Dear Board of Directors Essay Example for Free

Dear Board of Directors EssayUpon engageing a Broad Differentiation strategy, Andrews follow desired to chuck one across highly demanded products in each of the market segments, hold the majority market cover 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 smart set proved to be more difficult than expect due to high apostrophizes in marketing and RD, garbing in automation of sensors and due to our ratiocination to take out most of our loans in the early stages of our product, leading to negative profits for the first ii 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 remainder to hold high demand, continue cutting be with total quality focussing initiatives and by reeva luating our capacity and production issues, which will be discussed throughout the course of our analysis. Research and Development congruous allocation of funds towards research 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 social function 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(prenominal) price than competitors later on, thus obtain higher profit among other initiatives. Our high demand was essential in offsetting the costs associated with commit in marketing and promotional budgets, buy/sell capacity 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 customers of all types and charge a premium for our excellent designs. Another reward Andrews had over our competitors was that we forecasted at our potential market share, rather than our actual, based on the presumption 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 can then start to cut costs in this department. Finances supervise spending and Andrews finances was perhaps the most vital part of our success. In the earlier years of our go with 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 experienced a steep increase in sales, composition variable costs gradually increased (Exhibit 2). The extra debt we took out early on we believe to have assisted with the prominent increase in profits each year (Exhibit 3). One thing Andrews could have done to in addition assist with the increase in profits was to issue germinate, 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 nevertheless success of Andrews Company was production versus capacity. While production was upwards of 18,000+, capacity only resulted in more or less 11,000. Each year we gradually invested more and more in automation and capacity due to our insurrection profits, which allowed us to improve our margins (Exhibit 5). We should have properly invested in capacity in the earlier rounds to help bridge circuit 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 much so that this coul d not happen. TQM and Human ResourcesIn 2017, Andrews met labor demands 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 bullion each year on training employees for a maximum of 80 hour and recruiting spend of near $4.5 million each year, increasing our productivity index to 129.9% by the end of 2021. At the beginning of 2016, Andrews make an executive decision to invest in total quality management. Of a budget of $4 million, we portion $1.5 million in2016 and 2017, then another $600 thousand in 2018. After this amount was spent, we would have seen change magnitude 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, especially during this three-year span when competitors did not spend enough in TQM. The Future of AndrewsAndrews Company will continue to use its method of patient of differentiation in the upcoming 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, pass clientele a superior design. Appendix