Performance Lawn

Equipment:
Executive Summary

Si Wong
Professor Rankin
BAS121 Final Project
11/19/2013

Table of Content
Purpose

pg. 3

Methodology
pg. 3
Objectives
Results by Market Region
Mowers
Sales Forecast
Industry Market Assessment
Tractors
10
Sales Forecast
Industry Market Assessment
Production Cost Analysis
pg. 16
Mowers
Tractors

pg. 3
pg. 4
pg.

Overview/Conclusion
17

pg.

Sources
18

pg.

Purpose
The purpose of this executive summary is to provide an update to
clarify new questions and shed light on future sales trends and unit
production costs of mowers and tractors in each marketing region as
well as assessing future changes in market share of the industry. This
summary also provides insights on production costs for PLE mowers
and tractors.
Methodology
PLE managers have developed and provided a database of measures,
which are summarized and stored in the form of a Microsoft Excel
workbook, Performance Lawn Equipment. The database contains
various measures, recorded based on length in time, which are used to
evaluate the business performance of PLE. The following worksheets of
interest are given below:
Mower Unit Sales and Tractor Unit Sales, which provide sales by
product by region on a monthly basis. Unit sales for each region
are aggregated to obtain world sales figures.
Industry Mower Total Sales and Tractor Total Sales, which list the
number of units sold by all producers by region.
Unit Production Costs, which provides monthly accounting
estimates of the variable cost per unit for manufacturing tractors
and mowers over the past 5 years.
(Business Analytics, Evans 28-29)
Double Exponential Smoothing and Holt-Winters models were utilized
to determine forecasts based on observing overall sales and seasonal
trends, respectively. One-year forecasts were used to provide insight
on the next fiscal year and prevent major miscalculations in further
forecasts.
Objectives
Points of interest include:
I. Analyzing and forecasting sales of mowers and tractors in each
of the marketing regions.
II.
Determining industry sales trends to assess future changes in
market share.
III. Forecasting future increases in production costs of mowers and
tractors.

Results by Market Region

Mowers
North America
Unit Sales

Industry Sales

PLE and Industry sales seem to be holding a constant seasonal trend

between 2008 and 2012. We used a Holt-Winters forecasting model to
determine future trends. Looking at the model, we do not anticipate
any significant changes in the PLE market share in the next fiscal year.
South America
Unit Sales

Industry Sales

PLE and Industry sales seem to be holding a constant seasonal trend

between 2008 and 2012. We used a Holt-Winters forecasting model to
determine future trends. Looking at the model, we do not anticipate
any significant changes in the PLE market share in the next fiscal year.

Europe
Unit Sales

Industry Sales
6

PLE and Industry sales are seeing declining seasonal trends between
2008 and 2012. We notice that the Industry sales are declining at a
slower rate than PLE unit sales. We used a Holt-Winters forecasting
model to determine future trends. Looking at the model, we may
anticipate a decline in PLE market share by about 1% in the next fiscal
year.

Pacific
Unit Sales

Industry Sales

PLE and Industry sales have been seeing growth between 2008 and
2012. PLE has been seeing a slightly faster growth than the industry.
We used a Holt-Winters forecasting and Double Exponential Smoothing
models, respectively, to determine future trends. Looking at the model,
we may anticipate PLE capturing an additional 1.5% market share in
the next fiscal year.

China
Unit Sales

There is not enough information to assess growth or recline in mower

market share in China.

World
Unit Sales

Industry Sales

Looking at PLE and Industry sales trends, it seems that the seasonal
trends appear to be holding consistent between 2008-2012. We used a
Holt-Winters forecasting model to determine future trends. Looking at
the model, we may anticipate that PLE may overall anticipate a slight
decline in market share in the entire mower industry.

Tractors
10

North America
Unit Sales

Industry Sales

PLE and Industry sales have been seeing positive seasonal and overall
growth between 2008 and 2012. PLE has been seeing significantly
faster growth than the industry. We used Double Exponential
Smoothing models to determine future trends. Looking at the model,
we may anticipate PLE capturing additional market share,
approximately 5% by December, in the next fiscal year.

11

South America
Unit Sales

Industry Sales

PLE and Industry trends have been seeing an increase in sales between
2008 and 2012. We used Double Exponential Smoothing models to
determine future trends. Looking at the model, we do not anticipate
any significant changes in the PLE market share in the next fiscal year.

