Business Seminar
AllTask Business Plan
Executive Summary
Beau, Ben, Matt, & Sara
10
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Table of Contents
Executive Summary ........................................................................................................................ 3
Description of Business and Industry ............................................................................................. 5
Market Opportunity Analysis ......................................................................................................... 8
Marketing Plan and Sales Tactics ................................................................................................. 12
Manufacturing Plan ....................................................................................................................... 20
Financial Plan................................................................................................................................ 23
Human Resources Plan ................................................................................................................. 27
Appendices .................................................................................................................................... 28
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Executive Summary
This is a team made up of four members, each with different fields of business expertise.
The first executive member is Sara Paxston, and she is the only female member that the team
has. She is majoring in Marketing and Public Relations, and is a hard worker. Next is Matt
Maginot, Finance major with two minors, and is an all around numbers guy. After that, there is
Ben Kuebel who is double majoring in both Finance and Marketing. He is dedicated and has
good input and advice on how to improve our company, and is very creative. Our final executive
member is Beau Evans, and he was elected to be our group president. He is majoring in Finance
as well, and getting a minor in economics, and continues to remain organized and energetic
about building our company. This group of executive members will achieve success for two
reasons; diversity and chemistry. We are all studying different areas of business, and we all have
something different to bring to the table. The three men all have a major in Finance, but also are
studying or have studied other aspects of business, meaning that we all have different views on
how to succeed. This leads right into chemistry. We all have had classes with each other before,
and we get along well. However, in the team selection process, we knew it would be a long and
gruesome simulation, and we needed members that can stay focused for a long period of time.
All of us have been on a sports team before, and we all know what it takes to dedicate and
sacrifice some of your ideas for the betterment of the team. We can all sit down and discuss
different options and ideas. Then, we can argue our points and decide what is better for the
company as oppose to only listening to your own ideas.
The company’s products are continually improving computers to reach the highest desire
for the workhorse and the traveler segments. We can continue to improve a computer until it has
reached all the way to a 100 on the brand judgment. Some of our distinguishing features as a
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company would be the fact that we aim to be in the less crowded markets and take all the sales
from that city, as oppose to sharing the largest city with 3 other companies. We look to
monopolize cities that aren’t invaded by everyone. We also look to slowly improve our sales
force, and keep them happy so that our customers receive the best care available. We are very
careful of where we select our markets and when we select our markets. We want to expand into
cities first, so we can claim most of the market size that each city has to offer. We also want to
be patient of when we enter in, because think it is more important to establish our company and
everything within it, and improve on it. We don’t want to blindly expand outwards while we are
still unsure what the best decisions are.
In quarter 5, we will be accepting the full 5 million from our equity in order to expand.
With this 5 million, we will test out new computers and different builds of new computers over
the next 3 quarters, to significantly increase our brand judgment. We also have decided to invest
a good chunk of the money to R & D, to increase our computers, and also improve our change
over. Our change over is seriously hurting the company’s potential, and a lot of money needs to
be invested to perform at a higher level. In our next quarter decisions, we will also be expanding
even more. We will expand into different cities, and also expand our manufacturing output to be
able to match or demand. This way, we can improve our company and build it up, before we start
to expand and build it outwards.
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Description of Business and Industry
“We at AllTask wish to provide the hard-working individual with a productive and overall
valuable experience. We will infuse un-paralleled technology and durability into economically
innovative products worldwide”.
-AllTask Mission Statement, 2010
Our utmost concern at AllTask is to make our customers more successful whether that
takes place in or out of the office. Therefore, we provide four quality products that are now
infused within the market place. However, we will only have two different products on the
shelves at one time. This allows for us to make necessary improvements on a rotational basis per
quarter in order to better serve our customers. Moreover, our first and primary product is the
Endeavor and its successor the Endeavor II.
These products are directly targeted at the
workhorse segment of the market. In short, the workhorse is a customer that has specific needs
that enables themselves to perform multiple tasks, quickly, without any unwanted hardware or
software for frivolous tasks besides work. Thus, it’s essential that we provide a product that
meets their standards while providing great service so they can maximize their experience and
production. Next, our second and secondary product is the Voyager and its success the Voyager
II. These products are directly targeted at the traveler segment of the market. In short, the
traveler is a customer that has specific needs that enables themselves to perform tasks while on
the road or in the air. This means that we must provide a product this is undeniably reliable
while away from their home office and local sales service. In all, both customers including the
workhorse and traveler are very self sufficient but want the ability to rely on a highly functioning
service department.
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Furthermore, our regions of operation have begun within North America. First, our
manufacturing plant has been being built in Toronto, Canada along with a local sales office.
