1.
Andrews Corporation
Business Plan
BUSI
20173,
Section
074
Texas
Christian
University
Contributors:
Blake
Crowley,
Laura
Frazier,
Mackenzie
Hall,
Hannie
Tran,
Sydney
Wood
2. 2
Table of Contents
I.
Executive
Summary…………………………………………………………………….
3
II.
Company
Description…………………………………………………………………
4
III.
Market
Analysis………………………………………………………………………..
6
IV.
Products
and
Services……………………………………………………………….
8
V.
Strategy
and
Implementation
Summary…………………………………….
9
VI.
Financial
Plan……………………………………………………………………………
11
3. 3
Executive Summary
Since
the
beginning,
Andrews
Corporation
has
been
serving
both
the
low
and
high
tech
markets
of
the
sensor
industry.
We
distinguish
ourselves
from
competitors
by
creating
cutting
edge
high
tech
sensors
and
allowing
them
to
mature
into
the
low
tech
segment.
Using
affordable
pricing,
embracing
change
and
aiming
for
innovation,
we
hope
to
be
at
the
forefront
of
both
low
and
high
tech
segments.
We
value
customer
relationships
and
ensure
that
our
customers
are
receiving
their
ideal
product
from
a
company
they
know
and
trust.
We
currently
produce
Able,
a
sensor
that
was
introduced
into
the
high
tech
segment,
but
is
maturing
into
the
low
tech
segment.
As
Able
exits
in
high
tech,
we
plan
on
introducing
a
new
sensor,
Alpha,
to
retain
high
tech
sensors.
As
each
sensor
we
produce
matures,
it
will
eventually
need
to
be
phased
out,
however,
we
will
continue
to
introduce
new
high
tech
products
to
compensate
for
our
maturing
sensors.
Many
of
our
competitors
have
a
focus
in
the
low
tech
segment,
allowing
our
strategy
to
dominate
the
high
tech
segment.
By
the
time
our
products
have
moved
into
the
low
tech
segment,
they
will
be
at
the
perfect
age
and
have
the
positioning
to
appeal
to
this
segment.
Upon
their
introduction,
our
sensors
will
have
a
higher
price
due
to
the
research
and
material
costs
of
cutting
edge
technology.
However,
as
the
sensor
moves
into
the
low
tech
segment,
price
will
decrease
in
order
to
appeal
to
low
tech
buyers.
We
plan
on
driving
awareness
so
that
customers
know
about
our
products
and
will
invest
heavily
in
accessibility
in
order
to
be
leaders
in
customer
service.
With
such
high
demand
for
our
products,
we
plain
on
avoiding
stock
outs
by
investing
in
capacity.
In
doing
so,
we
also
hope
to
lower
increased
costs
due
to
second
shift
production.
In
order
to
raise
capital
for
R&D,
Marketing,
and
Production
we
plan
on
using
long-‐term
debt
as
the
primary
source
of
raising
capital
and
issuing
stock
as
a
secondary.
Because
of
low
interest
rates,
long
term
maturity,
and
the
ability
to
retain
majority
ownership
of
the
company,
long
term
debt
is
the
most
effective
way
of
raising
capital
for
our
company.
However,
if
we
need
to
raise
additional
capital
we
will
issue
stock.
Also,
since
we
phased
out
our
Acme
sensor
we
had
an
initial
influx
in
capital
from
factory
liquidation.
At
Andrews
we
strive
to
make
the
best
sensors
in
the
market,
which
means
we
will
heavily
rely
on
reinvesting
our
profits
back
into
the
development
of
our
sensors.
This
means
that
we
are
going
to
keep
our
cash
reserves
under
3%
and
will
not
give
out
dividends
to
our
stock
holders.
However,
we
believe
that
our
performance
will
cause
us
to
have
the
highest
stock
price,
which
will
make
up
for
not
giving
dividends
to
our
shareholders.
Finally,
we
are
going
to
use
stock
price,
profits,
and
market
share
to
accurately
gauge
our
performance.