12

Europe
Unit Sales

Industry Sales

PLE and Industry sales are seeing declining seasonal trends between
2008 and 2012. Although we do not see noticeable differences at first,
after further assessment, Industry sales are declining at a slower rate
than PLE unit sales. We used Double Exponential Smoothing models to
determine future trends. Looking at the model, we may anticipate a
decline of about 0.5% in PLE market share in the next fiscal year.

13

Pacific
Unit Sales

Industry Sales

PLE and Industry sales have been on a slow decline between 2008 and
2012. We used Double Exponential Smoothing models to determine
future trends. Assessing future trends, PLE unit sales may remain
constant and industry sales may rebound slightly in the new fiscal year.
With this, we may see a slight loss, approximately 0.5%, in PLE market
share in 2013.

14

China
Unit Sales

Industry Sales

PLE and Industry trends have both seen an increase in sales since the
launch of tractors in China. We used Double Exponential Smoothing
models to determine future trends. Despite capturing 5% of market
share in the first 3 years, PLE may remain relatively flat to 1%
additional market share in the 2013 fiscal year.

15

World
Unit Sales

Industry Sales

PLE and Industry sales have been seeing positive seasonal and overall
growth between 2008 and 2012. PLE has been seeing significantly
faster growth than the industry. We used Double Exponential
Smoothing models to determine future trends. Looking at the model,
we may anticipate PLE capturing additional world market share,
approximately 1% by December, in the next fiscal year.
16

Production Costs
Mowers

Tractors

PLE production costs have been observed to increase since 2008.

Looking into the new 2013 fiscal year, it can be estimated that the
production costs will increase slightly every month in a linear fashion.

17

Overview/Conclusion
This report was commissioned to evaluate trends in mower and
tractor unit and industry sales in the different marketing regions
globally as well as providing insights in production costs at PLE. Double
Exponential Smoothing and Holt-Winters forecasting models are used
to determine future trends for mower and tractor sales. Through trial
and error, a Double Exponential Smoothing or Holt-Winters forecasting
model were used depending on the observations of current trends
having overall sales growth/recession, cyclical cycles, or both. Oneyear forecasts were used to provide direct insight into the next fiscal
year and not forecast too far ahead where error is greater.
While observing mower unit sales for PLE and the industry, we
notice various trends across the different marketing sectors. In North
America, mower sales and PLE market share remain constant over the
five years and in the forecast. In South America, similar observations
are noted as North America. In Europe, both PLE unit and Industry
sales were declining over the five years into the forecast. However, PLE
unit sales in Europe depicted an accelerated recession resulting in loss
of market share. In the Pacific, the sale of mowers rate of growth
exceeded the industry rate of growth, which resulted in capturing
additional market share and a forecasted capture of 1.5% by the end of
2013. Unfortunately, Chinas mower industry sales report was not
available and an absence of PLE unit sales data prevented assessing
an accurate forecast of the next year. Looking into the World data of
PLE unit sales compared to the industry, we may anticipate a decline in
overall PLE market share in the mower industry.
While observing tractor unit sales for PLE and the industry, we
notice several differences across each marketing sector. In North
America, we notice a seasonal cycle as well as a positive sales growth
in PLE unit sales and the industry. Growth of North American tractor
sales exceed the industry resulting in an anticipated 5% market share
capture by the end of the forecasted year. In South America, we notice
a positive pattern in both PLE and industry sales, however it is noted
that PLE market share may remain relatively flat for 2013. In Europe,
overall sales from PLE and industry are on the decline with the
forecasted loss in market share of half a percent. In the Pacific, a
similar issue in loss of market share can be observed. In China, we see
a healthy growth within the provided five-year data, which is
forecasted to flatten out in 2013. Looking into the World data of PLE
unit sales, tractor sales increase gradually in a cyclical fashion. World
PLE unit sales growth rate seems to be growing at a faster rate than
the industry, which concludes that PLE may overall capture slight
market share.
18

When forecasting PLE production costs of mowers and tractors, it

is observed that production costs are gradually increasing and
forecasted to continue rising into the next year.
In the end, we can expect global market share to be largely
influenced by North American sales with a slight push or pull from
growth or recession from other marketing sectors.

Sources
Evans, James. Business Analytics. New Jersey: Pearson Education, Inc.,
2013. Print.

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