2. Think about and list what the fixed costs might represent for your fictitious business (be…
It is important to note that product differentiation lies in the mind of the consumer. In fact, two products may be identical, but are presented in such a way that one is superior to the other. In order to create such distinctions, firms have created image differentiation based on branding. Differentiation strategies allow for products to command brand loyalty and a corresponding reduction in price sensitivity. Brands are of increasing worth since they are intangible assets that are difficult for competitors to understand and…
Erie is currently a strong competitor in the Traditional segment. They have two products in this segment, they are both priced the same, however, Echo is spot on the ideal position customers want. The age is of these products are also close to the two years that customers want. The price is a little on the high side, but competitive. The MTFB of the sensors are also very competitive. The company could be a little more accessible. They have stopped the High performance plant and look to have stopped their Performance plant. I assume they are also going to stop the size plant as they only started the last round with 64 units, they may move it to another segment though since they kept capacity. All of the plants they did utilize they used them over 100%. Erie had low sales last round, but I expect them to gain more sales. They had a good margin at 31.3%. They have a low bond rating of CCC. I think if they would have kept a product in one of the other segments they would have had better sales. Their advantage now is having two products in a large segment.…
Brand differentiation is an important marketing concept for companies. Product differentiation refers to a marketing strategy where a company attempts to make its product unique from competing products. A successful differentiation strategy enables a product to stand out from its competitors. It also means that there are substantive differences between a product and other available alternatives in the market. Today, there are various products that have successfully differentiated from their competitors. They include the iPhone, Google search Engine, Coca Cola, and Toyota. The sections below provide detailed descriptions of the differentiating factors for the products.…
Strategic capacity planning involves keeping the system balanced so the output of one level is the required input of another level. A bottleneck anywhere in this process would limit the thoroughput time within this system. This is evident in the example of the Riordan manufacturing of the electric fans. The manufacturing process requires specialized piece parts and a specialized labor supply with proper knowledge to create the product.…
When pursing a differentiation strategy, the focus of competition is to add unique features in order to…
* I choose a broad differentiation strategy as a best fit. Allen Franks seeks to produce a competitive edge by incorporating attributes and features that set his payday loan company apart from rivals in ways that buyers consider his services more valuable. Successful differentiation will allow his firm to:…
Contribution margin is nothing more than a way to see if an organizations operation is profitable. The costs for any business will fall into two broad categories: fixed costs and variable costs.…
Mendel Paper Company has been doing relatively well with the sales of computer paper, napkins, place mats, and poster board. With more people eating out, the demand for napkins and place mats have increased. Computer paper and poster boards have slowly increased in demand as well. However, there is concern at the company with the fixed cost of operations. Marlene Herbert, the plant superintendent, said, “As we have automated our operation, we have experienced increases in fixed overhead and even variable overhead. And, we will have to add more equipment since it appears that we need even more plant capacity. We are operating over our normal capacity as it is.” (Case 2B). With the new production costs added in, will the Mendel Paper Company have what it takes to succeed?…
Marketing: Our company will spend modestly on promoting and selling products in our industry. Our prices will be lower than average. After we establish our cost leadership position, we will revisit our situation to explore options to improve awareness and accessibility.…
5. Assuming a firm’s costs are split between variable costs and fixed costs, once variable costs are covered,…
To maximize the total contribution margin when constrained resources are an issue, what should a company try to do? Produce the products with the highest contribution margin per unit of constrained resource.…
Our team decided to choose the “Broad Differentiation” strategy as the basic strategy for our company. We will attempt to differentiate our product line in several distinct dimensions. By providing products that are vastly superior and unique from our competitors and pricing the products with an affordable price, we can gain something that is beneficial for the company in the future, which is customers’ loyalty and awareness. We may change or modify our strategy for the next round depending how it performs against our competitors.…
The high demand causes shortages, but it can also leads to increases in sales for some firms; therefore effective plans can not only avoid the shortage, but also catch the huge demands.…
The unit contribution margin is the excess of the unit price over the unit variable costs. The total contribution margin is the excess of total revenue over total variable costs.…