Case Study Stratsim Simulation Assessment

2810 Words 12 Pages
Register to read the introduction… Our generic marketing strategy was focused around a balance of cost leadership, and product differentiation. Cost leadership was employed strategically for our economy and family car, executed with emphasis on efficiency and safety. In period one, our firm was positioned positively and strong; sales were at a profitable level of $20,516.

Due to poor management skills, and a decentralized functionality of departments periods 3 and 4 demonstrated our inability to coordinate our business operations and we suffered financially. By period 4, our net income had dropped to a negative value of $-1,978(millions) for the first time. Return on sales was at – 11.7%, also negative for the first time. Debt from period 3 to period 4 increased dramatically from $4,769 to $14,411. Capacity utilization had increased from a feasible 94%, to 138.2%. Our market value declined from $13,740 in period 3 to $7,889.6 in period 4. The lack of centralized decision making created an impossible environment for our business to take the most appropriate decisions. By not investing in technology, our cost of goods sold did not lead us towards profitability as we were not able to gain experience curve effects. This was the
…show more content…
Most of our focus was on our family and economy vehicle classes and production was constant towards particular cars making the firm have a small range of products in our portfolio. Not having range of different products or not diversifying firm’s portfolio maximized our risk and led to negative profits and debt owed remained high reaching $17,125.0 from $7,018. During period 2 efficient amounts were spent in research and development and instead of having a constant rate, research and development sharply declined from period 2 onwards. Research and development should be conducted on regular basis due to change in customers taste and preference. Due to mismanaged R&D firm spent huge amounts on marketing about product that was in demand during period 2 expecting increase in sales after promotion and advertisement. Firm reached high $700s in Period 5 and stayed stable until period 9 reaching close to $850s, keeping research and development expenditure low. This led to promotion of products that did not tend to have high demand in the market anymore making it hard to

Related Documents