Introduction The financials for Clipboard Company since 2011 indicate the financial progress for use when addressing factors that can cause the company to continue making profits or to fail. Currently, the company offers three technological devices specifically tablets under the names X5, X6, and X7. The three products have been in the market for different times as they were developed and introduced into the market at various times. X7 is the youngest product and apparently retails at the least price. However, it has not picked as expected in the market. The primary company 's objective is to maximize revenues by varying the prices of its commodities and undertaking research and development. However, the most beneficial strategy on the …show more content…
However, at 2015, the product will have reached shakeout stage, and it will have increasingly declining new customers. When the price is lowered to $420, and R&D for the product lowered to 25% then, the tablet will perform better than its competitors in the market. At this time, the total sales will be 1, 371, 992 in 2012, and 2, 316, 675 in 2013. However, according to SLP 3 that would mean that the company would have to reduce the production volume to achieve default run profitability. On the other hand, if the company increases the cost of X6 tablet to $450 and R&D to 40% it would mean that the customers pay the same for the tablet as they pay for other competing tablets in the market. In that case, it would call for a decision on the side of the customer based on their loyalty for them to purchase the tablet. In so doing, the organization will register a sale volume of $1, 854, 036 in 2014 and $2, 337, 247 in 2015. If the company will increase the price further to $470 and increase R&D to 45%, then tablet X6 will be less expensive for customers to buy than competing tablets. With that change, the company will make sales of 2, 337, 247 in 2014 and 1, 180 751 in 2015. The reason for the decline will be because the product will have reached the shakeout stage where the number of new customers will progressively decline (Calvin, 2002). Following the analysis above, the best strategy for tablet X6 is to increase the price to $450 and R&D to 40% for between 2012 and
Supply and demand is constantly changing for different products and services for a number of reasons. The good I chose to write about is the laptop I purchased to be used for school. The following are factors that could cause possible changes in the supply and demand of laptops on the market. When looking at the supply aspect of a laptop from manufacturers’ one factor that could change the supplied amount would be the cost to produce the item. If the cost to produce a laptop was to increase too much the supply may go down. Another factor would be the demand of the laptop. As long as there is demand for the laptop than the supply should be available however if the demand was to drop than the supply of the laptop could drop as well.
In 2010, in reaction to rumors of a 7-inch tablets being introduced into the market, Steve Jobs simply said, “7-inch tablets are tweeners: too big to compete with a Smartphone and too small to compete with the iPad” (Chen, 2010). While Apple has stayed true to this, many tablet manufacturers have introduced tablets smaller than the iPad, and they are having success. Samsung has introduced the Galaxy Tab, which is generally just 7 inches, although it also comes in a 10.1 inch version. flouting into a market with so many sellers is easy, but success is not guaranteed. One must look at the firm considered to offer the most competition,
(4 pts.) Price falls from $15 to $10. Does total revenue (TR) increase, decrease, or remain the same?
But on the other hand, after all the company was changing the product system because they want more profits, the pricing strategy provided by Rob was clearly ran in the opposite direction. I think it’s a little be less aggressive for the product manager to actually decrease their prices. Fortunately the profit margin for the QTX is good enough, so they can still make remarkable profit on it.
(decreases) (Lev, 1974, p.628). At the same time, the company incurred a 3 percent decrease in sales, which caused a 21 percent decline in profits (Edmonds, Tsay, & Olds, 2011, p. 147). This demonstrates a change in sales,
0.67, and an increase in price will result in a decrease in total revenue for good A.
(b) The demand for the firm’s product will decrease until price equals average cost and total profits are zero. [text: E pp. 488-490; MI pp. 230-232]
The three options are distinct with options one and two being more similar than option three. Initial annual revenue for option three is the only one in the positive; however, five years into each option, options one and two are roughly six and four times higher than option three respectively. Gross margins for options one and two are relatively equal, but the margin for is half for the distributer yet greater by seven percent for the retailers. The required investment for option three ($400+) pales by comparison with options one and two being nearly four and five million dollars respectively. This intial cost is offset by the potential profits over the lifespan of the options; option three yield of
(4 pts.) Price falls from $15 to $10. Does total revenue (TR) increase, decrease, or remain the same?
Due to these decreases, the company did not meet net income expectations and instead income took a nosedive. The company’s gross margin will be impacted greatly if it continues to reduce these product prices. These price reductions may render the company a “cheap” retailer to consumers as well.
The volume of unit sales at which the Martinez Company would be indifferent between the two manufacturing methods is calculated as Sales = Variable Costs + Fixed Costs + Net Income. The value for sales is equivalent to the sales price, $30, multiplied by the number of units sold. Variable costs of $14 for capital intensive and $18 for labor intensive are also multiplied by the number of units sold. Fixed costs were provided at $2,508,000 for capital intensive and $1,538,000 for labor intensive. Net income is assumed to be $0. The equation values for 180,000 units under capital intensive manufacturing and 240,000 under labor intensive manufacturing is the volume of units for each method to equal sales of $2,880,000, the point at which the annual unit sales volume would be indifferent.
In 2003, Quasar computers launched a revolutionary new laptop computer named the neutron. The neutron uses high speed optical conductors, which is the first technology of its kind to be used in a laptop. Over time many businesses need to evolve to stay competitive and continue to make a profit in the market place that they have entered. This paper will discuss how the Quasar computer company moved through the different market structures over the past ten years and how the pricing and non-pricing strategies affected the company’s growth. During their transition the company faced many obstacles that could have caused a detriment to their economic prosperity. We will also discuss some of the potential risks that the company may have faced and
penetration pricing strategy. All indications are that sales will continue to grow. In response to a
Has been on the market for 3 years and although its expensive compared to similar products in its category, it’s important to understand that this product is in a growth stage of its product life cycle. This requires additional R&D funding to further develop this expenditure. Quality of the X5 Tablet must be maintained and further additions to the features and support services need to be added to remain competitive. Once this product reaches the maturity stage in its life cycle it will be advisable to consider price reductions to remain both competitive and to maintain market share. This is why the R&D costs help to identify the current product lifecycle of the X5 and helps to better understand the distribution strategy of its promotion expenditures that will be incurred to continue growth and revenues.
Introduction Tablet Development Corporation develops three types of tablets that include Tablet X5, Tablet X6, and Tablet X7. Tablets X5 and X6 have been in the market previously, but Tablet X7 is introduced into the market in 2012. Joe Schmoe has been the Vice President of marketing in the organization and has the responsibility of developing the marketing strategiesfor the tablets. He was responsible for setting pricing and research and development cost for products from 2012 up to 2015. Joe Schmoe's strategy involved maintaining constant pricing and constant research and development