Second, we opened a local sales office in New York, USA and a web sales office in Chicago,
USA.
However, as times change and demand increases then production must increase.
Therefore, in Q4 we opened two more local sales offices, one in Montreal, Canada and one in
Los Angeles, USA. Within the later quarters we will likely expand again; however, it’s in our
best interest to develop our current sales and manufacturing departments into a highly function
and quality producing unit. Additionally, it is in our plan to expand further within the USA and
Canada in order to maximize our potential twelve month demand and increase our judgment
ratings and profitability. We believe we can accomplish this by providing the most reliable
product on the market, continue to build a market position and then defend it by taking the lead
against our competitors and not looking back.
Currently, we are engaging in a business plan that will launch ourselves into a leading
role with our industry and in all of our targeted markets. Within Q4 our strategic planning was
very promising but not drastically apparent. We believe that this allows for our competitors to
become soft and not realize that we do have a very strong position. For example, our market
performance within Q4 was the second highest among our competitors.
Secondly, our
investment in the future was the second highest among our competitor. Additionally, we have
recently taken an investment in venture capitalists that will greatly benefit our company’s
operations and future investment that has allowed us to greatly increase our product quality. All
of which our competitors are unaware but have been a part of our business plan from the past,
present, and into the future. Therefore, prospectively, we are planning and looking into more
ways to improve our product quality, increase our sales and factory productivity, and add value
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to our overall operations and business performance. However, just like all companies we do
have certain threats that can but hopefully will not play a role in what we are trying to
accomplish. For example, beginning in the Q3 we had the best brand judgment for both of our
products but we also had some of the poorest advertisement judgment ratings. So in order to
become even more successful within our markets we need to be more successful against our
competitors advertising techniques. Within our future quarters it is our plan and responsibility to
strive for an increase in advertisement ratings. This will undoubtedly be an accelerator of our
potential market demand and performance.
Cumulative industry results for last four quarters ending in quarter: Q3 & Q4
Minimum
Maximum
Average
AllTask
0.00
0.00
0.00
0.00
-16.54
-6.99
-12.70
-12.28
Market Performance
0.17
0.29
0.22
0.29
Marketing Effectiveness
0.64
0.70
0.66
0.64
Investment in Future
2.14
8.26
4.14
2.53
Wealth
0.31
0.47
0.41
0.38
Human Resource Management
0.68
0.77
0.71
0.69
Asset Management
0.56
1.55
0.94
1.29
Manufacturing Productivity
0.48
0.58
0.53
0.54
Financial Risk
1.00
1.00
1.00
1.00
Total Overall
Financial Performance
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Market Opportunity Analysis
Market Profile
Market Segments
Primary:
Workhorse
Secondary:
Traveler
AllTask Total Dollar Volume for Market
Total Dollar Volume
Q1
Q2
Q3
Q4
88,000
790,000
1,295,990
2,235,905
Demand & Sales – Q3 & Q4 Total
Brand
Net Demand
Number of Units Sold
Sales Revenue
Endeavor
499
428
1,213,372
Voyager
770
339
1,054,891
Endeavor II
647
527
1,510,123
1,916
1,294
3,778,389
Total
Total Market Share
&
Industry Trends
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Market Segment – United States – Q3 & Q4
City
AllTask
New York
X
Chicago – Web Center
X
Market Segment – Canada – Q3 &Q4
City
Toronto
Quarter 4
Actual EPS
-28
Actual Growth Rate
-75%
AllTask
X
Quarter 5
Projected EPS
-23
Projected Growth Rate -18%
Our product fits into our market segments based on what the customer needs which
means they want exactly what they want, nothing more and nothing less. Therefore, it is our
responsibility as a computer provider to research and develop a product that completely satisfies
our customer needs. After the first quarter of production we had a brand judgment on both of
our products that rated over a 70. In other words, the customer claimed our product was
acceptable. Our following quarter had a slight decrease in brand judgment (our method of trying
to find what the customer needs) which is reflected in our decrease of our market share and
shown in the graph above. Therefore, our product does fit into the market well; however, there is
definitely room for improvement and that is the direction we are headed. For instance, reflected
our progression we have financial progressed as well. Outlined above are our actual EPS and
growth rate numbers for our past quarter as well as projected for our next business cycle in Q5.
As stated above our projected growth rate is -18% which is dramatically higher than our actual
Q4 performance.
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Customer Profile
Being able to address the benefits customers seek is the key into addressing what the
customer needs because it translates into more potential demand, market share, and profits.
