Time Warp - Essay Example

I realized I was in a different dimension. I have traveled back in time. So I went on with my journey. I was hired at Handheld Corp. and was given a rather comprehensive task. I was asked to review Joe Schmoe’s financial report on handheld products sales. Analysis On the PDA simulator I had a final score of 1,185,800,553. I did better than Joe Schmoe by 20,890,196. I have observed that Joe’s strategy was a “lazy” implementation of marketing. If he took the time to analyze the performance of a product and what prices were appropriate to set, he would yield higher profits.

I have made numerous attempts using a simulator to prove that my strategies worked better. I followed the advisor’s analysis and used it as my guide in pricing and allocation of R&D. One strategy I used for marketing handheld products is market segmentation. This is implemented by providing handheld products in different categories (X5, X6, and X7) to serve specific needs of target customers and increasing market share. Even with the discontinuation of X5 handheld in 2009, it was a strategy to market better available products to attract buyers.

Pricing strategy was also what I’ve used relative to R & D allocations to generate profits. For instance, X5 sales were starting to decline. In 2008, I did not drop the price significantly or I Time Warp 2 will lose a lot of money. I was able to keep customers who purchased the X5 handheld for $240. Then, I decided to discontinue the product the following year to avoid more losses. R&D allocations were a bit tricky. I used the advisor’s analysis to manipulate the allocations. For example, when X5 was discontinued in 2009, I kept the same prices for X6 and X7 as of 2008 in 2009 and increased their R&D allocations to 30% and 70% respectively.

The tremendous increase in R&D had a positive impact on revenues. However, in 2008, I decided to distribute R&D of 25% equally to X5, X6, and X7 handheld products. When I tried to reduce X5 R&D to 10%, I had a higher loss. With 25% R&D I was able to avoid the loss of -9,870,920 and reduced it to a loss of -$6,176,598. If I didn’t adjust that 10% R&D, it would affect profits for 2009. I also based my analysis on the product performance and on what level they are in terms of sales. For instance, X7 handheld was in the ‘growth phase’ in 2006 with a profit of $3,199,108.

The following year, I reduced its price to $200 and allocated a higher R&D of 25%. The result was phenomenal. I had a profit of $23,555,939. Maintaining the 25% R&D and price the following year, the profit for X7 was more than doubled. Here’s the breakdown of prices, R&D allocations, and profits for X5, X6, and X7: 2006   PRICE R & D allocation PROFITS X5 255 25% $105,374,127 X6 415 30% $164,680,477 X7 215 23% $3,199,108 TOTAL     $273,253,711  Time Warp 3 I increased the prices for all handheld products and decreased their R&D.

As a result, advisory said X7 handheld was in the growth phase and potential X7 customers were new customers. X7 handheld performance was holding steady while X6 was priced the same as other competing products. Although Joe gained a higher profit of $295,185,49 in 2006, it was only temporary. 2007   PRICE R & D PROFITS X5 245 25% $98,442,902 X6 415 30% $213,598,730 X7 200 25% $23,555,939 TOTAL     $335,100,583  Since X6 performance was better than that of competition, I decided to maintain the price and R&D and it paid off as I had a higher profit. However,