4. 4
Company Description
Andrews
Corporation
is
a
sensor
company
in
the
business-‐to-‐business
market
that
manufactures
and
sells
electronic
sensors.
We
were
formed
in
2014
when
the
government
split
an
existing
sensor
monopoly
into
smaller
companies.
When
this
happened,
the
Andrews
Corporation
became
one
of
the
first
leading
sensor
companies
in
the
emerging
market.
Sensors
play
a
key
role
in
the
technological
world
and
have
been
implemented
in
a
variety
of
industries
such
as
airlines,
smart
phones
and
power
generation.
By
understanding
the
demands
of
not
only
high
quality
but
also
price
competitive
sensors,
we
aim
to
operate
in
both
the
high
tech
and
low
tech
markets.
Cutting
edge
technology
and
ideal
positioning
focus
will
distinguish
Andrews’
products
from
other
competitors
in
the
niche
market.
We
will
make
investing
in
the
promotion
and
sales
budgets
of
our
sensors
a
top
priority
in
order
to
maintain
high
customer
awareness
and
accessibility,
because
we
believe
our
products
meet
and
exceed
our
customer’s
expectations.
This
strategy
requires
a
dedicated
team
to
follow
a
vision
and
mission
statement
set
in
stone
by
the
management
team.
This
establishes
what
we
value
as
a
company
and
guides
our
company’s
direction
and
ultimate
purpose.
It
has
been
shown
that
companies
who
have
a
vision
statement
stand
apart
as
the
best
and
most
exceptional
because
vision
statements
give
companies
a
clear
picture
of
what
their
businesses
should
and
could
be.
As
a
new
company,
we
have
realized
the
importance
of
a
clearly-‐defined
vision
in
supporting
our
success
now
and
in
the
future.
With
this
in
mind,
we
created
of
our
potential
vision,
mission
and
values:
Vision:
At
Andrews
Corporation
we
strive
to
serve
the
needs
of
our
customers
by
providing
a
variety
of
effective
sensor
options
through
developing
cutting
edge
sensors
that
mature
into
reliable
products.
We
aim
to
be
at
the
forefront
of
both
low
and
high
tech
industries,
leading
in
affordable
pricing
while
also
keeping
a
competitive
advantage
by
embracing
change
and
aiming
for
innovation.
Mission:
Andrews
Corporation
provides
high
tech
customers
with
cutting
edge
technology
and
low
tech
customers
with
proven
reliability.
We
add
value
to
our
products
by
meeting
customer
needs
and
maintaining
reasonable
prices.
Values:
We
value
affordability,
innovation,
commitment,
integrity,
and
sustainability.
These
are
the
core
values
that
we
aspire
to
embody
in
the
workplace
to
help
ensure
that
our
employees
feel
inspired
and
that
our
company
has
sense
of
purpose.
We
believe
that
our
vision,
mission,
and
values
will
become
an
essential
aspect
of
our
company’s
potential
to
succeed.
Andrews
Corporation
aims
to
maximize
profits
by
valuing
the
relationships
with
our
customers
and
focusing
on
Research
and
Development
to
ensure
our
products
make
the
“fine
cut”
with
our
customer’s
preferences.
We
strive
to
fight
against
stock
out,
stagnation
and
malpractice.
We
will
have
a
dynamic
team
of
engineers
and
customer
support
representatives
who
will
serve
at
the
front
line
to
assist,
train
and
support
any
businesses
who
need
assistance
with
the
implementation
and
application
of
our
sensors.
5. 5
SWOT
Analysis
Internal
Strengths
.
High
sales
and
promo`on
budget
to
maintain
high
awareness
and
accessibility
.
Talents
aarac`on
with
good
insurance
plan
and
benefits
.
Customer
centric
.
Cucng
edge
knowledge
.
Operate
in
both
high
and
low
tech
market
.
Focus
in
innova`on
and
efficiency
.
Fast
reac`on
to
market
changes
Weaknesses
.
Error
in
calcula`on
of
product
posi`oning
.