Since we have local sales offices and a web sales office it is critical that we pinpoint and market
to each segment based on how they feel about each sales office. For example, within the web
office the customer needs include easy navigation on web site, security of credit card, and ability
to track purchases. Next, within the local sales office customer needs include no hassle, easy on
eyes, able to send and receive emails, and can use on the road. All are examples what benefits
customers seek and it is our goals to make those benefits the most readily available and reliable.
As stated above, in order for a customer to believe your product is acceptable it must
received a brand judgment rating of 70 or higher. In our previous two quarters our rating has
been over 70 and therefore, we have been able to successfully match our products with the
customer’s need profile. Additionally, it is our responsibility to improve on our products and
extend helping hand to provide great customer service while providing an even better quality
product. So our products do fit within the customer profiles; however, the improvements and
necessary research and development actions are being taken each quarter.
Furthermore, the sizes of our segments are
some of the largest with the world. For instance, the
total 12 month potential demand for the workhorse is
24,041 while it is 15,161 for the traveler. Also, the
markets that we are associated with are more price
sensitive; therefore, price is more important to them
than performance.
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Key Competitor Profile
As of Q4 our key competitor is U-Tech. They are targeting the same markets and have
share similar segments as our company. Additionally, their total market share in Q4 was 46%
while we had a total market share of 17%. However, in Q3 it was the other way around. We had
a market share of 37% while U-Tech had a market share of 20%. Therefore, only have a
marginal advantage over us in total market share over the past two quarters. So far our
competitor’s strategy has been to copy our brand design and then create their own success in
advertising. This definitely worked for them and is shown in the Q4 resorts. However, they
have also implemented rebates each quarter which, unfortunately, accumulates a false since of
sales. Reason being is that rebates take away from future sales; thus, making it tougher to
increase sales in later quarters. Moreover, it’s essential to look at our competitor’s strengths and
weaknesses as well. A noticeable weakness and, according to our data, U-Tech is struggling
financially. However, their strengths outweigh their weaknesses by far. Therefore, we believe
that their best strengths are the consistency to invest in the future as well as having a high asset
management rating. Moreover, we believe that U-Tech will attempt to capitalize on
opportunities that will place them in the lead. Therefore, they are likely to increase the quality
improvements, research and development, and sales and factory worker production. However,
we also believe that they are financially weak and unstable therefore giving us an advantage to
steadily advance without any worries. So our actions will likely continue to pave the way for our
competitors so they will likely copy our plans following the quarter that’s implemented. Overall,
it’s then very important that we analyze our market research data and make accurate decisions
that will keep us in the lead and place more distance between us and our competitors.
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Marketing Plan and Sales Tactics
Target Markets
AllTask has established a market in New York, NY, Toronto, Canada, and has opened a
web center online. We believe opening these sales offices will broaden our exposure
geographically and culturally. Our presence online will provide these same advantages, as well
as the opportunity to reach the individuals in the physical markets we do not yet have a sales
office in. This way, we can make up for a small part of lost sales in these untapped areas. We
would like to take the success we’ve had so far and expand it throughout the United States.
Instead of establishing a thin layer of coverage over the whole world, we will provide our brands
thoroughly to the areas we are located in. We will capitalize on these market shares by focusing
on fewer markets, covering them more intensely.
Target Segments and Segments to be Targeted:
We will focus our attention on the market segments of Workhorse and Traveler. We
have focused on Workhorse because of the size of the market in New York. It is not the largest,
but we played the psychological approach and went with the second largest market, rather than
London. We have also created a sales office in Toronto because of its location relative to our
factory. With our production also in Canada, we will cut down overhead costs by eliminating a
significant amount of shipping expenses. Also, we feel this moderately-sized market could
provide us with a nearly competitor-free market share.
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Needs & Demographic for Each Segment:
Web: Our existence in the segments of Workhorse and Traveler has us playing by the
needs and wants of the customers in these segments. Below are the needs and wants of the
segments based on Web customers. A higher number indicates a higher need or want, and a
lower number meaning the reciprocal. Thus, the higher numbers represent the ideal experience
of the segment. For the Workhorse, an emphasis is placed on the ease of which it is to navigate
the web site and security of credit cards and prevention of identity thefts. Other important
aspects include how easy it is to actually purchase merchandise as well as the interaction with
human sales representatives. As for the Traveler, they appeal to the security and identity
protection factors as well as the ability to track their purchase because of their location status
changes. The fact that their least valued category is last in this list is noticeable as well. These
values help us customize a different approach to the separate segments.
