Ambarella Inc

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Company Description

Ambarella Inc is headquartered in Santa Clara, California and was founded in 2004. Its main products and services include low-power, HD and Ultra HD video compression and image processing for consumer and security markets. It serves markets such as consumer electronics, automotive, drone, and IP security cameras.

Industry Overview

Ambarella Inc operates in the semiconductor industry, which is estimated to be worth around $469.8 billion in the United States. This industry employs over 1.3 million people across the country. The semiconductor industry is heavily concentrated in the United States, with approximately 70% of the global semiconductor production taking place in the US. The remaining 30% of production takes place in countries such as Japan, China, South Korea, Taiwan, Germany, and Israel.

Industry Classification

In terms of formal classification, Platform Executive has tagged Ambarella Inc as a business operating within the Semiconductors industry.

Major Products & Services

The main products and/or services commercialised by this business include:

  • High-Performance Video Processing SoCs (System-on-Chip)
  • Video Encoders
  • Video Analytics
  • Computer Vision Processors
  • Automotive Vision Processors
  • H.265/HEVC Video Compression Technology
  • IP Cameras
  • Drone Cameras
  • Robotics Applications
  • Surveillance and Security Solutions

Table of Contents

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Competitive Landscape

Ambarella Inc operates in a highly competitive environment within the technology industry. They face fierce competition from other companies that specialise in video processing and imaging solutions. These competitors offer similar products and services, and are constantly innovating to stay ahead in the market. In addition, the industry is constantly evolving and introducing new technologies, making it crucial for Ambarella Inc to stay on top of the latest trends. The competition is also intensified by the increasing demand for high-quality and high-resolution video solutions in various industries such as security, automotive, and virtual reality. To remain competitive, Ambarella Inc must continuously strive to improve and differentiate their products and services.

Key Competitors

We have identified the following organisations as being key competitors:

  • Xilinx Inc
  • Qualcomm Inc
  • Broadcom Inc
  • NVIDIA Corporation
  • Intel Corporation
  • NXP Semiconductors NV
  • Ceva Inc
  • Sony Corporation
  • Samsung Electronics Co Ltd
  • MediaTek Inc

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Key Stakeholders

Stakeholders are individuals or groups affected by a business's actions. Understanding their needs helps a business make decisions that benefit all parties.

Internal and external stakeholders include the following:

1. Customers: Ambarella Inc.’s customers include technology companies in the consumer electronics, automotive, security, and sports and medical markets.

2. Shareholders: Ambarella Inc.’s shareholders are the people who own a portion of the company’s stock.

3. Employees: Ambarella Inc.’s employees are the individuals who work for the company, developing and selling its products and services.

4. Suppliers and Partners: Ambarella Inc. works with suppliers and partners to create and innovate new products and services.

5. Government: The government sets regulations and policies that govern how businesses operate, and Ambarella Inc. must comply with these regulations.

6. Competitors: Ambarella Inc. competes with other companies offering similar products and services.

Customers and Cohorts

The main customers of the organisation include:

  • Automotive OEMs
  • Broadcast Equipment Manufacturers
  • Security and Surveillance Equipment Manufacturers
  • Consumer Electronics Manufacturers
  • Drone Manufacturers
  • Smart Home Device Manufacturers
  • Wearable Technology Manufacturers
  • Industrial Automation Equipment Manufacturers
  • Robotics Manufacturers
  • Hearing Aid Manufacturers

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

High-Performance Video and Imaging Technology: Ambarella's proprietary video and imaging technology allows for the capture of high-resolution video at ultra-low power, enabling products with longer battery life and more efficient storage.

Wide Range of Applications: Ambarella offers a wide range of applications for both professional and consumer applications, including surveillance, automotive, medical, broadcasting, and more.

Advanced Image Processing: Ambarella's advanced image processing technology allows for the real-time editing of videos and images, providing enhanced clarity and colour accuracy.

Low Cost: Ambarella's low-cost hardware solutions enable OEMs to create high-performance products at a lower cost than much of the competition.

Flexibility: Ambarella's flexible hardware solutions can be adapted to meet a wide range of customer needs.

Scalability: Ambarella's scalable solutions can be used to create products that meet the demands of a wide range of customers.

Market Trends

Market trends can significantly impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and ultimately affecting the organisation’s ability to remain competitive in the market. Staying ahead of these trends enables businesses to proactively adapt their strategies, mitigate risks, and capitalise on emerging opportunities.

