Week 8 - Final Paper (Draft 2024.02.17)

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Feb 20, 2024

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1 Week 8: Final Paper John Malkin Shafaqe Tariq-Gajjala Mirela Mujakic MGMT601 - MBA Capstone Professor John Gillis February 24, 2024

2 Company Organization In the short-term Baldwin focused on the lead customers in each segment. We wanted to target maximum market share even at the expense of profits and maximize stock price. We also minimized loans and issuing stock to keep our lability low and our stock price high. Issuing stock would dilute our shares reducing the price. It was necessary monitor our competition, so we maintained leadership in each segment. Shafaqe Tariq-Gajjala was excellent at calculating R&D to maintain our products landed ahead of the competition also in forecasting product sales and product production. John Malkin focused on the financials and keeping us from running out of cash. Also Mr. Malkin focused on charting a course for our market cap and stock price. Mirela Mujakic maintained notes as we moved forward though the eight years. Our long-term goals were to have the highest stock price and highest market share. To stratify shareholders, we maintain a high percentage for our retained earnings leaving the company in a good position going forward. Since, our customers were targeted in all segments, it was necessary to balance improvements in each segment to keep the product as close to ideal demand spot. Since this would be costly, we maintained between the ideal spot and our competitors last positions for performance, size, age and MTBF. MTBF we tried to maximize in each segment. Initial Strategy Our team’s initial strategy consisted of a Differentiation Strategy with a focus on Product Life Cycle. Our strategy focuses on premium positioning, differentiation, and adaptability to set us apart from our competitors. According to LinkedIn, differentiation strategy is defined as “an approach businesses develop by providing customers with something unique, different and

3 distinct from items their competitors may offer in the marketplace” (Indeed Editorial Team, 2019). Team Baldwin’s intent was to gain a competitive advantage by minimizing R&D costs and highlighting production through easy accessibility and increased awareness. Our team chose to set pricing slightly above average initially, to gain market share, especially for high end products. This strategy proved out product uniqueness and value to our sensors. This strategy also helped maximize the market demand, in turn, allowing for increased production and new products added. By allowing our sensors to grow in demand from High Tech to Low Tech buyers as the years progressed, we aimed to increase profits and provide positive ROA with each round, helping increase stock prices and gain market share. Our higher investments were in sales promotion, aiming for extensive brand recognition, with a goal of easy discovery by consumers. Our team was on a mission to avoid unwarranted overtime while investing in minimal automation increases. We decided that to improve size and performance throughout each round, to ensure our company kept up to the pace and constancy of our competition and the market. Our capacity naturally increased ad demand of our product increased. We targeted our initial strategy to appeal to both the high- and low-end markets and shifted each year’s decisions based on prior year results. Strategy Evolution As we maintained market share leadership, our contribution margin struggled. Baldwin responded by reducing costs and increasing Total Quality Management/Sustainability investments. As Chester rose in market share, it became harder to maintain our market share. It was necessary to closely watch both Digby’s and Chester’s moves in product position, price, and

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4 age. In year 7, Andrew’s market share for low end segment skyrocketed to 25% market share. This was due to three products moved into low segment. We needed to move our low end to the ideal position to capture additional market share. Impact of the Competition Baldwin could not operate in isolation and maintain a lead in market share and sales within the industry. Our goal of producing the best product and a minimum cost required us to closely monitor the product produced by our competition. Price and specification were the primary attributes in shifting market share. Every year we would recalculate based on industry movements, our annual results, and the new position of each competitive company. Since, Erie and Ferris didn’t offer competition to our market share, these were mostly ignored to focus closely on our direct competition. Overall, it seemed most of our competition as well as Baldwin, under produced in most rounds. In the later years we needed to adjust our forecasting production as our competitors better met their forecasts. Presentation of Result What were the results? Include Sales, Profit, ROS, Stock Price, and our Balanced Scorecard. Return on Sales (ROS) maintained nearly 9%, introducing new products to help us maintain market share kept it low. In year 5, 7 and 8, we are recognizing the benefits of these investments with over 12% in these years. This further substantiated by the robust Return on Equity (ROE) which has maintained over 20% and over the last four years over 25%. Our

5 stockholders have shown their confidence in our company’s investments. Our stock price has raised every year for the last 8 years from $34.25 to $xx.xx. Future Approach Upon reviewing the performances in all eight years of the Annual Reports, several areas of opportunity for our company have become apparent, which would contribute to our sustainability and provide us with a competitive advantage. Throughout years 1 thru 6, Baldwin consistently held the highest market share, although there was a slight decline in year 7. To address this, our team could enhance our market positioning for each segment by investing more resources and time into conducting comprehensive market analysis and research. It is imperative that our company further studies market shifts in consumer behavior and understands how our competitors operate to effectively differentiate ourselves from them. Increased investment in marketing for certain segments could help bridge the gap in accessibility and awareness among our clients. Now that we have achieved the highest leverage, our company could consider retiring some of our debts to increase overall profitability. Another area of opportunity lies in enhancing our operational effectiveness and efficiency by streamlining internal processes, leveraging automation, optimizing R&D allocation, and diligently improving capacity. These measures would lead to improved productivity, reduced costs, and overall performance enhancement. Additionally, introducing new products in the high-end and size categories could bolster profitability and provide a competitive advantage, further solidifying our position in the market. Lastly, our company values investing in our employees, and therefore, nurturing talent and fostering a culture of continuous learning through training programs would

6 enhance their skills and capabilities, ultimately empowering them to be more driven and contributing to greater success. Team Effectiveness The team demonstrated a high level of coordination and strong collaboration throughout the entire 8 years. Communication was frequent, clear, and responsive, leading to effective progress. Active sharing of responsibilities allowed the team to utilize each member’s areas of expertise to achieve common goals. Additionally, the team allocated ample time each week to discuss and brainstorm various strategies, studying competitors to gain leverage and maintain competitiveness in the targeted market. Mature conflict resolution skills were evident in managing disagreements effectively. Regarding individual contributions, everyone participated actively, sharing a balanced workload, and contributing to key decisions. Each team member had opportunities to provide input and assist in the decision-making process, ensuring inclusivity and clarity. The team quickly adapted to changing market shifts and customer criteria, adjusting strategies to overcome obstacles encountered during each round. Leadership skills within the team were effective and notable, with individuals ensuring that team goals and objectives were achieved in a timely manner and understood by all. Overall, the team's adaptability, flexibility, collaboration, and cooperation were exemplary, contributing to achieving shared goals and successful outcomes in each round.

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Week 8 - Final Paper (Draft 2024.02.17)

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