Office: As far as physical sales go, the necessities both Workhorse and Traveler place on their
experience obviously differ from that of the web resource. When choosing a computer,
Workhorse customers want a computer that is safe, secure, entails little-to-no hassle, is easy to
use and easy on the eyes, a good value for the features they’re getting, and fast connections to
other computers. Because of their segment personality, we think they consider least is how fun it
is to use, portability, and high level sound systems. Travelers on the other hand, are very fond of
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e-mail capabilities, road usage, portability, highly effective connections, reliability, small size,
and easy on the eyes. Segment personality leaves little room for CAD capabilities and video file
sending. These factors are all considered when we create our products, as we try to build the
best products with the best technology to best suit the consumer.
Segment Selection
We selected the segments we did for two basic reasons. The first is size. Sure the
traveler segment isn’t very large, but the Workhorse is. 12-month potential demand places
Workhorse at the head of the computer market with over 124,000 while Traveler only holds
about 74,000 potential consumers. We felt the entrance barrier into the Traveler segment would
be less because of the size of the segment. Now, even though the mass of the Traveler segment
is significantly smaller, the performance expectations of this segment are very close to those of
the Workhorse. This way, sales of similar products may overflow into the other segment. But,
the difference of price judgment still remains.
Figure 1: Shows the Price-Performance tradeoff of the 5 segments.
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Targeting Other Segments:
Future plans of delving into other market segments are small and not in the near future,
but consist of entering the Innovator group. We considered entering the Cost Cutter segment,
but even though it is bigger, we do not want to sacrifice company or brand image by degrading
the level of our product performance. Instead, we will establish ourselves in the primary
segments we have already aimed at, and then, if successful reach for the Innovator group by
upgrading the performance level in creating new products. We feel consumers want to see
company’s products get better, not cheaper.
Order of Market Development:
We have already indicated that our primary segment to be targeted is the Workhorse
segment because of its size and therefore opportunity and limited market barrier. Our secondary
efforts will then be directed toward the Traveler segment. Performance expectations are similar
between the two segments, yet price judgment is much higher for the Traveler. If success in the
two main segments is achieved and maintained, progression toward the innovator segments will
be pursued.
Product Lines:
Endeavor (II): This is our first product created. It was built to satisfy the needs of the
Workhorse consumer, evident by the aspects we selected in brand creation. However, we were
not satisfied with the results. We wanted more satisfaction from the consumer. So, we created
the Endeavor II by modifying its predecessor. The closest competitors for this new brand are the
Wasabi by TechZilla and the U-Work by U-Tech.
There are a few differences in these brands:
-Endeavor II and Wasabi hold CD read/write capabilities—U-Work doesn’t.
-Only U-Work has DVD read/write capability.
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-U-Work and Endeavor II contain statistical analysis software—Wasabi doesn’t.
-Wasabi and Endeavor II have 19’’ high resolution monitor—U-Work has 21’’.
-Only U-Work has the standard keyboard. Endeavor II and Wasabi have expanded
keyboard with hot keys.
The Endeavor II is tied with the U-Work with a United States brand judgment score of 70,
coming in behind the U-Work’s 73. U-Tech thus holds 46% of the Workhorse market share with
Techzilla holding 24% and we at all task hold 18%.
Voyager: Our second product created was the Voyager—built to meet the expectations of the
Traveler group. Other segment competitors include the U-Trek PRO by U-Tech and the Pandora
by InnoTech. U-Tech again leads the United States brand judgment with a score of 76, yet we
are close behind with a 74 for the Voyager.
Differences between the brands are as follows:
-Voyager and U-Trek Pro contain DVD read/write drive—Pandora doesn’t.
-Voyager and U-Trek Pro have bookkeeping and budgeting software—Pandora doesn’t.
-U-Trek Pro and Pandora have expansion slots for adding new devices-Voyager doesn’t.
-Voyager and U-Trek PRO have antivirus software—Pandora doesn’t.
-Pandora is the only brand with Windows for professionals.
-Voyager and U-Trek PRO have Windows for professionals with high security
protection—Pandora doesn’t.
U-Tech holds 55% percent of the Traveler market share, AllTask holds 28%, and 16% of the
market share resides with Innotech.
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Research and Development:
To increase the performance of our brands and company as a whole, we will allocate a
considerate amount of funds to the research and development department. $2.987 million dollars
will be used to enhance performance of our products. This research will take roughly two
quarters, but continuous R&D will continue to take place because of our will to provide the best
products available. This introduction of new technology will give us a leg up on our
competition. However, on the other side, if competitors introduce new technology, their
advancements will skim off sales of the rest of competitors, reducing market share of the other
company’s also.
Pricing
Our pricing strategy for Alltask is based primarily on customer judgment and feedback.
Little consideration is given to the prices of competitors producing brands in the same segments.
