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1

Statement of Communications Objective

YA.co’s Annual Report provides an overview of our corporate performance during the operational period (June to October 2008).

The Annual Review aims to provide accurate information to meet the needs of all stakeholders who have an interest in our activities. These groups include:

YA.co Employees

Young Achievement Australia

Clients

Media

Local Communities

The following pages outline YA.co’s operational performance, growth and achievements. The Review also includes overviews by each of our departmental directors providing an insight into the management and function of their department during the operational period.

2 Our Organisation

2.1 Who We Are

YA.co is a wooden craft production company founded by a group of current UQ students with the support from Young Achievement Australia (YAA). YAA organizes business activities to foster entrepreneurship among teenagers and university students. YA.co employees are from a full spectrum of backgrounds, each bringing previous experience and a set of skills to assist in the effective operational development of the company.

2.2 What We Do

YA.co is specialized in hand made wooden decorations and accessories. YA.co believes that the best customer service is delivered by providing customers with options. As such, the distinguishable feature of our product is to integrate customers' needs into the product, by engraving customers' ideas on wooden door hangers. Our business is primarily for the educational purposes of the employees, however in accordance with YAA regulations any profit accrued throughout the operational period is redistributed to the shareholders of YA.co.

YA.co | Annual Report 2007 | Page 1

the operational period is redistributed to the shareholders of YA.co. YA.co | Annual Report 2007 |

3

Board of Directors

3 Board of Directors Christine Yeung Managing and Manufacturing Director Currently, in the third year of

Christine Yeung

Managing and Manufacturing Director

Currently, in the third year of her BCom at UQ. Experience in management (Human and product/services) & customer service. Also prior experience in the crafts industry.

service. Also prior experience in the crafts industry. Aaron Sparshott Human Resources Director Currently, in

Aaron Sparshott

Human Resources Director

Currently, in the second year of his BSc at UQ. Prior experience in project & event management whilst previously studying BE/BEcon.

Ken Truong Co ‐ Finance Director Currently, in the first year of his MCom at

Ken Truong

CoFinance Director

Currently, in the first year of his MCom at UQ. From a marketing & corporate law background but also has practical experience in finance.

but also has practical experience in finance. Wayne Li Co ‐ Finance Director Currently, in the

Wayne Li

CoFinance Director

Currently, in the third year of his BCom at UQ. Practical experience fundamentally in finance, but also in customer service and other business roles.

but also in customer service and other business roles. Raye Newman Environmental Director Currently, in the

Raye Newman

Environmental Director

Currently, in the first year of his Diploma of Screen. Experience in graphic design/web design, also has an aptitude for creating a home environment which adheres to sustainable practices.

environment which adheres to sustainable practices. Kelly Le Sales Director Currently, in the third year

Kelly Le

Sales Director

Currently, in the third year of her BBusMan at UQ. Experience in marketing, human resources and general business.

Jenny Peng Elizabeth Coleman

Jenny Peng

Jenny Peng Elizabeth Coleman

Elizabeth Coleman

Marketing Director

Company Secretary

Currently, in the third year of her BCom at UQ. Experience in finance, research and communication and customer services.

Currently, in the first year of her BIHTM at UQ. Previous experience in YAA businesses and has acquired general business skills through work and courses.

YA.co | Annual Report 2007 | Page 2

and has acquired general business skills through work and courses. YA.co | Annual Report 2007 |

4

Managing Director’s Report

4.1 Product description

Our products are personalised door hanger by engraving the message on the spot. Our customers are provided with a broad range of colour choice for the base door hanger and different shape of wood ship on top of the door hanger.

4.2 Review of acceptance of the product

The eye catching colour attracts our target customer and they perceived our product as a unique art craft for their family and friend. Also the product fits in customer need for Christmas gift. We have been to 3 markets UQ, Trade Expo and Eagle Street Market. Although YA.co sold only small amount of product, by looking at the total number of people in those market, the percentage of total travel people attracted to our product is

4.3 Evaluate the effectiveness of strategies

Ya.co had been to 3 market which are UQ market, Eagle street market and Trade expo.

