Running Head: TEAM DIGBY COURSE FINAL PAPER
04/22/19
1
TEAM DIGBY
2
Table of Contents
Executive Summary .................................................................................................................................. 3
Company Organization ............................................................................................................................. 4
Competition............................................................................................................................................... 5
Industry Analysis ...................................................................................................................................... 6
Detailed Results ........................................................................................................................................ 7
Strategic Recommendations...................................................................................................................... 8
Team Effectiveness ................................................................................................................................. 12
Team Charter Assessment....................................................................................................................... 13
Conclusion .............................................................................................................................................. 15
References ............................................................................................................................................... 16
TEAM DIGBY
3
Executive Summary
Since the creation of Digby eight years ago, because of the government initiated split that
created our five competitors, and us, Digby has sought to lead the sensors market as a broad cost
leader. Targeting both the low-tech and high-tech markets using lower than average pricing
while maintaining a critical eye on customer buying criteria to ensure we are meeting those
needs. This document will provide overviews of Digby in areas including:
Company Organization, where the executive leadership of the company is identified,
along with descriptions regarding the structure used for decision-making amongst the leadership
team.
Competition, where the yearly performance results of our five competitors were
analyzed, and how the results of those analyses affected the executive leadership’s decisions for
each upcoming year for a total of 8 years. Key examples of data along with a SWOT analysis
are provided.
Industry Analysis, where the overall global sensor industry is explored to provide context
in how well Digby is doing within the industry itself. A key data point is how well Digby is
doing regarding profitability and how well we are keeping pace with industry growth.
Detailed Results, where the last eight years of Digby performance numbers are put forth
for your consideration. Results by year, for total sales, profits, and stock prices, along with other
information including the “star” rating at the end of each year are provided. Each year will also
include a summary of our leaderships thoughts on what worked well, and what did not.
Strategic Recommendations, consisting of current executive leaderships strategy
regarding the future of Digby. Recommendations are based on strategic planning and lessons
TEAM DIGBY
4
learned over the past eight years. Actionable goals for the company are provided, along with
insight into the market place and competitive and financial guidance based on research and facts.
Team Effectiveness, where the overall ability of the current executive team to work
together is reviewed. Several examples of teamwork are provided, and it is strongly encouraged
that the same level of commitment between executives is maintained for the future to help ensure
a solid foundation for Digby to continue to foster under.
Team Charter Assessment, includes an overall review of the Digby team charter agreed
upon at the founding of the company by each of the current executive team members. An
analysis of our initial business strategy, market segment target, project management plan,
conflict management plan, team rules, and code of ethics are discussed.
Conclusion, where the overall success of the current Digby executive team is discussed,
how the financials turned out, and most importantly any insight that we can provide based on
lessons learned over a very fast eight years of leadership within the organization.
It is our hope that our experience at Digby will act as a roadmap for the future, in how to
achieve higher levels of success while keeping an eye on the mistakes we made, in hopes that
you can then avoid making any of those in the future. Hindsight is 20/20, and our goal is to give
you the best vision possible moving forward.
Company Organization
Team Digby consists of five individuals with the team leader acting as the CEO. The
following organizational chart provides the members names and their assigned roles.
TEAM DIGBY
5
CEO, President
& Team Lead
Eric Raketic
Marketing VP
Aldjana Memic
R&D VP
Jessia Sterling
Production VP
Shawn McGrother
Finance VP
Eric Raketic
QA VP
Eric Raketic
HR VP
Shawntay Mclean
While the CEO acted as the team leader, and each team member assumed the role of at
least one position in our company, each member of the team had an equal voice when making
decisions where consensus was necessary. Such decisions were especially necessary during the
competition simulation rounds to ensure equal participation and accountability among the team
members. Live on-line meeting were held twice weekly to facilitate the decision making process
and to keep the entire team engaged.
Competition
Week three, round one was the beginning of the competition, and all companies
formulated their strategies. Digby chose the Broad Cost Leader strategy which consisted of lowpriced products, no more than two products, and marketing spending modestly on promotion and
sales. We based our decisions on that strategy for round one. Our results were modest for round
one and using those results we prepared for round two. We increased our sales and promotions
budgets during round two, to increase our market share and make us more visible to customers.
Based on our competition this was a necessary step to keep pace with the other teams. We also
added a new product in round two.
