strategic plan july 1999 xyz electronics 1999-00 to 2003-04

STRATEGIC PLAN

JULY 1999

XYZ Electronics

1999-00 to 2003-04

This document has been prepared by Genesis Management Services Pty Ltd on behalf of XYZ ELECTRONICS.

This document is tendered on the express condition (acknowledged by the recipient’s acceptance of the document) that the publishers authors and contributors in particular Genesis Mnnagement Services Pty

Ltd, their employees, associates and agents are not responsible for any errors or omission actions or the results of any actions taken or omitted to be taken upon the basis of information in this document. The publishers authors and contributors expressly disclaim all and any liability (whether arising by reason of

negligence or otherwise) to any person or corporation whether in receipt of this document or not in respect of anything and the consequence of anything done or omitted to be done in reliance whether

whole or partial upon the whole or any part of the contents of this document.

NOTE: The content and figures in this presentation have been disguised and are provided for evaluation purposes only. It is not to be copied or used for any other purpose than that approved by Genesis Mnnagement Services Pty Ltd .

Disclaimer

This five-year Business Plan was developed by the management team of XYZ Electronics Pty Ltd and facilitated by Genesis Management Services Pty Ltd. The purpose of the plan is to provide a strategic framework and direction to ensure focused decision-making by the management team.

The business planning process comprised:

a three-day workshop involving the management team to: - identify key issues- establish key objectives- develop broad strategies

meetings with functional managers to develop detailed strategies, action plans and timetables

a final meeting to ‘sign-off’ the plan prior to presentation to the Board of Directors.

The consultants would like to thank the executive management team for their frank and constructive contributions and assistance in preparing this Business Plan.

1.0 INTRODUCTION

This Business Plan sets out the Vision and Key Objectives for XYZ Electronics for the period 1999-00 to 2003-04, and documents the Key Strategies and Action Plans to be implemented by Management over the next year or so to achieve these Objectives.

In summary, by the Year 2003-04, XYZ Electronics will have consolidated its position as the global market leader for the consumer and health-care markets for its range of electronic products, and will be recognised as an emerging global force in industrial products. It will have a turnover of at least A$170 million, of which around 65% is earned from exports, generating group pre-tax earnings of at least A$55 million. Through effective tax structures and transfer pricing, the Group tax rate should be 20-25%, and distributions to shareholders of after-tax earnings in Australia should reach $27 million pa from 2002-03.

The company will employ some 1000 people, with operations in Australia, the USA and Italy, and distributors in other key regions.

XYZ Electronics will remain strongly research-focused, but will progressively develop a stronger focus on marketing and business development. In line with its international expansion and establishment of discrete business units, there will also be a stronger emphasis on information technology and systems to efficiently meet the information and communication needs of the organisation.

Achievement of XYZ Electronics objectives will be measured by Key Indicators such as profitability, sales growth, international reputation, quality, customer perceptions and employee satisfaction.

The key risks facing the business, such as loss of key people in critical roles, supply failures, breaches of IP and the Millenium Bug are addressed where possible in the Plan.

2.0 EXECUTIVE SUMMARY


0

10

20

30

40

50

60

70

80

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04

Consumer Products

Health

Industrial

Other

SalesA$ million

KeyMilestones

REVENUE FORECAST


0

10

20

30

40

50

60

1999-00 2000-01 2001-02 2002-03 2003-04

Net Profit after Tax

DividendsA$ million

PROFIT & DIVIDEND FORECAST

3.0 CORPORATE DIRECTION

The following senior executives participated in the business planning process:

xxxxxxxxxxx Chairmanxxxxxxxxx CEOxxxxxxxxx Development Directorxxxxxxxxxx Marketing Managerxxxxxxxxxx Product Managerxxxxxxxx Sales Managerxxxxxxxxx Administration Managerxxxxxxxx Business Manager, Health Productsxxxxxxxx Business Manager, Industrial Productsxxxxxxxxx Production Manager

The team worked as group during the planning workshops and individually or in smaller groups within their functional areas to develop their respective strategies and action plans.

