Xelor
1st Assessment
MN7029
Financial
Decision Making
Group Members:
Name
ID
Edyta Dorota Nowicka
22059437
Elena Constantinescu
22029513
Alaa Abdelhakam
22041073
Behnam Karami
22076160
Abhita Joshi
22075435
Agenda:
 INTRODUCTION
 KEY DECISIONS TAKEN
 FINANCIAL PERFORMANCE
& ANALYSIS
 STRATEGIC DECISIONS
FOR Y7-Y9
 FINANCIAL FORECASTS
 APPENDIX
Edyta Dorota Nowicka 22059437
INTRODUCTION
Strategy:
XELOR LTD's strategy is to reach business clients or
customers with large wallets. We focus on selling high-end luxury products (luxury
watches, smartwatches, modern watches and sports watches). To achieve our
mission and vision, we will implement a comprehensive strategy that encompasses
several key elements:
 Establish a Luxurious Brand Image
 Product Selection and Sourcing
 Online Presence an E-commerce
 Brand Reputation and Positioning
 Customer Experience and Engagement
 After-Sales Services
 Limited Edition and Customisation
 International Expansion
 Authorised Dealers
Mission: Our mission is to provide discerning customers with an exquisite
selection of luxury timepieces that epitomise craftsmanship, elegance and timeless
sophistication. We are dedicated to curating a collection of exceptional watches that
captivate the senses and resonate with individuals who appreciate the finer things
in life. Through our unwavering commitment to quality and exclusivity, we aim to
elevate the art of timekeeping and create a lasting legacy of luxury and refinement.
We strive to build a reputation as a trusted and reliable watch retail company,
earning the confidence and loyalty of our valued customers.
Vision: Our vision is to be the premier destination for connoisseurs of luxury
watches, smart watches or even sports watches synonymous with unparalleled
customer service. We aspire to cultivate enduring relationships with clients who
possess a penchant for the extraordinary, becoming their trusted curator of
exceptional timepieces that transcend generations. By infusing every interaction,
with a sense of prestige and sophistication, we seek to set the standard for luxury
horology and inspire a lifestyle of unparalleled refinement and elegance. We are
committed to cultivating long-term relationships with our customers and becoming
the go-to destination for individuals seeking exquisite timepieces that reflect their
lifestyles and personalities.
Elena Constantinescu 22029513
KEY DECISIONS
TAKEN
Key Decisions taken for the Round 1 (Year 3)
 Change in Cash in year 3 is £169,231
 Change in accounts receivable will enhance the cash inflow of the company.
 The Quality Control Checks is driven by the sustainable practice.
Change in Supplier and Pricing Strategy
 The CEO change will create an outstanding impact on company’s culture,
Market Research Investment
Budgets
Change in Reduced
Accounts Marketing
Receivable Terms
Reduced
Marketing
BudgetsBudgets
Budgets
Reduced
Marketing
Change in Supplier and Pricing Strategy
Supplier and Pricing Strategy
Change In Quality Control checks
CEO Change
Increased Spending on Training and
Salaries and Salaries
Cutting Board Budget
Inventory Management According to
Market Demand
Change in Marketing
Communication Tactic in
Marketing Communication
Tactic
Key Decisions Taken for Round 2 (Year 4) 2 (Years
4)
 Change in Cash in year 4 is £116,843
 In round 2 i.e., year 4 there was a research and development investment
 Reducing the salesperson will be feasible only it does not affect the revenue generating capacity of Xelor.
 Change from Yord to Xelor will improve for better the identification and perception of brand.
Cutting Salespeople from 20 to 15 to 15
Change in CEO
Change in Company Name me
Ordering Inventory According to Market
Demand
Filling in the
Strategy the
“Strategy” Part in
the Game
Key Decisions Taken for Round 3 (Year 5)
 Change in Cash in year 5 is £74,723
 In round 3 i.e., year 5 there was a research and development investment
 The increase in salary has affected the operating cost of the company which reduced profit.
 Just-in-time inventory purchase is a significant step to reduce over/ under stocking
Change CEO
Ordering Inventory According to
Market Demand
Demand
Increased Salespeople Salary and
Reduced their Number
Key Decisions Taken for Round 4 (Year 6)
 Change in Cash in year 6 is negative i.e., £279,412.
 This signifies that the profit growth is negative.
 The company lose its market share based on the customers in round 4.