On UQ market, we were planning to attract University student by providing discount for our grand opening. However, student reaction on our product has been fairly low and the sales are mainly from mother or women searching gift for children. Therefore, the low sale is attributed to the exposure to the wrong market. In terms of store setup, the colourful and energetic energy had been successfully aligned with our product feature which are colourful and eye catching, so that the coherent image had been delivered.

The same store setup is used in other market. On Eagle street market and Trade expo, we evaluated and evolved new strategy from the experience from

the UQ market. Instead of giving discount for our product, we purchased wooden ice cream stick for a low price ($2.5 for 40 pieces), engraved our company name and certain message and gave out for free sample. The decision made based on the following reason:

o

The product is a new product that people are not fully aware of its’ existence

o

People are also not known the benefit of having the flexibility of the engraving

o

Free sample attract more people to place interest on our product

o

Comparing the cost of the giving out discount and free sample, the low cost of the wooden stick work more effective and efficient then the discount

o It is easier for us to control the cost From the reaction of our customers, the awareness of our product has been highly increased.

4.4 Overview of performance compared to goals and target significant achievements

The performance has not reached the goals and target and are not showing any return to our shareholder. We haven’t been really exposed to the right markets that have enough traffic to generate enough sales to cover the cost. As our product emphasis on spot engraving, wholesale to other shops or distribute through middle man is not suitable for our business. It has been a constant struggle for our company to find the place to sell our product and being strongly limited for our distributed channel.

YA.co | Annual Report 2007 | Page 3

sell our product and being strongly limited for our distributed channel. YA.co | Annual Report 2007

The lack of corporation on our team also causes slow progress and delay reaction upon the low record of sales.

4.5 Return to shareholders

Currently we are still working on our sale to the community and doing our best to gain the return for our shareholder. However, in terms of return to our shareholder from our current financial statue, we are making lost at the moment.

4.6 Expression of thanks to the Sponsor Company and mentors

We had two irresponsible mentors who only attended a few meetings in this group. However we still would like to give our appreciation to their effort and limited advices. Special thanks however are appropriate, to Jennifer Chew and Laura Turner from YAA in assisting our company through its development and operational phases.

Christine Leung Managing & Manufacturing Director YA.co

YA.co | Annual Report 2007 | Page 4

phases. Christine Leung Managing & Manufacturing Director YA.co YA.co | Annual Report 2007 | Page 4

5

Departmental Overviews

5.1 Human Resources

Our people form a fundamental component of YA.co and as such focus was directed into effectively utilising individuals’ skills and subsequent integration into the company’s organisational structure. An initial assessment of each individual was undertaken to determine current skills and past experience to guide the appointment of roles within YA.co. Employee’s details and all other relevant information to the HR team were stored using the leading open source human resources management (HRM) software, OrangeHRM (OrangeHRM Inc.). Staff retention rates over the course of the operational period were below par, with three employees leaving the company. To accommodate the loss of these three employees, modifications were made to the organisational structure with the appointment of Kalie Le to Sales Director. Staff recruitment strategies were entirely ineffective, with no new employees hired beyond the initially start date. The main reason cited was, that the lack of a reliable mentor was viewed as a factor affecting the stability of the company.

Effective communication amongst employees was crucial, and as such secondary mediums were set up to provide a backup to the use of just email alone. The Facebook group initially played a pivotal role in employee communication, but during the operational period its use diminished. An attributing factor to its diminished role was that response time was too slow via this medium. Attendance of YA.co employees was reasonable, despite a breakdown in communication and leave procedures outlined in the business plan. Training was provided in engraving to employees by Christine Leung (Managing/Production Director) on the basis of artistic skill and a willingness to learn. Employees did acquire basic skills through this training regime, however to ensure the quality of our product, Christine Leung undertook most of engraving process.

YA.co lacked mentor support throughout the operational period, whilst not catastrophe it was detrimental to smooth operation of YA.co. Mentor support would have particularly been beneficial in situations that required an external mediator. To some degree, the role of the mentor was carried out by Young Achievement Australia officials (Jennifer Chew and Laura Turner) who offered professional advice where appropriate.

