Strategy Simulation Game: Economics for Managerial Decision Making
Introduction
This write up analyses the Strategy Simulation Game, the important economic and strategic decision that a firm must make in order to achieve maximal profit and how the approach changes based on the four general classification of industries (Stegmann, 2009) and the decision that I made using the information from AMBA670 and previous course. Decision making processes of management is described in different market structures. Just as it pertains to any for-profit business organization, the goal is to cut and maximize profits in each type of market structure. Based on the information provided, Quasar Computers developed and pioneered the first optical notebook. In 2003, the company launched their new product and branded it the Neutron. This product is described as an energy saving optical technology with its rechargeable batteries capable of lasting up to three days. From here the company begin their organizational structure as a monopoly and as the years proceed they have to adapt to the changing industrial structures.
Monopoly
As a monopoly enterprise, Quasar Computers was faced with maximizing their potential profits for the next three years, while controlling the market quantity and the sale price due to the absence of competition (Grant, 2010, Stegmann, 2009). One way to look at this is to use microeconomics, whereby a firm’s optimal performance or most profitable performance is when marginal cost is equal marginal revenue. When adjusting the price to determine maxim profit the maximizing profit tends to occur at the point where marginal cost equals marginal revenue as demonstrated by the results shown by toggling the price of the demand curve. With a maxim profit Quasar had a total cost of $12.18 billion, total revenue of 13.5 billion, total profit of 1.29 billion and set price per unit of $2,550.00. Additionally with this price, marginal cost and marginal revenue, Quasar can control the demand for their product sole based on
This write up analyses the Strategy Simulation Game, the important economic and strategic decision that a firm must make in order to achieve maximal profit and how the approach changes based on the four general classification of industries (Stegmann, 2009) and the decision that I made using the information from AMBA670 and previous course. Decision making processes of management is described in different market structures. Just as it pertains to any for-profit business organization, the goal is to cut and maximize profits in each type of market structure. Based on the information provided, Quasar Computers developed and pioneered the first optical notebook. In 2003, the company launched their new product and branded it the Neutron. This product is described as an energy saving optical technology with its rechargeable batteries capable of lasting up to three days. From here the company begin their organizational structure as a monopoly and as the years proceed they have to adapt to the changing industrial structures.
Monopoly
As a monopoly enterprise, Quasar Computers was faced with maximizing their potential profits for the next three years, while controlling the market quantity and the sale price due to the absence of competition (Grant, 2010, Stegmann, 2009). One way to look at this is to use microeconomics, whereby a firm’s optimal performance or most profitable performance is when marginal cost is equal marginal revenue. When adjusting the price to determine maxim profit the maximizing profit tends to occur at the point where marginal cost equals marginal revenue as demonstrated by the results shown by toggling the price of the demand curve. With a maxim profit Quasar had a total cost of $12.18 billion, total revenue of 13.5 billion, total profit of 1.29 billion and set price per unit of $2,550.00. Additionally with this price, marginal cost and marginal revenue, Quasar can control the demand for their product sole based on
References: Grant, R.M. (2010). Contemporary strategy analysis (7th Ed.). Malden, MA: Blackwell Jain, V. K. (2002). AMBA 607 Strategy. Note on Industry Structure. Retrieved from http://info.umuc.edu/mba/public/AMBA607/IndustryStructure.html Porter, M.E. (2008). The Five Competitive Forces That Shape Strategy: In HBR’s 10 Must Reads on Strategy Stegmann, J. (2009). Critical Thinking in Strategic Management: A Conceptual Guide to AMBA 670 Managing Strategy in the Global Marketplace. Retrieved from AMBA 670 Course Content