TATA INTERNATIONAL SYSTEMS
Tata Interactive Systems (Simulation Game)
Christie Smith
AMBA670 -9041
Professor. K. Edelmann
University of Maryland University College
Introduction
In this paper, economics in managerial decision making will be examined. It describes the decision making processes of management in diverse market structures. The main objective of an organization is to maximize profits in each type of market structure. Quasar Computers has done extensive research for the development of optical notebook. In 2003, Quasar launched the first all-optical notebook computer trademarked as 'Neutron '. Neutron uses energy saving optical technology, which established it as the market forerunner (Tata Interactive Systems, 2014.). Below are examples of pricing and other decisions which were taken for this product in various market structures.
Pure Monopoly
An industry is a “monopoly” when there is one firm supplying the market. (Custom text, 2012, p. 72) Quasar, being the only seller for the new and unique computer technology, established a monopoly market structure for their system. In a pure monopoly, profit expansion occurs where marginal cost and marginal revenue parallel each other (p. 72). In this scenario, Quasar objective was to maximize the profits, because of its monopolistic situation caused by the patent rights on all-optical technology valid for three years beginning in 2003. They were able to monitor requests for Neutron and earn maximum amount of profit by selling each unit at $2,550 . By doing so, Quasar was able to earn a profit of $1.29 billion. An increase in the fixed firm price at this level would have caused a decline in the profit as well as the number of units requested. Equally, a decrease in the price from this level would have also caused a decline in the profit though the demand was slightly more thereby, not achieving the business break even analysis. The total quantity wanted at this price particular level was 5.3 million units. Additionally,
Christie Smith
AMBA670 -9041
Professor. K. Edelmann
University of Maryland University College
Introduction
In this paper, economics in managerial decision making will be examined. It describes the decision making processes of management in diverse market structures. The main objective of an organization is to maximize profits in each type of market structure. Quasar Computers has done extensive research for the development of optical notebook. In 2003, Quasar launched the first all-optical notebook computer trademarked as 'Neutron '. Neutron uses energy saving optical technology, which established it as the market forerunner (Tata Interactive Systems, 2014.). Below are examples of pricing and other decisions which were taken for this product in various market structures.
Pure Monopoly
An industry is a “monopoly” when there is one firm supplying the market. (Custom text, 2012, p. 72) Quasar, being the only seller for the new and unique computer technology, established a monopoly market structure for their system. In a pure monopoly, profit expansion occurs where marginal cost and marginal revenue parallel each other (p. 72). In this scenario, Quasar objective was to maximize the profits, because of its monopolistic situation caused by the patent rights on all-optical technology valid for three years beginning in 2003. They were able to monitor requests for Neutron and earn maximum amount of profit by selling each unit at $2,550 . By doing so, Quasar was able to earn a profit of $1.29 billion. An increase in the fixed firm price at this level would have caused a decline in the profit as well as the number of units requested. Equally, a decrease in the price from this level would have also caused a decline in the profit though the demand was slightly more thereby, not achieving the business break even analysis. The total quantity wanted at this price particular level was 5.3 million units. Additionally,
References: Collis, D.J., & Montgomery, C.A. (1995, July/August). Competing on resources: Strategy in the 1990s. Harvard Business Review, 73(4).(Custom Textbook (2012), Managing Strategy in the Global Marketplace. Chapter 21 pp 495-514.) Newman, C. (2012). Custom textbook: Managing strategy in the global marketplace. McGraw-Hill. 12 Porter, M. E. (2008). Porter’s Five Forces Model Produced by QuickMBA. Retrieved from http://www.quickmba.com/strategy/porter.shtml http://info.umuc.edu/mba/public/TIS/economics/market/economics_market_part1.swf