Strategic Plan for 3D Systems

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StrategicPlan for 3D Systems

StrategicPlan for 3D Systems

Tableof Contents

Executive summary 4

Introduction 5

Company background 5

Mission statement 6

Vision statement 6

Value statement 6

Environmental scanning strategy: Creation of value and sustaining competitive advantage 7

External environment 7

General environment 8

Industry operating environment 9

Internal environment 11

Strengths and weaknesses of 3D systems including its resources (SWOT analysis) 12

Competitor analysis 13

Structure of 3D Systems 17

3D Systems competitive position 18

Business level strategies 20

Corporate level strategies for 3D Systems 21

Global strategies 21

Recommendation on the needed strategies 21

Action items 23

Task and task ownership 23

Resource allocation 24

Financial plan 24

Key success factors 24

Forecasted financials 25

Break-even analysis 26

Budget and marketing expenses 27

Risk management plan 27

Risks 27

Contingency plan 28

Conclusion 28

References 30

Executivesummary

A strategic planis an imperative activity in any firm as it allows the organizationto set priorities, focus resources, and strengthen operations toensure that all stakeholders work towards the definite and sharedobjectives. 3D Systems offers extensive 3D services andproducts such as print materials, on-demand service parts, 3Dprinters, and design tools thus, it is significant to analyze itsinternal and external environment to understand how it will pursueits goals and mission. 3D Systems strategic plan is imperativein offering a systematic guide for the realization of businesssuccess factors. The plan will help in diagnosing the competitive andenvironment situation of the firm in relation to its rivals,strategies, resources, and attainments. Besides, it will help increating a formulation and implementation guide on the activitiesthat the firm need to pursue to attain its goals and objectives inthe long-run. This means that the paper will evaluate the firm’sstrategic plan by providing a contextual outline of its systems,designs, innovations, and professionalism.

In assessing thestrategic plan, the paper will define the company’s mission, value,and vision statements, analyze its environmental aspects, conduct acompetitor analysis and a SWOT analysis. After undertaking asituational analysis, particularly supported by the SWOT analysis,the paper will relate the organization’s internal environment toits external and general environments, and provide a discussion onits business strategies. A strategic plan permits a firm to notewhether it can pursue its defined strategies and utilize itscompetitive advantage to realize success. This means that thediscussion will encompass the needed strategies within the firm’ssystems or framework and an implementation plan for applying theneeded strategies. The implementation plan helps in formulating thedefined strategies and milestones thus, the plan will help inillustrating the activities that the firm wishes to accomplish. Inconclusion, the paper will provide financial and risk managementplans to determine the effectiveness of its strategies or changemanagement. Therefore, this report evaluates the strategic plan of 3DSystems to determine the needed strategies, financials,competitive advantages, and resources that the firm needs in makingits services and products a success in the highly competitive andinnovative industry

IntroductionCompanybackground

3D Systemsdesigns, produces, and sells scanners, on-demand service parts, 3Dprinters, and software solutions. 3D Systems is a holding corporationis incorporated in Delaware, the USA in 1993 and operates in theMiddle East, Europe, and the Americas (3D Systems, 2016). Chuck Hull,the inventor of stereolithography founded the firm to create conceptmodels, functional prototypes, master patterns, and digital tools.Today, the company’s services, products, and innovations areutilized in the engineering, creation, and manufacturing stages ofmany industries such as healthcare, automotive, dental, aerospace,consumer goods, and architecture. However, the firm is notably knownfor its 3D printers particularly in creating STL andstereolithography file format (Huang, Leu, Mazumder, &amp Donmez,2015). In its effort to consolidate its 3D printing products andtechnologies, the firm’s output utilizes innovative andcomprehensive technology to target prospective consumers forpersonal, professional, and production usage. The company reliesheavily on internal technologies for the creation, enhancement, andprotection of its patents and products. The company offers more than7 core printing innovations and 50 different 3D printers and givenits extensive hold on 3D patents and hardware, the firm continues toaddress the wide spectrum of needs in the market.

Missionstatement

The firm offersconcept-to-print technologies, services, and solutions that partakein all stages of the value chain. The firm defines itself as thepioneer of 3D engineering and fabrication, a right definitionconsidering its accomplishments in the 3D industry. The organizationprides itself as the provider of inclusive 3D services, solutions,and products for professional, production, and personal use (3DSystems, 2016). Furthermore, the firm’s mission expands to drivingthe adoption of 3D printing services and solutions through ongoingtechnology and product development and focusing on industrial andprofessional applications and industries (3D Systems, 2016). Thisshows that the mission statement emphasizes on product andtechnological innovations, effective solutions and service delivery,and pursuance of innovation.

