StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Review of Joe Schomes Strategies - Coursework Example

Cite this document
Summary
From the paper "Review of Joe Schomes Strategies" it is clear that the company should also determine ways through which it can create barriers to market entry to reduce competition for X7 (Shim and Siegel 50). This can be through the differentiation of X7…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.4% of users find it useful
Review of Joe Schomes Strategies
Read Text Preview

Extract of sample "Review of Joe Schomes Strategies"

Task: SLP2 599 Introduction Joe Schome, the Vice President of Marketing at Clipboard Tablet Company, was fired after he failed to direct the company to the level expected by Sally Smothers, the Chief Executive Officer. He did not determine the right pricing and product development strategies for the three goods manufactured by the company. The products are X5, X6 and X7. As the new Vice President of Marketing at the company, it is essential to determine the right pricing and product development strategies to be implemented over the next four years. This paper reviews strategies used by Joe Schome and those adopted to move the company to a better position by 2016. Review of Joe Schome’s Strategies Joe did not change prices and research and development allocations for the products for a period of over six years. The strategy adopted was effective in that the company did not make losses. Products X5 and X6 registered profits for all the years. Product X7 made losses for the first three years. However, it improved in performance as the years progressed. Nonetheless, the strategy could not move the company to the next level as expected by Sally Smothers. Moreover, the sales, revenues earned and profits made by the products declined after two years. On the other hand, prices and total costs were maintained for all the years. This means that from the beginning, the profits and sales increased at declining rates. The price for X5 was maintained at $285 and there existed approximately six million customers. Additionally, market saturation was only 15%. However, performance declined and as competition increased, the profitability of X5 declined. By 2015, competition was stiff and market saturation was 94% (Mahajan, Yoram and Eitan 99). The profitability of X5 was only 17%. The price of X6 was also maintained at $430 for all the years. However, X6 also faced stiff competition and by 2015, market saturation was 93%. The number of customers had also declined to 488,152 and the profitability of X6 was 27%. It is clear that Joe should have determined a strategy through which customers could be retained. This would have been through manipulation of prices or vigorous product development. The price of X7 was maintained at $190. X7 did not face stiff competition and it had a large customer base of approximately 17 million people. Moreover, it has a lower production cost when compared to the X5 and X6. It also improved in profitability. However, its improvement in performance was at a slow rate. Joe should have encouraged vigorous product development so that the company specializes in production of X7. Generally, Joe’s strategy did not consider the value of customer retention. Hence, first time customers for all the products are high yet repeat sales are low. This also shows that the research and development strategy was not very effective. Proposed Strategies For the first year, the price for X5 should be maintained at $ 285. The research and development allocation should also be maintained at 33%. This would enable the company to make a profit of 16%. In the second year, the company can maintain the price and X5 can be 30% profitable. In 2013, the company can reduce the price as competitors enter the market. This would assist the company to increase sales. The assumption is that the competitors also charge $285 for X5. The company can charge $280 with the hope of increasing sales from 2,145,622 to 2,500,000. In 2014 and 2015, the company can reduce the price of X5 with the hope of increasing sales. It can also reduce the research and development allocation as it seems to be ineffective. The production of X5 should be discontinued in case customers do not respond positively to the reduction in prices by the end of 2015. This is because there would be stiff competition in 2016 and the number of customers would not be adequate to ensure recovery of production costs. Furthermore, X5 has a very short life cycle. The price of X6 should also be maintained at $430 in 2011and 2012. This would ensure the profitability of X6 is 16% and 28% respectively. However, the saturation of the market would be 34% by 2013. The number of customers would also reduce by 2013. Hence, in 2013 and 2014, new prices for X6 must be determined to ensure customer retention and continued profitability of the X6. The price can be reduced to $400 to increase sales. Additionally, the variable costs should not be increased in 2014. In 2015, the market saturation would be 93% and the number of remaining customers would be only 488,152. From the strategy used by Joe, it is clear that the amount invested in research and development did not result in improvement in the performance of the X6. Hence, in 2015, the total costs should be reduced by elimination of research and development allocation. The prices should then be maintained at $400 to capture more customers from competitors. The company began the production of X7 in 2012 and the product does not face much competition. Additionally, there exist over 17 million customers willing to buy X7. However, the performance of X7 improves at a very slow rate. Joe maintained the price at $190 and the performance improved. This may indicate that the price is not the issue that affects the performance of X7. Hence, in 2012, the introductory price should be higher than $190. The price of X7 in 2012 should be $ 275. On the other hand, more amount should be invested in the improvement of X7. The assumption is that customers are not concerned about the price of X7. Conversely, the assumption is that they are concerned with the quality or performance of X7. In all the other years that follow, the price of X7 should be maintained at $275 while the product is improved through more research and development. The company should also determine ways through which it can create barriers to market entry to reduce competition for X7 (Shim and Siegel 50). This can be through differentiation of X7. The production of X7 should continue in 2016 and the company should specialize in its production. Moreover, the company should ensure that customers who buy X7 are retained as it could be the main business area of the company. The product, X7, has a long life cycle and is likely to be profitable in the long term (Grieves 50). The recommendations are based on cost volume profit analysis of the three products (Hansen, Maryanne and Liming 590). Strategies Joe Should have Used At the beginning of 2012, the price of X5 should be maintained at $285 and be reduced to $280 in 2014. Its production should be discontinued in at the end of 2015. The price of X6 should also be maintained at $430 for the first two years of production. Afterwards, the price should be reduced to $400. Finally, the introductory price of X7 in 2012 should be $275. The price should be maintained for the rest of the years. Additionally, more amount should be allocated to the improvement of X7. Approximately 39% should be spent on research and development of X7. The final cumulative profit based on these changes is $ 727,396,674. This is higher than the performance of Joe, which was $ 270,573,835. Works Cited Grieves, Michael. Product Lifecycle Management: Driving the Next Generation of Lean Thinking. New York: McGraw-Hill, 2006. Print. pp39 Hansen, Don, Maryanne Mowen, and Liming Guan. Cost Management: Accounting and Control. Mason, Ohio: South-Western, 2009. Print. Mahajan, Vijay, Yoram Wind, and Eitan Muller. New-product Diffusion Models. Boston: Kluwer Academic, 2000. Print. Shim, Jae, and Siegel Joel. Modern Cost Management & Analysis. Hauppauge, NY: Barron's Educational Series, 2009. Print. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“SLP2 599 Coursework Example | Topics and Well Written Essays - 1000 words”, n.d.)
SLP2 599 Coursework Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/business/1466497-slp2-599
(SLP2 599 Coursework Example | Topics and Well Written Essays - 1000 Words)
SLP2 599 Coursework Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/business/1466497-slp2-599.
“SLP2 599 Coursework Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/business/1466497-slp2-599.
  • Cited: 0 times

