Stratsim Performance Essay

2810 Words Apr 30th, 2012 12 Pages
StratSim Simulation Assessment: Firm A

Team Members: Timothy McKinney, Alesh Shah, Sami Belbase, Brian Muirhead, Kayleigh Ballantyne

Initial Marketing Strategy

For our initial strategy we wanted to choose a product line that would be most intriguing to customers in this poor economy. To initiate this we focused our products around better gas mileage, safety, and quality. In order to do this we needed to evaluate consumers’ needs and desires when making a high involvement purchase such as a car. We believe the best target market for this type of car would be a middle class family that does not have as much disposable income due to the recession in our economy.

After choosing key characteristics that we believed
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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 most critical point in our business life cycle; from a lack of right decisions at such an important period our firm was not only not able to recover, but a snowball effect was started. With such poor standing, and our competition growing, we were simply headed downhill.

Sales between period 4 and 5 rose from $16,933 to $18,553, however due to an increasing, significant over capacity charge our net income was at a low of -$2151.3. Production and capacity were not considered in parallel. Periods 8 and 9 also showed over capacity problems, and negatively impacted our firm financially.

Evidently, there was a lack of experience curve and diseconomies of scale: this includes dealing with consumers (before purchase and post purchase experience) to producing cars and selecting target markets. None of

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