Gemini Electronics Essay

609 Words Oct 18th, 2015 3 Pages
Shiheng Pan
AGEC 630
14 September 2015
Case Memo 01
Case Summary
After six years of working in the electronics industry, Dr. Frank Wang came back to California and started Gemini Electronics. With a goal to reverse the domination TV brands in America to an American company, Gemini shortly achieved 35 percent of the market share and became the largest TV producer in the U.S.
Recommendations
Geographically diversify into Central and South America market. Relocate manufacturing to Mexico while remain R&D and product development in America to reduce cost. Funding in R&D for new products that fit with the trend of technology. Advertising and promotion in the title of American made brand.
Financial Analysis
Since 2005, the profit per
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Work in progress turnover is almost 13 times higher than the industry average which could due to the long shipping time of key components from overseas. Expanding Gemini’s Mexico manufacturing facility will not only contribute to cost reduction, but will also reduce the work in progress turnover. Relocating its manufacturing to Mexico will also be supportive for opening Central and South America markets. Mexico is geographically in the middle of the continent and surrounded by oceans. This will benefits for both side on the continent on shipments and also provide a lower labor cost for Gemini. See Table 2 and Table 3.
On Gemini’s profitability ratio graph, we can observe that the return on equity and return on investment has significantly dropped from 2006. Operating margin and net margin have been decreasing since 2006 even though they are still above the industry average. The decreases on gross margin and gross profit all show the need of expanding to new markets and the need to boost sales. Besides expanding into Central and South American markets, investing in advertisements will also help Gemini accelerate its domestic sales. Having the tag of “made in America” will attract customers for their patriotism. Technology in TV market is growing fast. Following the technology trend and developing new products with the latest technology is becoming more important to sales. Funding in R&D and product development will help Gemini maintain its position

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