Error
in
forecas`ng
posing
risk
of
stock
out
and
lef
over
inventory
.
Managing
budgets
and
balancing
financials
.
Bad
inflow
of
cash
.
High
carrying
cost
.
Long
adjusment
`me
External
Opportuni>es
.
Markets
grow
at
a
high
rate.
high
tech:
20%
and
low
tech:
10%
.
Technology
evolves
boos`ng
customer's
interest
.
The
collapse
of
monopoly
market
.
Equal
opportuni`es
for
all
of
the
entering
companies
.
Sensors
are
ubiquitous
.
The
increase
in
demand
for
sensors
Threats
.
Risk
from
compe``on
.
Risk
from
government's
law
and
regula`on
.
Cost
advantage
of
compe`tors
.
Compe`ng
and
ideal
products
from
compe`tors
.
Market
constant
changes
.
Customer's
expecta`ons
change
fast
6. 6
Market Analysis
Facts
about
the
industry
Andrews
Corporation
is
operating
in
a
business-‐to-‐business
market.
Our
company
sells
its
sensors
to
other
companies
to
be
used
in
their
products
which
are
then
sold
to
consumers.
Sensors
can
be
used
in
a
variety
of
areas
such
as
security,
aeronautics
and
biomedical
engineering,
creating
a
high
demand
for
sensors
across
an
array
industries.
As
technology
becomes
society’s
norm,
more
and
more
products
are
going
to
require
sensors.
The
already
high
and
increasing
demand
for
sensors
creates
the
perfect
opportunity
for
Andrews
Corporation
to
grow
and
expand
its
company.
Technology
grows
more
advanced
every
single
day
which
means
the
sensor
industry
is
constantly
evolving.
A
cell
phone
uses
dozens
of
sensors,
and
as
they
become
more
advanced
consumers
will
begin
to
expect
more
from
their
phones.
This
means
that
sensors
will
have
to
be
much
more
advanced
than
they
are
today.
For
this
reason,
we
anticipate
that
the
high
tech
consumer’s
expectations
will
increase
each
year,
demanding
smaller
and
higher
performing
sensors.
To
satisfy
these
demands,
Andrews
Corporation
is
creating
new
high
tech
sensors
with
cutting
edge
technology
every
two
to
three
years
to
keep
up
with
advancing
technology.
However,
we
recognize
that
not
every
consumer
wants
cutting
edge,
which
is
why
we
focus
on
the
entire
lifecycle
of
our
products.
Low
tech
consumers
want
sensors
with
proven
reliability.
After
we
introduce
our
high
tech
sensors
to
the
market
we
allow
high
tech
demands
to
continue
to
move
towards
more
advanced
improvements
while
our
sensors
mature
into
the
low
tech
segment.
By
the
time
our
sensors
have
reached
this
segment
they
have
proven
their
reliability
to
low
tech
consumers.
However,
as
technology
advances,
high
tech
customers
will
demand
greater
improvements
than
low
tech
customers,
causing
segment
demands
to
shift
at
different
rates.
Over
a
long
period
of
time
the
low
and
high
tech
segments
will
drift
apart
and
isolate
themselves
from
one
another.
With
more
stratified
consumer
demands,
it
will
become
more
difficult
for
our
sensors
to
drift
from
the
high
tech
to
low
tech
segments.
Recognizing
this
potential,
Andrews
Corporation
has
decided
that
as
our
high
tech
sensors
drift,
we
will
make
modifications
to
the
sensors
that
will
meet
the
demands
of
our
low
tech
consumers.
Market
segmentation
With
a
focus
on
the
entire
lifecycle
of
our
products,
Andrews
Corporation
competes
in
both
the
high
and
low
tech
segments
of
the
sensor
market.
Total
demand
in
the
sensor
industry
is
10,440,000
units.
At
the
end
of
2018,
demand
in
the
low
tech
market
was
6,708,000
and
demand
in
the
high
tech
market
was
3,732,000.
