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Digby report to shareholders
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Digby’s Report to Shareholders
Industry #C59908
Presented by Eric Willinsky, Francis Naccarati, Maite Schloesser,
Clare Singley, Stephanie Radziminski, Mark Rapposelli
Promise to our Shareholders
Steady 10% annual increase
in stock prices over 5 years
Industry Stock Market Summary
Previous & Future Company Drivers
1. Cost Structure and Stability
2. Market Share Dominance
3. Dividend Payout
Previous Cost Structure Strategy
• Higher Prices For Quality Products
○ Aligns customer-targeted pricing with higher R&D
budget
● Early investment in TQM
○ Lowered Variable costs by 12.9% avg
○ Lowered Administrative costs by 60%
● Emphasis on Capacity
○ Takes advantage of competitors’ unmet demand
and eliminate second shift variable costs
TQM Results
Digby's TQM Results
2019 2020 2021 2021 Industry Avg.
Material Cost Reduction 11.80% 11.80% 11.80% 8.85%
Labor Cost Reduction 14% 14% 14% 4.67%
Administrative Cost Reduction 60% 60% 60% 44%
Average Plant Utilization
Continuing Cost Structure Stability • Due to prior success in cost management, important profitability &
efficiency ratios are growing but at a sustainable pace as compared to
competitors
o Growth Rates (YoY):
ROE = 10.5%
CM = 1.25%
Profit Margin = 7.1%
• Lower ROE compared to competitor can be attributed to lower profit
margins. Innovative methodology for improvement of profit margins
includes:
o Automation Investment (lower variable costs outweigh initial
cap. ex)
o Inventory Management (targeted inventory levels to prevent
excess inventory costs)
ROE & Profit Margins for Industry
Market Share Dominance
● Focus on high market share to offset fixed costs
● Differentiate semi-homogenous product lines in a
competitive market through early promotional
marketing and bolstering R&D to mitigate
competitors power
● Digby’s Accessibility rate of 100% and Awareness
rate of 83% ultimately resulted in Market
Dominance
Average Product Awareness
Average Product Awareness (2019-2021)
2019 2020 2021
Andrews 41.60% 51.30% 51%
Baldwin 92.30% 94.70% 96%
Chester 54.70% 54% 55%
Digby 81% 81.80% 82.60%
Market Share Moving Forward
• Lower ROE also attributed to lower sales than competitor
• Opportunity to gain additional awareness and increase competitive advantage
by increasing the promotional budget & reducing sales budget
• Continued adherence on R&D and increased focus on catering product lines to
consumer demands mitigate customer power
o Product Age
o Product Price
o Product Reliability
Dividend Payout
● Only company paying dividends
at .5%
● Potential to offer increased
dividends in the future to match
sub-sector average at 2%
*cited from dividend.com
Why Should You Invest?
● Digby’s cost structure stability, market dominance, and
dividend payouts has contributed to its positive
profitability
● Historically, Digby has outperformed its competitors and
holds the highest stock price coupled with the strongest
EPS showcasing our current strength
● With a changing environment, Digby has prepared a
strategy moving forward that includes provisioning
infrastructure, revising inventory management protocols,
and strategically increasing dividend payouts
Appendix
● Dupont Model
● SWOT Analysis
● Porter’s Model
DuPont Model
DuPont Model
SWOT Analysis
Porter’s Model