3.1 Planning Team

Competitors reverse engineeringDiminishing Australian market

Mature consumer marketRegional conflict - affecting market accessibility

Downsizing trend of health institutionsInternet - damage from propaganda

International trade/tax legislationLegislation on health-care

US economic situationGST in Australia

Y2KStrong A$

3.2 External Environment

Opportunities

New technologiesJoint technologies for industrial products

Corporate joint ventures/teamingIndustrial patents

Rationalisation of distributorsLegislation for industrial productsAging of target consumer market

Internet marketingConservative consumer competitors

Government support for R&D and other incentivesWeak A$

Threats

Successfully commercialised in three core segments

Successfully commercialised at least one other product internationally

Sales turnover of $170m pa

Net profit before tax of $55m (32% on Sales)

No 1 in the world consumer and health-care markets

A fully-developed presence in USA/EU for all products

Joint-ventures with complementary technologies

1000 people employed worldwide

A range of industrial systems licensed to international specialists

A major force in the Australian industrial market

Full global distribution for health products

Strategic alliance in Israel

New electronic control system

Business Visionfor 2003-04

Business Visionfor 2003-04

3.3 5-Year Vision

What are we especially good at right now?

dedicated, performance-orientated people best product technology in the world international business (70% exports) financial control responsive to customer needs interface between marketing and research & development creating a dynamic culture achieving short concept-to-market lead time

How will we win in the future?

international market presence/image being proactive in rationalising consumer products industry continued development of new technology greater degree of control of distribution channels a modular approach to product technology & design stronger marketing function improved product development processes more formalised but still flexible organisation structure & systems joint-ventures with other firms proper resourcing of industrial division identifying another international product opportunity

3.4 Key Questions

World’s leading bio-tech electronics

technology

World’s leading bio-tech electronics

technology

ConsumerHealth

Industrial globally

ConsumerHealth

Industrial globally

Research, design, development,

production, marketing

Research, design, development,

production, marketing

ProductsProducts MarketsMarketsActivitiesActivities

3.5 Business Mission

STRENGTHS

OPPORTUNITIES

THREATS

• technology• sustainable continuing advancement• matching technology to customer

needs • ease of use• good range of accessories• ISO-9001• reliability• wide product range• customer service

• lack of repeatability in repair and servicing

• performance in air testing• ergonomics• mechanical quality

• repackaging of technology• hybrid circuits

• legislation/limiting access• new technology• piracy of patents• mature market

• ISO-9001• lower whole-of-life cost• technology• sustainable continuing advancement• matching technology to customer

needs• ease of use• reputation• robustness & reliability• relatively inexpensive to manufacture

• higher power consumption• initial perception of difference• product iterations• servicing & training

• arrays• joint-venture with other technologies• discrimination

• piracy of patents• new technology• competitor propaganda

• ISO-9001• sensitivity• innovative technology• Ten satisfied customers

• no satisfactory product• too heavy• difficult to manufacture• susceptible to vibration

• industrial products (huge market)• new legislation re food, etc• alliances with insurance companies• expansion of world market• market demand

• piracy of patents• new technology• product liability

CONSUMER HEALTH-CARE INDUSTRIAL

WEAKNESSES

3.6 SWOT Analysis - Product

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• distributor margins (export)• value-for-money• perception of quality = higher prices• high margins• manufacturing options• range of price points

• some products are low value-for-money (comparedwith competitive products)

• uncompetitive at lower end of market

• higher-performance product at high-price

• lower end of market (export)

• discounting• exchange rates

• value-for-money• perception of quality = higher prices• high margins• understanding of tendering process

• non-standard pricing (tendering)

• premium price for technology edge

• subject to bureaucratic purchasing processes (price)

• secret commissions• equivalent machine at lower price• differential pricing - customer collusion• exchange rates