We are trying to stay above the 95 level of price judgment by desired segments. But, if we were
to compare the prices of our brands to those of our competitors, this is what the comparison
would look like:
Workhorse (U.S.):
U-Work (U-Tech) — $3,198
Endeavor II—$2,849
Wasabi (Techzilla)—$3,100
Traveler:
Voyager— $3,169
U-Trek PRO— $3,598
Pandora— $3,000
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By reviewing the success of the other brands and their coordinating prices, you can see
that the market is fairly sensitive to price differences. Rebates tend to play a significant role in
sales numbers as well.
Promotion
For promotions, we are using a range of different advertising to get our product
information out there to our customers. Since we have a web center in the United States, we are
promoting across the country nationally to inform the entire nation that they are able to buy our
products online. So we created two advertisements to be viewed by the nation made for national
promotions, one for the Endeavour and one for the Voyager. We have three inserts for each
computer, so 6 total regional inserts in the United States. For each local city that we are in, we
put a different ad in just those cities portraying how our consumers can get their computers
locally. We have one insert in the cities in the United States, and three inserts in Canada for the
Endeavour and the Voyager. Because we just made a new computer, the Voyager II, that we
have high hopes for, we made a new add for that and placed one insert in all of the cities except
for New York. We also will have two points of purchase displays for each country, based on new
computers or leading computers. Right now we have around 7-10% of our sales will be
represented by sales. Once we have seriously increased the quality of our advertisement, we
won’t have to spend so much money on creating new ads, and can put more money into
increasing the number of inserts. We will try to keep our percentage of advertising around 8% of
our sales. Our biggest competitors have a better quality advertisement, and also more inserts.
However, they have regional advertisement for local sales, which we don’t think is well thought
out. We will eventually increase our inserts, but at a healthy rate so we don’t get ahead of
ourselves. This quarter we decided to improve all four advertisements, and create a 5th ad as well.
In quarter 4, our advertisement cost us $163,639. Since we need to increase our advertisements
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all around, our quarter 5 advertisements will be costing us $367,420. We more than doubled our
advertisement, but we also expect to sell an increasingly amount of computers. So our sales cost
is 8.37%, so we are still around our desired range.
Distribution
Geographic dispersion of AllTask is located in New York and Toronto with a Website
online. Our factory is located in Canada because of the intent to limit overhead costs of shipping
expenses. Our intent is to expand our market share in the United States and Canada before
moving overseas. Instead of having a thin layer of sales that can be volatile, we want to be
established in the markets we enter. The Workhorse segment has a potential demand of 8,602 in
New York and 7,281 in Toronto. Traveler market segments list as 6,347 in New York and 3,701
in Toronto for 12-month potential demand. To accommodate our projected growth, we plan to
have about 15 sales people for these channels based on a 1-2 salesperson growth per quarter.
These salespeople will be placed in new channels in the United States (Chicago and/or Atlanta)
and/or Canada (Calgary) at a rate of one new channel per two quarters.
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Manufacturing Plan
We at All Task have strategically placed our manufacturing center in Canada due to its
lower shipping and manufacturing costs. At our location we plan to keep expanding our fixed
capacity to fit our customer’s needs. Originally we set our fixed capacity at 25 units and we are
proud to say that we were operating at about 23 units, because of this we plan to expand in hopes
that our numbers will increase with our expansion. As it seems we will have to then follow the
trend and continually expand about once every 3-4 quarters. However we do understand that
growth can happen rapidly and we may have to act quickly when we receive current data. We are
aiming at efficiency and effectiveness understanding that there is no need to set our fixed
capacity at 100 units when we are only operating at about 23 units per day. We will continuously
save money up to expand our production because the costs rise dramatically as you go up the
ladder and eventually we will be producing close to 500 units per day. Money will be constantly
flowing into production and capacity in order to keep our business growing.
Production is also something that we will continue to focus a lot of our efforts towards.
We will do this by constantly trying to improve changeover by adjusting our target replenish
points as well as investing money into manufacturing as a whole. The more we can produce the
more we can sell and the better our changeover the less sales we lose. We will continuously
analyze our data to see what numbers we can change and where we could possibly be investing
more money in the future to make All Task the most efficient company across the board.
Production costs are also something that we will watch closely, keeping each products
production cost low will ultimately keep our customers satisfied. Research and development of
our changeover is something that we are not hesitant to place a good amount of money in
because this will also make us more efficient. If we can lower these costs we can afford to pay
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our employees more and afford to offer rebates on our products in later quarters. If we can also
reduce the amount of time it takes to change the production line from brand to brand we will be
saving money by not only making more sales but not essentially losing money to pay employees
to not produce goods. We want to know that our money is being spent in an effective way so that
we aren’t aimlessly throwing money away in essential places that it can be saved. Even if we
save $2000 dollars, which doesn’t seem like much compared to the millions invested, we can use
that money towards rebates to make our customers happier.