Visionstatement

A visionstatement describes a firm’s roadmap by indicating what theorganization wishes to achieve. Osterwalder and Pigneur (2013)contend that a vision statement defines a clear and inspirationallong-term desired change for a company. In this regards, 3Dsystems Corporation intends to shape the future of 3D solutionsby bringing innovative products to the market and driving newbusiness models (3D Systems, 2016). The firm will utilize its valuechains and resources to support advanced design and applications of3D products and services.

Valuestatement

A valuestatement denotes a declaration, which notifies workers and clientsabout the organization’s main concerns and core beliefs. This meansthat a value statement helps a firm to classify and connect withtargeted clients and remind workers of the set goals and priorities.3D Systems aims at becoming a global leader in the design andproduction of 3D services, solutions, and products while at the sametime enabling companies and professionals to optimize their designsand transform their workflows.

Environmentalscanning strategy: Creation of value and sustaining competitiveadvantageExternalenvironment

The externalenvironment refers to the outside factors that influence a firm’scapacity to function. A company can manipulate some of these externalaspects through marketing while other aspects require a firm to makeadjustments (Osterwalder &amp Pigneur, 2013). In this case of 3DSystems, the external elements include threats from competition,government, economy, customers, and the industry. Competitioninfluences every firm in the industry and comprises the relatedsectors with similar services and products, their markets andgeographical locations. The organization faces competition from thecreation of new technologies especially those products and servicesthat are not encompassed by the patents it owns. The companyexperiences competition from suppliers of 3D materials, printers,scanners, and tools, and firms that manufacture tools used to makemodels, molds, prototypes, and parts (3D Systems, 2016). Thecompany’s customers include midsized firms and large corporationsin a range of industries such as defense, consumer goods, automotive,and aerospace. According to the firm’s report, no client accountsfor more than 10% of its consolidated revenue (3D Systems, 2016).This shows that different clients influence the success of the firmthus, the need to extensively interact with the clients byencouraging trends and creating innovative products. On the otherhand, the government plays a significant function in influencing thesuccess of a firm, as it develops regulations and laws thatorganizations need to abide. Additionally, governments create anenvironment through which the firm can operate effectively, meaningthe lack of a favorable situation affects an organization negatively.The development and performance of the economy and the operatingindustry reflect on a firm’s success (Gibson, Rosen, &amp Stucker,2014 Laplume, Petersen, &amp Pearce, 2016). 3D Systems has become asuccess because of the existing resources, goodwill, and thealignment to innovation. The growth of the 3D sector has allowed thecompany to attain its objectives and continue to serve its clientseffectively.

Generalenvironment

The generalenvironment for the firm includes social, technology, economic,legal, and political aspects. The general external environment trendsin the (Additive Manufacturing) AM industry are relevant for 3DSystems as they can lead to opportunities and threats. Currently, theeconomic environment is in a state of uncertainty and recovery,especially from the 2008/2009 financials crises. It is worth notingthat although technology has become an important aspect in developingcompanies, most companies are still recovering from the financialcrises (Laplume et al., 2016). The company’s main customers includelarge corporations and mid-sized firms thus, it requires a certainand favorable environment to operate. The expansion of 3D Systemsincludes industrial and enterprise clients continuing to spend moreon capital equipment such as on-demand solutions and printers. Huanget al. (2015) and Petrick and Simpson (2013) projects the researchand development (R&ampD) and investment in capital equipment to growprogressively. This means that in an expanding economy, 3D Systemshas a chance to utilize its strengths in industrial offerings andcapture corporate clients. Furthermore, the projected growth servesas an opportunity for the company to market its products to the firmsusing 2D products.

