Overall, Markstrat was a unique experience. Our team really enjoyed the competitiveness of the game and the weekly battles for market position! Markstrat offers an amazing amount of detail and lets you control all the facets of a company.
In terms of things we would change, the instruction book was a little vague; especially when it came to what constituted a product modification. We ended up making a number of decisions based on incorrect information because we made incorrect inferences from the little information provided. As well, the R&D section lacked a lot of detail and left us with a bunch of unanswered questions. Things like base cost vs. minimum realistic cost were not explained at all and left us questioning which to use for our decisions. Some of the analysis tools we never figured out how to use (i.e. regression analysis). The book did not have any information on how to use them and so we ended up ignoring them for the most part.
In conclusion, the game as a whole was well worth the effort and we would recommend it to further classes
Thursday, April 10, 2008
Thursday, April 3, 2008
Period 10
We managed to maintain our 2nd place position this period. Our continued success is primarily thanks to general growth in volume sales for all of our Sonites. SONO continues to be our big “money-maker”— it’s contribution adds almost $30 million to our total profits! Despite a number of the other Teams losing their market share and competitive positions in the market, we must not forget that we are way behind Team E. Looking ahead, we will modify our VOTI to have it better targeted towards the Followers market. As well, we may introduce another Vodite to capture more market share in this rapidly growing market. As was mentioned above, our Sonites continue to perform well and with more advertising and more optimal sales force allocation, we will aim for constant growth of around 20% in volume sold in periods to come. 
The long term outlook for Company O is looking positive at this point. A major goal will be to close the gap between Team E and ourselves; our plans call for the meeting of this objective within three periods. We may even look into coordinating with Team E to create a duopoly environment that will be beneficial to both of our companies (as in the Coke and Pepsi industry); we recognize that there may not be a lot of incentive for Team E to agree to this now, but we feel that after closing the gap between our two companies they may be more inclined to take us up on our offer.
Thursday, March 27, 2008
Period 9
2nd place! Our initiatives are falling nicely into place for a strong finish.
Probably the smartest decision we have made to date was dropping SOCK; strategically it freed up valuable resources to push our more entrenched and popular products. We managed to not only get rid of all the inventory of SOLD and SOBO but also sold much more of them this period (almost 100% growth in volume sold for both of the Sonites). As well, we gained a lot of market share in both the Sonite and Vodite markets this period. However, even with our large gains in market share Team E continues to dominate the industry and their success is being reflected in their skyrocketing stock price. Nonetheless, a lot of positives resulted from our previous decisions and it is nice to see our increased sales force is helping to generate enormous sales.
Team E has built a comfortable cushion for themselves but Company O will never give up!
Probably the smartest decision we have made to date was dropping SOCK; strategically it freed up valuable resources to push our more entrenched and popular products. We managed to not only get rid of all the inventory of SOLD and SOBO but also sold much more of them this period (almost 100% growth in volume sold for both of the Sonites). As well, we gained a lot of market share in both the Sonite and Vodite markets this period. However, even with our large gains in market share Team E continues to dominate the industry and their success is being reflected in their skyrocketing stock price. Nonetheless, a lot of positives resulted from our previous decisions and it is nice to see our increased sales force is helping to generate enormous sales.
Team E has built a comfortable cushion for themselves but Company O will never give up!
Saturday, March 22, 2008
Period 8
We have dropped slightly and rank 3rd at the start of this period. This slip on our part is chiefly due to the fact that the Others market is over saturated with six highly similar products — our strategy to saturate the Others market failed because all our competitors were trying to do the same thing!
This saturation situation was not a complete loss as it has offered us a valuable lesson: careful consideration must be given to competitor actions in order to determine what direction they are planning to move their product mix. Our main goal for this upcoming period will be to get rid of inventory and reinvigorate the sales of our Sonites. As was planned previously, we will reduce our total number of products down to four (drop SOCK this period) so that we can shift more of our advertising and sales force resources to our key products. Thanks to the generous support of the Bart Industry Government, we are again receiving a subsidy this period. We will spend the extra budget on expanding our sales force so as to keep ourselves on par with the industry competitors’ levels.
With increased R&D activities, advertising expenditure, and sales force resources, we believe we will be able to continue to improve our sales in this ever competitive environment.
Thursday, March 13, 2008
Period 7
We are back up to 2nd place now! The subsidy from the Bart industry Government proved helpful in getting our products back on track.
