Product, Financial and Market Analyses of 3 Products Capstone Project

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Strategic Review -- Simulation

A 4-year strategic review of the Company's X5, X6 and X7 Tablets has been requested by Sally. The strategic review contains product, financial and market reviews for all 3 products over the 4-year period from 2011 -- 2014. As the report will show, the X5 behaved admirably but is now in shakeout, the X6 continues to perform best of all the products and the X7 has performed horribly in all 4 years. Consequently, I recommend discontinuing the X5 and X7 and allocating R&D and other resources to the X6 for 2015.

Generally in 2011, the cumulative profit score is $81,571,138. The X5 costs more than most other products in its category and last year it was in the growth phase of the product lifecycle. The performance of the X6 is better than that of competing tablets (Sun, Tablet Development Sim - View Summary, n.d.).

A. A review of the products, their life cycles, and how they stack up in terms of price and performance.

X5

The X5 Clipboard Tablet is designed for customers who are not concerned with performance and has been on the market for 3 years (Sun, Tablet Development Sim - Introduction, n.d.).

2) X6

The X6 Clipboard Tablet is designed for customers who care about performance rather than price and it has been on the market for 2 years (Sun, Tablet Development Sim - Introduction, n.d.).

3) X7

The X7 Clipboard Tablet is designed for customers who care about both performance and price and it has been on the market for 1 year (Sun, Tablet Development Sim - Introduction, n.d.).

B. Financial review for each product: X5, X6, and X7 -- sales, costs, profitability, prices, unit margins, etc.

1) X5

The X5 sells for $323.00 per unit (Sun, Tablet Development Sim - Market Info, n.d.) and costs $239.60 per unit, including variable costs, fixed costs and R&D (Sun, Tablet Development Sim - Financials, n.d.). Unit margin (Harvey, n.d.) is $323.00 price per unit less $239.60 cost per unit, totaling $83.40 unit margin (Wright, n.d.) and 34.81% profitability per unit.

2) X6

The X6 sells for $430.00 per unit and the product's performance is gauged at 1.02 (Sun, Tablet Development Sim - Market Info, n.d.).

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Unit margin (Harvey, n.d.) is $430.00 price per unit less $363.25 cost per unit, totaling $66.75 unit margin (Wright, n.d.) and 18.38% profitability per unit.

3) X7

The product sells for $190.00 per unit and the Company sold 0 units in 2011, with an installed base of 340,000, remaining customers numbering 17,500,000 and a market saturation of 2%. The product's performance is charted at 0.97 (Sun, Tablet Development Sim - Market With sales of 0 units @$190.00 per unit, 2011 gross revenues were $0, less total costs of $0, including variable costs of $0, fixed costs of $0 and R&D costs of $0, for a total profit of $0 or 0% profitability (Sun, Tablet Development Sim - Financials, n.d.). With no calculated sales, the unit margin is $190.00 price per unit less $0 cost per unit, totaling $190.00 unit margin (Wright, n.d.)

C. Market review: New Sales, Repeat Sales, Market Saturation, etc.

1) X5

The X5 sells for $323.00 per unit and the Company sold 968,979 units in 2011, including 882,729 first time customers and 86,250 in repeat sales with an installed base of 1,035,000, remaining customers numbering 6,000,000 and a market saturation of 15%. There is no charted performance gauge for the X5 (Sun, Tablet Development Sim - Market With sales of 968,979 units @$320.00 per unit, 2011 gross revenues were $276,159,075, less total costs of $232,167,777, including variable costs of $145,346,882, fixed costs of $75,000,000 and R&D costs of $11,820,896, for a total profit of $43,991,298 or 16% profitability (Sun, Tablet Development Sim - Financials, n.d.).

2) X6

The X6 sells for $430.00 per unit and the Company sold 562,961 units in 2011, including 516,018 first time customers and 46,943 in repeat sales with an installed base of 550,000, remaining customers numbering 6,000,000 and a market saturation of 8%. The product's performance is gauged at 1.02 (Sun, Tablet Development Sim - Market With sales of 562,961 units @$430.00 per unit, 2011 gross revenues were $242,073,200, less total costs of $204,493,360, including variable costs of $154,814,256, fixed costs of $37,500 and R&D costs of $12,179,104, for a total profit of $37,579,840 or 16% profitability (Sun, Tablet Development Sim - Financials, n.d.).

3) X7

The product sells for $190.00.....

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