Back Bay Batter Simulation

Simulation Performance

For NIMH, we focus on cost leadership strategy. Our R&D investment spend large proportion about $14.1 million on process improvement to decreased the various cost from $6.29 per unit to $4.21 per unit between 2013 to 2020 (Appendix 3&4). We also spend on $6.7 million on energy density in order to meet customer demands in power tools market. We decreased price from $10.0 per unit to $7.5 per unit due to the increasing customer desire on price of NIMH (Appendix 3&4). As a result, our total unit sale of NIMH increase $4.6 million from 2012 to 2013, the total revenue increased abound $32 million for the same year. It is decreased significantly from $27.7 million to $13.2 million between 2014 to 2017, and the revenue decrease by $158 million in the same year because of the high competition. Finally, after the adjustment of strategy decision, the total NIMH sales increased constantly again, from $13.2 million to $16.7 million. The total revenue of NIMH increased as well, from $105.8 million to $125.5 million. The total profit increase rate for NIMH from 31% per unit to 42% between 2012 to 2020 Appendix 2).

For Ultracapacitor, we focus on differentiation strategy. Our R&D investment spend larger proportion about 14.1 million on process improvement in order to provide ultracapacitor battery with good quality and lower the variable cost from $24.02 per unit to $20.40 per unit between 2013 to 2020 (Appendix 3&4). We decreased price from $20.0 per unit to $18.0 per unit due to the increasing customer desire on price of ultracapacitor battery. We also spent on $6.4 million on self-charge in order to meet the high customer desire in power packs market (Appendix 3). As a result, our total unit sales for ultracapacitor increased from 3.0 million to 4.8 million between 2012 to 2016, then decreased constantly from 4.8 million to 3.8 between 2016 to 2020. The total revenue for ultracapacitor increased rapidly from $60.96 million to $90.86 million between 2012 to 2016. And then decreased stably from $90.86 million to $67.84 million between 2016 to 2020. The increase rate of ultracapacitor profit increased rapidly from -25% to -17% between 2012 to 2020 (Appendix 2).

Simulation Implementation (What we done?)

NIMH

The primary strategy we used is cost – leadership strategy. This strategy used by Back Bay Battery company can create a low-cost business operation into their market. The reason use this strategy is to gain an advantage over competitors by lowing operation costs below than other competitor in a same industry and with a board range of opportunities (Mind Tools, 2017). In this simulation, we primarily focus on portable power tools market, this market has a large demand for NIMH batteries and represents 80% of the company revenue, have been a mainstay of Back Bay Battery business (Harvard Business, n.d).