leapfrog enterprises
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Leapfrog Enterprises. Breadon , William Hollis, Diana James, Mark Johnston, Charles. Executive Summary. About - PowerPoint PPT PresentationTRANSCRIPT
Leapfrog EnterprisesBreadon, WilliamHollis, DianaJames, MarkJohnston, Charles
Executive Summary About
Leading designer, developer and marketer of innovative, technology-based educational products and related content. LeapFrog is 100% focused on developing products that will provide the most engaging, effective learning experience - for all ages, in school or home, around the world.
Founded in 1995 by Michael Wood and Robert Lally.
Employs over 550 full and part-time employees.
Mission
“Helping kids to learn how to read.”
Products• LeapPad Ultra (4-9 yrs.)• LeapPad2 Power (3-9 yrs.)• LeapPad2 (3-9 yrs.)• LeapsterGS (4-9 yrs.)• Leapster Explorer (4-9 yrs.)• LeapReader (4-8 yrs.)• Tag (4-8 yrs.)• App Toys (3-6 yrs.)• Learning Toys (0-4 yrs.)• iPhone®/iPad® Apps (2-5
yrs.)
SWOT AnalysisStrengths• Brand recognition
and reputation• Popular licensed
content (i.e. Disney)• In-house design• Proprietary
curriculum developed by expert educators
Weaknesses•Perceived high retail prices
•Heavy reliance on main customers (Wal-Mart, Target, Toys R Us)
•Most suppliers and manufacturers concentrated in China
•Few numbers of proprietary characters
Opportunities• International
expansion• Lower priced
products• More mobile
applications• Expansion to an older
demographic of children.
Threats•Seasonal fluctuations •No long term agreement with retailers
•Mobile market (smartphones and tablets)
•Competition manufacturing lowered priced products
Marketing Impact LeapPad is following the basic
marketing plan as the Apple IPad. They intend on developing a pad that is aimed at children ages 4 to12.
Strategy: Sell the cheapest tablet on market,
for $100.
Focus on children ages 4 to 7.
Develop and sell accessories for the LeapPad unit.
Sell hundreds of apps for units.
Marketing ImpactThird-party apps
allowed in 2011. Available apps doubled on their store.
LeapFrog’s marketing focuses on the concept of “connecting with more carefully selected customers.”
Marketing ImpactStiff competition, specially from
Mattel Power Touch Pad.Closed environment, very
proprietary.More diversification to hinder
competition.
Marketing Impact In June 29, 2011, LeapFrog
introduced the LeapPad Explorer, a personalized learning tablet for children aged 4 to 9. The LeapPad Explorer pre-
sale units sold out in the first two weeks. LeapPad hit shelves on August 15, 2011
2013 LeapFrog app to be available for the IPad and IPhone.
Stakeholders 15% of shares held by all insider and 5%
owners 75 % of shares held by institutional &
mutual fund owners 89 % of float held by institutional &
mutual fund owners
Shareholders• Mollusk Holdings LLC (2,130,116),• Milken Michael R (1,301,789)• Rissman Owen Randall (443,321)• Barbour John (206,175) • Kalinske Thomas J (170,513)
Direct
• Wellington Management Company, LLP (6,026,546)• Wells Fargo & Company (4,599,629)• Franklin Resources, Inc. (4,294,730)• Vanguard Group, Inc. (The) (3,762,958) • Oppenheimer Funds, Inc. (2,500,000)
Institutional
Current Marketing Strategy Global initiative ‘We Give Books’ Facebook campaign
"Read 20 Minutes A Day"
Expand the impact from 150k to 2M
Financial ReportsLeapFrog (5 year) revenue model:
Financial ReportsLeapFrog (10 Year) Stock price:
Financial Performance$ in millions (except per share data) 2009 2010 2011 2012 2009-2012Net Sales $380 $433 $455 $581 15% CAGR
U.S. Segment Net Sales $307 $344 $342 $425 11% CAGR
International Net Sales $73 $88 $113 $156 29% CAGR
Operating Income (Loss) ($8) $8 $24 $64 $72
Operating Margin (2%) 2% 5% 11% 13 Points
Net Income (Loss) ($3) $5 $20 $86 $89EPS (Loss) ($0.04) $0.08 $0.03 $1.24 $1.28
Normalized EPS (Loss)* ($0.10) $0.06 $0.18 $0.56 $0.66
Adjusted EBITDA* $23 $34 $49 $93 60% CAGR
Cash & Equivalents $62 $19 $72 $120 25% CAGRDebt $0 $0 $0 $0 N/A
*Normalized EPS (Loss) and Adjusted EBITDA are non GAAP financial measures. Please see the following pages ‐for a discussion of these measures and their reconciliation to the most appropriate GAAP measure.**CAGR - Compound Annual Growth Rate
Strategic RecommendationToday’s Situation
Slow market growth. Increased apps and accessories for
LeapPad. Reaching out to children 4- 7 years old Competition with other tablet and
smartphones. Launching app for iPad and iPhone in
2013.
Strategic RecommendationHow we got here
Losses from 2005 to 2011. Competition with Mattel. Introduction of LeapPad
Explorer in 2011. Development of 3rd party apps
in 2011. Expanded content and games
in 2012. Agreements with children
educational content companies including Sesame Workshop.
Strategy Recommendation Addition of card readers and WIFI. Cloud storage for LeapPad products. More parental controls Compatibility with multiple platforms. Continue development of technology to
keep up.
Strategy Recommendation Establish more brand recognition. Engage costumers directly. Addition of other language and cultures
for international market. Build relationships with teachers,
families and caregivers.
Questions?
Thank you!