At YA.co people are not only our greatest asset but also the driving force of our group. YA.co’s small team of dedicated and enthusiastic employees has in itself created a work environment in which each individual has shown the capacity to willingly accept new responsibilities and overcome the challenges that arise.

and overcome the challenges that arise. Aaron Sparshott Human Resources Director YA.co YA.co |

Aaron Sparshott Human Resources Director YA.co

YA.co | Annual Report 2007 | Page 5

the challenges that arise. Aaron Sparshott Human Resources Director YA.co YA.co | Annual Report 2007 |

5.2 Manufacturing

5.2.1 Product selection, including testing and the evaluation of alternatives In the beginning stage:

The product we plan is wood pledge attached with string Due to the complexity, high cost and high man power involved to produce our original product, we adopt the alternative which is door hanger with a hole. The alternative not only reduces the work involved to produce the final product but also provide convenience to our customer by simply hang on their doorknob.

In terms of choice of material and colour:

Since there has been change in the use of material, due to the irresponsibility of the suppliers, we change the production progress. Instead of simply engrave on top of the former pine wood door hanger, we have to paint on the existing door hanger and stick small pine wood chip on top, so that not only it will provide a better quality to prevent damage, but it also act as a more attractive element in our product. This new features are more welcome by children and mothers.

Steps in the production process

Stage 1: Stage 3: Stage 2: Paint Different Paint satin colour small wood chip/ plastic
Stage 1:
Stage 3:
Stage 2:
Paint Different
Paint satin
colour
small wood chip/
plastic crystal

5.2.2 Production targets and outcomes, perhaps with an annotated graph showing improvements in production rates The product progress is functioning in an ideal scale and efficiency. All production process involved 3 people Production targets Stage 1: 10 hours paint 100 pieces in 10 different colours. Every 10 pieces in an hour Stage 2: 10 hours paint 100 pieces Every 10 pieces in an hour Stage 3: Stick on the spot with a glue gun. 30 second.

Review Stage 1: 4 hours paint 100 pieces Stage 2: 6 hours paint 100 pieces Stage 3: 10 second

5.2.3 Systems to ensure quality and safety We have glove and mask for painting staff to reduce the smell Manufacturing director as a professionally trained supervisor for the whole producing process Safety box have been well placed to provide instant cure for any accident

YA.co | Annual Report 2007 | Page 6

Safety box have been well placed to provide instant cure for any accident YA.co | Annual

5.2.4 Recognition of suppliers and subcontractors First suppliers Crazy Clerk A well know and recognised corporation selling different variety of product. Material purchased: Pine wood door hanger for 21 pieces However due to lack of demand, their inventory is not enough to supply to us for the rest of period. Notes: we purchase the rest of their stocks.

Second suppliers Custom creations Melbourne family wood craft supplier Material purchased: 100 pieces scrape wood (original order: pine wood) Our original agreement is 100 pieces pine wood door hangers for $1 each, however when the stock arrived, we found out they gave us scrape wood without any notification. Considered more cost and time will spent on returning and finding the original wood, we decided to use it and change the product so that time and resources could spend on productive activities.

5.2.5 Outstanding contributions by individuals Environmental director –Ray Marketing directorKelly They are both committed and enthusiastic teammates who show their dedications on the whole producing progress. We created an energetic and relaxing atmosphere when painting and coding the product.

Christine Leung Managing & Manufacturing Director YA.co

5.3 Environmental

The aim of Ya.co is to have a product that is friendly to the environmental from creation to completion. Eco paint and gloss were researched thoroughly, but the cost was too high for the company to make a profit. We were able to find a supplier of scrap wood, thus recycling it and also looked for the best alternatives for accessories and packaging. Overall, measures were taken where feasible to minimise the environmental costs associated with the product.

the environmental costs associated with the product. Raye Newman Environmental Director YA.co YA.co |

Raye Newman Environmental Director YA.co

YA.co | Annual Report 2007 | Page 7

associated with the product. Raye Newman Environmental Director YA.co YA.co | Annual Report 2007 | Page

5.4 Marketing

5.4.1 Overview Our marketing plan was highly effective in gaining general interest in the product, but struggled in converting general interest into sales. A summary of YA.co’s marketing operations and the effectiveness of the marketing plan against several criteria is provided for your viewing below.

