Michael Boehringer 1204898002 Quarter 1 and 2: The first decision that needed to be made in the first quarter was

naming the company. I elected the name COMpact PC. I choose this name because I wanted potential customers to easily recognize the capital letters COM and understand that the product being sold is a computer. Furthermore, I elected to spell out the word compact so that the people would recognize that the computers being produced are high-end compact designs that are leading edgeno one wants to buy a computer that is bulky. Next, I needed to decide what market to target. I debated either Mercedes our Workhorse, ultimately choosing Mercedes because of the potential for the highest profit margins. As exciting as it was, that was essential all the decisions made during the first quarter. From here it was time to design my first brand. The name, Elite PC, was chosen to give off a sense of class, this computer is elite and therefore should be desired by those who are performing elite tasks. After establishing the name it was time to actually design the product. For this section my main tool was customer needs. After looking at the needs the first thing that popped off was the need for it to be fast and powerfulso that is where I started. I gave my computer high speed computing power, high capacity hard drive, and networking. I did this because those were the top needs expressed by potential customers. This being my first product, I focused a lot on the component costs and only added the components I thought were absolutely necessary to sell. I elected to stay away from luxury items like a larger screen or expanded keyboards, all in an effort to cut costs and hopefully have a higher margin of profitability. What I forgot to think about was how these cuts would affect demand. After designing my brand I needed to set a price. I choose to set my product at a cost of $3900 with a rebate of $225. I choose this price because the price willing to pay for Mercedes brand was $4000 so I figured I would get somewhat close to that ceiling but not quite reach it. The other factor was the cost of production. Figure it was only my second quarter and demand would not be very high I focused much more on the 250 and 500 unit price costs of goods sold. With those being in the low 2000's and the goal of a 50-100% of those costs to be associated with profit I came to the number 3900. I felt like $3900 was a high enough number to promote confidence while also still being low enough to be demanded. As far as the rebate went I felt it was necessary to include a small rebate that would not detract too much from profits but also large enough to still spike an interest. My final task for the second quarter was to design a marketing scheme and create an advertisement. Again, just as when I designed the brand the first place I looked when creating my ad was at the customer's needs and wants. The number one customer need was that it be fast and powerful, therefore the first and largest claim in the ad was, "Fastest Processor on Market." I wanted consumers to know right off that this was a very fast and top-of-the-line computer. The next item I put was my brand name. I wanted consumers to be drawn to the speed and power of the computer and then immediately associate that with my brand name. From there I proceeded to add the top three demanded features of the computer. Finally, I decided to add a picture of a scientists so that people would associate it with a lot of testing and designs and overall a very good product. From here I need to hire people and my only office was in Chicago so I hired two sales people as well as customer service. I elected these numbers because I did not have the capital to hire a bunch of salesmen but also needed to create demand. Lastly I decided to open a new sales office in Shanghai because there was decent Mercedes demand and not very many competitors. The reason I did not choose Paris was because of the high competition. My overall performance after my quarter two decisions was not very good. My balanced scorecard was, to say the least, not balanced at all. The only one of the factors that I was performing well in was my marketing effectiveness, meaning my ads were up to par but everything else was falling short. I knew that my marketing performance would get better overtime as my product became known

but I also realized it indicated I needed a larger sales force. My financial performance was terrible as well but that is to be expected when demand it low and costs are high. Overall my total performance was not even up to par with the minimum. My market share was also weak, Synergy and Galileo immediately became my competition because they were dominating the market. My net profits for the division were not even positive but this could be attributed mainly to my start up costs and start up demand. In general, the main problem I saw was that my company was not creating enough demand. My demand was 100-200% lower than everyone else in the industry. As far as my pricing went I received a score of 100, meaning I could ask a higher price and still maintain demand. This, however, was the trend for the top selling brands as wellpeople wanted better technology and were willing to pay for it. As far as my ad went, I received a score of 81 which was the highest amongst all computers. This told me that I was targeting the right section and promoting the right things. I did have competition right behind me at 78 so I knew I would need to keep my ads at high level they were. I also noticed that I was falling behind in my sales force compared to my competition, but this was no surprise due to my low market performance despite a high market effectiveness. In general, I learned I need to be more aggressive and had a lot of close competition. Quarter 3: After the poor performance in quarter two, I decided it would be best to scrap my initial computer design and take a second try at. This time, unlike last time I decided to include more luxuries and focus a little less on the component cost and more on the product's desirability. I looked at the competitors brands and compared them to mine, looking for anything they might have included that added value for them. I realized the other firms were making their Mercedes not only their best products but the best products on the marketevery accessory mattered. After I revamped my product I turned to setting the price. I noticed everyone but Synergy was undercharging so the decision was simple, find a price in between mine and theirs. They charged, including the rebate, $4100, and I was only charging $3675. I therefore settled on $4050. This price in my mind gave me the most profits while maintaining demand. From here I moved on to ad design. My ad was already top in the industry so maintained essentially the same ad because the main features of my product did not change. After comparing my ad to my competition I felt confident that my ad would hold up to theirs. Now I needed to decide how many people I would need to push my product. I was still cautious of spending too much money on advertising so elected only to hire two more people for Chicago and open my new office in Shanghai with three people. The last decision I made was not to open any more sales offices. My rationale was that I did not want to incur too many costs while still trying to get my company on its feet. Just as in the second, I did not perform to standards that were acceptable. My balanced scorecard was still ten points below the average and below average in every category except marketing effectiveness. My financial performance was still weak due to my limited demand. Everything pointed to my weakness being my demand. Without people wanting my product I could not remain in business, I needed to separate myself from the pack. I realized I needed to learn from my competition. The industry leaders were shark computer and synergy technologies and so I used them as my guidelines for decision making. What they were doing was working, what I was doing was not. Not surprisingly my market share was a mere nine percent. Clearly, my methods were not working. As far as pricing went, this was one of my highlights. It appeared that I hit the nail on the head because my score was a perfect 99. Everyone else in the industry, except synergy, seemed to still be undercharging. This made it obvious to me that the Mercedes market demanded quality and was willing to pay for it. My other high point besides my pricing was my advertisements. Just as last quarter I scored the highest amongst everyone and improved my score by three points. Clearly my issue was not in the actual way I was promoting my product but instead boiled down to how small my sales force was and how few ads I was pushing. Quarter 4:

The first thing I realized I needed to do was expand my market presence. Other companies that were dominating the industry had a least two products. I elected to keep the same product, Omicron 2000, as my Mercedes computer and then designed a new brand, the Trojan, to market as a workhorse computer. Just as when I designed my first computer the main thing I looked at was customers needs and wants. This time I also had the information of what my competitors were using for their workhorse computers. None of the current products classified as workhorse computers were up to par with industry standards so I took the best of the worst products and made it better. The Orion II just fell short of industry standards so I took that as a reference point and added the only thing I thought it overlooked, which was manufacturing software. Besides that one addition I stuck to the same format as my competition only made it a little bit better. As far as my pricing went the Omicron 2000 scored a 99 so I chose to keep the price the same. For the Trojan the only data I had to look at was competitors prices and prices ceilings. The only competitor that had a decent price score was Ganymede which scored a 93 while several others scored 100. So, I looked at what price Ganymede was charging and all the people that were undercharging and just like last time found a healthy medium. Ganymede was charging $2800, including rebates, so I figured I needed a price a couple hundred below that, too much more would not give me any margin of profit. I came up with a price of $2800 with a $150 rebate. I did not want to overcharge my customers, especially since one of their top needs was affordable price. My Omicron 2000 ad was still top in the industry so I decided to keep what was working. I also needed to design an ad for my new workhorse computer. Just as when I was designing my product I turned to my competition. Velema and Orion II both had ads that were up to par with industry demands so I set out to take the best components of each and combine them to make my ad. The first thing I saw I needed to promote was the ease of use so that is the first thing seem in my ad. From there I followed a similar format to my other ad, however, put in a few more things making it a little bit more cluttered but also more informative. Next, I need people to advertise and that was a major shortcoming the last two quarters so decided to ramp it up. I expanded my sales force from 8 all the way to 14. I kept more in Chicago because it was a bigger market with more demand. The last decision I made was to open a sales office in Paris. Competition was dominating Paris and there was a lot of potential demand so I felt I needed to get involved. My performance in the fourth quarter was still not what I wanted it to be. Although my balanced scorecard increased by three points in relation to industry growth it actually got worse. However, the one highlight was I was no longer the worse company I was starting to turn things around. All aspects of my scorecard were growing, some just not as fast. It was clear that I still needed to spike demand. My market performance was better but still way off from the industry leaders. The component that lagged the most was my financial performance but that logically should be the slowest growing because it is very dependent on the other factors. If demand is low of course sales and finances will be low. Finally my market share saw a small jump and other companies began to have a presence. The industry became much more diversified. Synergy was still dominating the Mercedes market and was therefore what I compared myself to. I was not as worried about my low market share in the workhorse market because it was my first quarter entering. I saw a big spike in gross profit this quarter, over 350% growth from the last quarter. It became clear to me that I was headed on the right track and some fine tuning was required. The Omicron 2000 still had a perfect price score so again I left the price the same. The Trojan scored a 97 so was slightly highthe one thing I did not want. Competition at this point was still struggling to figure out pricing so I saw the next quarter as my opportunity to really step everything up. My Mercedes ad was still top dog, however, my workhorse ad just barely made the cut-off whereas other brands were peaking in the eighties. I realized my workhorse ad needed some work. Not only did my ad need work I was nowhere near the industry average for number of inserts. In fact, I was more than 50% lower than industry leaders despite my attempt to ramp up my sales force last quarter. Clearly I needed to go bigger.

