Market Simulation Performance
Market simulation refers to the act of mimicking a probable real-life scenario of an enterprise. Therefore, market simulation aims at assessing how a business may perform in the ‘real-word’ based on specific decisions. This paper gives an analysis of the company’s performance in the simulated market depending on the management’s decisions and also the strategies implemented by competitors. The main things that were changed by the management were prices of products, the level of effort in advertisements, number of sales officers, and the quality of product. Notably, the decisions of the company were based on the company’s strategies and also the changes in its market.
Quarter 1
Overview
The company started operating in quarter 1. Therefore, it did not have any significant information about its business environment. In this simulation, all competitors were assumed to have started operating in this period and were having similar information of the market. Accordingly, they all had equal levels of brand presence and recognition.
Major Decisions
The main decision established by the management in this quarter was the allocation of duties to senior management. In particular, Sun Ting was appointed as the company’s brand management vice president (VP Brand Management) and also as the vice president of finance (VP Finance).  Besides the appointment of the senior management, other officers were also allocated their appropriate duties. On its operations, the company decided to target the Workhorse business segment. Finally, the company decided to open a sales office to serve the Shanghai-APAC market.
Analysis of the Decisions
The business made the decisions for various reasons that aimed at enabling it to enhance its operations and marketing activities. In particular, the appointment of people to their respective offices and allocating them various duties ensured there is a smooth operation of all the company’s activities. Importantly, this structure is necessary for enabling the organization to achieve its objectives (Daft, 2015). The business decision to target the Workhorse segment was influenced by the perceived large market and ease of penetration. Finally, the company opened an office in the Shanghai-APAC market so that it could enjoy the broad market in this area, and also due to the low operating costs in this region.
Quarter Two
Major Decisions
            In this quarter, the business had already gathered significant insight into its market. From its observations, it still decided to concentrate on the Workhorse market segment. As a result, the company decided to introduce the ‘Light’ laptop as its flagship product. This laptop had essential base components and pre-installed office software. It also had other softwares, which were presentation and database software. It had a standard (laptop) case, a high capacity hard drive, a 14-inch standard (laptop) monitor, a high-speed computing power, s standard keyboard, and standard networking.
Regarding the laptop’s modified advertisement, the score of the brand name was 1, the score of features of office applications was 3, the features of presentation applications had a score of 6, and the score of features of database application was 5. The score for ease of use was 4 that data storage was 7, and that of a picture of business professionals was 2. The local media was concentrated in Shanghai-APAC at the cost of $8,000. There were 10 inserts, which resulted in a total expense of 63,546.
The price of “LIGHT” laptop was $2,399, and sellers earned an attractive rebate of $100. The business had two sales channel in this quarter; the Shanghai-APAC office, which was operational, and the Chicago-NORAM, which was opened in this quarter. Finally, the company had five sales personnel in the period, who were paid a quarter salary of $70,000. The Support, Workhorse, Mercedes, and Traveler had 1, 2, 1, and 1 sales officer respectively. The total cost of employing all the employees was $101,500.
Analysis of Strategy
            The business concentrated in the Workhorse segment since it appeared to have the largest market base. Accordingly, it believed it would have many clients if it focused on this segment. In the design of the laptop, the company focused on establishing a durable and powerful machine that could be used by analysts and scientists, who are in the Workhorse segment. As a result, the laptop had a high-capacity hard drive, high-speed computing power, and appropriate software (office, presentation, and database). In the allocation of sales personnel, the company hired 2 individuals for the Workhorse segment, since the “LIGHT” laptop had been designed for this market. 1 person was hired to assist in ‘Support’ to assist in eventualities. The company hired 1 for ‘Mercedes’ and 1 for ‘Traveler’ since it would venture into these segments in the future. Finally, the company opened the Chicago-NORAM office, since it was planning to expand in the attractive North American Market.
