The Back Bay Battery Simulation

Cost leadership is also an important key to success in any commodity industry since it is one of few areas where any true profit can be squeezed out of markets defined by undifferentiated products. ADM’s vertical integration

The initial strategy was to maintain a competitive presence in each segment by keeping our prices aligned with the average for each target market, while maintaining costs low. Specifically, it was our goal to become the leader in Traditional and low-end segments of the sensor business by allocating significant resources to R&D, marketing and promotions for these products. Our differentiator would be the result of a high investment in R&D to ensure our products were the best available.

The team’s unique reasoning behind the choice of strategy that we executed throughout the simulation played a significant role and set the tone toward the effort and attitude that each team member maintained during the process. The strategy of the broad differentiator was the teams choice, because we thought that it would be the most difficult to accomplish, would take the most time, and provide us all with a well rounded learning experience because we would be able to learn how to be successful in both the low and high tech segment with our products instead of just one of the segments. With our previous knowledge about running a business we all were in agreement that if we could sacrifice and work harder to participate in both segments it would lead to some great competitive advantages. As mentioned by Lui, (2013), “the only competitive global business strategies would be based on differentiation by unique specialization in terms of quality, product, service technology, or cost leadership” (p.2824). The great execution of the strategy by our team enabled us to find success and gain different competitive advantages with each of our sensors, in turn accomplishing our goal of meeting the needs and expectations of both the low and high tech segment.

Develop and diagram an activity based cost model using the information in the case. Provide your best estimates about the cost and profitability of Wilkerson’s three product lines. What difference does your cost assignment have on reported product costs and profitability? What causes any shifts in cost and profitability?

My strategy seemed to work well for the first two years but then it became evident that I was losing market share in the NiMH business. I decided to cut down R&D in that division too early and that caused me to miss my sales targets. As I lost market share in my core business, the volume effect from my decision to lower NiMH prices did not compensate enough to allow that division to remain profitable. Suddenly, I had a very tight R&D budget to work with (as it was based on sales projections) and limited cash could be allocated to the improvement of the ultracapacitors business. I also reacted too late to the shift in customers’ demand for Power Packs products from Power Tools products, which caused late and lower-than-needed investments in other products’ features such as self-discharge (high priority for both NiMH and ultracapacitors).

6. What lessons can we draw from this case about the challenges of pursuing a cost leadership strategy?

In playing the simulation of the BackBay Battery, managing the company’s mature technology NiMH and the emerging potential disruptive UC technology, I learned many lessons from analysing the game results, and also from the decision making process during the simulation. I adopted many different strategies in different playing times. The following report will discuss three main strategies I adopted, namely 1. investing in both technologies, 2. nurturing new technology with profit form current health business, and 3. cost leadership strategy respectively.

In other words, customers are willing to purchase low-tech products as long as their prices are relatively low. As a result, Niche Cost Leadership seems to be the most appropriate strategy for these two segments.

Cost leader strategy; This strategy is to provide the customers with products and services that have a price point lower or at the same price that a competitor is willing to sale the same products and services at.(Kinicki & Williams, 2013) JCPenney has never claimed to be a retailer that is interested in being the lowest priced rival in retail sales game. Consequently, Mr. Johnson did not indicate in this case study that the Cost leader strategy would be a course JCPenny’s would take under his leadership.

Electrical vehicles technology has been present for a while and is a proven technology that need only reshaping to meet the global need. Though, in the past, the technology had failed to compete with the internal combustion engine due to initial cost, the technology has done well in the past few years. Electric vehicle ability to reduce the emission of greenhouse gases like carbon and carbon dioxide and the advantages it enjoys such as low maintenance and running cost can enhance it market competitiveness. However, as experts try to make its charging system more efficient and its ability to store charge more long lasting, the global need continue to rise. The research proposal, therefore, aim at addressing an issue like government involvement can enhance improved use of EV, development of better EV batteries, energy management system and fast charging can help enhance the use of Electrical Vehicles and how electric vehicle drive train and the battery can be redesigned to make it affordable.

After analyzing the results from the previous quarter, it was determined that the prices set for each segment were not sufficient. Product sales priority were also not properly adjusted. With the R&D investments, sales priorities needed to be changed for the main focus to become the most profitable market segments. Prices were not competitive which in turned decreased revenue, market share, and profitability. To become more competitive we altered the prices in each market segment. The Workhorse product was the first to change, the price was lowered to $2500 in an attempt to increase sales; at this price Team 4 was still making a profit on this product, as well as making the price much more competitive. The Workhorse sales priority was also lowered to 3rd in Americas and 4th in APAC and EMEA. This product was not selling as well as we had hoped, and was no longer as profitable as it once was which led to this decision. Next, the Innovator product’s price was adjusted; this involved a price increase to $4100. This price was adjusted to include the new

Each team (consisting of three students) will design a Tablet that updates the design of current products on the market, with a particular emphasis on screen size. In addition to selecting the ideal screen size for a Tablet, your design should include 2-3 new product features that meet unmet consumer needs.

Kelly’s Salon made the choice to employ the Cost Leadership Strategy to gain a competitive advantage over competing businesses. This was a smart choice, establishing a competitive edge is the primary advantage of adopting the Cost Leadership Strategy. This strategy will permit Kelly’s Salon to become a low cost producer by enhancing internal business processes, accessing expansive supply sources with ease at low cost, and making ideal outsourcing and vertical

The organizations that endeavour to wind up the least cost makers in an industry can be alluded to as those taking after a low cost procedure. The organization with the least expenses would gain the most elevated benefits in the occasion when the contending items are basically undifferentiated, and offering at a standard business market cost. Organizations taking after this methodology place accentuation on cost diminishment in each action in the value chain. Note that an organization may be a cost pioneer however that does not inexorably infer that the organization 's items would have a low cost. In specific occurrences, the organization can for occasion charge a normal cost while applying the low cost leadership strategy and put the earnings made back into the business

A successful cost leadership strategy usually provides the entire firm with high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, and wide span of control efforts. However, some risks of pursuing this strategy are that competitors might imitate the strategy, thus, driving overall industry profits down; that technology breakthroughs in the industry may make the strategy ineffective; or that buyer’s interest may swing to other differentiating features besides price.