Current Market Condition

typical by sales representative, who said that they could be taken as average. Production costs

With this analysis, we will be familiar with the competitive forces that could significantly impact the success of this product. By analyzing these threats, we will be able to create more accurate planning strategies.

The Law of diminishing returns states that if one factor of production is increased while the others remain constant, the overall returns will relatively decrease after a certain point. The total fixed cost is the same regardless of the output; the total variable costs will change with the level of output resulting in the total cost as the sum of the fixed cost and variable cost at each level of output. Over the 0 to 4 range of output, the TVC and TC curves slope upward. They reflect a decreasing rate due to the increasing minor returns. The slopes curves will increase due to these diminishing marginal returns.

I. Executive Summary II. Situation Analysis o Market Summary  Target Market Demographics  Geographic  Demographics  Behavior Factors Market Needs Market Trends Market Growth o SWOT Analysis  Strengths  Weaknesses  Opportunities  Threats o Competition o Product Offering o Keys to Success o Critical Issues III. Marketing Strategy o Mission o Marketing Objectives o Financial Objectives o Target Markets o Positioning o Strategies o Marketing Mix o Marketing Research o Action Plan IV. Financials o o o V. Controls o o o VI. Summary Implementation Marketing Organization Contingency Planning Breakeven Analysis Sales Forecast Expense Forecast

From each total variable cost, we have average variable cost (AVC) = Total variable cost divided by number of outputs

1. The objective of the strategic analysis was to identify which products were world-class in terms of “competitive position and potential,” products which could become world-class, and products which have no hope of becoming world-class.

In the short run, at least one of the firm’s resources is fixed, usually the size of the firm. In the long run, all the resources are variable. That is, the quantities of all resources can change to alter the firm’s level of output, including the size of the firm.

The steeper the line (and hence the higher the mpw), the smaller will be the rise in national income and the smaller will be the multiplier.

The law of diminishing marginal utility describes a familiar and fundamental tendency of humanbehavior. The law of diminishing marginal utility states that:

If price falls below average total cost, but remains above average variable cost, the firm will continue to operate in the short run, producing the quantity where MR = MC doing so minimizes its

Competitive analysis is an important part of your business plan, there are a lot of different alternatives in the market, costumers usually look for different sets of values to focus on, benefit levels and what does the item include when they are choosing where to buy the product from. Even though costumers usually choose similar products to those alternatives, and that’s where competition is created.

Assume Labour: only Variable Input Assume the wage rate (w) is fixed relative to the number of workers hired Variable costs is the per unit cost of extra labor times the amount of extra labor: wL

A company needs to create a series of programs to differentiate their product from those from its competitors and to appropriately price the product to achieve the maximum demand, in order to set up the dynamics of its competitive strategy (David, 2007). The competitive strategy of a company is also expected to offer better products or services to its customers, at a reasonable cost. Due to the mass influence of the external environmental on the customers’ preference, it is vital for the company to develop an available competitive strategy to be able to solve a series of problems, and ultimately to improve the company’s performance. Those problems include: how to differentiate its products or service from competitors, how to create market segments to maximize demands, and how to offer a wider range of products or services to better meet the customers’ needs at more acceptable costs (David, 2007).

The vision was developed with the strategic intent to understand the rival’s current strategy, products offering, their market positioning, their objectives, their resources and capabilities, and assumptions industry.

Economies of scale occur when increased output leads to lower unit costs (lower average costs)