Work Sample. Company Strategic Analysis.

1. Innova Simply Innovation® Ten Year Review

2. Innova Innova In The News… Simply Innovation ® Innova Innova

3. Global Operations Summary Year 15 North America Retailer Demand EL: 875,000 MF: 135,000 Market Share EL: 32.9% MF: 21.8% Europe/Africa Retailer Demand EL: 933,000 MF: 93,000 Market Share EL: 31.5% MF: 16.6% Asia Pacific Retailer Demand EL: 737,000 MF: 76,000 Market Share EL: 29.6% MF: 14.6% Plant Assembly Entry Level: 3,220,000 Multi Level: 399,000 In-house: 3,604,000 Outsourced: 15,000 Latin America Units Sold EL: 801,000 MF: 95,000 Market Share EL: 34.4% MF: 20.6% Innova Simply Innovation®

4. Net Revenues Innova Simply Innovation®

5. Earnings Per Share Innova Simply Innovation®

6. Return on Equity Innova Simply Innovation®

7. Stock Price Innova Simply Innovation®

8. Credit Rating Innova Simply Innovation®

9. Image Rating Innova Simply Innovation®

10. Strategic Vision Innova Simply Innovation ® Innova will build a loyal customer base in two strategic target markets by providing a good-quality entry-level camera at a price lower than competitors. We will provide an excellent-quality multi-feature camera for consumers who are looking for nothing but the best. Our overriding goal is to maximize shareholder value. We believe that Innova will perform its best if its employees are highly valued and appreciated. Innova will generate sustained competitive advantage through long-term investments in above-average employee compensation, productivity increases, and research & development.

11. Innova Performance Targets Simply Innovation ® Innova Forecasts: Stock Price and EPS Innova Forecasts: Return on Equity Innova Forecasts: Image Rating

13. Innova Production Strategy- Workstation Capacity Simply Innovation ® We committed to assembling as many units as possible in-house We maintained above-average workforce compensation for most of the simulation (through year 13) Utilized temporary employees during the peak production season, Quarter 3 Number of Installed Workstations Workstation Utilization Rates

14. Innova Production Strategy- Labor & Workforce Simply Innovation ® Prioritized in-house production over outsourcing Completed permanent hiring at the beginning of each year Outsourcing was only necessary in rare instances when actual demand outperformed management’s projected demand Maintained accurate forecasting Total PAT Compensation Production Costs, In-House vs. Outsourced

15. Innova Financial Strategy Simply Innovation ® Utilized positive cash flows Reinvest in the business Reward our shareholders

16. Innova Financial Strategy Simply Innovation ® Use of debt paralleled policy on dividends Long Run: Pay down debt in order to better reward shareholders Short Run: Early years carried debt on books in order to better invest in the company’s future

17. Innova Entry Level Competition Simply Innovation ® Strongest competitor during the last two years was Company C Changed their strategy in year fourteen to become a low-cost provider, placing themselves in direct fierce competition with Innova. Our second closest competitor was Company E Had a best cost strategy In certain years, Company E threatened to steal demand and market share Never threatened to surpass Innova’s performance as a whole

18. Innova Multi Level Competition Simply Innovation ® Companies C and E were our strongest competitors Pursued a differentiation strategy Innova stayed ahead of the competition Quality Set standard as the industry leader Successfully reached its strategic goal of designing a camera for consumers who are looking for “nothing but the best,” Companies C and E became market followers and provided a camera for people who were looking for “almost the best” quality at a slightly lower cost.

19. Innova Actions To Take- Entry Level Simply Innovation ® Continue to reduce our costs to keep competitive edge Strive to offer the lowest-price entry-level camera and be the low-cost leader Investors expect an image rating of 70 or above Will not lower the quality of our cameras below 2 stars Will not jeopardize our brand reputation to win a cutthroat rivalry Constant fierce price wars can result in the destruction of the entire industry Not willing to sacrifice long-term viability in order to achieve by destruction

20. Innova Actions To Take- Multi Featured Level Simply Innovation ® “Stay the course” Continue to assemble the highest level quality cameras Maintain the position of industry leader though continuous investment in research & development Remaining flexible and innovative “These investments will give us a first-mover advantage in whatever changes affect the industry’s shifts in demand.” -Dan Wesolowski CEO

21. Innova Lessons Learned Simply Innovation ® Demand and Market Share In year eight we realized how important it was to focus on decisions that would increase our demand Found that the elasticity of demand in the entry-level segment is above 1.0, which means that total revenues increase when price is lower and that consumers in our target markets were fairly sensitive to price Technical Support The more money we would invest in tech support, up to a certain extent, communicated to customers how much Innova stands behind its products. This made a great impact in our product demand From Year 9 forward, we concentrated meticulously on the precise amount to invest in tech support Over time, we increased quarterly tech support per unit from $3.00 to around $5.00

22. Innova Lessons Learned Simply Innovation ® The Human Factor Above-average employee compensation resulted in a higher quality of work Contributed to our profit margin by lowering the warranty claim rates and production costs Savings allowed us to maintain the lowest price in the entry-level segment Improved employee dependability Lowering absenteeism Delivering their best work quality on a consistent basis. Innova’s human resource policies indirectly resulted in high customer loyalty and a high company image

23. Innova Lessons Learned Simply Innovation ® Production Capacity Took a risk by expanding production capacity But if successful – like Innova’s was – the rewards can be high Recommendation to other companies is that they should outsource processes that they perform at an average or below-average level. Those processes which they do well – their core competencies – should remain in-house. Foreign Exchange Rates Affected our company’s profits more than we expected We underestimated the sizable amount of the effect

24. Questions? Innova Simply Innovation®