As part of this study, we have identified a number of potential trends that could impact the organisation. These include the following:

Market Trends

Key Performance Indicators

Key Performance Indicators
KPIs (Key Performance Indicators) are important to a business such as Ambarella Inc as they help measure progress towards achieving organisational goals and objectives. They provide a useful insight into the performance of different areas of the Ambarella Inc business and therefore enable informed decision-making.

KPIs also help to motivate employees towards achieving targets.

Below is a list of Key Performance Indicators we deem relevant to this company:

Brand Strength

Brand strength is more than a logo or name. It reflects a company’s reputation and how it is perceived by customers, investors, and employees. It is built on core values, mission, and a unique selling proposition (USP) that differentiates the business.

Brand strength goes beyond superficial elements and taps into core values, the defined mission, and unique selling proposition (USP) of a company.

Below are key reasons why brand strength matters:

Trust and Credibility: In a market flooded with choices, customers gravitate toward brands they trust. A strong brand signals reliability and quality, fostering customer loyalty. Loyal customers not only make repeat purchases but also advocate for the brand, driving word-of-mouth growth.

Brand Strength Analysis

Differentiation: A strong brand helps a company stand out in competitive markets by clearly communicating its value proposition. It creates a unique identity, establishes a competitive edge, and positions the company as a leader in its industry. For example, Google is synonymous with internet search.

Customer Loyalty: A positive brand experience builds emotional connections, making customers less price-sensitive and willing to pay a premium. Loyal customers generate repeat business and act as brand ambassadors, reducing customer acquisition costs and boosting long-term profitability.

Talent Acquisition and Retention: A strong brand not only attracts top talent but also enhances employee morale and engagement. Employees who identify with a reputable brand are more motivated, productive, and committed, driving better business outcomes.

Benchmarking Brand Strength

Below is a guide as to the scoring mechanism used to gauge the brand strength of this company:

A

The company enjoys an excellent level of brand strength.

  • This score signifies that the company has developed a highly regarded and well-recognised brand.
  • Customers and the wider community perceive the company as trustworthy, reliable, and superior to competitors.
  • The company enjoys a strong connection with customers, who actively engage with and advocate for the brand.
  • The company's brand effectively communicates its unique value proposition.
  • The corporate attracts and retains top talent, and its reputation extends beyond its target market.
B

The company has a good brand strength, indicating that it has a solid and respectable brand presence.

  • Customers generally have positive perceptions of the company.
  • While the company may not be as distinctive or well-known as the top brands, it still differentiates itself from competitors and enjoys a loyal customer base.
  • The brand inspires some level of customer engagement and advocacy.
  • The company attracts top quality employees and maintains a good reputation. People want to work there.
C

The business has an average brand strength, meaning it is neither strong nor weak in the marketplace.

  • Customers perceive the company as ordinary or run-of-the-mill, lacking an emotional connection or distinctiveness.
  • The company faces challenges in standing out among competitors and needs to better communicate its proposition.
  • Decent level of customer satisfaction, but significant there is room for improvement in terms of brand loyalty.
  • The company's reputation is neither a huge positive, or negative.
D

The company's brand is quite weak. Work required to increase its potential.

  • Customers have mixed or negative perception of the company, associating it with average or below-average quality.
  • The business struggles to differentiate itself from its competitors and lacks a compelling value proposition.
  • Customer engagement and brand loyalty may be minimal, requiring some effort to improve the brand experience.
  • The company's reputation may have encountered challenges, poor press, or may not be well-known in the market.
E

The company's brand is weak and fails to resonate with customers and audiences. This needs to be addressed.

  • Customers perceive the company as being too unreliable, lacking in quality, or irrelevant.
  • The company struggles to differentiate itself from competitors, and there is a lack of customer engagement, or loyalty.
  • The company's reputation may be tarnished or negatively perceived, hindering growth efforts.
  • Significant efforts are required to rebuild the corporate brand and establish a more positive image in the market.
F

The company has a severe lack of brand strength. It is a problem that needs addressing with urgency.

  • The company is poorly recognised, and customers have negative perceptions or zero awareness of its offerings.
  • The company fails to communicate its unique value proposition or inspire customer loyalty.
  • The company's reputation may be highly unfavourable, and attracting customers or top talent is challenging.
  • Immediate and extensive actions are likely necessary to revitalise the brand.

Brand Strength Score

Scoring brand strength is subjective because it relies on individual perceptions and interpretations of various factors, such as customer sentiment, market dynamics, and the competitive landscape, which can vary.

