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Input Prices and R&D Allocation Analysis for Tablet Development Corporation - Research Paper Example

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The aim of this paper is to discuss the new pricing and R&D allocation strategy for the core products X5, X6, and X7 and to reflect on the subsequent performance of each product in response. The paper analyses the performance and life cycles of each product due to the difference in the decisions…
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Input Prices and R&D Allocation Analysis for Tablet Development Corporation
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Download file to see previous pages The pricing strategy is largely used as the competitive force for the companies to achieve maximum market share in a particular marketplace. For instance, Apple Inc. uses the low-pricing strategy along with its innovative product catalog to attract the largest customer share of the global marketplace. In the study conducted in 2010, Blevins, Cunningham, Ivanova, Koke, and Sullivan (2010) found that Apple Inc. has adopted an international price distribution strategy to achieve competitive advantage over its competitors; mainly the Microsoft. In this regard, it has a separate price strategy for each region which is consolidated and central in nature. Likewise, Tablet Development Corp.’s largest competitors are Acer, Apple, Samsung and Microsoft that are involved in the production and manufacturing of tablet computers and applications. In order to enter into the established marketplace, Tablet Development Corp. has to undertake the penetration pricing strategy. A penetration pricing strategy is used when the company has to enter into an established marketplace and to attract the market in a substantial manner through low-pricing techniques. After a while, the prices of the product are gradually increased with a strong focus on the product performance that is measured through the customer base and sales volume of each year. In the year 2012, the price of product X5 was set at the lowest possible price of $180 and it was increased by $5 every year. Similarly, the price of X6 was set at $300 only and was increased by $10 each year. The price of X7 was kept at $50 and is increased by $10 each year (See Annex 1).

Wind (1990) postulated that there are four purposes of R&D investment, namely: (1) Support and enhancement of existing products and services, (2) Line extension of existing products and services, (3) Discover new products and markets, and (4) Develop new products and services and market portfolios. ...Download file to see next pagesRead More
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