therefore, we forecast to sell 1500 units. In regard with marketing practice, advertising is low impact on sales while PR has strong influence. Therefore, we put $700,000 on magazine ad and $4million on internet and magazine PR.
3. Capacity Plan This year we increased our SCU to 36,500 since we are producing 2 lines of bikes so we need bigger plant. And we increased the efficiency index to 88.9 by budgeting $2million as well as quality index increased to 87.1 by budgeting $4,680,000. Therefore, we plant to produce 34,700 units of mountain bike and 15,000 of road bike this year to tie with our forecast sale.
4. Distributions Since we are launching new product, we want to give extra support to retailers to promote and boost the sale. Bike shops are the most powerful channel of sales, therefore extra support will be given only to bike shops by $50,000.
5. Brand Expenditure Branding index ,which was very high last year of 0.56 will remain same this year.
6. Equity We have decided repurchase equity of 1,500,000 and give dividend of $1 to give extra value to shareholders and increase SHV.
Conclusions:
1. Mountain Bike Selling price set at $765. Forecasting sales units is 35,700 Production plan set at 34,875
Advertising : TV $1,2000,000 Internet $1,200,000 Magazines $1,600,000 Total $4,000,000 Public Relations: TV $0
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Internet $0 Magazines $700,000 Total $700,000
2. Road Bike Selling price set at $2,399. Forecasting sales units is 15,000 Production plan set at 15,000
Advertising : TV $0 Internet $0 Magazines $700,000 Total $700,000 Public Relations: TV $0 Internet $1,600,000 Magazines $2,400,000 Total $4,000,000
Capacity Planner Capacity(SCU) 36,500 Efficiency $2,000,000 Quality $4,680,000
Distribution: Bike Shop: Support $50,000 Margin 25% Sports Stores: Support $0 Margin 25% Discount Stores: Support$0 Margin 25% Total $50,000
Branding Expenditure: $1,200,000
Equity Repurchase amount $1,500,000 Dividend $1
Action items: Enter the agreed number in the system.
Person Responsible: Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Deadline: 27th August, 2017 at 18:00
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Meeting Minutes – 5
Meeting Title: 5th Rollover – Determine sale price and marketing strategy for Pop Up Ltd.
Meeting Date 29th August, 2017
Meeting Time 10:30 – 14:30
Meeting Location: KOI Library
Attendees Present Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Absent: None
Agenda Topics: Decision making on the 5th Rollover for mountain and Road bikes 5th year rollover on 3rd September, 2017 (23:59pm)
Discussion:
Results from 4th Rollover: World 1 ranking #1, Class Ranking #1 We have taken a turn to number 1 in ranking in world 1 and also in the class.
Our SHV has increased to $56.87 where our main competitor – Nature Fiesta’s SHV at $55.17. It might because we did not lost any sales and had paid dividends to our shareholders at $1.00 where the competitor lost sales and did not paid any dividends.
This year, we had launched Road Segment where the market is less crowded and there are only 3 competitors in this segment. We gained highest market share 43.8% even our selling price is higher where the second highest gained 40.9%.
Decision making for 5th year rollover (2021):
1. Mountain bike We maintain the selling price as same as last year because we had the highest price in the market, and we expect others increase their selling price. We already have good awareness therefore raise PR expenditure only by $300,000. We expect to sell more units this year by around 8000 units, and we can achieve this by increasing PR , Quality , and branding.
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2. Road bike Road bike is rarely sensitive to price. But we had the lowest price in the market last year. Therefore, we decided to increase it by $100. Regarding sales units, we assume that 2 more companies join the segment this year. However, even though we already achieved high quality index and awareness we still want to increase the figures to acquire bigger market share. As a result, we aim to have 40% of total road bike market which is 17000 units. We stick with the same ad expenditure but increase PR by $800,000.
