Dear Board of Directors Essay Example for Free

Dear Board of Directors EssayUpon implementing a Broad Differentiation strategy, Andrews Company desired to corroborate passing demanded products in all(prenominal) of the mart segments, take a leak the majority market share compared to our competitors and increase the value of our firm by the year 2021. We believed that this strategy could get us to that point and we have successfully done so.The start up of Andrews Company proved to be more difficult than anticipated due to noble be in marketing and RD, put in automation of sensors and due to our decision to take out most of our loans in the early stages of our product, leading to negative cabbage for the first two years. However, Broad Differentiation lucratively brought Andrews market share up to 30.93% outweighing the competition (Exhibit 1). Andrews Company will continue to implement this strategy with the goal to hold high demand, continue cutting costs with total quality management initiatives and by reevaluating our might and toil issues, which will be discussed throughout the course of our analysis. interrogation and DevelopmentProper allocation of funds towards interrogation and development proved to be of high importance, allowing customers to have access to better-quality products. Andrews Company effectively adjusted each product to their proper ideal spot on the perceptual map by using the segment centers and ideal spot offsets annually. This allowed Andrews to gain optimal market demand, leading to us being able to charge a higher price than competitors later on, thus obtain higher profit among other initiatives. Our high demand was essential in offsetting the costs associated with investing in marketing and promotional calculates, buy/sell capacitor and automation of products.MarketingBy investing insistently in promo and sales in all the market segments, we were able to increase accessibility and market demand. It was Andrewss goal to have our products be in the minds of cus tomers of all types and charge a premium for our excellent designs. Another advantage Andrews had over our competitors was that we forecasted at our potential market share, rather than our actual, based on the impudence our customers will be loyal to our brand and we would continue to invest in marketing expenditures. Once wefeel comfortable that we hold enough market share, we chamberpot then start to cut costs in this department. FinancesMonitoring spending and Andrews finances was perhaps the most vital part of our success. In the forward years of our company we took out large quantities of long-term debt to help finance investment in automation and lowering the cost of producing sensors. Each year Andrews see a steep increase in sales, while variable costs gradually increased (Exhibit 2). The extra debt we took out early on we believe to have assisted with the dramatic increase in profits each year (Exhibit 3). One thing Andrews could have done to to a fault assist with the increase in profits was to issue stock, which would have helped raise more capital to invest in capacity capabilities. However, we felt that issuing stock would have diluted the price. We successfully raised our stock price to $281.95 by the end of 2021 (Exhibit 4). A 723% increase from the start of 2014. ProductionA barrier for further success of Andrews Company was production versus capacity. While production was upwards of 18,000+, capacity only resulted in roughly 11,000. Each year we gradually invested more and more in automation and capacity due to our rising profits, which allowed us to improve our margins (Exhibit 5). We should have properly invested in capacity in the earlier rounds to help bridge the gap between capacity and production. However, Andrewss strategy was to focus on correctly adjusting our products on the perceptual map to their ideal spots and we planned to never invest so oft so that this could not happen. TQM and Human ResourcesIn 2017, Andrews met labor d emands and we paid our employees a higher rate than competitors. This tactic was able to put some of the other employees in competitive firms to go on strike for several days, resulting in a higher market share and a better reputation among customers and potential employees. Andrews also spent money each year on training employees for a maximum of 80 hour and recruiting spend of about $4.5 million each year, change magnitude our productivity index to 129.9% by the end of 2021. At the beginning of 2016, Andrews made an executive decision to invest in total quality management. Of a budget of $4 million, we allotted $1.5 million in2016 and 2017, then another $600 thousand in 2018. After this amount was spent, we would have seen diminishing returns and opted to cap out at $3.6 million. The substantial investment allowed us to reduce labor and material costs, while increasing demand, thus allowing us to steadily increase profits each year, peculiarly during this three-year span when co mpetitors did not spend enough in TQM. The Future of AndrewsAndrews Company will continue to use its method of broad differentiation in the approaching years and plans to issue stock in order to help with investing in capacity issues that weve had in the past. We will continue to spend on marketing, research and development and compensating our employees adequately in order to keep our high market share. Distinguishing our products will continue to be of the utmost importance, offering clientele a capital design. Appendix