• premium price for technology• high ROI for customer

• exchange rates

CONSUMER HEALTH-CARE INDUSTRIAL

3.6 SWOT Analysis - Price

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• niche industry• local market presence (Aust, USA, EU)• customer data base (Aust)• technology is promotional strength• good quality promotional materials (some)• company image• good success stories

• marketing resources/budget (USA, EU)

• build up image and credibility• differentiated marketing strategies USA/EU• build database in new markets• use Internet• trade shows & exhibitions• new market segments (eg Baby Boomers)

• disinformation• industry feeds on rumours

CONSUMER

• UN endorsement• endorsement by international

research community

• promotional materials• poor representation (reliant

on distributors)• not recognised as a supplier

of hospital equipment• low profile

• more proactive worldwide

• disinformation• industry feeds on rumours• competitor propaganda

• notable success• perceived technological

advantage

• no international profile• not recognised as a supplier

of industrial equipment

• joint-venture with existing providers

• market expansion

HEALTH-CARE INDUSTRIAL

3.6 SWOT Analysis - Promotion

CONSUMER

STRENGTHS

OPPORTUNITIES

WEAKNESSES

THREATS

• Australian distribution network• good EU distribution• presence in Italy & USA• distribution tailored to each market• East-Coast USA distributor good• general distribution strategy/system

• dealers in Eastern Europe, etc• franchises• Internet sales

• poor-performing West-Coast USA distributor

• diminishing dealers• lack of contracts with dealers in Australia

• retailing poses conflict with wholesalers• competitors develop innovative distribution

network

• presence in USA and Italy for consumer products (not exploited)

• distance from major markets• no physical presence in major

markets

• only Australian local manufacturer

• distance from major markets

• franchising, licensing

HEALTH-CARE INDUSTRIAL

3.6 SWOT Analysis - Place

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• multi-skilled workforce• self motivation• opportunity for growth• recognition of performance• comprehensive range of skills

• functional boundaries• lack of HR policies• reliance on R&D Director for innovation• general awareness of OH&S

• can attract the best people

• key people headhunted• potential for overwork due to high growth rate of company

• loyalty• highly-skilled• team spirit• management depth• succession plan

3.6 SWOT Analysis - People

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• use of contractors to reduce process management/complexity

• measurement of performance• ability to change process technologies• ISO-9001

• unrealistic deadlines (focus)• MIS needs to be improved for future growth• some processes too subjective and labour intensive• high unit manufacturing costs

• electronic commerce (supply chain from customers to suppliers) • ability to change manufacturing capacity quickly (use of contractors)

• single-source contractors• loss of key contractors

• adequate MIS• communication infrastructure• not constrained by capital investment in

plant and equipment

3.6 SWOT Analysis - Processes

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• new corporate facilities (Adelaide and Italy)• own leased facility in USA• internal communication• corporate high-tech image• manufacturing hedge against disaster (outsourced product)

• need objective test equipment and procedures• distance from main markets (cost, travel)

• flexibility in manufacturing• electronic data interchange with suppliers• offshore manufacturing/assembly• new modules in MIS

• security• loss of data• fire• theft

• everyone together• room to expand• minimal investment in manufacturing• modern computer system

3.6 SWOT Analysis - Physicals

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• good distributors for consumer products• good and improving suppliers in Australia• strong contractual agreements with minimum performance criteria for dealers (except Australia)

• no partnerships (industrial products)• suppliers volatile• reliant on few powerful individuals• inconsistent product/service support with distributors

• industrial equipment suppliers• technology specialist/suppliers• acquire competitors’ partners• joint ventures

