Firm 4: Thirty Five Question Marks

Approach to Managing LINKS

Weekly Meetings
o All team members present o Reviewed prior weeks material before meeting o Reach consensus before making decisions

Team Strategy
Product Differentiation Primary Focus:
Higher Quality o Region Three o Channel Two

Higher Profit Margins

Higher Cost

Expand After Successful Postponement

o Avoid Duties and Tariffs

Reliance on Research Studies

Product Design
Product Differentiation
Concept Testing

Responsive to Market Changes

First-toMarket

LINKS levers to PD
Configuration Product Costs Patent Royalties

R&D Investment

Consumer Insights

Distribution/Transportation/ Manufacturing/Procurement
Distribution Transportation Manufacturing Procurement
Insourced DC utilized in Region 3 Lack of need for cross-docking

95% Air Shipments to meet Supply Chain Strategy Took advantage of 20% Rebates, when feasible

Took full advantage of Postponement (Product 0) Emergency Production vs. Production Volume Flexibility

Analyzed Monthly Market data to select a sole supplier Manufacturing alignment to measure inventory

Research Reports
#12: Market Statistics #14: Regional Summary Analysis
Pros: Industry Insight Cons: No firm breakdown
Pros: Dashboard of Info Cons: Limited explanation

Pros: Accuracy of Results #22: Configuration Analysis-Reconfigurations Cons: Difficult to interpret

#23: Concept Test #24: Price Sensitivity Analysis

Pros: Most-Valuable! Cons: Have to wait

Pros: Easy to Read Cons: Limit of 4 studies

Marketing Mix (4Ps)

Modest marketing; used sparingly Kept high to match differentiation Pricing to maximize profit (follow market sensitivity report)
MARKETING PRICE

PRODUCT

CHANNEL

Heavily Customized to Consumer Preferences

Focused on Direct (Channel 2)

Marketing Mix (4Ps) Analysis

Marketing Mix
PRICE MARKETING PRODUCT CHANNEL

Predictor
LEVEL OF FIRM INTENSITY HIGH MODERATE HIGH LOW

COMPETITOR PREDICTABILIT Y

HIGH

LOW

MODERATE

HIGH

CONSUMER PREDICTABILIT Y

HIGH

LOW

LOW

MODERATE

Forecasting approach
Estimate demand based on trailing average Adjust average demand based on:

o Industry demand and trend from research #12

Demand per product/ region/ channel Trend Unfilled demand

o Market share
Current and target market share

o Marketing strategy
Prices and marketing spending
Competitors pricing strategy Product and service quality

Competitor observations
Factors to consider: Market share & coverage Price & Margin

Product and service quality

Stock market performance

Competitor observations

Firm 1, 3 and 4 are more aggressive in gaining market share Several firms withdrew or reduced sales for region 2 due to lower margin/ sales

Firm 2 focused on Hyperware only In the last 4 months, firm 2, 5, 6 withdrew or reduced sales in region 3, resulting in higher sales and margin for the remaining firms

Results

What we did well & What we didnt:

Strengths Product Quality Region 3 Margins Region 3
o Quality o Postponement o Single sourcing

Weaknesses Demand Forecasting Failure Rate Region 2

Product Availability/Fill Rate

If we did it all again

Product Concept tests and Price Sensitivity tests earlier
o Costly reconfigurations o Metaware demand drop after reconfiguration

Reduce costs in marketing, recycling, service Work on improving forecast accuracy

o 55,000 leftover Epsilon

Re-evaluate transportation methods

Thank you!