Other than customizing Personal Computers to be adapted in Chi nines, Mr.. Simi also included enhanced audio capabilities into the Personal Computers which h allowed speech and melodies to be played. Since incorporation, Creative Technology Limiter's greatest achievement is the create on of the Sound Blaster line of audio cards. This has enabled Creative to leverage on its leading edge audio technology, huge user base and strong brand name to expand and introduce its products into the exciting lifestyle of the Personal Digital Entertainment market.

In June 1994, Creative gained public listing on the main board of the Singapore Stock Exchange (Sex: CA). To date, Creative Technology Limited has more than 5,000 employees worldwide. Cream dive has earned its reputation through the years to become a household brand name in Is negatron. 2. Time line - Key Events (19902008) Mid sass - Creative ventured into the CDR market and made a loss of close to US $100 million in inventory due to inflow of cheaper alternatives. April 1999, Creative launched the NOMAD line of MPH players which was later re introduced as the Move and ZEN series of MPH players.

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Creative dominated the MPH player mark et until the entry of Apple Inc. With their pod. 20012005 - Creative applied for U. S. Patent. ZEN Patent was awarded to Creative for the invention n of user interface for portable media players. This opened the way for potential legal cacti on against Apple's pod and other competing players. 2006 - Creative took legal actions against Apple. Apple paid Creative $100 million for the lice nose to use the Zen patent. Creative will also Join the "Made for pod" program which opens n ewe opportunities for the company. 2007 - Creative voluntarily delimited itself from NASDAQ. 008 - Creative Labs' technical support center located in Stillwater, Oklahoma, laid off severe I technical support staff due to Creative financial situation in 2008. 3. Their business Creative Technology Limited started off by marketing their Sound Blaster sound cards . They later moved on to produce digital entertainment products such as portable audio plan years (MPH players). Creative innovative hardware, proprietary technology, applications and services Ana bled consumers to experience hightail digital interdepartmental, anywhere. The targeted consumers are consumers who are in the Personal Digital Entertainment market.

In order to successfully target the Personal Digital Entertainment market con summers, Creative offers a complete, high quality digital entertainment experience through its hardware, software applications and services. Creative strives to have equilibrium between style and sophisticated technology. Creative is also actively expanding the power of the personal computer with a wide RA Eng of interactive personal digital entertainment product that comprises of MPH players, poor table media centers, multimedia speakers and headphones, digital and web cameras, graph hiss solutions, revolutionary music keyboards and PC peripherals.

This has allowed Creative to cater to the needs of their consumers with exceptional d Sign and technology to provide hightail digital entertainment experience. A. Major Customers One of Creative major customers is the music lovers who use the MPH players. Create Vive is also the supplier for sound cards and other hardware to major IT related companies such as International Business Machines Corporation (MM). In addition, Creative facilitates the suppliers of computer sound cards for events such as the annual World Cyber Games (WAG). B. Major Suppliers The major suppliers of Creative are "Philips" and Miami".

These 2 companies Provo De essential material (sound chips) in the manufacturing of Creative products. . Competitive Strengths Creative has forged partnerships with some of the industry's top technology companion sees and developers worldwide, fortifying their strength and leadership in product innovation and research & development. 5. SOOT analysts Creative Technology Limited Strengths 1) Creative has won numerous awards to prove and show that their products are go d. 2) Creative would do facilitates for their products to present consumers with the latest and trendiest designs. ) Creative maintain their product prices at an affordable range. They are able to Tara et consumers who have no monthly income (students). Example: Creative MPH players a re price at $90$350; Creative websites are price at $20$150. 4) Creative products cater to all age groups of people (students to working class adult s). Students would like the trendy MPH players and working class adults would like the s beaker systems that Creative has. 5) Prime location. Creative has outlets in the heart of Singapore (Plaza Singular).

Cree dative also distributes their products to major electronic stalls like Best Denied and Courts. 6) Creative is one of the pioneer companies that start producing MPH players and vary us audio products and enhancements. This would give the public confidence in their pr ducts. Weaknesses 1) Not effective budgeting and management of cost. Example: Management is spends nag large amount of funds on Research & Development when they are making a loss already. 2) Competitors are coming up with similar designs and marketing their products at a lower price. Creative cost of production or markup might be too high. ) Reputation. Creative reputation has been affected to a certain extend after its law suits with Apple Inc. Opportunities 1) With the rapid growth of technology in the market, Creative is able to take this pop rotundity market their product through internet marketing. 2) Economy is not doing well and people are spending lesser on entertainment proud acts. Creative can take this opportunity to have promotions on their products such as "buy nag the second product at 30% discount". 3) Collaboration with other audio product companies to gain economy of scale and at the same time cut cost.

Threats 1) Industry competitors. Apple Inc. Has been coming up with new and trendy product s. They combine their pod with the phone technology to create the phone. 2) Competitor's MPH players have more features than Creative. Competitor's MPH Pl areas allow user to take photo, surf the net and even play games. 3) Prices. Creative product prices are not as competitive as their other industry player Companies like Shinto produces MPH players that has the same features as Creative' s but markets their product at a much cheaper price. 6.