 The productivity of Xelor’s staff and its staff satisfaction is at the lowest.
 Modern watches is the most sold-out product in round 4.
 Reduction in the research and development and marketing budget.
Category Performance for Round 1-4
Smart Watch
Smart Watch
Smart Watch
Year 3
Year 4
Year 5
Year 6
400
Amount
350
180
160
300
Cost of Sales
134
134
134
174.2
300
200
100
0
Year 3
Luxury Watch
Year 4
Year 5
Amount
Cost of Sales
Year 6
Luxury Watch
Luxury Watch
Amount
Cost of Sales
Year 3
250
159
Year 4
130
159
Year 5
250
159
Year 6
440
206.7
500
400
300
200
100
0
Year 3
Year 4
Amount
Year 5
Cost of Sales
Year 6
Category Performance for Round 1-4
Sports Watch
Sports Watch
800
Sports Watch
Year 3
Year 4
Year 5
Year 6
Amount
240
140
550
600
Cost of Sales
142
142
142
187.2
600
400
200
0
Year 3
Year 4
Year 5
Amount
Cost of Sales
Year 6
Modern Watch
Modern Watch
Modern Watch
Amount
Cost of Sales
Year 3
460
144
Year 4
530
144
Year 5
140
144
Year 6
300
184.6
600
500
400
300
200
100
0
Year 3
Year 4
Amount
Year 5
Cost of Sales
Year 6
Comparison of the Amount to sell for Rounds 1-4
The selling price and marketing budget for
Xelor for Round 1-4
Amount to sell
Round 2
584
544
651
509
600
584
Smart Luxury Modern Sports
Watch Watch Watch Watch
Round 1
651
517
460
544
530
517
509
440
613
460
474
613
474
Round 3
343
224
530
274
Round 4
300
440
600
300
343
300
274
300
224
SMART WATCH
LUXURY WATCH MODERN WATCH SPORTS WATCH
Round 1
Round 2
Round 3
Round 4
Market Performance for Round 1-4
Round 1 - Year 3
Round 2 - Year 4
Market Performance for Round 1-4
Round 3 - Year 5
Round 4 - Year 6
Business Growth Strategy for Round 1-4
Market Penetration
• Xelor can focus on increasing its market share in
the current market by aggressive marketing and
sales strategies
Market Development
• The company can explore new geographical
markets or demographics for its watches
Product Development
• Xelor can consider expanding its product line by
introducing innovative or upgraded watches.
Diversification
• The company may explore diversification by
entering related markets or introducing
completely new products.
Porter's Five Forces Analysis for Round 1-4
Threat of
New
Entrants
The debt-to-equity ratio and debt to asset ratio, suggest that Xelor is using its equity
capital more than debt. This is making it challenging for the new entrants to secure
sufficient capital.
Bargaining
Power of
Buyers
The current and quick ratio of the company provides an overall structure regarding the
company’s efficiency in generating liquidity which suggests it strengthen position in the
market share and efficiency in meeting demand which provides the company some
power over buyers.
Bargaining
Power of
Suppliers
There was a change in suppliers in round which indicates that the company re-structured
its supplier strength. The company has a consistency in suppliers’ relation. This indicates a
varying degree of bargaining power of Xelor over its suppliers.
Threat of
Substitute
Products
or Services
The various watch categories including smart, luxury, modern, sports) offered by Xelor
may provide some protection against substitutes within the watch industry.
Competitiv
e Rivalry
Xelor faces competition from other watch companies like YORA Watches, YORB,
YORC, YORE, and Timeless and the decline in sales is evident in the round 3 which
indicates that the company requires to restructure its sales strategies against the
competitors.