Our decision to drop SONY was wise — at least we are not further incurring more inventory holding costs which will hinder the growth of our stock price. It is also good news to know that we sold out most of our products. Our main competitor now is Team E. We will need to find ways to compete head-on with their products; preferably before they get even richer! From the newsletter we found out that they dropped their SEHI (initially targeted at High-earners), and this means that we can now capture the entire High-earners market with our modified SONO the period after next. As for SEMI (which is targeted at Others), they are selling upwards of 378,000 units while our comparable product, SOLD, is only selling in the range of 96,000 units. We must modify SOLD with PSOAR this period so that we can “push” SEMI out of the Others market. At the same time, seeing this opportunity in the Others market, we will modify SOCK this period (based on PSOAR) so that we can saturate the Others market with our products.
The main highlight this period was the 413.7% growth in volume sold for VOTI. We are heading in the right direction and will further modify it with PVOOT to better target the explosively growing followers segment. The future of Company O is looking bright!
As an aside, Company O would like to thank the industry experts: they were generous in informing us that the change in perceptual objectives and price of a product will not be considered a modification to a product.
Our decision to drop SONY was wise — at least we are not further incurring more inventory holding costs which will hinder the growth of our stock price. It is also good news to know that we sold out most of our products. Our main competitor now is Team E. We will need to find ways to compete head-on with their products; preferably before they get even richer! From the newsletter we found out that they dropped their SEHI (initially targeted at High-earners), and this means that we can now capture the entire High-earners market with our modified SONO the period after next. As for SEMI (which is targeted at Others), they are selling upwards of 378,000 units while our comparable product, SOLD, is only selling in the range of 96,000 units. We must modify SOLD with PSOAR this period so that we can “push” SEMI out of the Others market. At the same time, seeing this opportunity in the Others market, we will modify SOCK this period (based on PSOAR) so that we can saturate the Others market with our products.
The main highlight this period was the 413.7% growth in volume sold for VOTI. We are heading in the right direction and will further modify it with PVOOT to better target the explosively growing followers segment. The future of Company O is looking bright!
As an aside, Company O would like to thank the industry experts: they were generous in informing us that the change in perceptual objectives and price of a product will not be considered a modification to a product.
Thursday, March 6, 2008
Period 6
So we rank 4th this period. Back to where we started at. But on a happier note, our budget is now at $11,000 for next period which gives us more room to work with. The Bart Industry Government is also granting each company a subsidy of $1.9 million to help with the slow industry growth.
For the 3rd period in the row, we are incurring a loss on our SONY product. After looking at our brand results report, the decision has been made to drop SONY; it is still in the middle of nowhere on the perceptual map even after modifying it with huge advertising research efforts post-launch. Still, something seems array and we can’t place our finger on it? Since period 4 our management team has wondered if the change in price and perceptual objectives to SONY are considered a modification. The answer is unclear – we inquired with a few of our competitors and as expected, we got consistent replies of “we’re not sure.” It seems that we will not find out the answer until our scheduled meeting with the ‘markstrat experts’ next period.
In the Vodite market, VEXX undercut us in price despite their base cost and characteristics are a little better than our VOTI. We might have been too greedy on our margin, and we will have to get rid of the huge inventory left next period as inventory holding cost for Vodites are considerable. Seeing how Team A is progressively doing better with their Vodites (note: a 139% increase in volume sold), we realized that the Vodite market (especially the followers segment with expected growth of 3000% in next 5 years) has infinite potential for expansion. That is why we are ordering more Vodite research studies next period – we must get to know more about the market before we can excel in it.
For the 3rd period in the row, we are incurring a loss on our SONY product. After looking at our brand results report, the decision has been made to drop SONY; it is still in the middle of nowhere on the perceptual map even after modifying it with huge advertising research efforts post-launch. Still, something seems array and we can’t place our finger on it? Since period 4 our management team has wondered if the change in price and perceptual objectives to SONY are considered a modification. The answer is unclear – we inquired with a few of our competitors and as expected, we got consistent replies of “we’re not sure.” It seems that we will not find out the answer until our scheduled meeting with the ‘markstrat experts’ next period.