Using our scoring methodology, the average score of a business is calculated as being C (average). This differs from the average score of the top 10,000 businesses featured in our coverage. Weighted to that cohort, the average brand strength score increases to a B (good).

The analysis team have noted the following factors impacting its brand strength:

  • Strong recognition in the high definition video processing market.
  • Increasingly well-known in the video streaming and surveillance markets.
  • Established customer base which includes major corporations such as GoPro and Nikon.
  • Gained a high level of trust from customers.
  • Modern image processing solutions have been adopted by major companies.
  • Brand Strength Score: A

7Ps Marketing Analysis

The 7Ps of marketing are crucial components of strategic decision making for any organisation in any industry vertical.

Using the 7Ps in competitive analysis provides a holistic view of the marketplace, allowing businesses to refine their strategies, capitalise on competitors' weaknesses, and better meet consumer needs. The 7P's are defined as:

  • Product/Service
  • Price/Fee
  • Place/Access
  • Promotion
  • People
  • Physical Evidence
  • Processes

All these elements together frame an organisation's marketing mix, crucial for creating effective marketing strategies.

This 7P analysis is designed to provide a valuable insight into the business strategies of the company. It can be used to reveal strengths and weaknesses in their marketing mix, offering opportunities to compare and enhance a business.

1. Product/Services: Ambarella Inc offers advanced video processing solutions for high-definition and ultra-high-definition video capture and processing. Their products include system-on-chip (SoC) solutions, software development kits, and reference designs for various applications such as security cameras, consumer drones, and automotive cameras. Their services include technical support, training, and customisation options for their products.

2. Price/Fees: The pricing strategy of Ambarella Inc takes into consideration the value of their advanced technology and the competitive landscape. Their products are priced at a premium compared to other video processing solutions in the market. However, they also offer flexible pricing options for their customers, such as volume discounts and customised solutions at negotiated prices.

3. Place/Access: Ambarella Inc has a global presence with offices and distribution channels in key regions such as North America, Europe, and Asia. They also have partnerships with leading technology companies to expand their reach and access to potential customers. Additionally, their products are available for purchase online through their website.

4. Promotion: Ambarella Inc promotes their products through various channels such as trade shows, industry events, and targeted advertising. They also utilise digital marketing strategies, including social media and email campaigns, to reach their target audience. Additionally, they have a strong brand presence and reputation in the industry, which helps to generate word-of-mouth marketing.

5. Physical Evidence: Ambarella Inc's physical evidence includes their high-quality and innovative products, as well as their strong partnerships with industry leaders. They also have a professional and user-friendly website that showcases their products and services, as well as customer testimonials and case studies.

6. Processes: Ambarella Inc has a streamlined process for product development and manufacturing, ensuring that their products are of the highest quality and meet customer demands. They also have efficient processes for customer support and training, providing a seamless experience for their clients.

7. People: Ambarella Inc has a team of highly skilled and experienced professionals who are dedicated to developing and supporting their advanced video processing solutions. They also have a strong network of partners and distributors who play a crucial role in promoting their products and services.

Potential Products

As part of this study, we have carefully examined and prognosticated a range of new products, services, or innovations that this organisation could potentially develop and introduce to strengthen its market position and respond to emerging industry trends.

Video Surveillance Solutions: Ambarella Inc could create a suite of video surveillance solutions that leverage the company’s existing expertise in developing video compression and image processing technologies. These solutions could be used for various applications such as home security, public safety, and asset monitoring.

Connected Cameras: Ambarella Inc could develop a range of connected cameras that integrate with their existing products and services. These cameras could be used for security and monitoring purposes, as well as providing streaming video to phones and other devices.

Autonomous Vehicles: Ambarella Inc could develop autonomous vehicle technologies that incorporate their existing image processing, vision, and navigation technologies. These solutions could be used for self-driving vehicles, autonomous drones, and other autonomous machine applications.

Augmented Reality and Virtual Reality: Ambarella Inc could create augmented reality and virtual reality solutions that leverage the company’s existing video processing and image processing capabilities. These solutions could be used for gaming, entertainment, and medical applications.

Cloud Services: Ambarella Inc could develop cloud-based services that integrate with their existing products and services. These services could include video streaming, storage, and analytics solutions.

Potential Synergies

Our proprietary product and portfolio-matching algorithm has identified the following organisations as having strong potential synergies with the company, based on strategic alignment, complementary capabilities, and opportunities for collaboration across markets or domains.

