QUARTER 6 Quarter six began by updating each of the product lines that Team 4 features. The Workhorse and Traveler market segment both had the same changes in this quarter. Here, the team analyzed both the customer needs and best competitor product for this market segment. The change made here we added ultrafast computing power; this was one of the most important features in terms of customer needs. Next, the group altered the Innovator product; ultrafast computing power was added, as well as changing the desktop to a 21” high resolution monitor. These decisions were based of the leading competitor’s product in this market segment; the strategy implemented here was to match competitors product (which was already proven effective) to …show more content…
The features Team 4 invested in was the Touch Screen and high speed Networking. By investing in this, Team 4 was setup to be very successful in the Mercedes target, but also allowed for the other product segments to be a step above the competitors’ products. After analyzing the results from the previous quarter, it was determined that the prices set for each segment were not sufficient. Product sales priority were also not properly adjusted. With the R&D investments, sales priorities needed to be changed for the main focus to become the most profitable market segments. Prices were not competitive which in turned decreased revenue, market share, and profitability. To become more competitive we altered the prices in each market segment. The Workhorse product was the first to change, the price was lowered to $2500 in an attempt to increase sales; at this price Team 4 was still making a profit on this product, as well as making the price much more competitive. The Workhorse sales priority was also lowered to 3rd in Americas and 4th in APAC and EMEA. This product was not selling as well as we had hoped, and was no longer as profitable as it once was which led to this decision. Next, the Innovator product’s price was adjusted; this involved a price increase to $4100. This price was adjusted to include the new
Research and development – totaled $98,280.00 in year 7, and in years 7 to 8 decreased -16.3% or $15,996.00. This is weakness in sales and performance, but a smart decision because of the cut in R&D saved -16.3% or $15,996.00 that would have been looked at as profit. They were able to use the previous year’s investment on R&D.
We evaluated our company’s position in the industry, and found ourselves in an excellent starting position to further develop our products and match them to the industry’s needs. Our market share is adequate and we can advance further with our strategy improve and reposition our products in the coming years. We have underutilized capacity, which we intend to improve, while increasing automation to reduce costs. We have plans to improve our promotion to improve product awareness and with the appropriate product lines we will increase price to improve margins and better align our high-end product image. Our current financial position is optimistic, showing our leverage (Assets/Equity) at 2.0, when our goal is to maintain 1.5-2.0 overall. By utilizing the analysis tools we are learning what elements are driving demand, how to effectively tailor our products through R&D, how best to adjust our marketing and pricing, while lowering input costs, in order to improve margins and to ensure our stakeholders are all satisfied.
2) To make a price cut of 20% would be unreasonable considering the costs of JanMar are unlikely to go down. Cutting price by 20% with the same variable costs would bring their contribution margin down to 19%. To get the same net contribution of $4.2 million using their current new contribution margin, they will have to generate $22,105,264.16 in sales which is far above their past sales of $12 million and creating more volume to increase sales at this lower cost is not feasible which just one manufacturer in the Dallas Fort Worth area. (exhibit 1.3) JanMar needs to focus not on cutting prices but positioning themselves differently from competitors as a superior quality and service company since they are a privately owned, focused just in the market of southwest United States.
