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¶ … Eve celebration. You finished analyzing performance Tablet Development a great report turned a days early Sally Smothers.
At the new beginning of 2012, decisions are made at three specific levels:
Research and development allocations
Product pricing, and Potential product discontinuation.
The advantage at this stage is that the future evolution of the market is already known and safer decisions can be made. In such a context then, the main decisions include the following:
The increase in the funds allocated to research and development
The maintenance of the product pricing
The maintenance of all three tablets -- the X5, the X6 and the X7 market tablets.
In the traditional scenario, the decisions regarding these three issues were taken differently. In this order of ideas:
Research and development funds were reduced as they represented a too large portion of the overall organizational costs
The prices of the products were increased in order to cover for the amounting costs which were incurred in the manufacturing and distribution of the tablets
The third tablet of the Clipboard Tablet Company -- the X7 market tablet -- was discontinued as it generated losses. In 2011 for instance, the X7 tablet did not generate any revenues, but total losses in the amount of $22,254,435.
These decisions seemed pertinent the first time around in 2012 and they were based on pure internal issues. Nevertheless, the...
In this order of ideas, the decisions regarding research and development, pricing and product discontinuation would be readdressed hereby. The following lines integrate the rationale for adjusting the three categories of decisions.
a) Research and development
R&D is indeed the most expensive part of production and the reduction of these costs could materialize in cost efficiencies. Still, these gains would only be applicable within the short-term, and on the long run, the company would suffer losses.
Research and development is responsible for product development, improvement, functionality, usability, quality and all of the other elements which ensure customer demand and satisfaction as well product competitiveness within the market. R&D is as such not only essential for current survival, but it is a guarantee of future competitiveness. Based on this realization then, the decision at this stage would be that of further investing in research and development.
b) Product pricing
The first time around in 2012, prices were increased in order to cover for the costs. At this stage however, retail prices would be maintained at the same level in order to consolidate the customer base (Schwartz, 2008). 2012 and 2013 would be difficult years from the standpoint of profitability, with increases…
References:
Lindsay, J.D., Perkins, C.A., Karanjikar, M.R., 2009, Conquering innovation fatigue: overcoming the barriers to personal and corporate success, John Wiley and Sons
Schwartz, R.A., 2008, Competition in a consolidating environment, Springer
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