sabre final presentation

AnnualResults

Market Studies

Underestimating the Dynamic Nature of the Market Led to Short-Term Strategy and Ineffective Spending

Static

Consumer Trends

Cost Structure

Competition

StaticDynamic

AnnualResults

Market Studies

Underestimating the Dynamic Nature of the Market Led to Short-Term Strategy and Ineffective Spending

Analyze Competitors’ Potential Moves to Strategically Launch New Products

Red, 7%Or-

ange,

60%

Purple, 31%

Green,

2%

STAR Market Share by Cummulative Value (Y1-

Y6)

1st TO STAR

MARKET

$2.07 MILLION

R&D COSTS

$3.3 Million

Marketing Costs

6 Additional Sales Hire

Competition Cost Structure Consumer Trends

Low

High

High

Competition Cost Structure Consumer Trends

CompetitorMarketing Spending

CompetitorProducts

Analyze Competitors’ Potential Moves to Strategically Launch New Products

Low Net Return for Epsilon-Targeted BallerCompetition Cost Structure Consumer Trends

TARGET EPSILON

$1.12 MILLION

R&D COSTS

$2.8 Million Marketing

Costs

BALLER RELAUNCH EXPENDITURES

0 1 2 3 4 5 6 7

-$1.5

-$1.0

-$0.5

$0.0

$0.5

$1.0

$1.5

$2.0

Net Contribution of Epsilon Targeted Baller

PeriodD

olla

rs (

Mill

ion)

Use Total Profit Equation to Determine if Net Return is Positive

Competition Cost Structure Consumer Trends

Product Baller Banness

Gross Margin 10% 25%

Year 2

Total Profit = ( Price –

Unit Cost x Volume )– Distribution

– Holding – Marketing

Use Total Profit Equation to Determine if Net Return is Positive

Competition Cost Structure Consumer Trends

Total Profit = ( ++Price –

--Unit Cost x Volume )– Distribution

– Holding – Marketing

Product Baller Banness

Gross Margin 10% 25%

Product Barack Bama

Gross Margin 36% 43%

Year 2

Year 8

Align Product Attribute Perceptions with Customer Needs

Year 5 Device Market Perceptual Map

Per

ceiv

ed S

peed

Val

ues

Perceived Complexity Values

Competition Cost Structure Consumer Trends

Others12%

Baller12%

Caster12%

Danil10%Faldo

16%

Gats12%

Gobble17%

Hammer10%

Year 5 Epsilon Market Share by Units

OthersBallerCasterDanilFaldoGatsGobbleHammer

Align Product Attribute Perceptions with Customer Needs

DATA

Yr. 3 Yr. 4 Yr. 5

R&D Product Release

R&D Timeline Schematic

Competition Cost Structure Consumer Trends

Choose Market Segments with Predictable Attribute Shifts

Competition Cost Structure Consumer Trends

1 2 3 4 5 60

1

2

3

4

5

0.200000000000001

1.3

2.3

4.1 3.9

2

Ideal Speed Value Changes for Epsilon

PeriodId

eal S

peed

Val

ues

1 2 3 4 5 60

1

2

3

4

5

1.5 1.4

0.699999999999999

1.8

1.11.4

Ideal Weight Value Changes for Beta

Period

Idea

l Wei

ght

Valu

es

Choose Market Segments with Predictable Attribute Shifts

Competition Cost Structure Consumer Trends

BAMA Fano Goober Dragon0%

5%

10%

15%

20%

25%

30%

35%

29%

19%

14%

9%

Y8 Leaders in Beta Segment by Units

Product Names

Mar

ket

Shar

e by

Uni

ts (

%)

Focus on In-Depth Analysis Prevented Rash Decisions and Led to Long-Term Strategy

Competition Cost Structure Consumer Trends

Year 40

2

4

6

8

10

12Budget Allocation

Sales ForceMarket StudiesR&D DevicesBlitz (MKT)Banness (MKT)Baller (MKT)

Perc

enta

ge (

%)

0 1 2 3 4 5 6 7 8-$5

$0

$5

$10

$15

$20

TeamRed Net Contri-bution

Period

Mill

ions

Competition Cost Structure Consumer Trends

Year 4 Year 60

2

4

6

8

10

12Budget Allocation

Sales ForceMarket StudiesR&D DevicesBlitz (MKT)Banness (MKT)Baller (MKT)

Perc

enta

ge (

%)

0 1 2 3 4 5 6 7 8-$5

$0

$5

$10

$15

$20

TeamRed Net Contri-bution

Period

Mill

ions

Focus on In-Depth Analysis Prevented Rash Decisions and Led to Long-Term Strategy

Create Long-Term Strategies by Analyzing Underlying Information in the 3Cs

Competition:Anticipate Changing Moves

Company:Analyze Cost Structure of Investments

Consumer:Align Products to Dynamic Trends