Week four, round three found us keeping pace with the other teams with significant
increases across the board. In round three, we were 1st in every category and our decision for
sales and promotions was to stay where we were from round two. The decision to stay mostly
TEAM DIGBY
6
inactive in round three cost us in round four. We misread the success and failures of our
competition in round three. This cost us in loss of sales, profits and market share for round four.
Week five, round five was the beginning of our recovery. We adjusted our decisions
accordingly and realized our mistakes that gave us a false sense of security. Digby needed to
interpret the financial statistics and decisions of other teams more closely in order to make sound
decisions in the future. Round six found us trailing again in many categories. We were not
aggressive enough in our promotions budget and fell to 4th in market share.
Week six round seven consisted of modest gains and our market share stagnated. We
stayed consistent with our contribution margin with maintaining a number one ranking for both
rounds. We continued to issue dividends in week seven as well as weeks five, six, and eight.
We lowered prices, and significantly raised sales and promotion budgets in round eight. This
resulted in an increase in profits, sales and market share.
Industry Analysis
The overall Sensor sector itself consists of multiple industries and technologies, and
revolves around a myriad of sensor types that are in demand across multiple industries, each
using those that fit their particular products. For example, there are sensors such as:
•
Pressure
•
Light
•
Ultrasonic
•
Smoke, Gas, and Alcohol
TEAM DIGBY
7
With this in mind, the overall Sensor market (MarketWatch, 2018) is expected to expand
at a compound annual growth rate of over 11% per year, through 2023 with a USD value of
$266.27 billion. Driving this growth are the ongoing needs of automation and control systems
businesses that continue to automate production lines across the world.
Digby has been successful in maintaining a positive bottom line. By implementing
effective operating practices, it has positioned us to continue to drive against the competition.
Our company came in second in profitability across the industry at, $23,807. In Round 8, Digby
was the top contribution margin performer. We continue to be a stronger leader in the sensor
industry.
Detailed Results
Digby has grown tremendously over the past eight years, and still is growing. In the first
year, Digby increased in profits, sales, as well as contribution margin. We started small in the
beginning because we knew putting too much out within the first year would be spreading
ourselves thin. We also knew that we did not want to take out any emergency loans, nor did we
need one.
The second year we increased from the first year in all areas. In the second year, we also
created a low-tech product, which we targeted to price it a little higher to match our gains for the
new product line.
The fourth and fifth years we saw a decrease in market share, but we could not keep
maintaining the large gains that we had from the year before. In addition, in the fourth and fifth
TEAM DIGBY
8
year we did not take out any emergency loans. In the future, we will be more aware of the
constant ever-changing market space.
The sixth and seventh years we progressed tremendously from our fourth year and are
ranking high with our competitors. In our eighth year as we are still continuously growing, we
have ranked high amongst most of our competitors while our goal was not to beat anyone Digby
wanted to make the right choices for the long term and not short term.
In year eight, Digby wanted to regain the market share we lost previously. During the
last few years we lowered our prices to help increase the market share based on those of our
competitors. In year eight, Digby learned to be stronger in the market so that promotions and
sales budgets could have helped in funding to keep us ahead of our competitors. With the afore
mentioned changes, Digby has strong positions across the board and is continuing to grow.
The following table provides a yearly breakdown showing key performance indicators:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Sales
Contribution Margin
Profits
ROS
Stock Price
$48,057
$62,380
$86,783
$78,431
$76,135
$76,660
$90,108
$110,149
23.40%
42.30%
38.50%
40.40%
42.40%
45.90%
47.90%
51.40%
$3,951
$11,833
$13,509
$11,811
$11,754
$12,740
$16,424
$23,807
8.22%
18.97%
15.57%
15.06%
15.44%
16.62%
18.23%
21.16%
$17.17
$34.22
$49.37
$53.47
$56.38
$62.10
$70.77
$85.55
Star Summary
Results
5 Stars
5 Stars
4 Stars
3 Stars
3 Stars
5 Stars
5 Stars
5 Stars
Strategic Recommendations
Digby has spent the last eight years steadily investing in R&D improvements, Marketing,
and Production, while keeping finances in order without taking on current debt. This work has
TEAM DIGBY
9
been done using the Capsim tool to manage key areas of the business. The following points
relate our lessons learned in operating Digby using that system:
•
Both the High-Tech and Low-Tech product lines must have yearly improvements
to meet changing customer buying criteria demands. For the High-Tech market,
the focus for improvements should be performance and size, with a lesser focus
on price and reliability. For the Low-Tech market, the focus for improvements
should be price first followed by age, reliability, and finally performance and size.