Achievements Since incorporation in 1981, Creative product innovations have won numerous intern sectional recognitions. Creative has received awards such as the award from the Consumer Electronics Show "Best of CUES" award for four consecutive years for Prosodies PC and music keyboards. 7. Financial Highlights A comparison of accounts in the financial statements: Fiscal year 2007 and 2008 An extract of the financial statement for fiscal year 2008: Years ended June 30 2008 STUDIO'S 2007 Net Sales $ 736,848. 00 $ 914,906. 00 Cost of goods sold $ 572,946. 00 $ 737,203. 00 Gross Profit $ 163,902. 00 $ 177,703. 0 Less Operating expenses: Selling, general and administrative $ 141,148. 00 $ 175,180. 00 Research and development $ 63,872. 00 $ 63,646. 00 Other charges $ 9,666. 00 Chairman's gift of shares to employees $ 3,774. 00 Operating Loss $ (54,558. 00) $ (61,123. 00) Gain (loss) from investments $ 18,761. 00 (1 ,880. 00) Interest income $ 10,679. 00 $ 9,916. 00 Interest expense $ (5,644. 00) $ (10,245. 00) Others* $ 12,762. 00 $ 114,622. 00 (Loss) income before income taxes and minority interest $ (19,734. 00) $ 51,290. 00 *In 2007, other income included a $100 million paid license by Apply Inc.

Analysis of financial statement: Gross Profit - Gross profit in 2008 was $163,902,000. There was a decrease in gross profit of 7. 77% a compared to the figures in 2007 of $177,703,000. This decrease in gross profit is ace potable as the world was facing the economy crisis and consumers tend to be more conservator eve in their spending. Despite the economic downturn in 2008, Creative managed to minim zee their decrease in gross profit. The 7. 77% decrease in gross profit is acceptable. Operating Expenses - Selling, general and administrative expenses have decreased by 19. 3% (a comparison between fiscal year 2008 and 2007). The decrease in the selling, general and administer retire expenses has proven that the management's cost cutting efforts are effective. The De crease in selling, general and administrative expenses was also due to the reduction in over all sales. Research and development (R&D) expenses has increased slightly by 0. 35% (a comma orison between fiscal year 2008 and 2007). The R&D expenses have increased in year 2008. T could be due to Creative effort to come up with new products to improve its sales.

Other charges - In fiscal year 2008, Creative management introduced a series of cost cutting measures. This included restructuring charges to reduce the business operation. The restricting char gees comprises of employee severance costs and other exit costs pertaining to lease cancer lotions. Creative laid off approximately 220 employees in 2008. Gain (loss) from investments - In fiscal year 2008, Creative made a gain from their investments. This has shown that Creative is able to generate a reasonable amount of income even if the overall sales I s low.

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Creative efforts in trying to make profits are remarkable as there was a change in try end from this account. In fiscal year 2007, Creative made a loss, however, in 2008, Creative mad EAI profit. Interest expenses - Interest expenses has decreased by 44. 91% (a comparison between fiscal year 2008 a ND 2007). This effort by Creative is remarkable as well. The reduction in interest expense has shown that Creative loans from other financial institutes have decreased. The reduce Zion in loans has decrease Creative chances of facing liquidation if they are unable to pay t heir loans.

Others - The figures in fiscal year 2007 was inclusive of the $100 million paid up license from Apple Inc. If there wasn't this paid up license, Creative other income would not be so high in 2007. The overall income of Creative in 2008 was As mentioned above, in 200 7, there was a paid license income of $100 million. This paid up license income is a onetime payment by Apple Inc. ND Creative would not receive such income in future years, it would not be meaningful to include this figure to compare. After removing the $100 million from the sass's income, the overall income of Creative 2007 would be ($48,710,000).

By comparing the figures in 2008 and 2007, it could be s en that the loss Creative made in 2008 was much lesser as compared to 2007. If this tree d continues, the 2009 overall income would be a positive figure. Shares: In fiscal year 2007, the highest value of Creative stock being traded in NASDAQ and S GIST is 7. 31 and 1 1. 40 respectively. The lowest value of Creative stock being traded in NAS ADS and SEX SST is 4. 78 and 7. 20 respectively. In fiscal year 2007, Creative Technology Limited has been delimited from NASDAQ voluntarily and the delegating from NASDAQ has not a effected the shares in GETS. . Future plans Longer business strategy: Creative makes strategic equity investments in companies that can provide Creative with technologies or products that management believes will give Creative a competitive advantage in the markets in which they compete in. Products: Creative short term plans for the next few years ahead is to turn their business back into profitability state by continuing the growth in their audio and MPH player businesses as mentioned in the financial report for 2007.

Percentage of Net Sales for fiscal years ended June 30 2008 2007 2006 Personal Digital Entertainment 53 % 63 % 65 % Audio Speakers and Headphones 26 % 18 % 15 % All other products **let could be seen that a large portion of sales income comes from the Personal Digit al Entertainment (MPH players). They would also be focusing on the highbrow and higher margin segments of the speaker and headphone market. Although the MPH player business does not bring in large a mounts of refit (low profit margin), Creative would still continue to focus on that sector of their business.

Creative also sees a significant growth in opportunities in one of their audio enhance meet product, the Xvi. The Xvi enabled products seen in previous years are Just the beginning of newer opportunities that can be expanded and used in other products such as a moor advanced Speaker Systems, Headphones, Portable Music and Video Players and Digit al Entertainment Products. Creative sees market potential for their X If Audio Enhancement Products in the "Made for pod" program which they are participating in.

Operations: Creative would continue to explore more strategic alternatives to improve in areas us chi as the supply chain, procurement and inventory management. Creative aims to reduce the o verbal level of operation expenses as they gain economy of scale in future years. Business debts: In order to concentrate on turning Creative back to profitability, Creative has repaid a $100 million outstanding balance of its syndicated term loan in 2008. With this repayment, Creative would be practically debt free, with no outstanding bank borrowing. This would position