In
the
low
tech
segment,
unit
demand
was
at
5,040,000
units
at
the
end
of
2015
and
has
increased
10%
each
year,
reaching
6,708,000
units
by
the
end
of
2018.
This
is
promising
for
Andrews
Corporation
because
by
the
time
out
high
tech
sensors
mature
into
low
tech
sensors,
there
will
be
more
customers
for
our
company
to
sell
its
product
to.
In
the
high
tech
segment
unit
demand
has
increased
20%
each
7. 7
year
from
2,160,000
in
2015
to
3,732,000
in
2018.
This
growth
also
represents
an
increase
in
potential
customers
as
we
introduce
new
high
tech
sensors
into
the
market.
Because
the
high
tech
segment
is
growing
at
a
faster
rate
than
the
low
tech
segment,
the
industry
is
slowly
shifting
more
towards
high
tech.
In
2015
70%
of
sensor
sales
were
in
the
low
tech
segment
with
30%
of
sales
in
the
high
tech
sector.
By
2015
those
percentages
had
shifted
slightly
with
only
64.3%
of
sales
in
the
low
tech
segment
and
35.8%
of
sales
in
the
high
tech
segment.
While
a
majority
of
sales
are
still
in
the
low
tech
segment,
over
time
high
tech
sales
will
eventually
surpass
low
tech
sales.
Andrews
Corporation
will
keep
this
in
mind
when
determining
how
much
of
each
sensor
to
produce.
The
growth
that
each
segment
is
experiencing
is
a
result
of
changing
customer
preferences.
The
high
tech
segment
is
demanding
smaller
and
faster
products
every
year.
In
2015,
high
tech
consumers
wanted
a
performance
level
of
7.4
and
a
size
of
12.6.
Between
2015
and
2018
performance
expectations
increased
2.1
to
9.5
and
size
expectations
decreased
2.1
to
10.5.
This
means
that
performance
expectations
are
increasing
an
average
of
0.7
per
year
and
size
expectations
are
decreasing
an
average
of
0.7
per
year.
This
information
is
extremely
relevant
when
deciding
to
introduce
new
high
tech
sensors
to
the
market.
New
sensors
are
in
Research
and
Development
one
to
two
years.
Knowing
the
rate
at
which
customer
preferences
move
allows
our
R&D
department
to
create
the
new
sensors
that
will
meet
our
customers’
demands
when
they
hit
the
market.
The
low
tech
segment
is
also
demanding
faster
and
smaller
sensors,
but
at
a
much
slower
rate
than
the
high
tech
segment.
In
2015
low
tech
customers
wanted
a
performance
level
of
4.8
and
a
size
of
15.2.
By
the
end
of
2018
performance
expectations
had
increased
1.5
to
a
level
of
6.3
and
size
expectations
had
decreased
to
13.7.
Based
on
this
information,
Andrews
Corporation
has
concluded
that
the
performance
expectations
for
the
low
tech
segment
increase
at
a
rate
of
0.5
per
year
while
size
expectations
decrease
at
a
rate
of
0.5
per
year.
This
information
allows
our
R&D
department
to
make
the
proper
modifications
to
our
sensors
in
order
to
satisfy
our
customers’
demands
as
they
mature
into
low
tech
sensors.
Low Tech
64.24%
High Tech
35.76%
Segment Unit Sales
8. 8
Andrews
Corporation
currently
holds
22%
of
the
high
tech
market
and
0%
of
the
low
tech
market.
However,
as
our
high
tech
sensors
mature
into
low
tech
sensors
and
we
introduce
new
high
tech
sensors,
we
anticipate
holding
25%
of
the
high-‐tech
market
and
20%
of
the
low
tech
market.
Andrews
Corporation
is
competing
against
five
other
companies.
Eerie
appears
to
be
focusing
on
low
tech
sensors,
leaving
its
share
of
the
high
tech
segment
available
to
competitors,
while
Ferris
seems
to
be
focusing
on
the
high
tech
segment,
leaving
its
portion
of
low
tech
customers
available
to
competitors.
