Industry A – Firm 1
Product 1
Objectives
Profit maximization for the firm over the
period of the game
Grow sales and market share
Success in making profit all 9 years and
average annual growth of retail sales of
9.44%
Strategy
Initially our strategy was to increase
product attributes and price to appeal to
creators and managers
After over differentiation of our product we
decided to make a product that had a
broad appeal
Performance
Average annual retail sales growth of 9.44%
Industry wide average annual retail sales growth
of 13.65%
Average annual net contribution growth of 26%
Average annual net profit margin of 13%
Net Contribution (OOPS)
Net contribution
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
0
2
4
6
Period
8
10
12
Success and Failures
Our firms biggest problem was declining
dealer push and brand recognition
Average Dealer Push compared to Market Share ($ Sales)
0.8
0.7
0.6
Average Dealer
Push
Period
0.5
Market Share ($
Sales)
0.4
0.3
Brand
Recogntion
0.2
0.1
0
0
2
4
6
8
10
Future Strategy
To be successful in the future we need to
grow “dealer push” by sales promotion and
dealer satisfaction while keeping a product
that is appealing across many market
segments
Product 2
Objectives
Our primary objective in introducing the
second product was to increase net
contribution for the firm, we also wanted to
be the DVC market leader
Highly successful – 40% of total net
contribution over last 5 years and 60% of
total net contribution over last 3 years
Strategies
Originally we introduced the DVC as
cheaply as possible to both have our foot
in the market and to steal sales from any
other firm that entered the market
As time progressed we developed Zapem
to be a major money maker by increasing
advertising and product attributes
Performance
Average annual retail sales growth of
104.88%
Average annual retail sales growth of
Getem (only competitor) was 70.09%
Average annual net profit margin of 16%
Average market share ($ sales) of 76%
Net Contribution of DVC
$1,800,000
Net Contribution
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
Series1
$600,000
$400,000
$200,000
$0
$200,000 0
2
4
6
Period
8
10
Success and Failures
Our key to success with our DVC brand,
Zapem, was our early entry into the
market
High brand recognition and willingness to
make large production orders also
contributed to the success of Zapem
Future Strategy
To ensure future success in the DVC
market we should strive to create a
broadly appealing product with a markup
of 45% - 50% while increasing sales
promotion
Combined
OOPS and Zapem
Performance
Average combined annual retail sales
growth of 14.05%
Industry wide average combined annual
retail sales growth of 17.54%
Average annual net contribution growth of
41%
Average annual net profit margin of 14%
Retail sales and net contribution
$16,000,000
Combined net
contribution for
A1
$14,000,000
$12,000,000
$10,000,000
Industry wide
combined
average retail
sales
$8,000,000
$6,000,000
Combined
retail sales of
A1
$4,000,000
$2,000,000
$0
0
2
4
6
Period
8
10
12