3. Youth bike Since four competitor have launched this product, we have consider price and awareness, so that we have determined price for $349 as lowest price from last year, $3,000,000 for advertising, and lower sensitive of PR, so that we decided to pay for PR for $250,000. The forecast of sale of unit is 55,000 as 25% of forecast demand of 2021.
4. Capacity Plan This year we increased our SCU to 55,670 units since we are producing 3 lines of bikes so we need bigger plant. And we increased the efficiency index to 91.9 by budgeting $3.4million as reduced wastage, quality index increased to 91.1 by budgeting $7,300,000 for significant effect of selling of road bike. 5. Distributions It’s not huge effect for sale of units, so that we are not support of any shops and remained same margin as last year which is 25%.
6. Brand Expenditure We want to get more high brand awareness, so that we decided to pay $1,200,000 to $2,000,000
7. Equity We want to get more high earnings per share and increasing SHV, we determined repurchase of $5,000,00 and paid dividend for $3.00.
Conclusions:
1. Mountain Bike Selling price set at $765. Forecasting sales units is 41,000 Production plan set at 41,000
Advertising : TV $1,2000,000 Internet $1,200,000 Magazines $1,600,000 Total $4,000,000 Public Relations: TV $0
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Internet $0 Magazines $1,000,000 Total $1,000,000
2. Road Bike Selling price set at $2,500 Forecasting sales units is 17,000 Production plan set at 17,000
Advertising : TV $0 Internet $0 Magazines $700,000 Total $700,000 Public Relations: TV $0 Internet $1,920,000 Magazines $2,880,000 Total $4,800,000
3. Youth Bike Selling price set at $349 Forecasting sales units is 55,000 Production plan set at 55,000
Advertising : TV $2,500,000 Internet $250,000 Magazines $250,000 Total $3,000,000 Public Relations: TV $250,000 Internet $0 Magazines $0 Total $250,000
Capacity Planner Capacity(SCU) 55,670 Efficiency $3,400,000 Quality $7,300,000
Distribution: Bike Shop: Support $0 Margin 25% Sports Stores: Support $0 Margin 25% Discount Stores: Support$0 Margin 25% Total $0
Branding Expenditure: $2,000,000
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Equity Repurchase amount $5,000,000 Dividend $3.00
Action items: Enter the agreed number in the system.
Person Responsible: Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Deadline: 27th August, 2017 at 18:00
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Meeting Minutes – 6
Meeting Title: 6th Rollover – Determine sale price and marketing strategy for Pop Up Ltd.
Meeting Date 5th September, 2017
Meeting Time 10:30 – 14:30
Meeting Location: KOI Library
Attendees Present Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Absent: None
Agenda Topics: Decision making on the 6th Rollover for mountain and Road bikes 6th year rollover on 10th September, 2017 (23:59pm)
Discussion:
Results from 5th Rollover: World 1 ranking #2, Class Ranking #7 This year we have fallen back to the second in our world and had dramatically drown in class ranking number 7.
Our SHV has little increased to $58.97 where our main competitor – Nature Fiesta got SHV $73.90, which it was not what we were expected it to be. After this year result was released, we have found that we have spent too much on our fund and it lead to fund shortage in the end of year. We have spent for products development and launched new Youth Bike segment in total of $5m. We also bought back our shares and the same time we paid dividend up to $3.00.
All of these mentioned are effect direct to our result, performance and definitely dragging down our SHV.
We had launched Youth Bikes, this market is already crowded and high competition in term of price and quantities. We were overestimated ourselves this year so it lead us underestimated competitors.
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Decision making for 6th year rollover (2022):
1. Mountain bike We have to sell out our leftover inventory this year without spending much cost, because we didn’t meet our forecast sales and had too much cost. Therefore, we lowered the sales price to 740 which is lower than our main competitors( they are Natures Fiesta and Regional Migrant) and we forecast to sell 44620 units. In this year, we do not increase Ads because we haven’t made enough cash last year and might have shortage of funds at the end of this year. Therefore, we cut the PR by $800,000.