In the Vodite market, VEXX undercut us in price despite their base cost and characteristics are a little better than our VOTI. We might have been too greedy on our margin, and we will have to get rid of the huge inventory left next period as inventory holding cost for Vodites are considerable. Seeing how Team A is progressively doing better with their Vodites (note: a 139% increase in volume sold), we realized that the Vodite market (especially the followers segment with expected growth of 3000% in next 5 years) has infinite potential for expansion. That is why we are ordering more Vodite research studies next period – we must get to know more about the market before we can excel in it.
Looking now to our long term perspective, we are planning to scale back our total number of products offered because we realize that we do not have enough budget to do extremely well with all five products in market at the same time. However, we must actively participate in R&D to ensure we capture sufficient market share to boost our sluggish stock price.
Thursday, February 28, 2008
Period 5
Things are not going too well at the moment…We have dropped down to 3rd and Teams I and U are really close to us.
If you have read the industry newsletter this period there are three new Vodites in the market (two from Team A and one from Team I). They are all very high-end products with base costs around $400 and pricing in the range of $1000. Last period we were forced to order less Vodite market research studies due to insufficient funds for R&D. We are no longer 100% confident that that our Vodites currently under R&D will appeal to the Vodites target markets given that they are comparatively less sophisticated than the Vodites being offered by Teams I and U.
If you have read the industry newsletter this period there are three new Vodites in the market (two from Team A and one from Team I). They are all very high-end products with base costs around $400 and pricing in the range of $1000. Last period we were forced to order less Vodite market research studies due to insufficient funds for R&D. We are no longer 100% confident that that our Vodites currently under R&D will appeal to the Vodites target markets given that they are comparatively less sophisticated than the Vodites being offered by Teams I and U.
As for Sonites, we got rid of most of the SONY inventory but unfortunately we have loads of SOLD leftover. We are continually losing our competitive positioning and market share in the Sonites market because our Sonites are not aligned closely enough to their respective target markets (after everyone’s modified their products). In light of this situation, we are planning for most of our budget to be spent on modifying our Sonite products to better target them to their intended segments. A new tool we have picked up on is the advertising experiment research study which gives us an idea of where we are overspending on advertising in the previous period — from this study we now know we can cut down advertising and spend that additional portion of the budget on the remaining R&D of PVOVO (which is expected to be launched next period under the name VOTI).
It is frustrating that we sacrificed our opportunity to gain first-mover advantage in the Vodite market because we did not have a big enough budget this period. Regardless, we believe that being risk averse will help us bounce back from financial hardship as opposed to dig ourselves deeper into trouble. The plan with respect to launching VOTI is to get more information on the Vodite market rather than enter it with a “pure guessing” strategy.
We know we will be able to get back to the top. It is just a matter of time, and maybe luck (we definitely need some luck when we launch VOTI!).
It is frustrating that we sacrificed our opportunity to gain first-mover advantage in the Vodite market because we did not have a big enough budget this period. Regardless, we believe that being risk averse will help us bounce back from financial hardship as opposed to dig ourselves deeper into trouble. The plan with respect to launching VOTI is to get more information on the Vodite market rather than enter it with a “pure guessing” strategy.
We know we will be able to get back to the top. It is just a matter of time, and maybe luck (we definitely need some luck when we launch VOTI!).
Thursday, February 14, 2008
Period 4
Despite exceptional performances by SOLD and SOBO (both had 50% plus growth in volume sold), we dropped to 2nd this period. SONY did not sell well this period and that really hurt us — there is a large amount of inventory leftover. Significant repositioning of this product will have to be the top priority for next period.
We noticed that Team I is starting to jump up the stock price index and they have moved into 1st this period. We are weary that we must protect our competitive position and make some attempts to curb Team I’s rapid progress. Because we do not have enough budget to complete our R&D for our Vodites, we will allocate part of the required budget to PVOVO (not the PVOLT because we believe that PVOVO, a mid-range product would require less modifying in the future than would a low-end product) and then dedicate the remaining difference next period. We may be losing the first mover advantage but our risk-adverse management team is looking for more stable profits so as to maintain our stock price for fear of it dropping even further down.
Planning ahead, we are also developing two new R&D feasibility studies (PSOHO and PSOBE) this period hoping to modify SONY and SOBO upon R&D completion. These modifications would help us better target SONY and SOBO to the Singles market, which is showing drastic growth in the coming periods according to the market forecast we purchased.