5.4.2 Target market The target market for YA.co was initially teenagers, who are trying to define self identity during their adolescent year. This was later revised, as YA.co progressed and our target markets were redefined to focus on middle age parents and the elderly.

5.4.3 Methods of positioning the company and the product in the market A number of methods were used to position our company towards our target market. In the product design stage, we decided to use a variety of colours for our door hangers in order to appeal our target market segment. During the course of the business, specific procedures were put into place to ensure that our company's image, products and marketing activities were consistent and attractive to our target market audience. Examples of the procedures include: design and layout of booth at market day; special uniform design; exploring and experimenting the appropriate market place for our products (setting up booths at UQ market Day and the Riverside Markets); emarketing through YA.co’s website and personal selling.

5.4.4 Advertising, promotions and publicity generated Since there were cost constraints due to, limited capital investment and resources, only limited funds were allocated to advertising and promotions. However, besides the publicity generated through our website online, our marketing team did manage to produce some flyers to distribute during the UQ open day to generate publicity and attract attention from customers.

5.4.5 Trade Expo performance Overall, the sales result was reasonable at the trade expo given the limited people traffic on that day and intense competition from other YAA companies. The main sales methods used by YA.co were personal selling by sales people and live demonstrations at the shop front.

5.4.6 Marketing and Promotional achievements A complete market research program was designed, conducted and analysed by the marketing team, which intern helped the decision with market orientation and market mix decision. The most successful marketing avenue during the operational period was via personally selling of the product.

period was via personally selling of the product. Jenny Peng Marketing Director YA.co YA.co | Annual

Jenny Peng

Marketing Director

YA.co

YA.co | Annual Report 2007 | Page 8

via personally selling of the product. Jenny Peng Marketing Director YA.co YA.co | Annual Report 2007

5.5 Sales

The unique features and original designs established by the YA.co team were key drawcards of the product. Customers could customise their door hangers with extra decorations and messages engraved on the spot. The product is different to most competitive products, which was a crucial element of YA.co’s sales strategy. YA.co had stalls at three different markets throughout the operational period. Sales were carried out on a regularly basis at UQ market day, mainly targeting students and staffs. While operations at the UQ markets were useful due to no associated costs, the market environment lacked the key target audiences. As such, sales at UQ compared to other venues was substantially less when comparing the amount of time operating at that venue. The Trade Expo and Eagle Street Sunday markets produced better returns per amount of time in operation, probably as result of greater numbers of our target audience at those venues.

YA.co aimed to sell at least 10 pieces at the usual UQ markets, 50 pieces at Trade Expo and 30 at the Eagle Street Sunday market. Only the first two sale targets were achieved. Initially, product price was set to $10 whilst only operating at the UQ markets. Overtime, a sales strategy was developed whereby prices were altered throughout the day to maximise sales. The basic on the day sales plan for each market was that, products were sold at full price from open till 12pm and half price from noon till close. Customers who bought more than 5 pieces as one purchase would receive a discount. The total number of units sold throughout the operational period was ??? at value of ???.

The majority of YA.co’s employees had previous customer service experience ensuring that YA.co as a company portrayed a friendly and helpful image. Where employees lacked experience, they were trained and offered tips by other team members on how to deal with customers. Due to the small number of team members, each of YA.co’s employees was assigned to different stages of the selling process and positions were rotated throughout the operational period between markets.

throughout the operational period between markets. Kelly Le Sales Director YA.co YA.co | Annual Report

Kelly Le

Sales Director

YA.co

YA.co | Annual Report 2007 | Page 9

the operational period between markets. Kelly Le Sales Director YA.co YA.co | Annual Report 2007 |