2. Road bike Same to the Mountain bikes, we have to sell out our leftover inventory this year without spending much cost. Therefore, we lowered the sales price to $2200 that is same price of Natures Fiesta. Because we realized that price really matters even though it is low sensitive to the price. Pop-Up and Natures Fiesta have almost same PR index, quality index and product spec. However, Natures Fiesta got 31.5% of market share while we got 23.7%. Therefore, we reached conclusion to reduce the price. After reducing price, we can now have our customers back to us. So we expect to sell 12000 units. In this year, we do not increase Ads and PR because we haven’t made enough cash last year and might have shortage of funds this year. Therefore, Ad cut down by 50% and PR by $800,000.
3. Youth bike We couldn’t sell as many units as we expected. We analysed that it is because Reginal Migrant(who got the biggest market share of %25.2) had been in to the market 1 year before we entered and could achieve high brand awareness. Therefore, we focus on setting the price as the lowest in the market. Because Youth bike do not give much margin and we do not want to invest lots of money. Therefore, We put the price as $335 and we forecast to sell 44000 units. Cut down Ad by $500,000 and put $0 in PR.
4. Capacity Plan This year, our priority is sell all of the stock left and produce minimum amount of units to save the cost. When
produce less, the capacity should be shrinked. But we don’t want big shrink of the capacity because it may cost a lot next years when we want to expand it. Therefore, we moderately decrease the capacity and also decrease the efficiency, keeping the idle to be less than 5%. Since we decreased the price of all our products, we are competing over price not over the quality. Therefore, we do not want to invest too much on quality and also we can save our costs in this way. Invest only $1,000,000 to quality.
5. Distributions It’s not huge effect for sale of units, so that we do not support for any shops and remained same margin as last year which is 25%.
6. Branding Expenditure We spend brand expenditure for $1 million to reach by 61%. This year’s strategy is to compete by price and save costs. We should cut down our expenditure. 7. Equity We want to get highest earnings per share, we decided repurchase Equity for $2,704,977, as SHV haven’t increased not much from last year. we can spend less money for repurchase. Even though, we haven’t got a good profit last year, we paid dividend $1.5,
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due to good effect for increase SHV.
Conclusions:
1. Mountain Bike Selling price set at $740. Forecasting sales units is 44,620 Production plan set at 43,846
Advertising : TV $1,2000,000 Internet $1,200,000 Magazines $1,600,000 Total $4,000,000 Public Relations: TV $0 Internet $0 Magazines $200,000 Total $200,000
2. Road Bike Selling price set at $2,200 Forecasting sales units is 12,000 Production plan set at 5,544
Advertising : TV $0 Internet $0 Magazines $350,000 Total $350,000 Public Relations: TV $0 Internet $1,600,000 Magazines $2,440,000 Total $4,000,000
3. Youth Bike Selling price set at $335 Forecasting sales units is 44,000 Production plan set at 25,216
Advertising : TV $2,500,000 Internet $0 Magazines $0 Total $2,5000,000 Public Relations: TV $0
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Internet $0 Magazines $0 Total $0
Capacity Planner Capacity(SCU) 36,508 Efficiency $1,200,000 Quality $1,000,000
Distribution: Bike Shop: Support $0 Margin 25% Sports Stores: Support $0 Margin 25% Discount Stores: Support$0 Margin 25% Total $0
Branding Expenditure: $1,000,000
Equity Repurchase amount $2,704,977 Dividend $1.50
Action items: Enter the agreed number in the system.
Person Responsible: Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Deadline: 10th September, 2017 at 18:00
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Meeting Minutes – 7
Meeting Title: 7th Rollover – Determine sale price and marketing strategy for Pop Up Ltd.
Meeting Date 12th September, 2017
Meeting Time 10:30 – 11:30
Meeting Location: KOI Library
Attendees Present Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Absent: None
Agenda Topics: Decision making on the 7th Rollover for mountain and Road bikes 7th year rollover on 17th September, 2017 (23:59pm)
Discussion:
Results from 7th Rollover: World 1 ranking #2, Class Ranking #12 This year we remain in ranking #2 in our world but the class ranking has fallen further down to number #12.