So that’s a lot of R&D projects…and they are expensive! We will have to cut advertising costs next period in order to spare money for all of the R&D that is on the go. At this point we feel that R&D is a key strategic tool in terms of evolving stagnant products and realigning them with new, growing segments. We are also ordering less Vodites research studies this period. This is going to be a sacrifice of short run sales for long run profits. We believe it will be more valuable to the company’s overall success to go with this strategy. We know that this is going to be a hard time for our company but we are committed to long term success and not just short term gains.
Planning ahead, we are also developing two new R&D feasibility studies (PSOHO and PSOBE) this period hoping to modify SONY and SOBO upon R&D completion. These modifications would help us better target SONY and SOBO to the Singles market, which is showing drastic growth in the coming periods according to the market forecast we purchased.
So that’s a lot of R&D projects…and they are expensive! We will have to cut advertising costs next period in order to spare money for all of the R&D that is on the go. At this point we feel that R&D is a key strategic tool in terms of evolving stagnant products and realigning them with new, growing segments. We are also ordering less Vodites research studies this period. This is going to be a sacrifice of short run sales for long run profits. We believe it will be more valuable to the company’s overall success to go with this strategy. We know that this is going to be a hard time for our company but we are committed to long term success and not just short term gains.
Thursday, February 7, 2008
Period 3
We rank first this period! :-)
Our modification of SOLD was very successful — it resulted in enormous growth in volume sold. According to plan, SOBO was a huge success in the Buffs market. Not only did it capture a huge market share in the Buffs segment, it also “bumped” SASS away from the Buffs. These positive results are great but we know we will have to continue to modify SOBO or it will end up like SASS this period.
As the industry progresses and all the teams are proving more profitable, their budgets are growing thus allowing them to spend more on R&D. Of note are teams A and I who are spending a substantial amount on R&D; it seems that they are launching highly specialized products next period. To ensure our competitiveness, we are also actively participating in R&D for both Sonites and Vodites. We are developing a new product with a new R&D project, PSONY. This new product (SONY) is expected to be launched next period to first capture the Buffs market (as the Buffs are interested in new technology), then to the Singles market in the long run (because the Singles market will be growing by over 135% in the next 5 periods according to the market forecast research study).
We are also investing in two new R&D feasibility studies on two Vodites:
1.) PVOLT – with the worst possible product specifications so as to minimize production cost; and
2.) PVOVO – a mid-level product.
Because no other teams have launched a Vodite this period we could not do any research on the market, we are totally “shooting in the dark,” trying to predict the preferences of the Innovators in the Vodites market.
Our modification of SOLD was very successful — it resulted in enormous growth in volume sold. According to plan, SOBO was a huge success in the Buffs market. Not only did it capture a huge market share in the Buffs segment, it also “bumped” SASS away from the Buffs. These positive results are great but we know we will have to continue to modify SOBO or it will end up like SASS this period.
As the industry progresses and all the teams are proving more profitable, their budgets are growing thus allowing them to spend more on R&D. Of note are teams A and I who are spending a substantial amount on R&D; it seems that they are launching highly specialized products next period. To ensure our competitiveness, we are also actively participating in R&D for both Sonites and Vodites. We are developing a new product with a new R&D project, PSONY. This new product (SONY) is expected to be launched next period to first capture the Buffs market (as the Buffs are interested in new technology), then to the Singles market in the long run (because the Singles market will be growing by over 135% in the next 5 periods according to the market forecast research study).
We are also investing in two new R&D feasibility studies on two Vodites:
1.) PVOLT – with the worst possible product specifications so as to minimize production cost; and
2.) PVOVO – a mid-level product.
Because no other teams have launched a Vodite this period we could not do any research on the market, we are totally “shooting in the dark,” trying to predict the preferences of the Innovators in the Vodites market.
Thursday, January 31, 2008
Period 2
We rank 4th this period. From the newsletters and market research studies it became evident that our competitors are investing huge portions of their budget on R&D. Specifically, last period’s winner (Team I) is spending a huge amount of money on R&D and is doing really well. The competition is getting fierce. We cannot afford to delay our R&D decisions and must modify our products as soon as possible in order to keep up with the frantic pace.
As for our current products, it’s exciting to know that our production department is getting more efficient — they produced significantly more than we requested, and the good news is we sold out everything. Increased marketing efforts were definitely helpful in boosting our sales. Our profits grew by $10 million this period.
