Back Bay Simulation Analysis

INTRODUCTION
My Syndicate group, Team Strategy One played a Back Bay simulation game where we were the manager of a consumer electronic manufacturer. We had the opportunity to test on an introductory platform before advancing to the advanced stage of the simulation. We had one test on the introductory platform and two runs at the advanced stage. The main challenge we faced in the simulation was getting a good balance between R&D spending for the key existing NiMH market and the potential in the emerging Ultracapacitor market. Sales forecasting also was a challenge during the simulation. We played two rounds of the advanced stage simulation and got fired on both occasions. We attempted various strategies to ensure we were not fired and make
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Being a Hypercompetitive market we identified the key arenas of cost/quality and timing/knowhow as important enablers to use. We then focused on cost leadership. With a cost leadership strategy, a manager tries to gain sustainable growth with lower prices in a broad range of subjects (Porter, 2008). We invested a significant portion of our R&D budget in process improvement to stay a cost leader in the powertools market and the market with Ultracapacitor batteries. We did this from 2012 investing $3Million in R&D for process improvement in NiMH (Appendix 1). By doing so the market with the NiMH batteries could be fully exploited and the market with the Ultracapacitor could be explored. Total R&D spent on this was $10Million from 2012 to 2016 (exploited) for NiMH (Appendix 1) and $6Million in Ultracapacitor from 2016 to 2018 (explored) (Appendix 1). Furthermore in the year 2016 we invested $4Milion of R&D expenses on the recharge time of NiMH …show more content…
We decided to reduce our prices to $8.50 in the year 2014 to grow our sales. Competition immediately followed suit and a price battle commenced. We found this difficult to play as sales forecast became a challenge due to our inability to forecast how the market will react to our pricing strategy. Not handling this situation well led to a massive sales drop by over 40% from 27Million units in 2014 to 16Million units in 2015. The reason for this massive drop is the market became more sensitive to lower pricing and competition with deep pockets offered $7.50 per unit. This affected our cumulative profit significantly. Adjusting back to the desired $7.50 price by customers steadied our sales in subsequent years. With the above strategies we achieved a cumulative profit of $94.11 as at 2018 before being fired for wide sales forecast

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