Our SHV has increased to $67.25 but the main competitor – Nature Fiesta has increasing significantly to $108.08
According the performance last year was not good enough so we implement new strategies especially in cost/profit also the selling price was higher than market. so we was decided to reduce the selling price in all segments to gain more sell and also cut all unnecessary costs such as advertisements, PR, branding awareness, cost of efficiency development and cost of quality development (except Road Segment).
Initially, we thought we will have more sales in Road – but eventually, we are failed in sales because the main competitor – Nature Fiesta has developed their Road Spec to 82% while we are only 75% spec even we have higher quality, PR level and same selling price but we still not able to compete.
In the aspect of profit was satisfied us in this year as we have gained more profit nearly $12m compared to last year where we were minus about $4.7m, it was the consequence of cost reduction.
However, this year the competition in the market is tough especially in Mountain segment because there are 3 new products from 3 different suppliers had launched in the same time. Therefore, instead of having only 7 competitors in market but now there are 10 shares competing and it obviously each competitors have gained more market share when they combined their existing products and new product together.
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Decision making for 7th year rollover (2023):
1. Mountain bike This segment has been too competitive last year since other companies launched new models of mountain bikes. We have decreased selling price to $735 and forecast to sale 35280 units. We do not have much cash to invest in marketing. Therefore we reduce by $500,000 from advertising.
2. Road bike The number 1 company in this segment has developed this model last year. But we do not have enough fund to develop. Therefore we decrease the price and forecast to sell 10250 units and cut off $500,000 from PR.
3. Youth bike We decide to drop the price this model as well to $330 and forecast to sell 33600 units. Since this segment does not give too much margin, we don’t want to invest too much on this. Therefore, we cut off $1,500,000 on advertising expenditure.
4. Capacity Plan Since we are producing lower volume, capacity must be reduced. We set SCU at 29613. We spend $500,000 on efficiency and $600,000 on quality but we still get bit higher index in both efficiency and quality.
5. Distributions We decided to give extra support to bike shops and sports stores by $100,000 in order to have more stores to stock our products aiming to boost sales.
6. Branding Expenditure We spend $1,200,000 on branding to have 61% of branding index to have positive effect on sales performance.
7. Equity Since we have repurchased all of Equity, We have decided to pay dividend for maximum of dividend per share, thus we can get maximized SHV.
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Conclusions:
1. Mountain Bike Selling price set at $735. Forecasting sales units is 35,280 Production plan set at 25,756
Advertising : TV $1,050,000 Internet $1,050,000 Magazines $1,400,000 Total $3,500,000 Public Relations: TV $0 Internet $0 Magazines $200,000 Total $200,000
2. Road Bike Selling price set at $2,100 Forecasting sales units is 10,250 Production plan set at 8,497
Advertising : TV $0 Internet $0 Magazines $350,000 Total $350,000 Public Relations: TV $0 Internet $1,400,000 Magazines $2,100,000 Total $3,500,000
3. Youth Bike Selling price set at $330 Forecasting sales units is 33,600 Production plan set at 25,832
Advertising : TV $1,000,000 Internet $0 Magazines $0 Total $1,000,000 Public Relations: TV $0 Internet $0 Magazines $0 Total $0
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Capacity Planner Capacity(SCU) 29,613 Efficiency $500,000 Quality $600,000
Distribution: Bike Shop: Support $100,000 Margin 25% Sports Stores: Support $100,000 Margin 25% Discount Stores: Support$0 Margin 25% Total $200,000
Branding Expenditure: $1,200,000
Equity Repurchase amount $0 Dividend 1,340
Action items: Enter the agreed number in the system.
