Introduction

Dr. Aelred Kurtenbach and Dr. Duane Sander two electrical engineers from South Dakota State University established Daktronics Inc. in 1986.Daktronics provided its first product,Voting Display for Utah Legislature in 1970. After that the company expanded itself in new markets and added some new products in its product line.

In the starting phase of the business, sports market grew significantly and many new stadiums were built in the country therefore, demand of new display and scoreboard increased significantly. Daktronics Inc. grasped this opportunity and provided scoreboard to Winner Olympics in 1980. The company grasped opportunities and modernized itself such that in 1996, company used small bulbs with green and red LED lights to produce color on TV and other TV-like screens. Currently, the company is the world’s largest supplier of large electronic display system, electronic scoreboard and digital massaging solutions which areused in sports, communication and transportations.

The company is an internationally diversified and vertically integrated company operating in mainly steps of a product cycle from the design and engineering to manufacturing, selling and servicing of the product which gives it essence over the competitors. Furthermore, the companyuses equity source of finance for the growth.

Due to the innovative nature, diversification and a strength over the competitors, the revenue of the company increased significantly in the past and currently company pays a continuous dividend to its shareholders. However, in the current year, the financial performance of the company deteriorates significantly. In addition to this, the share price of the company decreased from 38.66 per share to7.72 per share in 2010.

In 2010, company intended to grasp the emerging opportunities to support its growth but before grasping theseopportunities company intendedto know that either it should pay the dividend to its shareholders or should use earnings to support its growthand if thecompany decidesto pay dividend then should it be increased by 10% or should remain same.

SWOT Analysis

SWOT is a method which is used to analyze the internal and external environment of the company. It has four elements Strengths, Weaknesses, Opportunities, and Threats. From these four elements, strengths and weaknesses are used to analyze the internal environment of the company while opportunities and threats are used to analyze the external environment of the company. Strengths analyze the factors which provide essence over the competitors and weaknesses analyze the factors which deteriorate the position or performance of the company.On the other hand,opportunities analyze the factors which can be grasped by the company to enhance its position or growth while threats are the factors which can deteriorate the position of the company in the future. (Susan( E. Jackson, 2003)

Strength:

Daktronics Inc. operates internationally this indicates that the company is a diversified one which strengthensthe overall profitability of the company and hence due the stable profitability the overall risk of the company is reduced.Furthermore, the company has a broad range of products (indoor and outdoor scoreboards, electronic display, video display game and others) which further strengthen its position and maintain the overall risk of the company......................

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