Quarter Three
Major Decision
In the third quarter, the business had significant knowledge of the Workhorse business segment, especially after its experience in the second quarter. Since the company had observed that it could expand its market presence in this segment, it decided to concentrate on it in the third quarter. In this quarter, the business introduced the “Notebook” laptop. This laptop had essential base components and pre-installed office software. It also had presentation software. It had a standard (laptop) case, a standard hard drive, a 14-inch standard (laptop) monitor, a standard computing power, and a standard keyboard.
The price of “Notebook” laptop was $1,888, and sellers earned an attractive rebate of $150. Noteworthy, the company did not discontinue the sale of its “LIGHT” laptop in this period. Similarly, it retained the retail price of the old laptop at $2,399 and the rebate of $100 for the sellers. “LIGHT” laptop had a priority of 1 and “Notebook” laptop had a priority of 2. The business had two sales channel in this quarter; the Shanghai-APAC office and the Chicago-NORAM, which were both in operation. Their total cost was $230,000. Regarding local media, the Chicago-NORAM inserts of best for business were 8 each at the cost of 11,000, while for Shanghai-APAC, the advertisements of best for business were 10 each at the cost of 8,000. Their total expenses were $135,024, and their total number of inserts were 18.
Finally, the company had nine sales personnel in the period, who were paid a quarter salary of $170,000. In particular, 4 sales personnel worked in the Chicago-NORAM office and were paid $100,000 quarterly, while 5 worked in the Shanghai-APAC office, and were paid $70,000 quarterly. In Chicago-NORAM, the Support, Workhorse, Mercedes, and Traveler had 1, 1, 1, and 1 sales officer respectively. In Shanghai, the Support, Workhorse, Mercedes, and Traveler had 1, 2, 1, and 1 sales officer respectively.
Analysis of Strategy
The major strategies in this quarter entailed the operationalization of the Chicago-NORAM office and the introduction of the “Notebook” laptop. The operationalization of the Chicago-NORAM offices enabled the business to expand its business to the attractive North American market. Overall, the “Notebook” laptop had lower specifications than the “LIGHT” laptop, which made it to be priced much lower, just $1,888 when compared to LIGHT’s $2,399. Finally, the attractive rebate of $150 and $100 for “Notebook” and “LIGHT” laptop were incentives to motivate sellers to increase their sales efforts. This strategy enabled the company to win the market of individuals who were unable to afford the more expensive LIGHT laptop (Merna & Al-Thani, 2015). Employees in the Chicago-NORAM office were allocated evenly in all the offices, Support, Workhorse, Mercedes, and Traveler since the business was intending to diversify its products into other segments.
Quarter Four
Major Decisions
The fourth quarter was interesting for the business since it diversified its operations by serving the Mercedes segment. The company was able to achieve this strategy by introducing the Forbus desktop computer. Importantly, this decision enabled the company to have a broader market base.
The Forbus desktop computer had essential base components and pre-installed office software. It also had a presentation software. It had a standard desktop) case, a standard hard drive, a 17-inch standard (desktop) monitor, a standard computing power, and a standard keyboard.
Regarding modified ad, the rebase special price deal had a score of 1 in Forbus. Features office applications had a score of 2 in Forbus, and ease of use had a score of 3. Regarding local media, there were 8 inserts in Bestforbus and 3 Forbus in Chicago-NORAM. There were 10 inserts in Bestforbus and 5 Forbus in Shanghai-APAC. Chicago-NORAM had a cost of 11,000 and Shanghai-APAC had a cost of 8,000. Overall, there were 26 inserts and a total expense of $196,645.
The price of Forbus laptop was $1,968, and sellers earned an attractive rebate of $15. Noteworthy, the company did not discontinue the sale of its “LIGHT” or “Notebook” laptops in this period. Similarly, it retained the retail price of LIGHT and Notebook laptop at $2,399 and $1,888 respectively. The rebate prices were also retained at $100 for LIGHT and $180 for Notebook. “LIGHT” laptop had a priority of 1, “Notebook” laptop had a priority of 2, and Forbus had a priority of 3. The business had two sales channel in this quarter; the Shanghai-APAC office and the Chicago-NORAM, which were both in operation. Their total cost was $230,000.
