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Marbles story : a traditional and booming game !

Marbles story : a traditional and booming game !. People play marbles for ages : Egyptians, Greeks, Romans used to play marbles… One of the oldest marbles (Oxford museum) should have 6 000 years Not only children play marbles, but adults as well Easy to carry, easy to play

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Marbles story : a traditional and booming game !

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  1. Marbles story : a traditional and booming game ! • People play marbles for ages : Egyptians, Greeks, Romans used to play marbles… • One of the oldest marbles (Oxford museum) should have 6 000 years • Not only children play marbles, but adults as well • Easy to carry, easy to play • Low cost/low price • Worlwide business today ! BD Terrier Conseil

  2. Marbles business • Product may look traditional, despite manufactured with modern technologies • Must comply with safety regulations • Product’s look has to be very attractive: flashy or subtle colors • Tough competition from Asia; ww market • Cost structure (Europe): about 1/3, 1/3, 1/3 materials, manpower, depreciation • Channels of distribution changing quickly • Before: retailers and small local shops • Today: more & more large stores and internet • Offer: trend to a limited diversification • Materials: (ceramics, stones, composites) • Additional games (marbles cicuits) BD Terrier Conseil

  3. Marbles March story • « Marche & fils » company was founded in 1873, near Paris • The company was sold in 1965 to Mr Jean-Claude Martinez, who moved all the facilities near Marseilles, keeping the same brand name and updating all the manufacturing process • After his death in 1988, his heirs sold part of the shares to venture capital funds banks (40%), and some individuals (25%). • One of them, Denis Agathe, is CEO; he kept the « Marche » name in France, and developped abroad the new brand name «Marbles March » • Under his prudent and innovating management, « Marbles March » SA has enjoyed a steady and profitable growth • Sales 2003 : 45 M€ (export 30 %); EBIT/Sales 12 % • Markets require new investments • 3 major projects are presented to executive committee and need to be ranked (business attractivity, financial return, risks…) BD Terrier Conseil

  4. Marbles March key data (2003) BD Terrier Conseil

  5. Marbles March major projects (summary) • Marketing & Development VP, Hervé Lenoir, would like to extend the existing offer to « Hi-Tech » marbles, producing flashes when hitting an obstacle • Sales VP, Jacques Leblanc, intends to takeover « Princess Cheung Ping » company (China), to develop the local and booming market • Operations VP, Georges Marron, heading IS department, wants to set in an Erp, due to poor reliability and performance of existing systems BD Terrier Conseil

  6. « Hi-Tech » projectmain assumptions • Requires 7 M€ budget in 2004 and 2005 • New offer, in a « niche » market, should lead to 6 M€ incremental sales (in 2006) • Growing after by 30 % pa • With attractive selling prices => 50% gross profit • Generating moderate operating expenses increase BD Terrier Conseil

  7. « Hi-Tech » project – summary BD Terrier Conseil

  8. « Hi-Tech » project – cumulative DCF BD Terrier Conseil

  9. « China » projectmain assumptions • Requires 3 M€ budget in 2004 and 2005 • Incremental sales 4 M€ (in 2004) • Growing after by 15 % pa • With discounted selling prices => 34% gross profit • Generating moderate operating expenses increase • And limited incremental working capital (COD) BD Terrier Conseil

  10. « China » project – summary BD Terrier Conseil

  11. « China » project – cumulative DCF BD Terrier Conseil

  12. « Erp » projectmain assumptions • Requires 6.5 M€ budget in 2004 and 2005 • Generates savings (5 M€ operating expenses) then implies moderate operating expenses increase • Improves the performance of supply & distribution chain => decrease of Working Capital • Improved delivery time => small incremental sales (1 M€ in 2006), growing later by 10% pa with improved gross profit margin (45%) BD Terrier Conseil

  13. « Erp » project – summary BD Terrier Conseil

  14. « Erp » project – cumulative DCF BD Terrier Conseil

  15. « Marbles March » projects:how prioritize ? • The 3 projects require 15 M€ in 2004 and 2005 • i.e 150 % Net Present Value (as of end 2003) • Board of Directors does not intend to take risks • Denis Agathe is concerned about the decision to be made • He requests your assistance BD Terrier Conseil

  16. « Marbles March » projects : Questions • On the basis of the above informations, prioritize the projects according multiple-criteria analysis • Market priorities and strategic considerations • Financial return (data and assumptions may be amended) • Risk management • Your findings and recommendations to be • Summarized in a 10-12p report to be given to Stéphanie Viega (due date: April 13th) • Presented to the all class on April 14th (5p PowerPoint) hot line: terrier.comte@wanadoo.fr BD Terrier Conseil

  17. Income statement - definitions BD Terrier Conseil

  18. Balance sheet – definitions BD Terrier Conseil

  19. Balance sheet – definitions BD Terrier Conseil

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