CarramrodCarramrod

Abraham ApplebyAbraham Appleby Brittany BeersBrittany Beers Cornelius CobbCornelius Cobb Darrell DragonDarrell Dragon

Global Operations Summary for Carramrod in Year 15

M-F = 5.5%

Market Share:

E-L = 275k

E-L = 5.4%Outsourced Units = 0k

E-L = 6.8%Market Share:

LatinAmerica

Units Sold:

E-L = 6.7%M-F = 6.2%

Plant

In-House Units = 1246k

Taiwan

North

M-F = 55kMarket Share:

AfricaUnits Sold:

AmericaUnits Sold:

M-F = 75k M-F = 60k

Units Assembled: Entry-Level = 1007k Multi-Featured = 239k

AsiaPacific

Units Sold:E-L = 262k

E-L = 6.5%

E-L = 262k

Market Share:

M-F = 6.9%

E-L = 208kM-F = 49k

M-F = 7.4%

Europe

Net RevenuesNet Revenues

(millions of dollars)

8

Carramrod Net Revenues

$300

$500

5

$350

$400

$650

Year11 12 13 14 156 7 9 10

$50

$100

$150

$250

$200

$450

$600

$550

200

159

216202 194 192

237 232253

235 245

Earnings Per ShareEarnings Per ShareCarramrod Earnings Per Share

$6.00

$4.00

$2.00

–$4.00

–$2.00

$0.00

(EPS)

$8.00

$12.00

$10.00

$14.00

13 14 15Year

9 10 11 125 6 7 8

= Annual investor expectation of EPS performance.

2.000.56 1.66 0.78

-0.90

0.742.05

1.612.34 2.08

4.05

Return on EquityReturn on Equity

= Annual investor expectation of ROE performance.

Carramrod Return On Equity(ROE)

Year7 8

–10%

–20%

14 155 6

10%

70%

60%

50%

40%

20%

30%

0%

139 10 11 12

15.0

5.8

16.9

7.7

-10.8

8.1

19.0

13.717.5

14.1

24.8

Stock PriceStock Price

= Annual investor expectation of Stock Price performance.

Carramrod Stock Price(dollars per share)

$160

$140

$40

$100

$120

$200

$180

$60

$80

15Year

11 12 13 147 8 9

$20

105 6

30.0022.93 23.24

17.76 11.91 8.8823.02 23.04

35.50 34.05

49.86

Credit RatingCredit Rating

B+

B

B–

A–

A

A+

C

C+

C–

137 8 14 15Year

9 10 11 125 6

= Annual investor expectation of Credit Rating performance.

Carramrod Credit Rating

Image RatingImage Rating

100

15

90

80

70

7

60

50

40

13

30

20

1412

10

= Annual investor expectation of Image Rating performance.

Carramrod Image Rating

Year9 10 115 6 8

70

61 61

68

75 7672 73 72 71

68

Carramrod Strategic VisionCarramrod Strategic Vision Our vision is to become Our vision is to become

the most recognizable the most recognizable brand in digital cameras brand in digital cameras by offering the highest by offering the highest quality products and quality products and accessories at accessories at competitive prices. We competitive prices. We intend to become the intend to become the global leader in the global leader in the production and production and marketing of the world's marketing of the world's most premier camera most premier camera supported by innovative supported by innovative technological standards technological standards and a world renound and a world renound culture among team culture among team members.members.

Performance TargetsPerformance Targets

EPS Target for year 16 is $4.25EPS Target for year 16 is $4.25 EPS Target for year 17 is $4.50EPS Target for year 17 is $4.50

ROE Target for year 16 is 25.3ROE Target for year 16 is 25.3 ROE Target for year 17 is 25.8ROE Target for year 17 is 25.8

Credit Rating Target for both years is A+Credit Rating Target for both years is A+

Performance TargetsPerformance Targets

Image Rating Target for year 16 is 70Image Rating Target for year 16 is 70 Image Rating Target for year 17 is 72Image Rating Target for year 17 is 72

Stock Price Target for year 16 is $52Stock Price Target for year 16 is $52 Stock Price Target for year 17 is $55Stock Price Target for year 17 is $55

Entry Level StrategyEntry Level Strategy

Our strategy was Our strategy was differentiated in that differentiated in that we tried to focus on we tried to focus on the highest quality the highest quality camera.camera.

We realized that this We realized that this was too costly in both was too costly in both production and labor production and labor therefore we therefore we experimented in latter experimented in latter years with a best cost years with a best cost provider strategy.provider strategy.

Multi Level StrategyMulti Level Strategy

Our strategy was a differentiated Our strategy was a differentiated strategy in that we focused on strategy in that we focused on providing the highest quality camera providing the highest quality camera to the most exclusive retailers. to the most exclusive retailers.

Similar to our entry-level strategy Similar to our entry-level strategy we experimented with several we experimented with several business models before finding our business models before finding our niche.niche.

Carramrod’s Production Carramrod’s Production StrategyStrategy

We preferred employing enough We preferred employing enough labor to produce our product in labor to produce our product in house, and found that paying our house, and found that paying our employees overtime was more cost employees overtime was more cost effective than outsourcing in most effective than outsourcing in most instances.instances.

Financial StrategyFinancial Strategy

After finding ourselves in some financial troubles After finding ourselves in some financial troubles we had to completely cut out our dividends to pay we had to completely cut out our dividends to pay our outstanding loans in early years in order to our outstanding loans in early years in order to maintain a good credit rating. maintain a good credit rating.

In later years we were able to reinstate the In later years we were able to reinstate the dividends and plan to gradually increase dividends dividends and plan to gradually increase dividends in years to come to help boost investor confidence.in years to come to help boost investor confidence.

Entry Level CompetitionEntry Level Competition

We considered companies B, D, and We considered companies B, D, and F as our strongest competitors in the F as our strongest competitors in the long run, even though our strategy long run, even though our strategy and our competitors’ strategies and our competitors’ strategies changed over the years changed over the years

Multi-Level CompetitionMulti-Level Competition

We felt that competition changed We felt that competition changed throughout the course of the game, throughout the course of the game, but we considered our strongest but we considered our strongest competitors to be A, H, and I in multi-competitors to be A, H, and I in multi-level.level.

Actions to TakeActions to Take

We are trying to cut labor and production We are trying to cut labor and production costs while maintaining our camera’s high costs while maintaining our camera’s high quality standards in both categories of our quality standards in both categories of our cameras.cameras.

We plan on putting more money into We plan on putting more money into quarterly tech support and advertising to quarterly tech support and advertising to gain increased market share against our gain increased market share against our competitors.competitors.

Lessons Learned…Lessons Learned…

When deciding a price to place on a When deciding a price to place on a discount bid be sure that you will discount bid be sure that you will earn a profit if you win the bid, by earn a profit if you win the bid, by selling the camera for more than it’s selling the camera for more than it’s production cost.production cost.– We lost $27 per camera by not grasping We lost $27 per camera by not grasping

the idea of the discount bidding, the idea of the discount bidding, therefore we dug a financial hole that therefore we dug a financial hole that took our company years to get out of.took our company years to get out of.

Lessons Learned…Lessons Learned…

Keep a keen eye on your Keep a keen eye on your competitor’s strengths and competitor’s strengths and weaknesses.weaknesses.

QUESTIONS?QUESTIONS?