Looking at each of our brands we will accurately estimate demand and our potential for
sales each quarter. We plan to produce 2-3 brands in order to satisfy all of our customer’s needs
and if the need comes along we will expand our brands as well. Production will prove to be one
of the most sensitive aspects that we can change but with accurate calculations and time we will
be able to make educated decisions that will help our company to grow at a healthy rate. Each of
our products will also constantly be under a quality improvement check even if our customers
are satisfied because we believe that there is always room for more growth and keeping our
customers happy will only help that. Also if our customers are happy our business prospers by
way of reducing warranty costs and improving sales. Our quality improvement is something that
we will invest in constantly so that not only does our product work but it lasts, which will set us
apart from the rest of our competition. It isn’t only about our company reducing costs; it is
always about making the customer happy. Our reliability is something that we want to take high
pride in, we want our customers to come back to us because we have the best and most reliable
product and there is no reason that this cannot be met.
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We know that warranty costs will hurt us at first but with our constant look towards
improvement we will gradually see these numbers falling and be able to take that added capital
and invest it back into our company. We will be producing a solid product that will last for our
customer and hopefully make our brand the first brand that comes to our customers minds when
they need to purchase a new computer. Our brands are each designed to fit a wide variety of
customer needs which means that there are many aspects that we have to watch when looking at
our quality costs but we will effectively manage each aspect of this during production.
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Financial Plan
Financially, we were given 1 million dollars each quarter from selling stock. With this
money we started up our company. We set up two different sales offices in New York and in
Toronto. Then we also thought it would be a good idea to open up a web center in the United
States. We had also started to expand with two new sales offices, one in Los Angeles and one in
Montreal. We also started to put some money into R&D, and some into testing new products and
advertising. However, we were just given the option to take out 5 million dollars in equity, and
we have decided to take out 4 million out and be able to expand our company. With this money
we can expand upwards by increasing the quality of our computers and advertising, and also
improve our sales force. We can also expand outwards, and increase the number of sales offices.
Now to get into further details of what we need the money for. Our first two computers
that we made were both above a judgment rating of 70 (Endeavour got a 72, and Voyager got a
74). Even though that is acceptable for the first quarter, that score isn’t good enough for us and
can be improved. Over the next three or four quarters, we will have two computers for each
segment that we will target. From here on out, for which ever computer has a higher brand
judgment rating we will keep it. Then we will modify the other computer to make that computer
better. We will continue to do this until we have reached as high of a number as we can, or until
the simulation is over. Each computer design costs $60,000. We need this money at least once a
quarter from here on out, and that is just for the two segments that we sell to currently.
There are other ways to improve the computer that we need to take interest in also. That
other way is R&D to improve our computers for our customer needs. We decided that we would
purchase two different R&D sections. The first that we would look into is ‘High speed
network/internet connection’. With this, it will improve the computers connection, and that is a
P a g e | 24
high need for both the workhorse and traveler segments. The next section that we have decided
to invest into is ‘Long-life battery for portable’. This will only improve our laptops and will
pertain strictly for the traveler segment, but we think that with this it will improve our brand
judgment significantly. Now this is a price thing to look into for us though. Also due to costs, we
wanted to get the R&D available for our products in quarter 7 as opposed to quarter 6. The price
for high speed network/internet connection for quarter 7 is $836,607 for two quarters, and if we
wanted it available for quarter 6, it would cost us $1,989,798. Now the price for the long-life
battery for portable in quarter 7 is $657,334 as oppose to quarter 6 would cost us $1,563,413
each quarter. So if we decided to wait one quarter it would costs us $1,493,941 each quarter, and
a total of $2,987,882 of R&D to have the components ready by quarter 7. However, if we wanted
the quarters ready by quarter 6, it would cost us $3,553,211. This is a smarter choice for us,
because we want our computers to be the best possible by next Christmas season, Quarter 8. In
doing so, we need them available at least one quarter ahead. The difference to have them ready
in quarter 6 and quarter 7 is $565,329. We don’t think that we will generate enough sales in one
quarter with the number of sales offices that we have to cover that difference.
There are two more aspects that we are taking interest into our computers. The first is the
quality improvement, and the second is R&D to improve changeover. We have invested this
quarter $224,739 into improving quality of our computers. We invested in quality inspection last
quarter in only two components, the internal hard disk drive and the monitor. We think that was
worth it, but we also need to improve all aspects of our computers. So this quarter and for the
following quarters we will invest in quality improvement. It will cost $151,633 this quarter for
inspection and defect repair costs. We are unsure how much it will cost in following quarters, but
the most it will cost is the same amount. This once again will further improve our computers,
P a g e | 25
decrease defects and increase customer satisfaction. We also need to improve our changeover
greatly. In order to improve our changeover we need to invest money into it each quarter. This
quarter we invested $250,000 into changeover and will invest another $200,000 into it next
quarter to continue to improve it.