Finally, the company had nine sales personnel in the period, who were paid a quarter salary of $170,000. In particular, 4 sales personnel worked in the Chicago-NORAM office and were paid $100,000 quarterly, while 5 worked in the Shanghai-APAC office, and were paid $70,000 quarterly. In Chicago-NORAM, the Support, Workhorse, Mercedes, and Traveler had 1, 1, 1, and 1 sales officer respectively. In Shanghai, the Support, Workhorse, Mercedes, and Traveler had 1, 2, 1, and 1 sales officer respectively. The cost for employing employees in the quarter was $213,500.
Analysis of Strategy
The major strategy in this quarter was the business diversification into the Mercedes segment through the launching of the ForBus desktop. There was also the offering of rebate of $18 for each sale of the laptop. The diversification into Mercedes segment helped the business to expand its presence to a broader market (Wheelen, Hunger, Hoffman, & Bamford, 2015). Importantly, the issuance of rebates encouraged retailers and sales officers to make more sales of the laptop.
Quarter Five
Major Decisions
In the fifth quarter, the business was able to venture into all the available market segments for laptops and desktop computers. The business achieved this strategy by introducing the MATEBOOK laptop. Importantly, this decision enabled the company to have a broader market base and access the Travelers’ segment.
The MATEBOOK laptop had essential base components. It had a standard (laptop) case, a standard hard drive, a 14-inch standard (laptop) monitor, a standard computing power, and a standard keyboard.
Regarding modified ad, the ease of use had a score of 1 in MATEBOOK. The laptop had a score of 3 regarding stylish design, and a score of 2 in the picture of business travellers. Regarding local media, there were 8 inserts in Bestforbus, 3 ForBus, and 0 for MATEBOOK in Chicago-NORAM. There were 10 inserts in Bestforbus, 5 ForBus, and 0 for MATEBOOK in Shanghai-APAC. Chicago-NORAM had a cost of 11,000 and Shanghai-APAC had a cost of 8,000. Overall, there were 26 inserts and a total expense of $196,645.
The price of MATEBOOK laptop was $2,106, and sellers earned an attractive rebate of $106. Noteworthy, the company did not discontinue the sale of its Forbus, LIGHT, and Notebook laptops in this period. Similarly, it retained the retail price of Forbus, LIGHT, and Notebook laptop at $1,986, $2,399 and $1,888 respectively. The rebate prices were also retained at $18, for Forbus, $100 for LIGHT, and $180 for Notebook. The LIGHT laptop had a priority of 1, Notebook laptop had a priority of 2, Forbus had a priority of 3, and MATEBOOK’s sales priority was 4. The business had two sales channel in this quarter; the Shanghai-APAC office and the Chicago-NORAM, which were both in operation. Their total cost was $230,000.
Finally, the company had nine sales personnel in the period, who were paid a quarter salary of $170,000. In particular, 4 sales personnel worked in the Chicago-NORAM office and were paid $100,000 quarterly, while 5 worked in the Shanghai-APAC office, and were paid $70,000 quarterly. In Chicago-NORAM, the Support, Workhorse, Mercedes, and Traveler had 1, 1, 1, and 1 sales officer respectively. In Shanghai, the Support, Workhorse, Mercedes, and Traveler had 1, 2, 1, and 1 sales officer respectively. The cost for employing employees in the quarter was $213,500.
Analysis of Strategy
The major strategy in this quarter was the business diversification into the Traveler segment through the launching of the MATEBOOK laptop. There was also the offering of rebate of $106 for each sale of the laptop. The diversification into Traveler segment helped the business to expand its presence to a larger market. Importantly, the issuance of rebates encouraged retailers and sales officers to make more sales of the laptop (Kotler & Keller, 2015). Additionally, since the company did not hire more workers, the expansion of the market ensured all employees’ were fully engaged.
