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KarmaCorp. Action Charter (V) (2014-2015)

Vision:

Consistently innovate, produce medium-cost & low-cost bikes in a number of segments, to be the market leader

by using cost as an advantage to enable almost anyone to own a good quality bike.

Marketing:

Price:Penetrative pricing; steadily change the retail price of older products in accordance with introduction

of new products, fluctuating demand & competitor activities.

Promotion:Medium-High promotion (for successful market penetration) accompanied with Medium-High

branding at initial levels to ensure better awareness.

Distribution: Reduced distributor margin with medium-high extra support, relying on increased salesvolumes to attract more stores.

Decision: In the market we have 4 products Adv5, Adv5Neo, SpeedRacer, StreetMax.This time we have

reduced the price of Adv5 to $2049 from $2100, SpeedRacer price is same $3999, Adv5Neo price is

increased to $2249 from $2200, And the price of StreetMax is same $349 . We have invested heavily in

Advertising ,PR and Branding. We have reduced the retailer margin by 2% that is 31% and increased the

extra support to $1000000

Product Development:

Introducing a product in each segment as part of our strategy to make the most of untapped markets and

have the entrant advantage (Blue Ocean).

Successful process reengineering, modifying our product(s) to have a lower prime cost every second year to

support our basic cost advantage.

Decision: We have developed 0 products for next year.

Operations:

Responsiveness: Increased production capacity in order to maintain a good level of responsiveness in (all)

segment(s). Steadily expanding our operations and workforce initially while anticipating the need to

increase capacity further in the longer-term.

Quality:Focus on medium-high quality creation, increased training hours, increased maintenance levels as

the plant expands, improved relationships with suppliers, and increased inspection %.

Decision:We have increased the work force by 10 employees and purchased 0 SCU of plant. Increased

supplier relation to $1200000 and raw material inventory stock to 6 weeks. We have increased the salary ofthe employees and training hours. And invested heavily on preventive maintenance and Quality system

technology.

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Finance:

Equity:Issuing of equity would be preferred more in the initial role overs than final role overs. As and when

enough cash inflows are generated, equity would be again repurchased.

Dividends:A marginal (preferably 10% - 20%) part of the profits would be distributed to the shareholders

annually, subject to change in case of loss.

Debt:Expansion would be funded from existing cash flows, but will, if necessary, increase debt to finance

it. We would expect increased cash flows following expansion to allow us repay any such debt quickly.

Decision:We have issued the Equity of $613000000 and Raised debt of $126000000 and the amount of

investor relation is $1500000

Expected Result:

Assuming that the competing players follow a complementary high margin strategy, we expect increased

revenues, market share & hence good profits which will subsequently result in an increased SHV.

Competitive Response:

If the competing players choose to follow a cost-based strategy, we will further revise our strategy with regard

to our vision.