Comparative Product Analysis: Tablets and Phones

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Joe Schmoe made a number of fundamental errors and my objective was to remedy those errors as a means of improving performance. My analysis revealed a number of things, for example that the X5 needed to be discontinued after 2014 because it became unprofitable at that point, with its high fixed costs. I also saw that the research and development budget for the X5 was better allocated to the other products because the X5 was close to the end of the product life cycle. Consumers of that product simply do not care about new advances. The research and development budget was better allocated to the X6, which has a premium positioning in the market, and the X7, so that product can deliver the best quality/price ratio in the industry. The X6, I felt, would have a low price elasticity of demand. As such, a higher price would increase the profit of that product. I also felt that the X7 needed a much lower price, because it is basically competing as a cost leader. Both of these strategies were incorporated into my strategy. All told, the strategy was as follows: 2012 2013 2014 2015 X5 $270/ 0% $265/0% $250/0% Discontinued X6 $445/50% $445/50% $445/0% $420/0% X7 $140/50% $140/50% $140/100% $140/100% This strategy yielded the following results: 2012 2013 2014 2015 X5 Profit 137,160,822 91,914,151 8,850,648 0 X5 Saturation 54% 77% 94% 100% 2012 2013 2014 2015 X6 Profit 237,270,592 303,345,070 165,711,240 52,857,432 X6 Saturation 37% 62% 90%

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