Corporate Social Responsibility Strategy for Round 1-4
Sustainable Sourcing
Reducing Environmental Impact
• Xelor must evaluate its suppliers including Prodovski
S.A. HongKong Ltd. Kansas Inc. Henderson Ltd.,
Schneider GmbH
• Xelor must incorporate initiatives to reduce its
environmental footprint
Community Engagement
• The company strengthen its engagement with the local
communities where it operates
Ethical Marketing
• It is essential to enhance the company's reputation and
build trust among consumers
Employee Welfare and Development
• Maintaining fair labour practices and ensuring a safe
working environment with handsome salary
Demand, Supply and Sales Analysis for Round 1-4:
Inventory Performance
Smart Watches
Round 1- Year 3
Round 2- Year 4
Round 3- Year 5
Round 4- Year 6
Demand
390
381
396
303
Supply
584
544
343
160
Sales
390
381
343
160
Luxury Watches
Round 1- Year 3
Round 2- Year 4
Round 3- Year 5
Round 4- Year 6
Smart Watches
Demand
392
415
445
436
Supply
651
509
224
250
Sales
392
415
224
250
Luxury Watches
700
700
600
500
400
300
200
100
0
600
500
400
300
200
100
0
Round 1
Round 2
Demand
Round 3
Supply
Sales
Round 4
Round 1
Round 2
Demand
Round 3
Supply
Sales
Round 4
Demand, Supply and Sales Analysis for Round 1-4 :
Inventory Performance
Modern Watches
Round 1- Year 3
Round 2- Year 4
Round 3- Year 5
Round 4- Year 6
Demand
535
545
612
606
Supply
517
460
530
550
Sports Watches Demand
Round 1- Year 3
379
Round 2- Year 4
340
Round 3- Year 5
381
Round 4- Year 6
362
Sales
517
460
530
550
Modern Watches
Supply
613
474
274
140
Sales
379
340
274
140
Sports Watches
700
600
500
400
300
200
100
0
700
600
500
400
300
200
100
0
Round 1
Round 2
Demand
Round 3
Supply
Sales
Round 4
Round 1
Round 2
Demand
Round 3
Supply
Sales
Round 4
Alaa Abdelhakam 22041073
PERFORMANCE
& ANALYSIS
Our Stock value:
 Past years
 Planned targets
 Competitors
Profitability
Profiltability
Ratios
Year 2
Year 3
Year 4
Year 5
Operating
Profit Margin
11.8%
21.5%
24.2%
17.2%
Gross Profit
Margin
38%
45.4%
45.3%
43.9%
Return on
Capital
Employed
(ROCE)
8.6%
15.5%
16.2%
9.13%
What went wrong in Year 5?
Efficiency
Efficiency
Ratios
Year 2
Year 3
Year 4
Year 5
Average
Inventories
Turnover
Period
713
475
381
331
Sales
Revenue to
Capital
Employed
0.72
0.72
0.67
0.53
22,051
30,201
25,065
Sales
18,960
Revenue Per
Employee
Liquidity
Liquidity
Ratios
Year 3
Year 4
Year 5
Current Ratio
26.6
25.5
47
Acid Test
Ratio
11.3
17
35
Market Share
Luxury
Smart
Modern Sport
Year 2
16.67%
16.67%
16.67%
16.67%
Year 3
22.73%
16.7%
18.74%
17.75%
Year 4
24.23%
16.61%
17.12%
15.90%
Year 5
13.69%
15.51%
17.59%
15.43%
Year 6
Revenue
443,955
Revenue
285,300
Operating Profit
Margin
29%
Operating Profit
Margin
11.9%
Gross Profit Margin
51%
Gross Profit Margin
43%
Return on Capital
Employed (ROCE)
21%
Return on Capital
Employed (ROCE)
6.5%
Year 7
Revenue
434,000
(Y6) 285,300
Gross profit
123,092
125,030
Behnam Karami 22076160
STRATEGIC
DECISIONS FOR
Y7-Y9
Future Strategic Decisions for Rounds 5-7 (Years 7 to 9)
 Buy more market research in
competitive prices and market
analysis
 Informed decisions, Competitive advantage, Risk mitigation.
 Retaining current suppliers
 Consistency in Product Quality, Established Relationships, Cost
Stability, Reduced Transition Costs, Faster Time-to-Market.
 Importing directly from factory
 Cost Savings, Better Profit Margins.
Sample Footer Text
20XX
30
Future Strategic Decisions for Rounds 5-7 (Years 7 to 9)
 Retaining The Selling Prices
 Customer Loyalty, Brand Image and Perception, Ease of Budgeting for
Customers.
 E-commerce marketing: shift to mobile advertisements
 Widespread Reach, 24/7 Accessibility, Cost-Effective Options, Easy
Sharing and Virality.
 Ordering our inventory according to the market
demand
 Reduced Risk of Obsolescence, Reduced Holding Costs, Improved Cash
Flow, Optimized Stock Levels.
