Comparison of Time Warps Case Study

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Business Management

Comparison of Time Warp 2 and Time Warp

Time warp 3 has begun and the plan to make changes to the prices with the aim of optimizing the performance of Clipboard Table Co (CTC). The planned changes that were made at the end of time warp 2 will not be implemented, and the results of time warp three can be compared directly with time warp 2. The third time warp appears to have been more successful, with an accumulative profit of $1,970,217,066 compared to time warp 2 where there was an accumulative profit of $1,752,777,185, so the changes made during time warp 3 increased the profit for CTC by a total of $217,439,881. To compare the changes each year will be compared.

Comparing results for 2012

In time warp 2 the price for the X5 was $270, with R&D cut to zero, the X6 was priced at $440, and R&D was set at 33%, and the X7 was priced at $141, with R&D of 67%. In time warp 3 a different approach was adopted; the price for the X5 was reduced to $220, the price for the X6 was kept at $430, and the price for the X7 was kept at $170. The results for 2012 are shown in table 1. The decision to reduce the price for the X5 appears to have been a good decision the sales increased with the lower price, and while the profit margin decreased from 31% to 25% as seen in table 2, the firm benefits with much higher sales, and saw the profit generated by this product increase by $103,723,745.

The results for the X6 in time warp 3 were disappointing, the sales level increased slightly, with an additional 83,326 units sold, but the overall profit level decreased by $48,400,370 in 2012 in time warp 3 compared to time warp 2. However, the strategy was also to increase market share.

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The X7 had very similar results, in both time warps the product resulted in a loss to t CTC. In time warp one the loss had been accompanied by a price reduction, so in time warp 3 the price was kept high to increase the contrition of each item with the aim of reducing the lead period. This strategy did not work, the unit sales reduced by 161,070, and the losses incurred increased by $1,479,255, to $26,966,847. As this was a new product it may be argued that this was a mistake, as it has also mean the firm has a much smaller share of the market at a time when a fast effective lead in a new product could have helped to increase market share and supported long-term sales. However, the year was an overall success, as the profit for 2012 in time warp 3 was $53,844,069 greater than in time warp 2.

Table 1; Units and sales profits warp 2 & 3 for 2012

Time warp 2

Time warp 3

Difference

Units Sold

Profit

Units Sold

Profit

Units Sold

Profit

X5

2,064,017

172,682,008

5,020,082

276,405,753

2,956,065

103,723,745

X6

1,205,673

153,516,090

1,288,999

105,115,720

83,326

-48,400,370

X7

326,656

-25,487,622

165,586

-26,966,847

-161,070

-1,479,225

Total

3,596,346

300,710,557

6,474,667

399,554,626

2,878,321

53,844,069

Table 2; Market saturation and net profit margin time warp 2 & 3 for 2012

Time warp 2

Time warp 3

Market saturation

Profit Margin

Market saturation

Profit Margin

X5

27%

31%

27%

25%

X6

16%

29%

16%

27%

X7

2%

-55%

2%

-86%

Comparing results for 2013

The results for time warp 3 for 2013 were not as good as 2012. Time warp 3 saw.....

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