The Back Bay Battery Simulation

1220 WordsAug 11, 20165 Pages
Back Bay Battery Simulation The Back Bay battery simulation presents the managers with a dilemma of choosing between an established, profitable product and a new innovative opportunity. The decision has to be taken through investments in R&D and also make sales forecast for the coming year. Even though, the main aim of this exercise was to generate maximum profit but it actually is a way of analysing complex information and making decisions with the help of news flash updates about current trends amidst unstable market conditions. During the duration of eight years, a balance has to be established between a profitable stable product and an innovative product while keeping in mind the objective of generating maximum cumulative profit. The overall strategy undertaken by the team while investing in R&D was to tackle two major issues: price and energy density which represented the desired features required by customers. In terms of Porter’s analysis, cost-leadership and product differentiation strategies were implemented by the team during the simulation, which resulted in the maximum profit of 278.59 million dollars. Cost leadership (Johnson et al., 2013, p194) strategy involves becoming the lowest-cost organisation in a domain of activity. In this case, NiMH battery prices were reduced to remain competitive in the market considering the fact that NiMH batteries represented the Cash Cow of the company. A Cash Cow is a business unit within a portfolio that has a high market

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