Socially, the AMindustry is optimistic especially due to possibilities inintellectual property, design processes, and business potentials andoutcomes. Currently, most companies are turning to innovations andtechnologies to push their profits thus, the industry will exploitthe new realignment. Sharing, peer-sourcing, and crowdsourcingpractices have become mainstream while designing has become animportant element in most firm’s success, which means that theindustry can utilize these practices to develop. Most technologicalcompanies have taken to 3D services and products to diversify theirrevenue hence, technological changes including large-scaledigitization and advanced robotics apply to the industry greatly(Laplume et al., 2016) Wohlers, 2014. On the other hand, theindustry is experiencing major trends technology wise. According toCotteleer and Joyce (2014), the permeation of internet connectivityin countries such as USA, Germany, UK, China, and Japan shows thatthe industry can address user needs through online platforms andtools. The ubiquity of computing shows that most people have accessto internet and PCs thus, the industry can benefit greatly bydelivering services and reaching clients using the web. Furthermore,the industry’s products such as 3D printers can be connected toWi-Fi and USB protocols while most existing software can accept theuniversal file format for 3D printers.

Politicalimplications apply closely to modern digital connectivity and STLformats. The existing technology allows people to print 3D plasticelements, for example, guns, which shows that governments need toobjectively regulate 3D printing. However, the regulations shouldattempt to regulate the manufacture of illegal or unchecked productsrather than the supply of manufacturing technologies. Presently,there exists a low political risk in the regulation of 3D products,but this might change in future especially in regards to medicalapplications.

Industryoperating environment

Smith (2012) andOsterwalder and Pigneur (2013) assert that the best way to evaluatetrends in the industry operating environment is by using Porter’sFive Forces since an industry analysis should examine the interactionamong suppliers, buyers, competitors, and products or services. TheAM industry especially the 3D printing sector continues to grow andexperience technological development. This means that it has notfully developed or expanded thus, there exists numerousopportunities and engagements.

Table 1

The industry’sfive porter’s forces

Industry Structure for 3D Systems

Force

Force Strength

3D Systems Response

Competitive rivalry

High, increasing

Emphasize on innovation and quality

Threat of substitutions

Medium, decreasing

Specialized products and services

Threat of new entrants

High, increasing

Provision of superior products and services

Bargaining power of suppliers

Low, decreasing

Focus on maintaining the existing relationship with suppliers

Bargaining power of customers

High, increasing

Remain dependable, provide comprehensive products, and emphasize on quality value chains

  1. Competitive rivalry

Currently, although the industry contains numerous firms with similarproducts, it is not concentrated. The 3D sector is developing, andnot many firms have entered the sector while the existing ones havenot fully developed.

  1. Bargaining power of buyers

The industry is characterized clients from a wide range ofcategories. The majority of the clients are corporates and mid-sizedcompanies with different preferences, capacities, and necessities.This means that their power is high and companies may find it hard todeal with their preferences especially given the increasinginnovation.

  1. Bargaining power of suppliers

The choice of most suppliers is not greatly influential sincecompanies assemble the products and spare parts are purchased fromproducers. Most companies use a common technology while thedevelopment of the products requires multiple raw materials.

  1. Threat to substitution

Parts-on-demand is the main substitutes in the industry and given theincreasing innovation experienced in the market, they will soonbecome unpopular. E-commerce provides a greater convenience forclients thus, a threat to 3D printers. However, the threat ofsubstitution is not significant given the major breakthroughs beingexperienced in the industry.

  1. Threat to new entry

The threat is high especially from 2D printer manufacturers whoalready hold a great relationship with retailers and consumers. Someof these producers have high investment capacity and have alreadystarted researching the market for opportunities.

Internalenvironment

The internalenvironment includes components within a firm that define employeebehavior. These elements include management, logistics, employees,organizational values, and support activities. 3D Systems hasdeveloped a structured framework for the engineering and developmentof comprehensive products and services. Helped by a committedworkforce, the firm continues to create a favorable environment forthe production and selling of its products. The firm has notexperienced any tangible work stoppage and continues to have asatisfactory relationship with its employees (3D Systems, 2016). Theleadership of the firm has helped especially in motivating employees,acquiring employees, and diversifying the company’s patents. Theseaspects are evident in the firm’s financial statements where itrealized increased incomes from 2011 to 2013. Revenues for 2015increased from US$653.7 million in 2014 and US$513.4 million in 2013to US$666.2 million. However, risk factors in foreign markets such asforeign-exchange fluctuations continue to affect the firm’sperformance.