After a period of declining sales for Allround, we increased the advertising budget to be consistent with our competitor’s budget. We decided to be very consistent with our strategy over the ten periods; however, in hindsight we should have implemented a more dynamic strategy that factored in the changing
As a group, team A collectively provided input and decisions on our MSRP in order to increase sales and attempt to gain market shares. Thus we wanted to understand the price sensitivity of the different target markets to set the appropriate price (Winer & Dhar, 2016, p. 248). We carefully reviewed the MSRP performance summary provided, starting with the first period, comparing it to the average retail price by way of the channel report (ARPCR). The original price for Allround was $5.29. At that time we were $.40 higher in price than our competition however the team felt that with the $.50 coupon discount we were offering, we would fall in line with other over-the-counter Besthelp who was our immediate
Next, the actual money that spent on this project is far exceed the budgeted amount. To date, it spent 12.55 million more than expected. However, this is not the end, there are still two testing remains incomplete which will cost company more to finish them. Regarding to each items, the item that results in the most unfavorable result is the software development that cost the company 12.90 million more to finish development. We should also notice that the items far behind the schedule are all related to the software. This tells us that the company is extremely not good at developing software. This may due to the sudden change from the medium segmentation focus to the high end products. I would initially recommend the company to have a joint venture with the other high end company to implement this project. However, as the project is almost done, the most important thing is how to promo this product that makes it profitable or at
All segments are critical for the implementation of our company’s strategy because we chose to be broad cost leaders. Cost leaders maintain a presence in all market segments by focusing on low production costs and competitive pricing. With that in mind, one segment is considered to be slightly more important than the others: the low end segment. We will compete in every market segment, but this is one of the most important due to the fact that price is the main consideration of the buying criteria at 53% importance. Our costs will be much lower than our competitors which translates into a lower market price for this product, which is ideal for our customers.
Wilkerson’s competitive situation is that of declining profits due largely to chronic and severe price-cutting on pumps, the company’s main product in terms of units produced (Exhibit 4). Being a standard commodity product, demand for pumps is price elastic, and customers look for the cheapest price irrespective of the company they buy from. With its competitors constantly lowering their prices, Wilkerson’s only option for remaining competitive in the pump market was to match these price cuts. As a result, the actual selling price of pumps is $87, well below the target selling price of $107.69 (Exhibit 2). Consequently, Wilkerson’s actual gross margin of 19.5% on pumps is well below the company’s uniform target line of 35% for all
sales, Best Buy’s financial situation was precarious. The company’s stock price had fallen from $45 to $15 per
We continued to estimate a decline in NiMH sales, lowering our forecast to $21M which also mirrored the sales figure in 2012. However, we forecasted a sharp increase in Ultracapacitor sales with a 2013 sales estimate of $6.9M which is also the 2012 sales figure. (Break-through?) The price of the NiMH was lowered to $8.50 due to increasing market pressure, but we left the price of the Ultracapacitor the same. We kept our R&D investments in process improvement the same for both the NiMH and Ultracapacitor, but decreased our investment in NiMH energy density to $2M. The decision to decrease this investment was based on the decline in sales for this product.
Due to the losses that the business has experienced in the past 3 years, it is critical to take action and define a new way to approach the market in order to make the company profitable again. That’s why it’s necessary to adapt the business by adding a new concept focusing on a different target without setting aside the current and loyal costumers.
After closely reviewing the financial and production data, our accounting team has found that your traditional cost allocation is faulty and misleading. The costs of products A and C were over allocated and products B and D were under allocated causing deceptive information on the true profits of the company. Also, product B appears to be
New Product Development : the aggressive investment strategy into R&D division led to speed in releasing new products in the market. This gave the company higher ROI returns projections. The faster cycle of innovation led to multiple product availability in the market which led to further increasing the gap between them and the competitions and also the company indulged in manufacturing self brand products rather than Co-branded or Partnerships.
He had a large amount of financial investment in an innovation to be sold and the first time around he did not succeed or come anywhere close to the prelaunch boast found in Time magazine. The magazine has a quote claiming the SHT would be the quickest product to reach $1 billion in sales after its launch. Mr. Kamen has begun to make moves with new hires, but he needs to step away and let professionals sell his product at a successful rate, as he has done with previous inventions. The value of professional marketers adjusting the marketing mix variables of price, promotion, place and product, for the SHT will surely be realized quickly with a noticeable boost in sales. One example of adjusting the marketing mix by these executives would be with price. The SHT could be “relaunched” at a new lower price (i.e.: $2,200). This new strategy would make the SHT a more attractive and realistic buy to the average consumer.
Engineering and technology team – similar to AC&T, they are responsible for creative thinking. What are the important features that this product can deliver? Is it something brand new in the market? Or is it a product which is made to match the market demand? •