Pest Analysis Of Capsim

We have cumulated a profit of $206 million over this period, second of the industry. Our goal of escalating profit has advised us to increase automation level and for cutting costs, which enabled us to have the margins of all products above 30% in 2019 and an average margin of 53.4% in 2024. Additionally, we invested to keep our products updated to the market trend with an attention to customer buying criteria. Moreover, starting from recent years, we run our full capacity with second shifts whenever the market need has a possibility to accommodate our production. To achieve a greater profit, we based our pricing strategy on the market movements in general by decreasing our price by $0.50 every year except for our Low End product-Acre.

1.3 ROE
Our ROE ratio is 19.5% whereas the industry average is 15.38% (excluding the unprofitable company). We invested the most efficient amount on the Promo Budget and Sales Budget in order to reach 100% awareness and kept high accessibilities for every product. For eliminating undesirable expense, we also borrowed the right amount of debt to maintain an appropriate interest rate. To further reduce costs, we initiated TQM Management, which facilitated reductions in several aspects over 10% and increased demand by 14.40%. Besides, we paid dividends in the recent years to lower our equity and utilized leverage effect.

Maintaining the strategy in High End with our product Adam was unprofitable since other companies have introduced new products in early stages while our company did not invest in new products. Adam could not keep up with the market trend in 2019, which had forced us to abandon High End segment. Therefore, we sold our stocks and shifted Adam from High End segment to Traditional segment in 2020.

At the beginning, we did not invest massively in Size and Performance segments for Promotion and Sales. However, we did not rush into withdrawing from the two segments either and kept the two products, Aft and Agape, to determine how well the market would grow. Later on, we discovered opportunities for the two segments as they are less competitive, especially the Size segment. We developed Aft and Agape by increasing Promotion and Sales Budgets accordingly from 2020. With this considered, we are currently adopting a broad differentiator strategy.