Quarter 5: After seeing poor results even after the fourth quarter and watching my competition sky rocket, I realized I needed to introduce a lot more brands. In this quarter we were given new technology to play with so I saw this as my chance to create both top-of-the-line products decked out with the new technology and a line of cheaper alternatives to the high-end lines. Using this method it would give customers options between product categories as well as within those categories. Therefore I designed five new brands and kept the Omicron 2000. I created the Omicron 3000 to be the high-end Mercedes option. I equipped this computer with the best technology available and added every luxury possible. Next I revamped the Trojan to be the Trojan 2.0 with just a few little changes to add value. Then I created the Trojan 3.0 to be the high-end workhorse computer. I gave this computer all the top-of-theline software and hard drive component but excluded the luxury features such as bigger screen size or better keyboard as not to make it the same as my Mercedes computers. The last two brands I designed were for the travelers market. These were the first computer I had made for this market, so, again turned to customer needs and wants as well as looked at what features the companies that were dominating this industry had. I created Hermes 360 and 720. The 360 was essentially the same product everyone else in the industry was putting out, this would be my lower-end. I based it a lot off of Tiger Shark + which received the highest industry ratings. The 720 took the everything included in the 360 and made it better. I gave it the sleek design, the better keyboard, anything to make it stand out as the high-end product. After I created all these products I needed to price them. This actually took a lot of time. The one product I knew the price for was the Omicron 2000, it was going to stay the same. From there I was able to set the price for the Omicron 3000. It clearly needed to be higher than the lower-end product but could not be so high it drew away from sales. Next I had to price my workhorse computers. The Trojan was slightly overpriced last quarter so for the Trojan 2.0 I added an additional $50 to the rebate. From there I set the price of the Trojan 3.0 one-hundred dollars higher. I only set it that much higher because of the concern for over-pricing it especially since the Trojan was over-priced the quarter before. Lastly, I needed to set the price for my traveler computers. Since this was my first product in that market I priced it exactly how I priced my other products for the first time. I looked at the traveler's price ceiling, costs of goods sold, and competitors prices. I elected to design ads for all of my products this quarter because I felt as though even my established products and lower-end products had room for large amounts of growth. After seeing how few sales people and ads I had compared to my competitors I decided this was the quarter I needed to really grow my company. Therefore I increased my sales force by 24 people and my ads by 84 inserts. I realized if I wanted to be at the top of my industry I needed to push my product and make sure people knew about it. The fifth quarter was finally the quarter where I saw large improvements in essentially every category. My scorecard score jumped from being in the bottom of the industry all the way to number one. I was number one in every aspect of the scorecard, indicating my expansion approach in the fifth quarter was definitely a wise decision. I also dominated the market share, taking 38%, the largest share of any company. I owned 36% of the workhorse market, which is large in proportion to the number of companies. I also owned 32% of the Mercedes market, which is second to Synergery, but still good due to my expansion in other markets. Finally, I owed a dominating 53% of the traveler market, which was very impressive because I just entered it last quarter. Fifth quarter to fourth quarter I was seven times more profitable mainly due to the large jump in demand for my products. When looking at pricing it seemed the only one I really got right was the Omicron 2000, all my other products expect the Omicron 3000 where underpriced. The Omicron 3000 was overpriced but was not a huge concern to me because it was my luxury product. All of my ads proved to be very successful and the best in the industry for workhorse and Mercedes. The only market where my ad was not number one was in travelers where I was just barely beat by the Eye-oh. Overall, this quarter was where I really settled down into a

competitive company. My strategy of providing more options proved to being right on and set me in the right direction to be an industry leader. Quarter 6: After having such a successful quarter five my goal for the last quarter was to really push the products I had and tweak any last little things to spike demand a little more. I noticed my lower-end brands were not up to par with industry demands so I revamped all of my low-end products and made them much more middle-end. By improving my worst products and pushing the technology edge with my high-end products I felt as though this would really boost demand. I customers were not only very satisfied with my elite products but also my average products there would be no reason to buy my competitions. As far as my pricing went this quarter I went more with a plan of pushing my high-end products and making my other products a little bit cheaper. This strategy would draw a lot more attention to the products with the higher profit margins and still make money off of anyone who is turned away from that high price. Just as for my pricing, for my priorities I chose to focus on all of my high-end products first and market to them. This trend can also be seen with my choices in what ads I ran. I elected to stop running all the ads for my low-end computer and then really push my high-end. This can be seen when you look at how my ads were distributed. Yes, I only increased my total number of inserts by 18 but those 118 inserts are much more focused this time instead of being broad like last time. As far as my sales force went since my demand was growing I needed to hire more workers so I increased my force by 22 people. A lot of these new workers went to my new office in Sao Paulo and then the remaining were spread out through existing offices. My last quarter performance was the best to date. My scorecard totaled to over 100 indicating that I was performing well in every aspect of my company and was doing a much better job of generating demand than before. Just as my scorecard was the highest yet, so were my profits and sales. Also, all of my brands were performing within 15% of each other in respect to percent of sales revenues. This indicates my brands were all performing and every brand was receiving appropriate amounts of attention. As far as market share goes, I controlled the largest stake in every market. The next closest company to my total market share percent was 22% awaymore than double their entire share. The last quarter I dominated my competition and left little decision to be made by consumers as to what brand to choose.