Quarter Six
Major Decisions
The business strategy in the sixth quarter entailed it maximizing on its excess capacity. Therefore, the business launched a new desktop, the SUS desktop, without increasing its human capital. This strategy helped the company to reduce its variable costs, effectively enabling it to increase its profit margins. Additionally, the business concentrated in the Workhorse and Mercedes segments, which were the most lucrative.
The SUS desktop computer had essential base components. It had a pre-installed games software. It also had a standard (desktop) case, a high capacity hard drive, a 19-inch standard (desktop) monitor, a high-speed computing power, a standard keyboard, and a high-speed networking system.
Regarding modified ad, the ease of use had a score of 2 in LIGHT. The score for the slim portable design was 3 in LIGHT. The laptop had a score of 1 for the feature office applications in Bestforbus. It had a score of 4, 3, and 2 for feature presentation apps and feature database apps for Bestforbus. Regarding local media, there were 8 inserts in Bestforbus, 3 ForBus, 0 for MATEBOOK, and 0 for LIGHT in Chicago-NORAM. There were 10 inserts in Bestforbus, 5 ForBus, 0 for MATEBOOK, and 0 for LIGHT in Shanghai-APAC. Chicago-NORAM had a cost of 11,000 and Shanghai-APAC had a cost of 8,000. Overall, there were 26 inserts and a total expense of $196,645.
The price of SUS desktop computer was $2,888, and sellers did not earn any rebate. Noteworthy, the company did not discontinue the sale of its MATEBOOK, Forbus, LIGHT, and Notebook laptops in this period. Similarly, it retained the retail price of MATEBOOK, Forbus, LIGHT, and Notebook laptop at$2,106, $1,986, $2,399 and $1,888 respectively. The rebate prices were also retained at $106 for MATEBOOK, $18, for Forbus, $100 for LIGHT, and $180 for Notebook. The LIGHT laptop had a priority of 1, Notebook laptop had a priority of 2, Forbus had a priority of 3, MATEBOOK’s sales priority was 4, and the sales priority of SUS was 5. The business had two sales channel in this quarter; the Shanghai-APAC office and the Chicago-NORAM, which were both in operation. Their total cost was $230,000.
Finally, the company had nine sales personnel in the period, who were paid a quarter salary of $170,000. In particular, 4 sales personnel worked in the Chicago-NORAM office and were paid $100,000 quarterly, while 5 worked in the Shanghai-APAC office, and were paid $70,000 quarterly. In Chicago-NORAM, the Support, Workhorse, Mercedes, and Traveler had 1, 1, 1, and 1 sales officer respectively. In Shanghai, the Support, Workhorse, Mercedes, and Traveler had 1, 2, 1, and 1 sales officer respectively. The cost for employing employees in the quarter was $213,500.
Analysis of Strategy
The major strategy in this quarter was the business maximization of its excess operating capacity. This strategy was achieved by the business selling the SUS desktop without increasing the number of its sales officers (Daft, 2015). Importantly, this strategy ensured that all employees’ were fully occupied, which helped the company to become more efficient regarding labour. Additionally, the new SUS desktop could play games because of its pre-installed games software. This feature was essential in enabling the company to attract individuals who play computer games. Finally, the company did not offer rebates to sellers since it was convinced that its sales personnel were competent enough to sell all the available computers. This strategy was crucial in enabling the company to maximize profits from the sale of its computers.
References
Daft, R. (2015). Management (12th ed.). Cincinnati, OH: South-Western College Pub.
Kotler, P., & Keller, K. (2015). Framework for marketing management (6th ed.). New York, NY: Pearson.
Merna, T., & Al-Thani, F. (2008). Corporate risk management (2nd Ed.). Hoboken, NY: Wiley.
Wheelen, T., Hunger, D., Hoffman, A., & Bamford, C. (2015). Concept in strategic management and business policy (14th ed.). New York, NY: Pearson.