It is also important to note that Digby always kept R&D projects to less than one
year in length, as any projects over one year would have stagnated the affected
product for over a year and inhibited growth.
•
Sales and Promotions budgets must be managed to ensure there is enough access
and awareness to meet sales projections year over year. Comparisons to market
competitors is critical to gauging the necessary increases to those budgets, and to
see if other changes such as product pricing are necessary.
•
Sales forecasting accuracy is a critical component to any success and must take
into account our own product prices, compared to the prices of our competitors,
while leveraging any advantages that Digby can create such as lowing prices to
capture more market share. Over aggressive forecasts can lead to unexpected
drops in earnings, and have a detrimental effect on the overall company.
•
Production capacity and automation must be established to support sales as well
as R&D processes. For example, the higher the automation levels in production,
the more time it takes R&D to make enhancements to our products. Capacity
must be available between two shifts of work to meet sales forecasting and
TEAM DIGBY
10
beyond, while at the same time not having excess capacity that ends up costing
dollars with inactive capacity.
•
Finance has accrued zero debt, while leveraging long-term bonds that are going to
start coming due in two years. Stock issuances have also been commonplace over
the last eight years, with the last four years paying a dividend to shareholders.
With Digby focusing on a broad cost leader strategy, debt should continue to be
avoided, with preparations made to start paying on the long-term bonds. If at all
possible, the dividends should also be maintained to ensure shareholders continue
to see Digby as a valuable investment.
It is important to point out these facts on our past strategy, as over the last eight years
Digby has seen the following growth:
Year One
Year Eight
Change +/- %
Sales
$48,057
$110,149
+129%
Profit
$3,951
$23,807
+503%
Contribution Margin
23.4%
51.44%
+28%
Stock Price
$17.17
$85.55
+398%
These are significant gains, so we strongly encourage these tactics be considered for both
the short and long term. Digby has also never taken an emergency load over these same eight
years.
While those trends should be analyzed and continued, there must be efforts made to take
further market share from our competitors. Over the last eight years Digby has varied in market
share where we reached a high of 22.3% in year three, and we have been trying to get back to
that point and beyond ever since. There are a myriad of ideas to recoup market share but the
following are our initial suggestions for the incoming board to take into consideration:
TEAM DIGBY
•
11
Innovation (Tice, 2011) can work to take on market share by identifying new
trends in the industry, and to get in front of competitors with new technology or
advancements in existing technology. This is an option for our High-Tech market
segment, which places a top priority on Performance, Size, and Product Age.
This will not work for our Low-Tech market segment, which places very little
importance on those same factors.
•
Responsiveness (Tice, 2011) to customers translates to both awareness of
customers with our products as well as accessibility. Our current strategies have
placed a high level of importance on both these areas and budgets already, and
this simply reinforces the need for Digby to ensure this is enhanced for the future.
•
Listening to Customers (Tice, 2011) will help Digby understand trends and needs
within the markets that we target. As with responsiveness, Digby currently pays
close attention to the identified customer buying criteria we have access too, and
this again reinforces the need for Digby to pay attention to the information to
leverage it in any way we can.
•
When innovation, responsiveness, and customer needs are met, the matter of price
(Suttle, 2019) should also be considered. When there is little difference between
product offerings among competitors, price can be used to create a difference that
can drive sales to you or away from you. With this in mind, our biggest strategic
recommendation is to remain lean in expenses while maximizing profits and to
continue the current trend of lowering prices over the last two years. This will
reinforce Digby’s current position in the marketplace, and make it a player in the
industry for the future.
TEAM DIGBY
12
Ways to increase market share, and to remain solvent for the future, should leverage the
experience of the last eight years while following our financials as a guideline. Growth must be
sustainable and not diverge from the company’s financial strategy too rapidly, less you spook
investors and end up losing market share in the short-term to only need to add that amount to the
total you want to achieve in the long-term.
Team Effectiveness
Of various examples of effective teamwork out there, (McQuerrey, 2019) Team Digby
met several such as:
•
Brainstorming sessions were held twice weekly where ideas on strategy were
encouraged, not only during the competition rounds of the simulation, but also
regarding all other deliverables our team was responsible for. This enabled our
individual strengths to add to our group total and make us a better functioning
team overall.
•
Trust was established via respect for everyone’s opinions and input, as well
reciprocated throughout our tenure as a team by everyone meeting their own
obligations, and recognizing individual accountability that added up to our
success as a team. There was never an instance where an individual in the team
did not communicate with others, or in any way show a lack of professionalism or
dedication.