Strengthsand weaknesses of 3D systems including its resources (SWOT analysis)

Table 2

SWOT analysisfor 3D Systems

Strengths

Weaknesses

  • Quality and unique Product – 3D Systems provide comprehensive, quality, well-designed, and easy to use products

  • Product dimension and wide range of products and services – The firm offers a wide variety of software, 3D printers, scanners, haptic devices, print materials, and surgical simulators

  • On-line platform, experience, and research – The firm has an ongoing development and research program to enhance portfolio and new products

  • Low product awareness – 3D printers are still developing and most firms are still using 2D products thus, little awareness of the elements of 3D printers

  • Low brand recognition – the firm only has a presence in few countries.

  • The products require innovation and internet connectivity, which means limitation

  • The firm has not created a diversified and extensive value chain

Opportunity

Threats

  • International expansion – the firm has room to expand to other markets especially in Africa and parts of Asia

  • Globalization – as globalization becomes more diversified the firm will expand to growing markets and interact with companies and clients.

  • Mass distribution – currently, the firm sells to corporate and mid-sized firms but can take advantage of social networks and value chains to sell its products in mass distribution.

  • Increased competition especially with increasing threat of new entrants

  • Economic recession and unstainable growth

  • Foreign currency exchange rates fluctuations.

Competitoranalysis

The firm agreesthat it faces competition from the creation of new techniques andtechnologies. Most of the firm’s competitors include suppliers of3D materials and printers, software, scanners, and manufacturingsolutions (3D Systems, 2016). According to Wohlers Associates (2016),the 3D printing sector generated roughly US$5.2 billion globally andgrew by 25.9%. However, this growth surpassed the growth of 3DSystems, which grew by 2% to post a revenue of US$666 million. Adecrease in customer spending and increased competition negativelyimpacted the firm’s revenue. The report points to Stratasys,Lithoz, HP, Carbon, Xery, and ExOne as the main competitors of 3DSystems.

Table 3

Similar products

Competitor identification

Potential Competitors/New entrants

Direct Competitors

Apple, HP, Samsung, Metal AM Systems, BAAM, Canon, Lexmark

Stratasys, Voxeljet, Lithoz, Carbon, Xery, 3D Corporation, Makerbot, Delta Micro Factory, and ExOne

Non-competitors

Indirect Competitors/substitutes

DIY alternatives, parts-on-demand, e-commerce, Amazon, large material extrusion technology

Similar needs

Table 4

Competitoranalysis

FACTOR

3d Systems

XYZ

Stratasys

EOS, Ultimaker, and M3D (Others)

ExOne

Voxeljet

Products

3D printers (production, desktop, and professional), on-demand parts, solutions, and software

3D printers, pens, scanners, and software

3D printers (Idea, Design, Production, Technologies, and Dental series), solutions, and materials,

3D printers and scanners

3D printers (production, education, and prototyping), services

3D printers (Form 2 and Form 1+), materials, pre-form software,

Leading products

Stereolithography and Selective Laser Sintering

Stereolithography and Polyjet

Polyjet and Fuse Deposition Modeling

SLA, SLS, and Beam Melting

Binder Jetting

Electron Beam Melting

Price

Moderately high

Medium, increasing

Moderately High

Medium

Medium

Quality

High

Moderately high

High (but lower than 3D Systems

Medium

Medium

Medium

Service

Warrant, support, and maintenance

Support and services

Warrant, support, and maintenance

Maintainance, services, and support

Services and support

Services and support

Reliability

Reliable

Reliable

Moderately reliable

Moderate

Half-reliable

Not strong

Stability

Stable

Moderately stable

Issues of stability

Issues of stability

Stable

Moderately stable

Ease of Use

Easy to use

Low-to-medium usability issues

Easy to use

Moderate

Difficulty

Difficulty

Technology

Highly innovative

Innovative

Moderately innovative

Moderately innovative

Highly innovative

Highly innovative

Distribution Channels

Moderate

Moderately high

Weak

Weak to medium

Weak

Weak

Reputation

High

High

Moderate

Moderate

Weak

Weak

Market share (in terms of sales)

10%

32%

8%

45%

3%

2%

Table 5

Past incomefor the companies

3D Systems has agood trajectory and continued growth as illustrated in the diagramabove. Although the company’s net income decreased fromUS$44,119,000 in 2013 to US$11,946,000, the company will continue togrow given its revenues increased in the same period. The table showsthat the firm’s main competitors realized negative net incomesduring 2013 and 2014.

