Performance & Reflection

Performance & Reflection:

In class simulation generated cumulative profit of $261.99 (7/42). Of course there is chance to do better, but at $34.76 for first run, the numbers have improved considerably helping me to learn core concepts. Initially I thought, ratio analysis will wring the maximum profit out of BBB, but dynamic contexts and changes in business scenarios helped me focus on other aspects such as market conditions, innovation and industry lifecycle as well.

I identified Technology, M&S as activities to drive the success. I focused on improving the process to drive down cost, especially for UC, as they had high variable cost. Looking at demand and supply, I thought a good cost structure along with improved recharge cycle and recharge time would improve the desirability/profitability of UC. Even though the capability to produce a good battery is imitable, it takes time to develop technology, hence I decided to invest in technology. As I saw in simulation, there was potential to exploit organizations resources and capabilities to lower the cost.

Challenges

Even though I had to invest to reduce the cost of the UC to improve the firms’ profitability, taking the decision on percent to invest and other features to consider was a significant challenge, as forecasting demand and gauging market elasticity for a particular price point was difficult.

I used Horizon 123 technique as follows:

1 – Extend and defend existing NiMH business.

2 – Build emerging business by making right investment decisions using “Four Actions Framework”. For example raise/add “Self Discharge” or “Recycle Time” features.

3 – Create viable options by reducing cost of UC by investing in “Process Improvement”

In summary I was focused to create

• Short term supremacy for NiMH as this product was declining
• Long term victory for UC as this is the emerging technology.

Improvements

I noticed there was a demand was elastic. I should have run regression to discover how the demand curve looked like. My plan was to skim NiMH market to maximize the profit to invest in R&D of NiMH and UC, this did not go well due to unanticipated high elasticity of demand.

Dynamic Contexts

Followed following directions to maximize profits:

• Improve market position by increasing market share for NiMH
• Improve cost structure of UC to improve contribution margin.

I anticipated dynamism in market, but demand changes, and price reduction requests made me realize the impact of dynamic context on the business operations.