Baldwin
and
Digby
are
competing
in
both
low
and
high
tech
segments
with
differentiator
strategy.
Both
companies
are
revising
their
products
each
year
in
an
effort
to
keep
their
designs
fresh.
Chester
is
also
competing
in
both
segments
but
is
using
a
cost
leader
strategy,
pricing
its
products
competitively
within
each
segment.
Products and Services
Current
Products
At
Andrew’s,
we
currently
offer
one
high
tech
sensor,
Able,
and
are
excited
about
the
introduction
of
an
additional
high
tech
sensor,
Alpha,
in
the
upcoming
year.
Although
Able
was
introduced
in
the
high
tech
industry,
it
is
sold
in
both
low
and
high
tech
segments.
Andrews
8.60%
Baldwin
24.20%
Chester
19.50%
Digby
21.50%
Eerie
17.00%
Ferris
9.20%
Total Market Share
9. 9
New
Production
In
past
years
we
produced
a
low
tech
sensor
called
Acme
but
we
soon
realized
it
was
in
the
best
interest
of
the
company’s
future
to
phase
out
Acme
and
have
Able
gradually
fill
its
spot
in
the
low
tech
industry.
In
our
mission
statement,
we
have
highlighted
our
goal
of
being
at
the
forefront
of
both
the
high
tech
and
low
tech
industries.
After
phasing
out
Acme,
we
put
our
focus
on
aging
Able
to
appeal
to
the
low
tech
industry
and
will
have
Alpha
dominate
the
high
tech
industry.
Although
we
currently
operate
with
a
sole
focus
on
high
tech
sensors,
we
are
aware
of
the
need
and
desire
for
low
tech
sensors
as
well.
Therefore,
we
plan
to
let
Able
age
into
a
low
tech
sensor
once
Alpha
is
introduced,
with
Alpha
remaining
a
high
tech
sensor.
Our
company
envisions
a
system
of
constantly
introducing
new
high
tech
sensors
to
replace
the
current
one
in
that
industry
and
in
return
allowing
the
replaced
sensor
to
age
and
fall
into
the
low
tech
industry.
Once
each
new
high
tech
sensor
is
introduced,
the
low
tech
sensor
at
the
time
will
be
phased
out
and
replaced.
Our
research
and
development
team
will
continually
be
inventing
new
products
and
working
to
improve
current
sensors.
Technology
By
inventing
and
producing
new
high
tech
products
every
couple
of
years,
we
will
appeal
to
the
numerous
clients
in
this
segment
who
are
interested
in
having
the
newest
forms
of
technology.
Alpha,
along
with
each
new
high
tech
sensor
introduced,
will
be
aimed
at
the
lower
right
hand
corner
of
the
perceptual
map
which
consists
of
the
newest
technological
advancements,
creating
high
demand
for
these
new
sensors.
Andrews
believes
that
as
a
corporation,
it
is
beneficial
to
appeal
to
both
customers
in
the
low
and
high
tech
industries.
When
Able
transitions
to
a
low
tech
sensor
it
will
mean
lower
prices
for
this
sensor,
attracting
customers
who
are
not
willing
to
pay
for
our
other
sensors.
Competitive
Comparison
Most
of
Andrews’
competition
has
a
majority
of
their
sales
in
the
low
tech
segment,
with
a
few
exceptions.
Since
we
plan
on
continually
introducing
new
high
tech
sensors,
we
will
dominate
the
industry,
providing
the
newest
technology
that
consumers
desire.
By
placing
Alpha
at
the
lower
right
corner
of
the
perceptual
map,
we
will
have
the
advantage
over
our
competitors.
On
the
other
hand,
our
placement
in
the
low
tech
segment
will
be
successful
because
our
sensors
that
eventually
move
into
this
segment
will
embody
the
age
that
low
tech
consumers
desire
at
the
low
price
that
they
are
willing
to
pay.