Structureof 3D Systems

The companyoperates a balanced matrix structure. This is because the firm’sChief Technology Officer and Chief Operations Officer, both of whomare in charge of project management and the Chief Financial Officerwho is in charge of finances and resource management share theresponsibilities of the firm. The three officers support the CEO andexist as the face of the company. In a balanced matrix structure, theproject and finance or facilities managers share responsibilities,exert authority and support the running of a firm. Thus, 3D Systemsfit the structure of a matrix organization. The CEO is aided byCharles Hull, co-founder, Chief Technology Officer (CTO), andExecutive Vice-President. Hull co-founded the company and holdsroughly 85 patents in 3D printing and ion optics. The co-founder ofthe firm is the CTO, which shows the company’s position as a matrixorganizational system. Other members of the executives include achief legal officer, COO, and CFO.

3DSystems competitive position

The company is apioneer in the 3D sector and continues to adopt innovative techniquesand support the development of new technologies. The company has amarket capitalization of US$1.8 billion and a market share of roughly15% (Wohlers Associates, 2016). Coupled with numerous acquisitionsand a committed labor force, the firm competes favorably in themarket.

Table 6

3D Systemscompetitive position

marKET SHARE/ High end

A B

3D Systems

Stratasys

XYZ

HP

Voxeljet

Carbon

C D

ExOne

Reputation/Segments

Highlycompetitive firms should be in the right-upper corner while followersin the market are in the left-lower corner. Box B illustrates themost competitive firms, 3D as number one followed by Stratasys, thenXYZ. Box A shows the highly moderate competitive firms, box D showsthe moderately competitive firms, and box C shows the lesscompetitive firms. Thus, the matrix shows that currently, 3D Systemsis in pole position competition wise. The firm’s position issupported by its provision of comprehensive products and solutions.

WohlersAssociates (2016) report that major corporations such as Airbus,Nike, General Electric, and Lockheed Martin have become greatlyinterested in 3D technology, which means the firm’s position in theindustry may continue to improve. However, traditional 2D technologyfirms entering the market will benefit from their existing pool ofcustomers. Given, 3D Systems history, experience, innovation,capabilities, resources, and research it might succeed in future andcontinue to become a major player in the industry.

Businesslevel strategies

The firm canutilize cost leadership and differentiation to establish competitiveadvantage and compete favorably in the market. 3D Systems has beencritical to providing differentiated and extensible solutions,development of an effective model, and acquiring technologies. Thefirm has also accelerated its 3D printer penetration through productdiversification and channel expansion. By expanding its 3D printers,the company has managed to increase revenue generation and build astable presence in the market. The firm has enhanced its businesslevel strategy by smoothing the process of offering 3D blueprints andsolutions. In fact, the provision of comprehensive solutions hasallowed 3D Systems to promote its business and become a world leaderin 3D content. The firm’s razor-razor blade approach allows thecompany to physical print and integrates materials into its systems.Furthermore, the company has developed a forward and backwardapproach, which allows the creation of digital threads. The modelallows the firm to make its products robust and innovative (Gibson etal., 2014 Wohlers, 2014). This means that research and innovationswill continue to become significant aspects of the firm’s success.

Corporatelevel strategies for 3D Systems

The company hasa corporate level approach that focuses on mergers and acquisitions,financial performance, allocation of resources, and human resourcemanagement. Traditionally, 3D Systems has managed to develop itsbusiness through acquisitions of potential competitors, as well as,the patents held by the acquired firms. The acquisitions haveenhanced its product portfolio and market share. This is evident inthe company’s acquisitions of Burbank, Simbionix, LayerWise,botObjects, and Easyway. These acquisitions are in line with thefirm’s objective of highly differentiating its products. Allocationof resources and human resource organization are evident in thefirm’s research and development approaches where it sets hugeamounts of money for employee training, development, and engagement.The organization employs technology to allocate the resources,develop skills, and enhance financial performance.

Globalstrategies

Roughly 44% ofthe organization’s revenue comes outside the USA, which shows thatthe firm depends greatly on international markets. It is worth notingthat the firm’s assembly and designs of most of its products occurin the USA thus, it experiences numerous risk factors in dealing andcompeting in the international market. This means that innovation anda competent value chain remains the key global strategies for thecompany. Furthermore, the company has outsourced the assembly of someof its products to other suppliers, and purchase components fromthird-parties. However, the firm only uses a limited number ofsuppliers to ensure quality supply and effective checks.Differentiation and leadership will determine the company’s successin the international market given consumers will likely purchaseinnovative and highly quality products.