Our capital structure for our company is to try and spend/reinvest our revenues, and
money that we may get from our investors. We are continually trying to improve every aspect of
our company, and we are continually holding ourselves to a higher standard. Having high cash
balance isn’t that impressive to us if all we do is sell 2 mediocre computers in 2 cities, and just
let the money pile in. We are reinvesting into the company with R&D, changing advertisement,
modifying our computers, increasing employee wages, and being able to expand to build a bigger
company. That is the stance that we hold for our capital structure, because a great company is
more than just cash, its taking control of the market and that is what we intend to do and will
continue to do it.
Since we are taking investment from venture capitalists, they have become our investors.
In order to keep our investors happy, we need to give a return to our investors. There are two
ways that we can return back to our investors; return in building, and return in dividends. For the
next three quarters, we are going to use the money to expand and improve our company. Having
a steadily and healthy growing company will improve our stock price, and will return to our
investors with a profit in the stock market. That is clearly what our intention is for the next three
quarters, to improve our products, service, and expand into different cities. Once we have
expanded a necessary amount, we will start to pay dividends to our stockholders. Right now we
think that around quarter 8 is when we will start to pay dividends. Making these payments is very
tricky and has to be done cautiously. If we pay too high one quarter, and then cut it back the next
P a g e | 26
quarter our investors won’t be too happy. We have to give a constant dividend return with a
slight increase to keep investors happy and satisfied, as well as grow and improve our company.
So to recap our financial decisions for the next couple of quarters, we plan on taking a 4
million dollar investment from our investors. With this money, most of it is going to our R&D in
one form or another. We are going to put $1,493,941 in each of the next two quarters to improve
our computers and not get tied in with another companies R&D. We have invested $250,000 into
changeover, and another $200,000 next quarter for changeover. We are also improving our
quality by eliminating defects. This is going to cost us $151,633 this quarter, and either the same
or slightly less next quarter. So by the end of quarter 6, we will be putting in a total of
$3,471,148 into improving our computers and our production. With these improvements we will
increase our revenue, and start to expand into new cities appropriately. With opening two new
sales forces in two new cities, we expect that our revenue will be about $4.4 million, an increase
of $1.8 million with the opening of 2 new stores and improving 2 of our computers. With this
money from revenues, we will be able to expand outwards and allow our company to grow.
P a g e | 27
Human Resources Plan
All of our employees are held to the highest standards and because of that we expect that
they are meeting our customer’s needs and are able to fulfill our product demand to their highest
capabilities. We have given them all of the tools necessary to meet at least the minimum demand
of our customers and so far they are meeting our expectations. All Task expects their employees
to sell around 45-50 units per person per channel, whether it be through our web center or our
sales office locations. We have to also be able to expand our manufacturing so that each
employee has more opportunity to sell more units. Our demand for our product is expected to be
high so we will also plan to continue to expand our personnel especially through our holiday
seasons. All employees, no matter what country, are going to be held to the same standards and
they will be compensated proportionally.
Our compensation plan varies a little bit between countries according to their countries
standards. Take for instance what each country values, in the United States we will pay a higher
wage than in Canada but in Canada we will offer a better vacation package to compensate.
Across the board however we will offer the same health benefits package. Throughout the
quarters we will be giving raises across the board and this will typically be about every two or
three quarters depending on performance, sales, and demand.
P a g e | 28
Appendices
Web Customer Needs and Wants
.
Work Horse Traveler
'Easy to navigate on web site
132
122
'Security of my credit card/identity
127
133
'Easy to make purchase on web
124
112
'Wants human sales reps/support
124
124
'Like to buy on the web
120
119
'Able to track my purchase
113
127
Customer Needs And Wants
.
