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Lecture 2

ADM 1100 Lecture Notes - Lecture 2: Pricing Strategies, Energy Density, Supercapacitor


Department
Administration
Course Code
ADM 1100
Professor
Alan O' Sullivan
Lecture
2

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Lecture 2 - The simulation
Notes
Timing
Basis
A different mix could have led to a better performance?
Allocate money across different projects
What's a good allocation depends on your understanding of the game
financial understanding is necessary
Strategic side - what drives success
Identify which market is the most promising..how much money avaliable,
how do i prioritize?
Interest is profitibility of your decision making
You can succeed by taking sales away from rivals in the
There are people who can lure into the market
Pricing strategy
Luring in new customers
If you don't drop price you loose revenue
Very appealing in terms of performance can i charge a higher price?
Each market values different things different dimensions in the battery
There is no one best way, you have to make decisions across a range of
dimensions
The technical aspects of the product
You invest money to improve one or more of those dimensions
As a manager if you can you will want to appeal to price
Have to adopt a cost based strategy
Part of that - getting prices down
Manufacturing costs...R&D
Price based competition is more favourable in one market than
another
Your buyers are picky about different things?
Which needs am i going to serve?
How am i going to serve?
Price and 4 other performance dimensions
I need to decide which performance needs to which product
invest in particular kinds of RnD for that product to improve it in
dimensions that appeal to the market
What you claim you can achieve should be achievable
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Your profit vs. all the class profit
Simulation
2008
Overall sales in Power Tools grew by 37% this year to 20.0 million units
annually.
Pricing and R&D decisions to make
Prof simulation period 1
NiMH
R&D Investments NiMH
Energy density - $0.0
Self discharge - $2.0
Recharge time - $0.0
Process improvement - $3.0
Ultracapacitor
R&D Investments
Energy density - $4.0
Its a big market
Do i do it on both batteries or just one?
get a coherent set
will we get a logic?
pricing, performance features, cost, price reductions
NiMH one is more matured - well established business, customers,
needs
Period 2
NiMH
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