• failure of partnerships

3.6 SWOT Analysis - Partnerships

3.7 Basis for Growth

AUSTRALIA

NORTHAMERICA

EUROPE/OTHER

Consumer Health-care Industrial New Product

PRODUCTSM

AR

KE

TS

Mature market; Sales levelling off

new product launched in 2000-

01 to extend market life

Steady growth in market share to reach 30% by

2003-04

Steady growth in market share to

reach $10 mill by 2003-04

Minimal sales in Australia

Baseline market steady at 1998-99

levels

Baseline market steady at 1998-99 levels; Unknown

opportunities from other products

New Industrial products launched

in 2000; steady growth by 2003-04

Industrial technology

licensed in USA in 2003-04

Industrial technology

licensed in Europe in 2003-04

New product launched in

2002-03; revenue $2 mill in Year 1, $3 mill in Year 2

XYZ Electronics has identified the following Critical Success Factors which will need to be addressed for it to achieve its Vision:

Market leadership in product quality and performance Increased emphasis on product development rather than research Continual product innovation Development of new markets in health-care and industrial segments Recruitment and motivation of top quality staff Effective focus and management of R&D time Effective MIS Effective distribution channels for each product group.

3.8 Critical Success Factors

4.0 FINANCIAL PROJECTIONS

4.1 Revenue and Profit Projections

Australia

USA

Europe/Others

Total Consumer

Total Health-care

Total Industrial

TOTAL REVENUE

Gross Margin

Gross Profit

Overheads

NPBT

NPAT

Capital Expenditure

2002-03 2003-041999-00 2000-01 2001-02

Revenue

Consumer Products

New Product

Inventory

A$ million

Figures removed in this illustration copy

Consumer ProductsAustralia - Decline in overall market demand due to saturation of

market

USA - Steady growth in market until 30% market share achieved

Europe/other - Steady growth in market until 40% share achieved

Health-care - Market expected to peak at around 3,000 units in 2001-02 and 2002-03

Industrial - $10m in year 5 is a preliminary estimate, including $4m from exports

Gross margin - Marginal increase in Gross Margin from 62% to 64% with increased Health-care and Industrial revenue contribution; Cost of Goods Sold includes 0.25% royalty

Overhead expenses - Increases in sales/marketing staff (USA/Europe), overseas operations, systems & administration to cope with growth

Capital expenditure - Steady investment in tooling, equipment & computer infrastructure at $1,000,000 pa; New building for Industrial in 2000-01 at $2 mill financed by 20-year mortgage

Inventory - Stockturn maintained at 3x throughout forecast period

Debtors - One month of Revenue

Trade Creditors - Two months of Cost of Goods Sold

4.2 Revenue, Profit & Investment Assumptions

The Cashflow projections are based on the following assumptions:

Stock Increase - change in value of stock based on average of 4 months’ stock valued at COGS, assuming forecast Gross Margin

Depreciation - based on 20% of capital expenditure for year added back as non-cash

Building Loan Repayments - repayment of $90,000 pa for 20 years for new building

Royalties - based on 4.0% of sales, included in Cost of Goods Sold

Tax - 36% tax rate in Australia for local Consumer Products profits, all health-care profits and local Industrial Products profits; minimal profits generated in US

Dividends - full distribution of after-tax profits generated in Australia

4.3 Cashflow Assumptions

4.4 Cashflow Projection

2002-03 2003-041999-00 2000-01 2001-02

CASH IN

Gross Profit

Total Cash Inflow

CASH OUT

Overhead Expenses

Stock Increase

Capital Expenditure

Depreciation Add Back

Tax

Total Cash Outflow

Dividends

Net Cashflow

Building Loan Repayments

Debtors Increase

Creditors Increase

Figures removed in this illustration copy

The forecast cashflow indicates that, within current overdraft limits, XYZ Electronics is capable of funding its growth and working capital from internally-generated funds and that positive net cashflows are achievable beyond 1999-00.

Assuming that inventory can be reduced to more acceptable levels in 1999-00, the only new debt funding required will be to finance a new building for the Industrial Products Division in 2000/01. XYZ Electronics should achieve zero net debt within 2001-02.

Profits generated in overseas markets by XYZ Electronics internationally will be retained in Italy to fund the company’s working capital requirements.

