For each round in the research and development decision, we had to adjust the performance, size, and position of the product for the following rounds or slightly better than the ideal position in order to gain a competitive advantage. We set price within the designated range but left enough room to have a higher profit margin. We did an excellent job in improving our product to stay on top of the changing trends. However, our prediction for the sales wasn’t met until round four. The reason is that our competitors always had a lower price with almost the same performance and size as our product. Furthermore, we had more inventory carrying costs for the first few rounds, which decreased our …show more content…
Furthermore, the performance and size for the product was set to meet the ideal position in round six, which implies by round six, our product will be the best age for the segment. However, during the simulation, some of our competitors had the same strategy in automation level setup, which made it difficult for us to compete in price. In round five, we made a mistake in marketing, causing us to have a relatively low contribution margin compared to our competitors. Except for round three, we had high inventory carrying costs for this segment.
High End Segment Currently, we have three products in this segment, and we are the market leader. Two new products were launched in round four because we thought that would be the best time to have a new product in this segment; during round four, the cumulative growth of this segment peaked. We made a mistake in the high-end segment in marketing; we spent too much money, and the outcome did not meet our expectations.
Size and Performance While these two segments are not our top priority compared to other segments, we still try our best to have a little bit of market share in both