Business and Cost Strategy Implemented for Time Warp 2

851 Words Jan 6th, 2018 3 Pages
The decision to raise the price for the X6 is based on the understanding the for this premium product, the market can probably support a higher price.
Results
The results for this strategy are as follows:
2012
2013
2014
2015
X5 Profit
151,182,710
83,101,400
1,822,181
0
X5 Saturation
54%
80%
95%
100%
2012
2013
2014
2015
X6 Profit
240,511,901
307,464,930
137,132,198
103,417,497
X6 Saturation
37%
63%
92%
100%
2012
2013
2014
2015
X7 Profit
-10,469,487
23,914,012
90,925,056
204,946,249
X7 Saturation
3%
5%
10%
19%
2012
2013
2014
2015
Cumulative Profit
672,800,006
1,087,280,348
1,317,160,503
1,625,524,248
These results show an improvement over the previous strategy. This improvement comes from a few different places. With respect to the X5, the company clearly benefitted from the CVP analysis, because this product was cut from the lineup, avoiding steep losses. The potential sales in 2015 were below the breakeven point, so this product had to be removed from the lineup. As no changes were made to the price point of this product,…