Bus599 Slp4 Hnolefoods

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TRIDENT UNIVERSITY

Module 4 Session Long Project

BUS 599: MBA Interactive Project

Introduction
Continuing the work and analysis begun in the first three SLPs, we again project ourselves back in time to the year 2012. I am in responsible for decisions on product development and pricing for the next four years for our line of tablets. I will show the score, financials and market data at the end of the four year period from my previous time discussions. Finally we can make a detailed discussion and analysis of the data using CVP analysis, and will explain why I recommend specific pricing and research and development (R&D) costs for the next four year period.

Discussion
The Clipboard Tablet Company is currently making three different tablet models; the X5, X6 and X7. The X5 has been on the market for three years already and market research has determined that consumers are not very worried about performance for this older tablet. The middle tablet, the X6, has been on the market for two years and market research shows consumers are concerned about performance but not necessarily price. The final tablet, the X7, is the newest and has only been on the market for one year, and market research shows the consumer is interested in both performance and price. With this in mind, we can analyze how the products evolved when Mr. Shmoe was in charge.

The following table depicts the price and R&D percentage for each tablet over the preceding four years (since the last run) and whether or not the particular tablet production was discontinued or not. The graphs also depict the revenue generated and profit from the different tablets over the time period I was in charge of making the decisions instead of Mr. Shmoe.

Annual Pricing & R&D Allocations|
| 2012| 2013| 2014| 2015|
X5| Price: $300| Price: $300| Price: $275| Price: $260| | R&D: 5%| R&D: 1%| R&D: 0%| R&D: 0%|
| Discontinue? No| Discontinue? No| Discontinue? No| Discontinue? No| X6| Price: $375| Price: $380| Price: $385| Price: $390| | R&D: 40%| R&D: 39%| R&D: 35%| R&D: 35%| | Discontinue? No| Discontinue? No| Discontinue? No| Discontinue? No| X7| Price: $120| Price: $125| Price: $130| Price: $135| | R&D: 55 %| R&D: 60 %| R&D: 65%| R&D: 65%| | Discontinue? No| Discontinue? No| Discontinue? No| Discontinue? No|

Revenue

Profit

2014-2105 Financial Data
| This Year| Last Year| % Change|
Revenue| | | |
Total Sales| 7,685,514| 5,712,453| 26%|
Revenue| 1,396,749,808| 1,308,121,078| 6%|
Cost| | | |
Variable Costs| 715,848,398| 739,090,570| -3|
Fixed Costs| 150,000,000| 150,000,000| 0%|
R&D Costs| 24,000,000| 24,000,000| 0%|
Profit| | | |
Total Profit| 506,901,411| 395,030,509| 22%|
Total Profitability| 36%| 30%| 17%|

2014-2015 Marketing Data
X5 Marketing Report for 2014-2015|
| This year| Last Year| % Change|
Customer Base| | | |
Installed Base| 6,132,426| 4,354,114| 29%|
Remaining Customer| 902,574| 2,680,886| -66%|
Market Saturation| 87%| 62%| 29%|
X6 Marketing Report for 2014-2015|
| This Year| Last Year| % Change|
Customer Base| | | |
Installed Base| 6,550,000| 6,268,945| 4%|
Remaining Customer| 0| 281,055| -100%|
Market Saturation| 100%| 96%| 4%|
X7 Marketing Report for 2014-2015|
| This Year| Last Year| % Change|
Customer Base| | | |
Installed Base| 4,294,481| 1,861,123| 57%|
Remaining Customer| 13,545,519| 15,978,877| -15%|
Market Saturation| 24%| 10%| 58%|

Review
Overall the results of the third run of the tablet simulation had an end result which was approximately $142 million greater than...
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