1. Panasonic: Panasonic and Ambarella have created a strategic partnership to develop and market video processing solutions.
2. Sony: Sony and Ambarella have a long-term collaboration to develop advanced imaging and video processing solutions.
3. Intel: Intel and Ambarella have worked together to develop and market video processing solutions.
4. Microsoft: Microsoft and Ambarella have partnered to develop and market video processing solutions.
5. Qualcomm: Qualcomm and Ambarella have formed a strategic partnership to develop and market video processing solutions.
6. Huawei: Huawei and Ambarella have collaborated to develop and market video processing solutions.
7. Toshiba: Toshiba and Ambarella have a strategic partnership to develop and market video processing solutions.
8. LG: LG and Ambarella have a long-term collaboration to develop and market video processing solutions.

Porter's Five Forces

Developed by Michael Porter in 1979, Porter’s Five Forces is a model used to analyse industry attractiveness and evaluate competitive environments. It considers five forces:

  • Competitive rivalry
  • Supplier power
  • Buyer power
  • Threat of substitution
  • Threat of new entries

We include this framework because it supports strategic planning, investment decision-making, and long-term competitive positioning across industries by highlighting structural pressures, market threats, and potential profit constraints.

The Porters 5 forces for Ambarella Inc are:

1. Bargaining power of buyers: LOW

2. Bargaining power of suppliers: MEDIUM

3. Threat of new entrants: MEDIUM

4. Threat of substitute products: MEDIUM

5. Competitive rivalry: MEDIUM

Overall, Ambarella Inc scores average in relation to the Porters 5 forces.

PESTLE Analysis

A PESTLE analysis is used to evaluate external factors affecting an organisation. It examines (1) Political; (2) Economic; (3) Social; (4) Technological; (5) Legal; and (6) Environmental influences. This framework helps businesses identify potential risks and opportunities in the macro-environment, supporting informed decision-making, strategic planning, and long-term sustainability in dynamic markets.

Reasons to use a PESTLE include:

  • Environmental Scanning: PESTLE helps assess external factors, keeping executives aware of key forces
  • Strategic Planning: It identifies opportunities and threats, aiding market alignment and goal-setting
  • Risk Assessment: PESTLE highlights risks, helping businesses develop mitigation strategies
  • Market Insights: It provides insights into trends, behavior, and regulations for better strategy development
  • Business Adaptation: Regular analysis allows businesses to stay competitive by adapting to changes

Below is the PESTLE analysis for this company:

PESTLE Analysis: political, economic, social, technological, legal, environmental

CATWOE Analysis

CATWOE

The CATWOE analysis helps businesses understand stakeholders' perspectives for informed decision-making, covering six elements:

  • Customers: Beneficiaries of the system’s outputs
  • Actors: Those who influence the system’s functionality
  • Transformation: Converting inputs into value-creating outputs
  • World View: The broader context behind the system’s existence
  • Owner: Decision-makers with authority over the system
  • Environment: External factors impacting the system

The CATWOE analysis is most effective when used alongside a SWOT analysis.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the Ambarella Inc business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

SWOT Analysis: strengths, weaknesses, opportunities, threats

Strengths

The strengths of a company refer to its internal attributes or capabilities that provide it with a competitive advantage.

Below is a list of the key strengths we have identified for the business:

1. Ambarella Inc has a strong leadership team with significant experience in the industry.

2. The company has a diversified product portfolio which gives them a competitive edge in the market.

3. Ambarella Inc has a strong financial position with no debt and a cash reserve of over $200 million.

4. The company has a global customer base and a growing market share.

Opportunities

Opportunities refer to factors that present potential avenues for growth, advantage, or improvement for an organisation.

Below is a list of opportunities we have identified for the business:

1. Invest in R&D to extend its product portfolio and develop innovative solutions for the IoT and automotive markets: Ambarella Inc should invest in research and development to further extend its product portfolio and develop innovative solutions for the Internet of Things and automotive markets. This will give it a competitive edge over its competitors and help it to stay ahead of the curve.

2. Increase its presence in Asia: Ambarella Inc should increase its presence in the Asian market, which is the fastest growing region in terms of IoT and automotive markets. This will give it access to a larger customer base and help it gain a larger market share.

3. Implement cost-saving measures: Ambarella Inc should implement cost-saving measures to reduce its operating costs and maximise its profits. This can be done by reducing the number of employees and outsourcing certain tasks.

4. Utilise data analytics: Ambarella Inc shouldutilise data analytics to get a better understanding of customer needs and preferences. This will help it to customise its products and services to better meet the needs of its customers. Additionally, it will help it to identify potential opportunities for growth and expansion.