•
During meetings and through other forms of group contact, the willingness to
share expertise with one another was readily evident. Such expertise came from
personal work experience as well as from experiences from previous classes we
TEAM DIGBY
13
have been taking up to this point. Collaboration like this kept us very competitive
throughout our competition rounds.
•
The team utilized our individual abilities, as described earlier during our
brainstorming meetings regarding business strategies. As individuals we each
have our own strengths based on experience and education and those were used to
complement one another to add to our overall group competency.
•
Openness to others suggestions was encouraged and practiced regularly during all
team meetings and communications. There were no points where members were
overbearing or dismissive to one another.
•
From the very start of our term as a team, we acknowledged that we would either
succeed as a team or fail as a team, and that each of us is accountable to one
another for that success or failure. This understanding was evident throughout the
term where no one was singled out for anything other than our own individual
contributions to the team.
Each of these examples provides its own view into the overall team dynamic that Digby
had, which was largely very good, and provides for almost nothing that we believe could have
been done differently to improve upon.
Team Charter Assessment
The Digby Charter and the Project Management Plan it contains, initially identified the
following goals:
•
Regarding meetings and communication plans: We need to have a meeting at the
start of each week to identify deliverables and assign tasks to members of the
TEAM DIGBY
14
team. A follow up meeting could be held later in the week with texts or
discussion posts in-between meetings for questions and completed member tasks.
The team will also use group texts to provide a real-time communication path.
•
Regarding Documents and Change Management: The Files area will be used to
share documents while each week of the class will have a discussion added for the
team to work on via our group team page.
Since the start of the competition rounds Digby has adopted a two meetings per week
schedule, with the first meeting held on Monday evenings where the first competition round is
completed, and the second meeting is held on Friday evenings where the second competition
round is completed. Via a Web-Ex session, one person will have the Capsim tool open with the
simulation presented on the screen. Members of the team then present their suggestions on
changes necessary to meet the targets for the simulation for that round. Once in agreement, one
person submits the saved decisions for the team.
This has worked very well for the group in week 3, and helped to ensure we are all
learning as a team, where we each have the opportunity to provide our own thoughts on how to
be successful. Being “accountable and empowered” (Folkman, 2017) helps make the team gel.
Aside from adding a second meeting per week to complete the required two competition
rounds, no other changes have been needed beyond what was initially spelled out in the team
charter. Furthermore, there have been no conflicts between any team members and it is clear we
all have the same goal, which is to do our best in the class and complete it with the best grade
possible.
TEAM DIGBY
15
It should also be pointed out; all Digby executive team members have abided by our
statement of ethical commitment, which is as follows:
•
“Each team member will act in such a way as they would want to be treated
themselves. We will be professional, understanding, and helpful in areas we can
assist when possible. We will be honest, upfront, and consistent with our work
and with each other. We are also each responsible for our own behavior, but must
be willing to call out when someone is not towing their line or acting in an
unethical way. Through honesty with one another we can be successful as a
team.”
All in all our team has been good working together and helping each other as needed.
We all work, and have other classes and commitments, but none of that has gotten in the way of
our ability to work together.
Conclusion
The
TEAM DIGBY
16
References
Folkman, J. (2017, Mar 2). The 6 Key Secrets To Increasing Empowerment In Your Team.
Forbes. Retrieved March 24, 2019, from
https://www.forbes.com/sites/joefolkman/2017/03/02/the-6-key-secrets-to-increasingempowerment-in-your-team/#2eaea93a77a6
MarketWatch. (2018, Dec 11). Sensor Market Size, Share, Trends and Industry Analysis project
to reach USD 266.27 billion by 2023. Retrieved March 17, 2019, from
https://www.marketwatch.com/press-release/sensor-market-size-share-trends-andindustry-analysis-projected-to-reach-usd-26627-billion-by-2023-2018-12-11
McQuerrey, L. (2019, Feb 04). Six Examples of Teamwork. Chron. Retrieved April 10, 2019,
from https://smallbusiness.chron.com/six-examples-teamwork-10032.html
Suttle, R. (2019, Feb 12). Growth Strategies in Business. Chron. Retrieved April 12, 2019, from
https://smallbusiness.chron.com/growth-strategies-business-4510.html
Tice, C. (2011, Nov 9). Five Ways Your Business Can Grab Market Share Today.
Entrepreneur.com. Retrieved April 12, 2019, from
https://www.entrepreneur.com/article/220670
Purchase answer to see full
attachment