CHECK THESE SAMPLES OF Review of Joe Schomes Strategies

Analyzing the Learning and Development Strategies of an Existing Organization Wal-Mart

This case study "Analyzing the Learning and Development strategies of an Existing Organization Wal-Mart" is about reference is made to a particular organization, Wal-Mart.... The incorporation of effective learning and development strategies in modern organizations can ensure that their activities will be effectively supported in regard.... Learning and Development strategies in Wal-Mart 2.... Overview of Learning and Development strategies in Wal-MartIn order to evaluate the effectiveness of the L&D strategies of Wal-Mart, it is necessary to review the key aspects of L&D, as developed in the particular organization....
17 Pages (4250 words) Case Study

SLP 1 - Strategic Review Simulation

To: CEO, Clipboard Tablet Co From: VP Marketing, Clipboard Tablet Co Date: August 19, 2012 Subject: SLP 1 - Strategic Review Simulation The objective of this annotation is to elaborate the adjudication related to pricing, R&D expenditure and discontinuation strategies along with the adjudication accomplished by Joe Schmoe regarding strategies pertaining to three tablet models manufactured by the company.... It bestowed the information regarding the design and method as well as their consequences regarding market share and financial accomplishment from the past six years for the elaboration that either those strategies are beneficial for the company or not....
4 Pages (1000 words) Essay

Organizational Diagnosis for Clipboard Tablet Company

This report will express the alternate strategies applied by the marketing manager of the company to check and compare the improvements brought into the decisions (Pandey, 2007).... In this study, all the three categories will be part of the analysis to make right decisions on financial and marketing areas, with respect to improvement on decisions made by joe Schmoe the vice president of the company.... Strategic Decisions With respect to the decisions made by joe Schmoe, certain brand values were set to devise a financial strategy (Pandey, 2007)....
5 Pages (1250 words) Case Study

Identify the Perceptions of a Wide Variety of Different Employees

All of the theoretical and professional viewpoints described in this critical review viewed the employee from multiple perspectives.... Individual recognition could theoretically come in many forms, such as the aforementioned promise of promotion for meeting target goals, praising the employee in front of managers, colleagues, or clients, or offering an incentive bonus (after an annual review) which rewards the individual at a later time for meeting performance targets....
9 Pages (2250 words) Essay

ANALYZE THE CORPORATE STRATEGY AND OPERATING ENVIRONMENT

Corporate Strategy is a significant aspect of business that focuses on the general rationale and extent of an organization's operations in satisfying the expectations of its stakeholders.... It is a significant aspect since it directs the process of decision making all along in.... ... ... More over, there is substantial influence exerted on the business by investors....
4 Pages (1000 words) Essay

Bonus Schemes Utilized by Bibby Financial Services

This report "Bonus Schemes Utilized by Bibby Financial Services" reflects the bonus scheme of a company offering professional financial advice to owners of small businesses and factoring.... The company considers numerous factors within the organization in determining the amount of bonus offered....
10 Pages (2500 words) Book Report/Review

Organizational Diagnosis, the Tablet X5

An organization has to be intelligent in terms of its long term strategies, especially in the areas of finance and marketing.... An organization has to be intelligent in terms of its long term strategies, especially in the areas of finance and marketing.... his report will express the alternate strategies applied by the marketing manager of the company to check and compare the improvements brought into the decisions (Pandey, 2007).... In this study, all three categories will be part of the analysis to make the right decisions on financial and marketing areas, with respect to improvement on decisions made by joe Schmoe the vice president of the company....
6 Pages (1500 words) Essay

Analysis of the Market Strategies

The paper 'Analysis of the Market strategies' is a meaningful example of a management case study.... The paper 'Analysis of the Market strategies' is a meaningful example of a management case study.... The paper 'Analysis of the Market strategies' is a meaningful example of a management case study.... Trader joe's business can penetrate the market through the use of SO strategic option.... Trader joe's business can penetrate the market through the use of SO strategic option....
6 Pages (1500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us