4.5 Funding

5.0 RESEARCH & DEVELOPMENT

Continue to Develop Innovative Products in Response to Customer Needs

Meet Product Launch Dates

Optimise use of R&D Resources

Maintain Technology Edge over Competitors

Sales Market Share

Products launched on time Overruns x $ Revenue Lost

Achievement of Project Milestones Reduced “damage control” Low staff turnover in R&D

Market Intelligence Patents Competitor Benchmarking

KEY OBJECTIVESKEY PERFORMANCE

INDICATORS

5.1 Key Objectives

Key Objective

Continue to Develop Innovative Products in Response to Customer

Needs

Continue to Develop Innovative Products in Response to Customer

Needs

Strategies

5.2 Strategies

Obtain regular, comprehensive market feedback

Respond to market feedback

Introduce New Product Evaluation phase

Key Objective



Strategies

5.2 Strategies

Improve product development planning

Improve project planning

Improve usage of consultants

Improve ease of manufacture - reduce manufacturing cost

Key Objective



Strategies

5.2 Strategies

Review current resource mix

Improve use of resources across multiple projects

Protect key R&D resources

Key Objective



Strategies

5.2 Strategies

Increase frequency of technology advances

Forecast future trends in customer requirements and technology advances

Investigate other imaging technologies

Protect innovations with patents

6.0 MARKETING

6.1 Key Objectives

Maintain High Margins

Capitalise on Presence in Australia, USA and Italy

Build and Leverage XYZ Electronics Brand as Global Leader

Become No 1 in Consumer Products Worldwide

Become Recognised as No 1 Worldwide

Extend the Market for Consumer Products

Gross Margins

Seamless service/support infrastructure

Brand recognition

Unsolicited enquiries Market share

Proportion of First Time Buyers

Unsolicited enquiries Market share

Proportion of direct sales Sales margin


INDICATORS

Achieve Greater Control over Consumer Products Distribution Channels

6.1 Key Objectives

Achieve Recognition as a Worldwide Centre of Excellence

Establish Effective Control over Distribution Channels

Identify and Commercialise a New Product

Maintain our Excellent Reputation for Ethics and Service

Market share Unsolicited enquiries

Commission expenses as % of revenue

Product launched Sales revenue for new product

Customer perceptions


INDICATORS

6.2 Strategies

Key Objective

Maintain High MarginsMaintain High Margins

Strategies

Develop brand promotion

Develop existing products/technologies into new market segments

Develop recognition as market leader in innovation of product design

Maintain market leading position

Maintain pricing structure with high margins

6.2 Strategies

Key Objective

Capitalise on Presence in Australia,

USA and Italy

Capitalise on Presence in Australia,

USA and Italy

Strategies

Establish corporate marketing plan/program

Control all XYZ Electronics communications directly

Fully develop and use database

Coordinate promotions between zones

6.2 Strategies

Key Objective

Build and Leverage XYZ Electronics Brand as

Global Leader

Build and Leverage XYZ Electronics Brand as

Global Leader

Strategies

Corporate promotional activity

Corporate public relations programme

6.2 Strategies

Key Objective

Become No 1 in Consumer Products

Worldwide

Become No 1 in Consumer Products

Worldwide

Strategies

Improve product line

Aggressive marketing program

Develop international marketing program

Aggressive attack on competitors and competitive products

6.2 Strategies

Key Objective



Strategies

Establish presence in key target markets

Build linkages with Consumer Products distributors and service agents

Collaborate with relevant research facilities in Australia, US, UK and Europe

Widely promote XYZ Electronics technology

Build alliances in health-care

6.2 Strategies

Key Objective



Strategies

Extend promotion beyond existing media segments

Review the use of existing technology in alternative applications & markets

Review bio-technology and other market potential

6.2 Strategies

Key Objective

Achieve Greater Control over Consumer

Products Distribution Channels

Achieve Greater Control over Consumer

Products Distribution Channels

Strategies

Define consumer product distribution channels

Develop direct communications between dealers and consumers

Develop tight control and communications with non-English speaking distributors

Review product pricing

Establish contracts with Australian dealers

6.2 Strategies

Key Objective

Achieve Recognition as a Worldwide Centre

Achieve Recognition as a Worldwide Centre

Strategies

Research Australian market

Develop marketing strategy for Australian Food Industry

Achieve accreditation by internationally-recognised authority

License technology overseas

Research Industrial market internationally

6.2 Strategies

Key Objective

Establish Effective Control over

Distribution Channels

Establish Effective Control over

Distribution Channels

Strategies

Prepare Business Plan

Conduct joint market visits

Review Agreement

6.2 Strategies

Key Objective

Identify and Commercialise a New

Product

Identify and Commercialise a New

Product

Strategies

Establish alliances with Universities

Evaluate new product opportunities

6.2 Strategies

Key Objective

Maintain our Excellent Reputation for Ethics

and Service

Maintain our Excellent Reputation for Ethics

and Service

Strategies

Develop affirmative ethics and service policies

Develop service policies and procedures

Improve communications with customers

Employ people with the same values

In foreign markets, use locals for “local business customs”

