Analysis of Clipboard Tablet Company performance report 2016

Tablet SIM II

The analysis that was conducted revealed a few recommendations for Clipboard Tablet Company that were different from the company's choices under the Joe Schmoe regime. With the opportunity having presented itself to take the company in a different path, the following strategy was enacted:

Discontinued

The results of this strategy were as follows. For the X5:

X5 Profit

151,182,710

83,101,400

X5 Saturation

X6 Profit

240,511,901

307,464,930

137,132,198

103,417,497

X6 Saturation

X7 Profit

-10,298,475

24,820,249

93,863,284

X7 Saturation

Cumulative Profit

672,971,018

1,088,357,597

1,325,384,992

1,641,496,441

These figures indicate that the performance was better than that of Joe Schmoe. Some of the improvements were low-hanging fruit. Whereas Joe Schmoe lost money on the X5 in 2015, I discontinued it, saving the company that loss. However, some of the other tactics were based on sound analytical techniques, leading directly to financial improvement.

With the X5, I realized that 2012 would be the last good year for this product. This product reached saturation within the four years. No price reduction was necessary in order to achieve these sales, as my model predicted. My model also predicted that a product at the tail end of the product life cycle would not need any further investment in research & development in order to sell out, and that was another correct assessment. On reviewing these figures, it is unlikely that the product would have been more profitable. One possible way it could have been more profitable is to sell it out by the end of 2013, saving the company the fixed costs associated with operating this product in 2014.

The X6 had a good run. It was predicted that the market could bear a higher cost for this product, and that proved to be the case. There were two years of profit increases before this product reached the tail end of the product life cycle. The product remained profitable through the end of the simulation, and sold out. It is possible, on review, that this product could have been even more profitable at a different price point. That might be investigated in the future.

The X7 was the product that had the most potential, and the performance was actually a little bit disappointing. The X7 reached only 20% market saturation by the end of 2015. It had been hoped that this product would reach a higher level than that, well into the growth or even maturity stage of the product life cycle. The investment in research and development was generous for a product positioned at the low end of the market. This leads to the conclusion that perhaps the price was still too high. An analysis should be conducted to determine the point of maximum profit, all other things being equal. This is probably going to be lower than the $149 price point that was chosen. In order to get the most out of this product, we need to sell more than 3 million units. With my strategy, Clipboard Tablet left over 12 million unit sales on the table, and that is not acceptable. It is necessary, then, that the company takes a different approach, perhaps lowering the price even further. Of particular concern is the lack of momentum that we saw in 2012 and 2013, where sales were below expectations and the product was failing to get beyond the introductory part of the product life cycle.

If this project were to be repeated, the most important thing would be to perform further analysis on the X7, since that product underperformed the most, and had the most potential to add to the profits at Clipboard. The other two products performed to expectations. There may be some tradeoffs involved, especially with R&D on the X6. While that product needs extensive R&D investment, it may be that the X7 will benefit more from that investment, because that investment would drive millions more in unit sales. This is something worth exploring.

Overall, I feel that the performance for the past four years under my watch was strong. The only real disappointment was the X7, and in that the strategy of lowering the price and improving the quality was apparently not aggressive enough. To do it again, I think a more aggressive approach would deliver better results for that product.

I believe that the analytical approach that I took is something that can be built upon. There are a few ways in which this can be done. The first is to be more immediately responsive. I had set out a strategy and refused to deviate from it. When the X7 did not sell well in 2012, I probably should have lowered the price right away, but I wanted to see what would happen at that price point. I was disappointed with the overall result, but next time more flexibility might be required.