Strategy and Implementation Summary
Marketing
–
Pricing
Strategy
Our
current
sensor
Able
appeals
to
the
high
tech
market,
but
in
order
for
our
vision
of
being
a
sensor
company
that
appeals
to
both
high
and
low
tech
markets
to
be
realized,
we
plan
on
allowing
Able
to
mature
through
the
years
into
a
low
tech
sensor.
Until
then,
Able
is
currently
priced
at
$38
which
is
in
10. 10
the
ideal
price
range
of
$25
to
$45
for
high
tech
customers.
Next
year,
when
our
new
and
innovative
Alpha
sensor
is
introduced
into
the
market,
we
will
begin
the
process
of
transitioning
Able
from
high
tech
to
low
tech
by
dropping
the
price
to
$34,
which
falls
between
the
low
tech
preferred
price
of
$15
to
$35.
We
plan
on
pricing
Alpha
at
$45
once
it
becomes
available
and
though
this
is
a
steeper
price,
we
believe
that
Alpha
will
be
at
the
very
forefront
of
the
high
tech
sector,
making
the
high
price
worth
the
innovation
that
our
high
tech
customers
crave.
As
our
sensors
go
through
the
lifecycle
of
high
tech
to
low
tech,
our
prices
will
evolve
with
the
sensors
from
the
higher
prices
that
high
tech
customers
are
willing
to
pay,
to
the
lower
prices
that
keep
low
tech
customers
happy.
Promotion
and
Sales
Strategy
When
we
first
started
out
as
a
company,
we
did
not
initially
invest
as
much
money
as
we
could
have
into
our
promotion
and
selling
tactics.
However,
we
have
recently
turned
this
around
by
maximizing
our
promotion
and
sales
budgets
for
Able,
spending
$3,000,000
for
promotion
and
$4,000,000
for
sales.
This
decision
paid
off,
because
we
are
currently
this
year’s
top
high
tech
sensor
–
having
the
highest
awareness
(91%
of
our
potential
customers
for
Able
know
it
exists),
accessibility
(56%
of
our
customers
find
it
easy
to
work
with
us),
and
customer
satisfaction
survey
score
amongst
all
the
other
high
tech
sensors
in
the
industry.
We
are
proud
of
our
industry-‐leading
91%
awareness
and
strive
to
keep
our
customer
awareness
at
or
above
90%.
To
keep
our
momentum
in
awareness
and
accessibility,
next
year
we
will
spend
$1,500,000
on
promotion
to
simply
maintain
our
high
awareness
and
spend
the
peak
beneficial
amount
of
$3,000,000
on
sales.
With
our
promotion
expenditures
we
will
continue
to
drive
our
awareness
in
order
to
effectively
persuade
customers
to
choose
our
sensors.
With
our
sales
expenditures,
we
will
drive
our
accessibility
so
that
we
can
efficiently
close
the
deal
through
our
salesforce
and
distribution
channels.
Ultimately,
when
we
invest
in
accessibility,
we
invest
in
customer
service.
This
is
an
important
factor
for
us
because
at
Andrews
Corporation,
we
value
building
strong
relationships
with
our
customers.
Sales
Forecast:
11. 11
Production
Our
strategy
of
exploiting
niche
markets
and
attracting
potential
customers
led
us
to
to
introduce
Able,
our
first
product,
as
a
high
tech
sensor.
As
mentioned
above,
we
have
been
focusing
on
investing
in
promotion
and
sales
in
order
to
obtain
a
high,
industry-‐leading
percentage
of
customer
awareness
and
accessibility.
When
we
invest
in
the
sales
budget,
it
will
contribute
to
the
segment
accessibility.
This
will
help
us
raise
accessibility
in
both
markets
and
save
a
significant
amount
of
cost.
Therefore,
even
though
Able
is
a
high
tech
sensor,
it
enables
us
to
earn
market
shares
in
the
low
tech
market
and
earn
additional
profits
from
both
markets.
After
Able,
we
will
introduce
our
new
product
Alpha
as
targeting
the
high
tech
market
and
will
optimize
the
ideal
position
the
month
it
will
be
released
to
earn
the
most
revenue.