7.0 OPERATIONS

7.1 Key Objectives

Establish and Maintain a Safe Working Environment

Successfully Integrate Product Development within Operations

Accelerate Industrial Product Development

Integrate procedures to meet Customer Requirements

Progress towards Zero Defect Quality Status

Lost time accidents Near misses

On-time product release dates

Product launched

Warranty costs Product returns Complaints


INDICATORS

Develop Objective Diagnostic Test Procedures

Eliminate Crisis Management in Production Start-ups

Warranty costs Product returns Complaints

Customer feedback

On time product launches

7.1 Key Objectives

Continue to Reduce Manufacturing Cost

Establish Production Facilities in Italy

Maintain Inventory at Optimum Levels

Gross margins Reductions in standard costs

Facilities established


INDICATORS

Stockturn Stockouts Stock write-offs

7.2 Strategies

Key Objective



Strategies

Engage external expert to guide and provide advice on OH&S on regular basis

Educate staff in safe working procedures

Maintain and support OH&S Committee

7.2 Strategies

Key Objective

Successfully Integrate Product Development

within Operations

Successfully Integrate Product Development

within Operations

Strategies

Develop information collection systems

Establish goals for Consumer product development

Establish Product Development facilities

Define the scope of Product Development

7.2 Strategies

Key Objective



Strategies

Establish Industrial R&D project team

Prepare and submit IR&D Grant application

Prepare detailed 3-year Business Plan for Industrial

7.2 Strategies

Key Objective



Strategies

Customer follow-up post rework to ensure satisfaction

Coordinated reporting, tracking and analysis of customer complaints company-wide

7.2 Strategies

Key Objective



Strategies

Encourage XYZ Electronics suppliers to use designed test procedures

100% finished product testing in-house

Establish clear specifications for product performance and test protocols

Standardise where possible on components

Train staff in quality requirements

7.2 Strategies

Key Objective

Develop Objective Diagnostic Test

Procedures

Develop Objective Diagnostic Test

Procedures

Strategies

Review and list requirements

Establish test facilities

7.2 Strategies

Key Objective

Eliminate Crisis Management in

Production Start-ups

Eliminate Crisis Management in

Production Start-ups

Strategies

Improve estimation of production lead-times

Review policies and practices for new product launches

7.2 Strategies

Key Objective



Strategies

Bring in-house/automate production of mechanical components where cost justified

Establish dual sourcing for key components

Standardise on components where possible

Design for procurability manufacturability

Conduct Value Analysis for all product components

7.2 Strategies

Key Objective



Strategies

Develop manufacture of solid-state circuitry

Set guidelines for authority and responsibility

Implement business operating system

7.2 Strategies

Key Objective



Strategies

Evaluate Economic Order Quantity (EOQ) optimisation

Improve sales forecasting

Enforce supplier delivery schedules

Conduct supply chain review

8.0 HUMAN RESOURCES

8.1 Key Objectives


INDICATORS

Reduce Stress Levels

Achieve Effective Communication & Understanding throughout the Organisation

Create and Maintain a Contented, Well-Motivated Workforce

Staff turnover Staff perceptions Achievement of deadlines

Staff perceptions

Continue to Develop OH&S Processes

Eliminate Key Resource Risk

Accidents Near misses Staff perceptions

Staff turnover Absenteeism

Growth Profitability

8.2 Strategies

Key Objective

Create and Maintain a Contented, Well-