Recommendationon the needed strategies

The firm shouldextensively utilize business, corporate, and global level strategiesto enhance its plan and desired change. Financial performance,product diversification, further acquisitions, and cyclic growthshould be part of the firm’s strategies. Currently, the firmdepends on a limited number of suppliers, which may disruptoperations, reduce control, and create a shortfall or shortage.Furthermore, the company has failed to expand to some markets and setaside some money for marketing. This has hindered the firm’s brandrecognition and product awareness. In this regards, the firm needs toextensively market its products especially through online platforms(Cotteleer &amp Joyce, 2014). Concerning the outsourcing of assemblyand supply of products to limited suppliers, the firm needs topartner with more suppliers pursuant to its controls and procedures.Increasing the number of suppliers will help the firm increase itsproduction, streamline forecasts, and ease operations.

Implementationplan

Objectives

Presently, themarket is underdeveloped due to the novelty of the 3D products andtechnologies. In addition, the report shows that the firm has a weakdistribution chain and low brand awareness hence, it should buildits strategy towards the following objectives

  1. Expand its online presence and technological development by participating at 4 events and ensuring 20,000 visits daily in its blog, website, and social platforms

  2. Increase product development and quality by reducing the time spent on production by 8 minutes

  3. Increase the sales of 3D printers by 4000, services by 3000 units, and materials by 5000 units by entering in mass distribution retailers

  4. Launching of ProX DMP 320 printer, which is engineered for high precision and optimization

Functionaltactics

The main tacticsin strategizing and applying the implementation plan will include

  1. Marketing – The firm will extensively engage in marketing especially in international markets through online and direct advertisements. The firm will market products in online and social media platforms, for instance, YouTube, Facebook, Blogs, and Twitter.

  2. The firm will set US$150 million to ensure it attains the desired objectives

  3. The company will realign operations by streamlining its human resources

Actionitems

Entry into themass distribution will be a major aspect of the firm’s strategicplan. The firm will enter into the mass retailer distribution inNetherlands, Germany, UK, and develop a software to track all theactivities. The entry into the mass distribution is aligned toreducing costs and increasing efficiency.

Milestones anddeadlines

Table 7

Milestones

3D Systems activity timeline

Activity

Timeline

Risks

Expand online presence

6 months

Costs

Human resources streamlining

15 months

Attrition and organizational holdup

Product development

12 months

Delivery and input problems

Increased sales

36 months

Costs, marketing problems

Rebranding through marketing and sales

36 months

Costs and communications challenges

Taskand task ownership

The managementwill supervise the realization of the needed objectives. Themanagement will create a group headed by a project manager to ensurethat all the activities are realized successfully. However, each ofthe tasks will have a key responsible manager to oversee the task andits aspects. The form will use CentriQS application to set,assign, oversee, regulate, manage, and track the tasks.

Resourceallocation

3D Systems willutilize US$150 million to complete all the tasks effectively. Thefirm will also utilize human resources to complete the tasks. Themarketing department, financial department, operations management,and legal department will collaborate effectively to ensure that allthe tasks are completed successfully. Technology will play a vitalrole in allocating the resources while the firm will ensure that allvariables required for the completion of the tasks remain availableto the team. The team will be allowed to use the boardroom to drawand design the framework required to oversee the attainment of thestrategic plan.

Organizationalchange management strategies

The mostsignificant aspect of any change management is the human resourceaspect. In this regards, the firm’s success will depend on theattraction and retention of key employees. The senior management iskey to the realization of the desired change management anddevelopment of the identified strategy (Smith, 2012). The 3D industrywill continue to experience competition for qualified employeesthus, it is in the interest of the firm to offer competitivecompensation package for its employees. Furthermore, the firm givenits limited resources compared to some new competitors, such as, HPwill need to engage more in research rather than acquisitions toensure it takes advantage of the existing business success factors.

FinancialplanKeysuccess factors

KSF for the firminclude

  1. The firm’s products have accuracy and model resolution. The report by Wohler Associates (2016) shows that 3D Systems` products have a quality score of more than 90%.

  2. The company’s history, experience, and research in developing comprehensive products will play a key role. Although large corporations, for example, Carbon3D and HP, have increased competition with the introduction of innovative products, they have only managed to offer printers with value added solutions and limited materials (Wohlers Associates, 2016). However, 3D Systems offers complete and comprehensive 3D services, products, and solutions.