Work Horse Traveler
'Peace of mind-safe,secure,no hassle
124
119
'Easy to use
122
104
'Easy on eyes
120
121
'Computers are lowest price
120
107
'Fast computer to computer links
119
119
'Reliability of product (up-time)
119
122
'Fast service response time
119
112
'Available in all local markets
118
107
'Multi-purpose workstation
118
89
'Local technical service
117
116
'Minimum complexity for operators
117
107
'Savings in operator cost (training)
116
102
'Service personnel trained often
115
108
'Easy to tie into local area network
115
110
'Easy to set up and use new PC
114
113
'Little training needed before use
114
109
'Established brand name
113
106
'Recommended by others
112
116
'Fast processing and output
112
103
'Service available everywhere
111
110
'Want high performance over price
111
108
'Financial stability of manufacturer
109
103
'Able to send and receive emails
109
126
'Fast access to graphical images
109
102
'Want more productive operators
108
102
'Small footprint/size
107
121
P a g e | 29
'Can handle large scale tech. tasks
107
95
'Able to tailor to individual needs
107
106
'Need to program special functions
106
96
'Security - able to back up data
105
106
'Competent sales personnel
105
98
'Quick response to commands
104
107
'Vendor around for long time
103
101
'Ultra fast, handle large tasks
101
87
'Can see, work on multiple programs
101
99
'Courteous service personnel
100
104
'The more storage space the better
98
110
'Vendor is technical leader
97
107
'Computer is light weight
94
114
'Able to work on tiny graph. detail
'Computer aided design
(CAD)graphics
92
84
91
62
'Can be tailored to special appls.
87
105
'Can connect to office when on road
85
123
'Can use on the road
85
126
'Want to send live video files
84
68
'Portability
83
123
'Want high fidelity sound
79
109
'Fun to use
68
81
Segments By Business Function
.
Work Horse Traveler
'Office & administrative services
122
59
'Plant management
105
66
'Financial management
123
85
74
93
115
95
68
109
119
118
98
136
'Production process control
'Data processing
'Engineering
'General & corporate management
'Marketing/sales
Segments By Application
.
'Web design and management
'Statistical analysis
Work Horse Traveler
112
58
90
68
P a g e | 30
'Business graphics
'Computer aided
design/manufacturing
110
114
64
33
'Technical graphics
72
63
'Manufacturing process control
88
72
126
101
'Bookkeeping, budgeting
'Engineering/design
'Data management-accounts,
inventory
75
89
119
109
'Word Processing
126
122
'Presentations
108
131
'Communications with other
computers
120
124
Market size
.
Work Horse
Traveler
'Beijing
4,838
2,333
'Guangzhou
3,500
3,547
'Tianjin
4,544
2,538
'Shanghai
4,289
4,269
'London
9,358
5,454
'Berlin
7,157
4,363
'Rome
6,515
3,934
'Paris
6,664
4,519
'Belo Horizonte
4,902
1,881
'Sao Paulo
6,035
3,066
'Rio de Janeiro
6,720
2,401
'Curitiba
5,879
2,071
'Vancouver
5,062
2,892
'Calgary
4,453
2,508
'Toronto
7,281
3,701
'Montreal
5,978
3,513
'Los Angeles
8,164
5,723
'Chicago
8,158
5,113
'Atlanta
6,207
3,874
'New York
8,602
6,347
P a g e | 31
Price Willing To Pay
.
Work Horse
Traveler
'Beijing
2,659
3,023
'Guangzhou
2,597
2,844
'Tianjin
2,662
3,037
'Shanghai
2,493
3,071
'London
2,997
3,274
'Berlin
2,857
3,221
'Rome
3,013
3,364
'Paris
2,781
3,409
'Belo Horizonte
2,634
3,121
'Sao Paulo
2,722
3,027
'Rio de Janeiro
2,582
2,972
'Curitiba
2,541
2,955
'Vancouver
2,890
3,010
'Calgary
2,809
3,152
'Toronto
2,915
2,973
'Montreal
2,700
3,184
'Los Angeles
2,928
3,436
'Chicago
3,019
3,293
'Atlanta
2,827
3,388
'New York
3,010
3,192
P a g e | 32
Competitor Tactical Highlights
Innotech
Total Demand
Innovative
Computer
Solutions
AllTask
U-Tech
TechZilla
900
1228
637
3266
1035
Number of Sales
Offices
2
2
2
4
1
Total Sales Force
Last Quarter
12
14
8
22
7
Number of Web
Centers
1
1
1
0
1
Total Web Sales
Force Last Quarter
4
7
2
0
7
Number of
Operational Web
Traffic Features
1
5
1
0
3
Number of
Operational Web
Productivity
Features
2
4
2
0
3
Number of Brands
for Sale
4
2
4
3
2
3194
2972
3354
2973
2650
Total Local Inserts
2
6
4
16
9
Total Regional
Inserts
3
6
2
7
8
Total RD Features
Available
Average Price
Factory Location
Sao Paulo
Toronto
Toronto
Toronto
Toronto
P a g e | 33
Factory Workers
Compensation
16062
22704
21369
25447
26705
Fixed Capacity
25
25
50
25
50
Operating Capacity
17
23
11
19
18
Reliability
64
66
66
68
64
0
0
0
0
0
Current Quarter
Balanced
Scorecard