Motivated Workforce

Create and Maintain a Contented, Well-

Motivated Workforce

Strategies

Maintain competitive salary structure

Provide challenging jobs

Provide a conducive work “environment”

Maintain flat management structure

Provide opportunities for career development

Establish HR policies and practices

8.2 Strategies

Key Objective

Reduce Stress LevelsReduce Stress Levels

Strategies

Monitor workloads and skill requirements, and compare with staff capabilities

Set realistic timelines/ deadlines

Enforce Annual Leave

Monitor stress indicators

Establish corporate fitness programme

8.2 Strategies

Key Objective

Achieve Effective Communication &

Understanding throughout the Organisation

Achieve Effective Communication &

Understanding throughout the Organisation

Strategies

Keep everyone informed on company direction and progress

Establish effective inter-office communication processes

8.2 Strategies

Key Objective



Strategies

Develop Company policy document

Implement HACCP

Report quarterly to Management

Conduct independent audits

Italy and USA to implement OH&S systems, adapted to local conditions/regulations

8.2 Strategies

Key Objective



Strategies

Determine appropriate strategies for critical personnel

Pay market salaries or better

Establish profit-sharing for all employees

Establish incentive programme for Managers based on KPIs

9.0 FINANCE & SYSTEMS

9.1 Key Objectives

Improve Project Expenditure Tracking & Reporting Systems

Implement System for Allocation of R&D Costs to Business Units

Implement Effective MIS for Business Units

Standardise Systems in Australia, USA & Italy

Maintain Conservative Gearing

On budget projects

Perception of value for money by Business Units

Achievement of budgets Ability to answer questions

Systems in place On time reporting

Debt to equity ratio


INDICATORS

9.2 Strategies

Key Objective

Improve Project Expenditure Tracking &

Reporting Systems

Improve Project Expenditure Tracking &

Reporting Systems

Strategies

Implement time recording for R&D and Production in Australia and Italy

Establish standard times for production

Train staff in manufacturing management information systems

9.2 Strategies

Key Objective

Implement System for Allocation of R&D Costs

to Business Units

Implement System for Allocation of R&D Costs

to Business Units

Strategies

Business Units to define R&D requirements and budgets in consultation with R&D Dept

Establish policies and systems for cost allocation

Introduce ROI evaluation for investment in R&D and product development

9.2 Strategies

Key Objective



Strategies

Strengthen Administrative/Finance resources

Establish information requirements at Board and Business Unit Manager level

Install new systems in USA and Italy

9.2 Strategies

Key Objective



Strategies

Implement new systems

Implement Virtual Private Network

Investigate on-line business process

9.2 Strategies

Key Objective



Strategies

Reduce stock levels and retire debt

Retain 50% net earnings for working capital

Retain XYZ Electronics International profits in Italy for growth and working capital needs

If necessary, borrow for Australian working capital requirements

Maximise R&D grants

Loss of key people Breach of security Infringement of Patents Product liability Millennium Bug Failure of key suppliers/critical components Bad debts New technologies Legislation Loss of data

10.1 Key Risks

11.0 ACTION PLAN

strategic plan july 1999 xyz electronics 1999-00 to 2003-04

Documents

behalf of xyz electronics

key strategies

executive management

key objectives

fiveyear business plan

strategic plan

key issues

business developm