 Keeping Human Resources, Auction and Distribution
the same
 Consistent Company Culture, Efficient Resource Allocation, better
change management
Sample Footer Text
20XX
31
Future Strategic Decisions for Rounds 5-7 (Years 7 to 9)
 Increase the salespeople's salary and reduce their
number
 Increased Motivation and Job Satisfaction, Focus on Quality over
Quantity, Improved Sales Team Collaboration, Better Sales
Performance Measurement.
 Shift all products from full check to sufficient check
 Cost Efficiency.
 Increase the amount of money for Research and
Development on all areas
 Efficiency Improvements, Market Leadership,
 Will not apply for loan
 Financial Independence, Debt Avoidance, Faster Decision-Making,
Ownership and Control.
 Accounts receivable terms in months will be 1
 Improved Cash Flow, Minimized Collection Efforts,
Sample Footer Text
20XX
32
Abhita Joshi 22075435
FINANCIAL
FORECASTS (Y7Y9)
INCOME STATEMENTS
1
2
3
4
5
6
7y
8y
9y
Net turnover
0
379,219
441,035
422,815
350,910
285,300
485,138
533,652
586,017
Cost of sales
0
234,770
241,007
231,377
196,806
160,270
91,070
93,800
93,800
Gross sales margin
0
144,449
200,028
191,438
154,104
125,030
394,068
439,851
492,216
Sales costs
41,000
63,500
59,000
48,500
53,000
46,950
46,950
46,950
46,950
General administration costs
35,100
35,830
46,284
40,752
40,800
44,120
44,120
44,120
44,120
Sum of costs
76,100
99,330
105,284
89,252
93,800
91,070
182,140
184,870
184,870
Operating profit
-76,100
45,119
94,744
102,186
60,304
33,960
302,998
348,782
401,147
Other company revenues
0
0
0
0
0
0
0
0
0
Other company costs
0
0
0
0
0
0
0
0
0
Interest revenue
0
0
0
0
0
0
0
0
0
Interest costs
9,750
9,750
9,750
9,750
7,500
7,500
9,750
7,500
7,500
Net financing costs / income
-9,750
-9,750
-9,750
-9,750
-7,500
-7,500
9,750
7,500
7,500
Operational earnings before taxes
-85,850
35,369
84,994
92,436
52,804
26,460
293,248
341,282
393,647
Taxes over operational earnings
0
0
21,249
23,109
13,201
6,615
6,615
6,615
6,615
Operational earnings
-85,850
35,369
63,746
69,327
39,603
19,845
286,633
334,667
387,032
Exceptional losses and profits
0
0
0
0
0
0
0
0
0
Taxes over exceptional result
0
0
0
0
0
0
0
0
0
Exceptional result after taxes
0
0
0
0
0
0
0
0
0
Net profit
-85,850
35,369
63,746
69,327
39,603
19,845
286,633
334,667
387,032
Summary and
Implications
Net Profit Trends
Year 7
£286,633.50
Year 8
£334,667.35
Year 9
£387,032.59
2. **Overall Business Performance:**
1- The company is projected to experience increasing
net profits over the three years in the scenario of a 10%
increase in sales, operating profit, and inventories.
2 - This suggests potential growth and positive
momentum in the business, possibly due to effective
strategies, market demand, or operational efficiency
improvements.
3. **Considerations**
1 - It's essential to identify the key factors contributing to the
positive trend and leverage them for sustained growth.
2- Continuous monitoring and adjustment of strategies may
be necessary to capitalize on opportunities and maintain
profitability.
3- Strategic investments or expansions might be considered
to support the growth trajectory.
Operational Earnings Percentage for
year-7 to 9
%
Year 7
59.14%
Year 8
62.75%
Year 9
66.11%
Any questions?
Thank you!
Appendix
Name
ID
Contribution
Alaa Abdelhakam
22041073
1.Acted as the CEO and submitted
all the game decisions.
2.Produced slides for the financial
analysis part of the presentation;
slides 22-28.
Elena Constantinescu
22029513
1.Produced slides for the decisions
taken part of the presentation;
slides 7-20.
Edyta Dorota Nowicka
22059437
1.Produced slides for the
introduction part of the
presentation; slide 5.
Behnam Karami
22076160
1.Produced slides for the future
decisions part of the presentation;
slides 30-32.
Abhita Joshi
22075435
1.Produced slides for the financial
forecasts part of the presentation;
slides 34-37.