Revision P 3

Pro 3 Feedback

This paper was not proofread, indicative of at least three different fonts in the submission and numerous grammatical errors.  A simple spellcheck alone would have made improvements.  It would have also benefited from the addition of charts/graphs, corresponding with the story. That said, you do bring out analysis for your decisions, which is at the foremost for this submission.  Spending more time on the writing and proofreading would have certainly helped. 

Niche Differentiator

Resource &Development

           Speed: Round 1, I was confused with the whole shebang. Concerning the team strategy choice, we decided to go with the local Niche Differentiator. The strategy focuses on high tech market segments. The goal is to have a competitive price advantage in the market and by designing excellence and exciting products to meet client’s buying criteria. The speed and accuracy criterion represents 32% of customers’ preference in the new product design. In this round, consumers buying criteria were set at 8.1 for both speed and accuracy. However, I set my parameters to 7.1 for accuracy, and speed I was shy and non-aggressive enough to elevate the bar to meet customers’ satisfaction.

           In round 2, the customers buying criteria were at 8.8 for both speed and accuracy. Here again, I missed the opportunity to go bold in keeping with the product pace when setting the speed at 7.8.

It was in round 3 and 4, where I commenced grasping the quintessence of the game. I set up the speed parameter at 8.7 (round 3) and 10.2 (round 4). The reason for going lion attitude was that, in the end, it is the primary clients’ wants.    

           Accuracy goes hand in hand with speed. Both represent customers’ desirable product criteria. We will notice that from round 1 through round 4, I started increasing each round by at least one digit each year to meet consumers’ needs. With that in mind, the ideal position will be reached and also that we will observe an incremental drift each year in the perceptual map. Remember that all data manipulation in each round had the effort to keep the product of at least two years. In round 4, when I tried to over two years, the system warned me that I couldn’t go beyond 2years of product revision.  

           Service Life was number three on the list, with 19% of customers’ satisfaction wants. It is the average time before the device is likely to fail. The higher life ratings are the most wanted by customers, who by the way they willing to spend money on the goods. That is why decisions made in round 1 through 4 into consideration these customers buying criteria. 

Capsim decision simulations posted in the discussion area are supplement to this.

  

Marketing

Regions Selected for Sales: Local Niche Differentiator (USA)

For each region selected: Local Niche Differentiator (USA)

           Price: For round 1, because my team chose a local niche differentiator strategy, I increased the price from $32 to $34.50. Because this was the first round, I was cautious about increasing the amount too much. I knew that our strategy was to have a product that was above the average price that must provide excellent design, high awareness, and easy accessibility. By increasing the price, I was able to increase the new high-tech accessibility. In round 2, I continued to increase the price from $34.50 to $38, again in round 3, I increased it from $38 to $41.50, and finally, in round 4, I increased it to $43.

           Promotional Budget: The promotional budget ties in with customer awareness. Our goal is to design fresh and exciting products that can keep up with the market’s demand. In round one, I increased the budget from $1,000 to $1,300, in round 2 I increased it to $1,550, in round 3 I increased it to $1,950, and finally, in round 4 it was increased to $2,150. Every time it was raised, the fixed and variable costs increased as well as awareness.

           Sales Budget: The sales budget goes hand in hand with accessibility, which is the number of customers that can interact with the company. Because there is only one product, I kept it under $3million. In round one, I increased from $1,000 to $1,600, round 2 it was increased to $1,900, and round 3 was increased to $2,150. I did not make any changes to the sales budget in round 4 because it did not make any significant changes to the percent of accessibility the product had.  

           Forecast: I was the most confused with this section. The forecast is an estimate of how much I think we will sell, so for round one, I just took a guess and increased it from 1,250 to 1,500. In round 2, we seemed to be doing well at reaching our forecast amount, so I continued to increase it in round 2 1,600. In round 3, I increased it again at 1,900, and in round 4, I increased it to 2,150 to coincide with the increased awareness and accessibility.  

Capsim decision simulations posted in the discussion area are supplement to this.

Production

Plant Location: US

Regions Selected for Sales: Local Niche Differentiator (USA)

           Being in a team that chose a local niche differentiator strategy, and based on the forecast I got from R&D and marketing, I was aiming to produce high sales and low variable costs. In round 1, we produced 1475, lowered the capacity by 250, and I increased automation to 4. In round 2 produced 1675 increased capacity by 200 increased automation to 4.4. In round 3, we produced 1775, increased capacity by 150, increased automation to 4.6. In round 4, Produced 1950, increased capacity by 150, and increased automation to 4.8. The contribution margin formula helped me find an optimal price point for our product, and also was a very crucial technique to measure whether the product was generating enough revenue to pay for fixed costs and determine the profit it was generating.

           Inventory: Keeping the inventory under 200 units and plant utilization average of 104 was the goal I set for our team, considering the segment growth rate gradually increasing in rounds but then I failed to observe the need for additional capacity for next round; due to this I was able to produce only 1775 In round 3 I bought additional capacity by moving it to 4.6, increasing our capacity by 150.

           Automation: the capacity of our plant utilization average was 103 for all four rounds. I bought additional capacity in round 4 to produce products aggressively for round 4. I also realized that though automation reduces the labor cost, automation itself costs a considerable amount of money.

           Labor cost/unit: I identified the importance of automation late in the game, which could have helped a great deal in reducing the labor costs. As automation rating increases, the number of labor hours required to produce each unit falls, lowering our labor costs.

           Total variable cost: I have been trying to figure out some ways to reduce our variable costs since they make up a majority of our expenses, and I finally learned how to decrease them.

Finance: 

           Financial decisions were made after R&D, Marketing, and Production were funded. In round 1, I tried to raise money by borrowing current debt, Issuing stocks, and acquiring long term debt. I kept funding capital to avoid emergency loans. An emergency loan is a one-year bailout loan from an emergency lender. If finance does not acquire enough capital and you run out of money during the year, you will require an emergency loan to keep your company afloat. Because of the “quick-fix” nature of an emergency loan, it comes with an extremely high-interest rate. 

           Borrow: I borrowed $4,900 in round 1 as the initial phase of raising money for the company. I continued to raise funds through ground three, including round 4, which was only $300. The reason for me to borrow money in all rounds was to make sure to have enough money to be funded in all the departments. 

           Issue (Borrow): Since Bonds issues that are due in 10 years, I made sure to borrow long term debt to raise money for the company. Round 1 was a little confusing hence why I wanted to make sure all the departments were appropriately funded; thus, I did not spend any cash on retirement Bonds. I didn’t want to risk spending excess cash thinking we could be needing later.

           Retire: I continue to raise money until round 3, where I felt comfortable to retire long term bonds as a long-term investment. However, I should have continued to raise funds in all rounds for more closing cash position, which came at only $61,030 in round 4. 

Issue: I sold share common stock to the public to raise capital. 

Buy Back: Buying back shares of common stock from the public reduces the number of shares outstanding, but I realized it is best to reserve when you have excess cash. With this understanding, there weren’t any changes in buyback until round 4 of $1,100.

Issue Dividend: I gave money to shareholders in round 4 to $1.40 to slightly increase the company’s stock price because we had some cash we could spend.