The Clipboard Tablet Company - Essay Example

? TBUS599 - Integrative Project, Mod 5 SLP Introduction The Clipboard Tablet Company has done pricing for three years from to2014 and a projection for 2015 pricing. In this scenario, the New Year, 2015 has arrived and the 3 products X5, X6, and X7 tablets are performing just well according to the market projections. Pricing for product X5 had been discontinued for product 5 according to the earlier price projections that no customer would be retained for it. However, the company makes adjustment for the other products for the year 2015 because product X5 has been discontinued, having attained market saturation. The pricing for the other products X6 and X7 have to undergo strategic analysis and appropriate changes in order to retain and improve the company based on the remaining two products. The New Year celebration comes at the beginning of the year 2016, but we realize that the celebration experience was not valuable because the year 2015 did not end with better performance. This calls for an analysis of the performance of the last two years so as to determine the major causes of low performance and make better decisions for the future. As we compare the results for the last two Time Warps, we allocate appropriate decisions that will improve the performance for 2016. We then take the results through the analysis of Cost, Volume and Profit to determine the differences in results obtained. Simulation We begin simulation by analyzing each product separately. Based on the decision to discontinue product X5 in the year 2015, we will first have an analysis of the products X6 and X7, then a separate analysis for product X5 in order to know whether to remain as discontinues or return to the market. We will have the simulation results as follows: Product X6 The X6 has existed for the last 5 years, and was discontinued for 2016 as a result of having attained market saturation point. The company had been reducing prices every year in order to encourage large volumes of sales (Hansen & Mowen, 2006). The prices for competing products were still lower than that hence the number of customers repeat sales went down to 0. Likewise, the number of retained customers remained 0. Product X7 The product X7 targets clients whose objective is to obtain good prices as well as performance. Its pricing depends on parameters for high performance and cost effectiveness. It has not reached its saturation point in the market hence it is not discontinued. It proceeds to the year 2016. Year 2014 2015 2016 Price 275 250 246 Results and Decisions The simulations indicate that product X5 and X6 do not make it to the year 2016. Both of them reach saturation points and they no longer attract customers. Product X7 continues in the market in 2016 and the first time customers continue to increase. The results can be interpreted to mean that as long as there is a product whose customers depend on a single attribute, it will certainly attain a saturation point of the price and looses the power to retain customers. At the same time it fails to attract new customers as in the case of product X5 and X6. It leads the management of Clipboard Tablet Company to consider producing more of product X7 than the others. Difference in Results using CVP Analysis (Cost, Volume and Profit) The analysis of cost, volume and profits enables a company to develop and focus on the approaches that will introduced in connection to the product pricing (Williams & Williams, 2010). It also focuses on the needs of research programs that can improve the productivity and customer satisfaction index of a company. Clipboard Tablet Company can now formulate and implement the strategies that on the basis of Cost, Volume and Profit analysis (CVP). CVP analysis will enable Clipboard Tablet Company to determine the best strategy to use in connection to the pricing of the three products. It also determines when a particular product should be discontinued depending on the contemporary ranges of tablets prices in the market (Drury, 2007). A CVP analysis is an essential planning tool that is also used for making vital decisions. It acts as an important and influential instrument in planning the future prospects of the company. Thirdly, it helps a company to increase the sale level of the company products. For Clipboard Tablet Company, the analysis has led to critical decision making for each of the three products. During the year 2015, Clipboard Tablet Company drops product X5 after reaching saturation point. In 2016, product X6 reaches saturation. Essentially, in 2016 Clipboard Tablet Company deals only with product X7. Here are the results of CVP analysis: Product CVP Analysis Result Decision Target Time X5 Cost: The production cost goes up Discontinue the product. 2015 Volume: Sales Volume gradually reduces to 0 and sales amount goes down from 2,077,898 to 0. Profitability: Profitability reduces as a result of reduced sales. X6 Cost: The production cost goes up Discontinue the product. 2016 Volume: Sales Volume gradually reduces to 0 and sales amount goes down from 680,722 to 0. Profitability: Profitability reduces as a result of reduced sales. X7 Cost: The production cost remains within a constant range Maintain product X7 Introduce new versions Continuous To be decided on later. Volume: Sales Volume gradually rises and sales amount goes up from 84905 to 127034. Profitability: Profitability grows as a result of increased sales and new customers. Decisions Clipboard Tablet Company decides to follow the results and decision target dates to discontinue product X5 and X6, based on the CVP analysis projections for the year 2015 and 2016 respectively. The company however decides to continue with product X7 while developing the next version of products that attract customers using profitability and prices of the products (Jain, 2000). The company takes care of the rapid variations in customer choices, but continues to offers product X7 in the market. The company then has to produce a new product to avoid depending on just one product. Conclusion This analysis is about the performance expectation and decisions for enhancing performance of the subsequent years. Clipboard Tablet Company celebrates the end of 2015. The company welcomes 2013, makes reviews for the last four years and makes decisions to drop two products X5 and X6, but retains X7 in 2016. By the second month, the company celebrates. References Drury, C. (2007). Management and Cost Accounting. New York: Cengage Learning. Hansen, D. R., & Mowen, M. M. (2006). Managerial Accounting. New York: Cengage Learning. Jain, P. K. (2000). Cost Accounting. London: Tata McGraw-Hill Education. Williams, S., & Williams, N. (2010). The Profit Impact of Business Intelligence. London: Morgan Kaufmann. Read More