To everyone’s surprise, Team A launched a new product (SASS) this period and it entirely captured the Buffs market. In such a competitive environment, we believe the best strategy to pursue is differentiation from our competitors. Our Board of Directors have agreed to launch a new product (SOBO) which will be very similar to SASS but with a significantly lower price; the aim for SOBO will be to capture lost share in the Buffs market. Together, coupled with more aggressive advertising expenditure, we are hiring more salespeople to help promote and sell this brand new product. In addition, the added sales force should help to increase sales for our existing SOLD and SONO products to their respective target markets.
We know that we will have to continue to strategize with the future in mind in order to succeed. We are ordering a feasibility study on our PSONY project which is going to be a brand new product targeted towards Singles in the long run. Next period, we will use the finished R&D project, PSOLI, to modify SOLD and better target it to the Others market. We are also altering the MDS dimensions of our current products to help better target them towards their respective target markets. In the long run, we are planning to enter the Vodite market to gain possible first-mover advantage; in anticipation of entering this new market we are ordering some Vodite market research studies.
We know that we will have to continue to strategize with the future in mind in order to succeed. We are ordering a feasibility study on our PSONY project which is going to be a brand new product targeted towards Singles in the long run. Next period, we will use the finished R&D project, PSOLI, to modify SOLD and better target it to the Others market. We are also altering the MDS dimensions of our current products to help better target them towards their respective target markets. In the long run, we are planning to enter the Vodite market to gain possible first-mover advantage; in anticipation of entering this new market we are ordering some Vodite market research studies.
Thursday, January 24, 2008
Period 1
We rank last this period amongst industry competitors. Not the start we were hoping for but the good news is there is only one direction we can go from here. Both products have showed moderate growth in sales but comparably lower than what the other companies are currently selling. One reason is that a competitor of ours, Team E, is undercutting us on price for both products. The other reason is that we have not allocated enough advertising budget to create brand awareness in the market.
Obviously, our goal next period is to capture more market share. We will adopt a price-penetration strategy – we will decrease the price for SOLD and SONO to $199 and $499 with the aim of undercutting all our competitors so as to capture market share in the early stage. We are also hiring more salespeople to assist in the expected growth in sales. Further, we are happy to see that the results for our feasibility study have been released: we are going to invest budget into our first R&D project, PSOLI, which will be used to modify SOLD in period 3.
This period’s decisions feel inline with our overall growth strategy. It certainly feels as though we are aligning our strategy to start heading in the right direction — up!...the stock index chart that is!
Obviously, our goal next period is to capture more market share. We will adopt a price-penetration strategy – we will decrease the price for SOLD and SONO to $199 and $499 with the aim of undercutting all our competitors so as to capture market share in the early stage. We are also hiring more salespeople to assist in the expected growth in sales. Further, we are happy to see that the results for our feasibility study have been released: we are going to invest budget into our first R&D project, PSOLI, which will be used to modify SOLD in period 3.
This period’s decisions feel inline with our overall growth strategy. It certainly feels as though we are aligning our strategy to start heading in the right direction — up!...the stock index chart that is!
Thursday, January 17, 2008
Period 0
We have developed two Sonite products for launch next period: SOLD and SONO.
- SOLD is a lower end product, priced at $219; and
- SONO is a higher end product, priced at $549.
Thursday, January 10, 2008
Welcome!
Welcome all fellow bloggers, this is the blog for Company O in the Bart Industry. Here you will be able to find current updates within our company, and understand our strategy to maintain a strong stock price within the industry.
From our previous knowledge of the industry in the MarkStrat world, we are approaching this business venture with the following overall strategy:
- conservative production levels
- competitive sales force size (firing costs are extremely high)
- products targeted towards niche markets
- undercut fellow competitors with regards to price
- eventually enter into Vodite market
We can anticipate that throughout the next couple of years, our strategies will need to evolve in reaction to rising competition. Ultimately, our goal is to retain a high stock price and capture a majority of market share in both Sonite and Vodite markets. Have faith in us - we will not disappoint you.
Keep you posted,
From our previous knowledge of the industry in the MarkStrat world, we are approaching this business venture with the following overall strategy:
- conservative production levels
- competitive sales force size (firing costs are extremely high)
- products targeted towards niche markets
- undercut fellow competitors with regards to price
- eventually enter into Vodite market
We can anticipate that throughout the next couple of years, our strategies will need to evolve in reaction to rising competition. Ultimately, our goal is to retain a high stock price and capture a majority of market share in both Sonite and Vodite markets. Have faith in us - we will not disappoint you.
Keep you posted,
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