We
aim
to
take
a
high
contribution
margin
and
profit
margin
to
make
up
for
the
volume
of
sales
as
our
strategy
to
earn
as
much
cash
as
possible.
We
will
let
the
aging
product
mature
into
the
low
tech
market
and
revise
it
into
a
reliable
sensor
to
meet
this
segment’s
customer
expectations
and
use
a
high
volume
of
sales
to
earn
revenue
as
a
strategy.
Investing
in
production
will
be
our
next
concern
when
we
already
have
a
large
amount
of
cash
resulting
from
selling
Able
and
doing
financials.
Our
goal
is
to
provide
enough
capacity
to
meet
the
demand
of
each
market
to
gain
the
maximum
profit
and
avoid
stock
out.
We
plan
to
increase
in
capacity
and
automation
in
order
to
maximize
production
and
minimize
labor
cost.
This
will
allow
us
to
avoid
overtime
which
will
also
result
in
reducing
labor
cost.
We
will
have
to
focus
on
training
and
recruiting
well-‐qualified
employees
once
we
have
new
and
improved
machinery
and
processes
in
place.
However,
our
strategy
is
to
use
automation
mainly
to
reduce
the
dependence
on
human
labor
and
diversify
the
risk.
Therefore,
as
the
years
go
by,
we
will
12. 12
invest
in
TQM
in
order
to
reduce
the
adjustment
time
in
R&D
for
an
existing
product
when
we
have
a
high
automation
level.
Andrews
Corporation
already
phased
out
Acme,
one
of
our
low
tech
sensors,
because
it
was
costly
to
produce
and
didn’t
bring
profit
to
the
company.
We
will
consider
liquidating
any
product
line
that
is
no
longer
bringing
profit
to
the
company.
When
we
phase
out
a
product,
we
will
leave
at
least
one
unit
left
in
order
to
be
able
to
sell
the
product
at
full
price
instead
of
half
price.
Financial Plan
Financial
Assumptions
Andrews
Corporation
plans
to
use
long-‐term
debt
as
the
primary
option
and
issuing
stock
as
the
secondary
option
to
raise
capital.
Long-‐term
debt
gives
our
company
three
distinct
advantages
over
any
other
capital
raising
methods.
First,
long-‐term
debt
provides
our
company
with
the
necessary
amount
of
capital
needed
to
develop
our
products,
while
giving
up
no
ownership
share
company.
This
is
important
because
it
gives
our
company
more
control
over
operations
in
the
future.
Second,
the
ten-‐year
maturity
on
the
long-‐term
bonds
gives
our
company
time
to
start
generating
substantial
profit
margins.
By
giving
our
company
ten
years,
we
will
be
able
to
use
the
money
to
develop
brand
new
high
and
low
tech
sensors
that
will
increase
our
profit
margins.
Third,
we
are
predicting
that
our
new
products
successes
will
help
bring
up
our
bond
rating
and
drive
down
our
interest
rate.
By
doing
this,
long-‐term
debt
will
be
the
cheapest
method
to
finance
projects.
Currently,
Andrews
has
a
bond
rating
of
C,
but
by
introducing
our
new
Alpha
sensor,
our
profit
margins
should
rise
over
the
long
term
and
interest
should
fall.
Although
long-‐term
debt
will
be
at
the
forefront
of
raising
capital,
we
will
also
issue
stock
in
times
where
we
need
additional
capital.
For
the
next
few
years
we
will
not
be
issuing
any
stock
because
of
how
low
our
stock
price
is
currently.
Our
stock
price
is
$1
per
share
right
now
and
we
do
not
plan
to
issue
stock
till
we
are
at
least
at
$11
per
share.
We
believe
the
phasing
out
of
our
Acme
sensor
is
what
caused
our
stock
price
to
drop,
but
we
predict
that
our
stock
price
will
raise
to
its
previous
level
with
the
release
of
our
new
Alpha
sensor.
