CORPORATE ENVIRONMENT.
So, let´s provide a few observations about Sylvania´s corporate environment:
Dominance 2, (excluding Tomahawk Corp.) shows a few statistics comparing the group controlled by us (A) vs the group not under our control (B):
To give an idea about SALES EFFICIENCY, we can see that our A "team" generates 93% of total corporate profits, controlling just 47% of the total equity.
Related to efficiency, we have included operating costs (as a % of revenues) in the far right for each corporation. Any number above 100% means the corporation cannot cover their operating costs with their income (a.k.a is losing money).
If we look for sectors with the lower costs to operate, we see both R.E. and Media at the top of the list. In this case we assume that´s so because they have virtually no competition, so they can charge a higher price for their services and have not any second thoughts about it.
Other business sectors are all above the 50% threshold, being our cosmetics subsidiary(!) (CHAN) the most efficient, making almost 2$ for each 1$ "invested" (53%), followed by SKY (61%).
That could mean a monopoly, even if disguised, is in place.
In terms of MARKET SHARE, we could look at revenues (gross earnings) to see where the chips are falling: it´s A 63% vs B 37%.
Altough local producers still control a good chunk of the consumer market, we can conclude that our team is doing quite well in terms of GROWTH. Looking at gross numbers, we increased revenues by 1 billion$ between 2020-2025 while our opponents did by a mere 180mm$, or a 5:1 or better growth ratio between them.
Looking closer we can see that most of our growth came from both our newspaper publisher and our smartphones subsidiary (SKY).
By looking at this data segments we could argue to make a case for future new ventures: high efficiency and high growth possibly means a new frontier is being opened, so we could always drive a wedge there if we move fast and can find a good and motivated manager.
Next, we included a % of revenues spent in marketing, for each corporation.
We can see that many use less than 6% of their gross income to, we guess, MAINTAIN their brand level. These would be corporations with a mature brand that are not suffering from new upgrades to their line of consumer products nor from careless diversification.
Any number above 6%, we´re guessing, speaks volumes about corporations finding obstacles pushing their products to market.
In extreme cases the expenses can go quite high (FNK 35%, STAK 41%) and we assume these players are diversifying their product lines with the wrong marketing strategy (forced mergers & corporate strategy?). We believe the only solution there would be to reset brand or risk bankrupcy.
In any case we detect a few corporations whose marketing expenses are currently low in terms of revenues (below 6%) and also have been low in absolute terms (CHAN, FRUT, FUS), probably meaning lack of appeal in products of the competition, both from other corporate players and also locally produced. Again that could give us clues about "new frontiers" for new ventures.
Another aspect included is share issuance/repurchase:
We mentioned before about our now fully incorporated subsidiary MNK (toy) repurchasing their own shares (using 218mm$ cash).
On the other side of the bridge we find that there has been a lot of reaching out to private investors for funds: two blatant examples that raised 3,2 billion$ that way are GL and SL.
As the result has been a mere increase in equity and not in earnings nor revenues, we guess they used the cash to set up resource firms. Lucky us, we haven´t had a sizable interest in any of them... so far.
CITIES.
Here first, as stated before, we sold all govt. apartment buildings to Tomahawk, and then a few public media companies to our newspaper, all at reasonable prices. By the way, we noticed (now) that these media firms sold were paid in full, but only 1/3 of the cash found its way to the city coffers...
With the cash we built a few new schools and other education facilities.
Then we lowered the tax rates as planned and set the unemployment benefits to zero.
Well, that last backfired and proved to be horrible for our R.E. business, as many people emigrated.
We were then forced to reverse policy two years later and allocated a 40% benefit as the minimum required to prevent the drain.
Cities now have to spend an extra billion$ more each year than previously planned, half of it in Lambs Grove because of growing levels of unemployment.
That, plus the (over)expansion in education facilities forced us to gradually raise income taxes to 22%, thwarting our previous plans for a high income&jobs rating.
BUDGETS then remained quite stretched for the most part of 2020-2025: As we didn´t want to deviate too far from our original intention, taxes were set to break even. As that didn´t prove to be enough we were finally forced to issue one 200mm$ bond in most cities, plus Tomahawk had to intervene by buying land.
UNEMPLOYMENT: has remained stable at the minimum 2% in all cities except in Lambs Grove, the biggest, and once richest, city, where unemployment reached at one point 4,5%.
At that time we thought a good temporary solution would be to try to put a lid on the opening of new factories in Funk (the "industrial" city) and also stave off there a runaway budget, by raising corporate taxes to 25% and so divert some factories to Lambs Grove.
In 2025 unemployment in Lambs Grove, we believe, has changed trend and now stands at around 3,5% but we cannot make sure yet that our new tax policy in Funk was the cause or even if unemployment will keep rising from now on.
PLANS: Our objective is to have a 100 level in income&jobs. When that category improves, as people get higher salaries and are fully employed, we could raise income taxes further keeping the 100 level. We assume 100 means people have enough income to buy all the stuff they care for, and can put aside some cash for a rainy day.
We believe we are doing a good job on the corporate side, but probably we could help local businesses to create some extra high paid jobs: We knew all along about the GLOBAL competitiveness rating, but we haven´t been paying too much attention to it, so we have updated the city competitiveness chart to reflect global levels so we can direct our universities to fill the gaps as follows:
- City Competitiveness-2025.png (26.71 KiB) Viewed 6671 times
We´ll increase research in the categories below 60 and stop research in those with higher levels of global competition (esp. above 100).
We´ll make Lambs Grove invest in the lower end of the range and see if locals can offer the needed jobs.
That way the city budget will become less strained. In the meantime we´ll have to raise both income taxes (25%) and corporate taxes (23%) there, as shown in the chart:
- City budget&projection-2025.png (61.72 KiB) Viewed 6671 times
We have changed the average of land sales to include the last 20 years of data so it becomes more reliable.
We´ll lower taxes in both Lynden and Glen Fork and will keep the 25% corporate tax in Funk.
NATION:
We´ll now offer two charts about Sylvania´s GDP component evolution before we start playing the next period, with some brief comments:
As you can see there´s been a big drop in the growth of consumer spending thanks to our unemployment benefit policy of no-benefits.
- GDP components-2025.gif (31.99 KiB) Viewed 6671 times
In the next chart you can see that private investment has kept increasing side by side a decrease in the number of exports, meaning a deterioration in the quality or appeal of the Sylvania brand abroad. We hope our new university research focus will revert that in the immediate future and we´ll see exports picking up again.
- Inv&exports-2025.gif (26.57 KiB) Viewed 6671 times