  3. Support and help – The firm supports customer experience and care by offering warrant and communication support for its products.

Forecastedfinancials

Report by WohlerAssociates (2016) shows that the growth of 3D printing sector grew by25.9%, which shows the firm expects the demand for 3D printingsolutions to increase in future. In 2015, 3D Systems realized a 2%increase in revenue and generated US$150.7, US$257.4, and US$ 258.1million in materials revenue, product revenue, and service revenuerespectively. During the same period, the company sold a total of125,417 materials, products, and services. The company realized aconsolidated revenue of US$666,163 million, US$653,652 million,US$513,400 million, and US$353,633 during 2015, 2014, 2013, and 2012respectively.

Simulated demand= [(2015 sales + 2014 sales)/2] = 666,163 + 653,652 = US$659,907

Given theprevious growth of 2% and the projected demand in the market, theforecasted sales/revenue for the firm should stand at 2% of 2015revenue = 666,163 * 2% = 679,486 million

The firm expectsto sell an additional 12,000 units

Break-evenanalysis

In 2015, thecompany made a net income loss of 663,925 since it wrote offimpairment of goodwill and intangible assets worth 537,179 million.The company made a net income of 11,946 million in 2014, and 44,119million in 2013. The average price for the company’s solutionsstands at US$4,000

Table 8

Breakevenanalysis

Revenue Break Even 100,000 units

Assumptions

Average Sale Per-Unit Revenue $4000

Average Per Unit Variable Cost $2500

Average Sale Per Unit Revenue $4000

Estimated Annual Fixed Costs $150,000,000

Breakeven units =Overhead (fixed) costs / (average price per unit – average variablecost per unit)

= 150,000,000 /4000 – 25000 = 200,000,000 / 1500 = 100,000

The firm willneed to sell 100,000 to breakeven

Budgetand marketing expenses

The firm will setUS$45 million for marketing, which represents roughly 6.7% of thefirm’s total revenue. During 2017, the budget will be increased toUS$50 million and US$ 60 million in 2018.

Table 9

Budget

Budget Expenses

2016

2017

2018

Design

11 million

13 million

15 million

Online advertising

6 million

4 million

8 million

Distribution costs

10 million

12 million

12 million

Events and fairs

4 million

5 million

7 million

Stores

5 million

5 million

8 million

Training

5 million

4 million

2 million

PR

2 million

2 million

4 million

Press

2 million

5 million

4 million

Total

45 million

50 million

60 million

Riskmanagement planRisks

The firm’srisks include

  1. Significant competition in many elements of its business, which may cause decreased profit margins

  2. Rapid technological changes, changes in clients’ preferences and requirements, and rapid introduction of new products in the market

  3. Acquisition-related risks such as difficulties in integration, attaining objectives, assuming liabilities, unanticipated costs related to acquisitions, and diversion of management

  4. Write off of intangible assets and goodwill as evidenced by the company’s write-off of more than US$600 million in 2015

  5. Acquisitions of intellectual property and defense of the same against claims

  6. Global political, social, and economic conditions and financial markets

  7. Regulatory frameworks, foreign exchange fluctuations, and terrorism given that the firm operates globally.

Contingencyplan

The firm mayintroduce low-priced products to counteract the increasedcompetition. It can support the low prices by developing a low-costtechnology, as well as, promoting short-term price interventions andpromotions. The company will continue to review its financial andmarketing plan or reduce long-term obligations if sales decreases orproduct development withers. The company will develop effective andcomprehensive technologies to counter decreased revenue, outsourceproduction to counter foreign exchange fluctuations or globalenvironment, or undertake a venture. Ultimately, the firm canliquidate if it fails considerably to cover liabilities or continueproduction and product development.

Conclusion

A company’sstrategic plan establishes a framework for the realization orpursuance of missions, visions, objectives, and change management.The plan has reviewed the company’s strengths, weaknesses, andthreats especially as it tries to develop new products and expandinto new markets. Furthermore, the plan has reviewed the firm’sinternal and external environment and showed that despite the slowgrowth, the firm will benefit from the extensive technologicalinnovation in the industry.

References

3D Systems. (2016). 3D Systems Corporation form 10-K: Annualreport for the fiscal year ended December 31, 2015. 3D Systems.Retrieved 29 August 2016 fromhttp://www.3dsystems.com/files/2016/investor/20151231-10-K-With-Exhibits.pdf

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