The performance of the company is influenced by many factors such as the selling price of products, the promotion strategy, the innovation and addition of value, the sales promotion and also the advertisement. The transition from round 5 to round 6 is characterized by many changes in these elements. The paper will explore the impact of changes made on the performance of stock prices and market share.
The first change that was made in round 6 is the reduction in the prices of most of the products. The price for Able, which is a Low Tech product, was reduced from $30 to $25. On the other hand, the price of App, which is a High-Tech product, was reduced from $44 to $40. We only maintain the price of Cake at $35. Nevertheless, it should be noted that Each, which was still in R & D department in round 5 was now ready in the market. We set its selling price at $34. The prices for all other products remaining such as Fast, Feast, Endo, Earl, Eat, Digne, Dabble, Deftly, Daze, Cake, Baller, Best, Basic, and Baker were all reduced.
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Another strategic move that we made is to increase the productivity by motivating employees to work overtime. The budget set for overtime was increased for virtually all products. For example, the overtime for the Able product was increased from 5 percent to 22 percent. However, we reduced the productivity of Eat, Endo, and Cent by allocating them 0 percent overtime. We did this because these products were in their decline stages of product life cycle. We allocated Basic, Best, and Each the highest overtime rate of 100%, 100% and 97% respectively. Each was our new product and we expected its demand to be high and that is why we promoted its productivity rate. As expected, the production capacity for those products which we allocated higher overtime rate increased significantly. Plant utilization also increased significantly in round 6 due to the changes in productivity. Concerning material cost, we made a number of slight adjustment. Material costs for some products were increased, whereas that of other products was reduced. The material cost for Each was set at $10.77. The labor cost was also adjusted slightly.
It is undisputable that the strategic adjustment made in round 6 resulted in significant change in the value of the company in terms of stock prices. In round 5, Each, a new product was introduced and had to be passed through research and development department. Each is highly demanded in Low Tech market. No bond was issued in this round because the liquidity status of the company was good. The round did not also invest in any TQM as a way of saving cash.
In round 6, the stock price performs exemplarily. Our company was among the top three in terms of stock price. One of the major strategic change made in round 6 was to invest in TQM. The capacity of the last two products was increased, while the capacity of the initial two products was reduced because they were beginning to decline in terms of market coverage. The last two products introduced were bound to take the places of the initial products and to cover both the Low Tech markets and High-tech markets. The ROS was 11.9 and the asset turnover was 1.34. The sales realized in this round is $109,104, 725. The market share at this round was highest as compared to the rest of the rounds. It was 21.48 percent. There was also highest change in the stock market of $15.20. The closing stock price was almost 40, which is highest. The top products in Low Tech Segment include Able, Endo, Eat, and Basic. The lowest products include Cent, Baller, and Each. Top products in High Tech segments include Fast, Feast, App, Best and Dabble. Fast covered 15 percent of the market share whereas Feast and App covered 14 percent and 13 percent respectively. Most of the products in High Tech segments were all bought meaning that the demand was very high. The change in stock market price is attributable to a number of changes. The first change that was made is that the prices for most of the Low Tech products were reduced. For example, the price for Able was reduced from $30 to $25 and that of Endo from $33.55 to $29.49. Unlike round 5, promotion budget for top products in Low Tech segment was introduced. This increased the customer awareness significantly. Promotion budget for Able, for example, was $1, 400 while that of Endo was $2500. Sales budget for top products in Low Tech segment was also introduced. This increased the customer awareness significantly.
Conclusion
The foregoing analysis has demonstrated that performance of the company is influenced by many factors such as the selling price of products, the promotion strategy, the innovation and addition of value, the sales promotion and also the advertisement