Weaknesses

The weaknesses refer to factors that hinder a company's performance or competitive advantage.

Below is a list of the weaknesses we have identified for the business:

1. Lack of Diversification: Ambarella is heavily reliant on the GoPro market for its revenue. In 2015, GoPro accounted for 66% of Ambarella’s total revenue.

2. Seasonality: Ambarella’s revenue is highly seasonal, with the majority of its sales occurring in the holiday quarter. This can make it difficult to manage expenses and can lead to quarters of losses.

3. Competition: Ambarella faces stiff competition from both larger companies like Qualcomm and Broadcom, as well as smaller companies like HiSilicon and Novatek.

4. Margin Pressure: Ambarella’s gross margins have been declining in recent years, falling from 63.5% in 2013 to 58.9% in 2015. This is due to increased competition and the need to offer discounts to win business.

Threats

The threats to an organisation refer to factors that pose challenges or risks to a company's success.

Below is a list of the threats we have identified for the business:

1. Technology Advancement: Ambarella Inc is facing a threat from rapid technological advancement. As technology is evolving and more sophisticated devices are being developed, Ambarella Inc is at risk of losing its competitive advantage and market share to other players in the industry.

2. Market Competition: Ambarella Inc is facing intense competition in the video processing solutions market. There are many other players that provide similar products and services, which could put Ambarella Inc at risk of losing customers.

3. Financial Risk: Ambarella Inc is subject to financial risks due to its dependence on external sources of capital, such as venture capital businesses, to finance its operations. If these sources of capital become restricted, it could have a significant impact on Ambarella Inc’s ability to continue operations.

4. Regulatory Risk: Ambarella Inc is subject to regulatory risks due to its exposure to the video streaming industry. Changes in regulations, such as in the US or EU, could affect the company’s ability to remain competitive due to compliance costs.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for Ambarella Inc. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to Ambarella Inc, as well as areas where the company needs to improve its operations or strategy.
Company: Ambarella Inc is a semiconductor design company that develops low-power, high-definition and Ultra HD video compression and image processing solutions. It provides systems-on-a-chip (SoC) and software for HD, 4K Ultra HD and 8K Ultra HD video capture and streaming applications.

Collaborators: Ambarella works with a variety of partners, including OEMs, distributors, integrators, and software developers, who are integral to the success of its products.

Customers: Ambarella’s customers include a wide range of global companies in the automotive, smart home, security, medical, and industrial markets.

Competitors: Ambarella’s competitors include leading semiconductor companies such as Intel, Qualcomm, and Texas Instruments.

Content: Ambarella’s content consists of video, audio, and image processing software and hardware for the automotive, home security, medical, and industrial industries. The company’s products enable applications such as HD and 4K Ultra HD video recording, streaming, and playback, audio and image processing, and intelligent video analytics.
5C Analysis: company, customers, competition, collaboration, climate

MOST Analysis

MOST Analysis: mission, objectives, strategy, tactics

The MOST analysis framework is used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. The MOST analysis helps executives focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles.

  • Mission defines the organisations purpose and core values, providing a clear direction and inspiration for stakeholders
  • Objectives are specific, measurable targets that support the mission; they indicate what the organisation aims to achieve within a defined timeframe
  • Strategy outlines the high-level approach the organisation will undertake to reach its objectives, detailing how resources will be allocated and initiatives prioritised
  • Tactics are the actionable steps and specific plans that implement the strategy, ensuring that all team members understand their roles in achieving objectives

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

The team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism designed to benchmark innovation.

First, we allocate a score of A-E for the industry, based on the key organisations operating within the space; and then score the individual organisation using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Innovation Scorecard

Industry Score:

A The industry is amongst the most innovative; with the leading players all driving the sector forward.
Example industry: PaaS
B The industry and its leading players have a good track record of innovation; and can quickly react to change.
Example industry: Pharmaceutical
C Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate.
Example industry: FMCG
DBusinesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption.
Example industry: Retail Banking
E The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change.
Example industry: Publishing

 

Company Score:

1 The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2 The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3 The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5 The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.
The team at Platform Executive has judged Ambarella Inc as having an innovation score of A3.

Appendices

The appendices section of this report contains supplementary information that we deem helpful in providing a more comprehensive understanding of the report.

Methodology

This study on Ambarella Inc forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The report is based on information and learning from the following sources:

  • Corporate websites
  • Proprietary research databases
  • SEC Filings
  • Corporate press releases
  • News articles
  • Financial data API's
  • Product-matching algorithm

Further Reading

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Disclaimer

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Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

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