What assumptions did you make when you planed your strategy? Did these assumptions prove to be right, or was there something else you didn't think about that influenced your results? How will taking those factors into account affect your strategy in this upcoming run?
Again, you need to crunch some numbers to determine how successful you were, where the greatest sources of profit are, and what changes make sense. Make sure you proposed changes in strategy are firmly based in this analysis and sound business principles.
Run the PDA Sim again, this time making any changes you proposed in the Module Two SLP. Then, explain
How you did on this round (Better or worse? What was your score?).
Why do you think you did better (or worse)?
What changes in strategy will you make for the final round?
Again, ground your analysis in business principles and support your arguments and recommendations with data. I am less concerned with the actual performance on this simulation as I am with your ability to explain it and devise a logical strategy to deal with it.
For the third and final run of this simulation, enter your decisions taking into account the changes in strategy you proposed in Module Three and discuss
1. Your company's performance in this run.
2. How it compares to the last run.
3. Why you think you did better or worse.
By this time you know the drill! Ground your analysis in solid business theory and principles, and support your conclusions with data.
Now that you have run this simulation three times, I would like for you to evaluate the experience. First, I would like you to focus on the actual process you went through as you ran the simulation. Specifically, I'd like you to consider the following questions:
What did you learn from this exercise?
It's important to keep the timeframe of measurement in mind. A long-term investment in the rapid-rising product may not show results until after the end of the period being studied. This was the case for X7, which required a longer missionary time than the model allowed.
There's little that you can do for a product in the shake-out phase to make it more attractive or to maintain profits. The X5 product's sales seemed to decline rapidly whether or not I poured in R&D or not, whether I maintained prices or dropped them.
Charging too much for a popular product can move it lower in consumer estimation than the competition. The buyers of the X6 cared about performance, but price was important as well. By increasing the price to $450, then $475, I found a significant reduction in sales and repurchase, which demonstrated that I hit a significant customer resistance point.
How did your strategies and decisions change?
The first round's strategy was the most drastic. By dropping the X7 altogether, fixed costs were reallocated and the other two products did not make up for the loss. Even though the X7's overall contribution to profits during the simulation period were not high, they nevertheless contributed to overall profit.
The strategy for X5 should be "ride it out," with no drastic changes in R&D (which I tried) to save sales, nor should there be a significant change in price.
3. What was the business theory, model, or analytical tools were most useful to you in determining your approach to the decisions you made?
Secondly, I'd like some feedback on this simulation. Did you find it interesting? Would you recommend continuing its use in future terms? Would you like to recommend any way the simulation exercise could be improved?
The simulation was fun, and detailed enough to be able to drive decisions based on previous data.
It would be helpful to have an ending valuation which included future sales, much as a stock price includes future expectations of performance. By doing so, decisions to invest in X7 growth, for example, would receive a higher valuation. Similarly, continuing sales in the X5 would not be valued as highly.
I would look for a way to present a 'dashboard' for the key financial and market figures on one page.