When
our
stock
price
rises
back
to
its
previous
level,
issuing
stock
will
be
a
valuable
tool
because
it
will
help
our
company
raise
extra
funds
to
either
develop
new
products
or
drastically
overhaul
a
current
product.
Another
way
in
which
we
are
going
to
raise
capital
in
the
short
term
is
through
factory
liquidation.
Since
we
have
decided
to
phase
out
our
Acme
sensor,
we
plan
to
get
to
get
a
short
term
boost
in
capital
as
we
liquidate
the
sensors
and
the
factory
capacity.
Also,
in
the
future
we
will
not
hesitate
to
phase
out
a
product
if
it
is
not
performing
to
our
standards.
We
believe
that
our
sensors
will
be
able
to
cater
to
our
consumer’s
wide
range
of
needs
and
if
our
sensors
do
not
reach
that
standard,
we
will
liquidate
them
for
extra
capital.
Andrews
Corporation
is
determined
to
be
the
best
sensor
company
industry
and
one
of
the
ways
we
are
going
to
achieve
this
is
by
being
very
aggressive
with
our
investment
strategy.
We
plan
on
keeping
less
than
3%
of
our
cash
in
reserves,
meaning
that
any
dollar
not
being
put
into
reserves
will
be
invested
right
back
into
the
company.
This
will
give
our
company
a
competitive
advantage
over
other
companies
13. 13
because
we
will
have
more
capital
being
invested
into
the
development
our
projects,
thus
they
will
be
better
tailored
towards
the
needs
of
the
customers.
The
only
time
we
would
choose
to
hold
a
substantial
cash
reserve
is
if
we
were
planning
to
phase
out
a
product.
This
will
ensure
that
we
do
not
see
the
same
results
when
we
phased
out
Acme,
where
our
stock
price
plummeted
because
we
had
to
take
out
an
emergency
loan.
Our
aggressive
investment
strategy
extends
to
how
much
we
pay
our
shareholders
for
dividends.
Since
we
are
committed
to
making
the
highest
quality
sensors,
we
will
not
be
giving
out
dividends
to
our
shareholders
because
we
want
to
use
a
majority
of
our
profits
to
reinvest
in
our
products.
This
will
help
our
company
build
better
products
and
will
help
our
company
capture
a
majority
of
the
market
share.
If
we
are
able
to
increase
our
market
share
and
profits,
then
this
will
increase
our
stock
price
which
will
make
shareholders
satisfied,
because
having
a
higher
stock
will
compensate
for
the
fact
that
we
are
not
giving
out
dividends.
However,
there
is
a
circumstance
in
which
dividends
will
be
given
out
to
stock
holders.
If
Andrews
ends
up
controlling
over
one
third
of
the
market
share,
then
the
profits
not
being
reinvested
into
R&D,
marketing,
or
profits
will
be
divided
between
all
the
shareholders.
In
order
to
track
the
financial
progress
of
the
company,
we
are
going
to
use
three
different
financial
indicators,
which
are
stock
price,
profits,
and
market
share.
Stock
price
is
a
valuable
indicator
for
financial
success
because
if
a
companies’
stock
price
is
high,
then
it
shows
people
have
faith
in
the
companies’
direction.
Profit
is
an
excellent
indicator
of
how
a
company
is
doing
because
high
profits
indicate
that
a
company
has
maximized
sales
while
minimizing
variable
costs.
Finally,
market
share
is
the
best
way
to
compare
our
company
to
other
companies
within
our
sector.
If
we
hold
the
most
market
share
out
of
any
company,
then
that
shows
we
are
the
most
successful
sensor
company.
Projected
Profit
and
Loss:
14. 14
$-‐
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
$140,000.00
$160,000.00
2018
Actual
2019
2020
2021
Sales
(dollars
in
thousands)
$(5,000.00)
$-‐
$5,000.00
$10,000.00
$15,000.00
$20,000.00
$25,000.00
$30,000.00
2018
Actual
2019
2020
2021
Profit
(dollars
in
thousands)