Person Responsible: Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Deadline: 17th September, 2017 at 18:00
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Meeting Minutes – 8
Meeting Title: 8th Rollover – Determine sale price and marketing strategy for Pop Up Ltd.
Meeting Date 19th September, 2017
Meeting Time 10:30 – 12:30
Meeting Location: KOI Library
Attendees Present Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Absent: None
Agenda Topics: Decision making on the 8th Rollover for mountain and Road bikes 8th year rollover on 24th September, 2017 (23:59pm)
Discussion:
Results from 7th Rollover: World 1 ranking #2, Class Ranking #12 This year we are still #2 in our world and remaining position in ranking #12.
Our SHV has increased to $95.87 whereas the first ranking’s SHV closing at $149.65.
We used the same strategy in lower the operating cost and selling price and production in all segments.
This year one of the competitor in mountain bike segment has dropped out from the market but however instead we could get some market share in this year but our market share percentage were lower than last year even we lower the selling price.
Not just only in mountain segment that our market share were down but literally it dropped in all segment.
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Decision making for 8th year rollover (2024):
1. Mountain bike Since we have decided to make a small factory and cut all of cost of this year, retail price of mountain set $730, and forecast sale units are 24,360, which is 12% of forecast demand.
All of advertising and PR are reduced significantly which is $3,700,000 to $500,000.
2. Road bike Same strategy of mountain bike, cuts of retail price, sales of unit and all advertising and PR cost, which account for $2,050, 7140(17% of forecast demand) and $500,000, respectively.
3. Youth bike Youth bike is lower margin of product, all cost of advertising and PR didn’t spend this year, as follow reduce retail price and sales units, which is $320 and 26,520(12.5% of forecast demand), each.
4. Capacity Plan As become small factory this year, we reduced SCU 24,878, and didn’t spend Efficiency and Quality this year.
5. Distributions Cost of support is not boost of sale of unit, we cut all of support cost.
6. Branding Expenditure Branding expenditure is good effect for increasing sale units, so that we still spend $1,100,000.
7. Equity We have decided to pay for maximum price of dividend, due to great effect of paying dividend.
Conclusions:
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1. Mountain Bike Selling price set at $730. Forecasting sales units is 20,564 Production plan set at 24,360
Advertising : TV $0 Internet $0 Magazines $500,000 Total $500,000 Public Relations: TV $0 Internet $0 Magazines $0 Total $0
2. Road Bike Selling price set at $2,050 Forecasting sales units is 6,489 Production plan set at 7,140
Advertising : TV $0 Internet $0 Magazines $0 Total $0 Public Relations: TV $0 Internet $0 Magazines $500,000 Total $500,000
3. Youth Bike Selling price set at $320 Forecasting sales units is 25,118 Production plan set at 26,250
Advertising : TV $0 Internet $0 Magazines $0 Total $0 Public Relations: TV $0 Internet $0 Magazines $0 Total $0
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Capacity Planner Capacity(SCU) 24,878 Efficiency $0 Quality $0
Distribution: Bike Shop: Support $0 Margin 25% Sports Stores: Support $0 Margin 25% Discount Stores: Support$0 Margin 25% Total $0
Branding Expenditure: $1,100,000
Equity Repurchase amount $0 Dividend 1,210
Action items: Enter the agreed number in the system.
Person Responsible: Sunhye KIM, Mihyun PARK, Hattaya TIENGTHAM
Deadline: 24th September, 2017 at 18:00
Final Results Simulation game has finished we ending with #2 in our world and remaining position in ranking #12
The Shareholder Value is the highest over past 8 years at value of $131.09. According the financial strategy has been used for this year especially focusing on reduction of operating cost and lower overhead cost which it leads EPSs has increased significantly from previous year at $14.398 as same as Net Income has increased up to 1.34% compared to last year, however, the Sales Revenues has dropped down 1.3% as advertisement and PR has been reduced the expenditure scale. We have paid dividend to our shareholders at amount of $12.10 and reflecting our share prices is now cost at $96.98 per share.
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