Transcript of Turbo Tech Final Plan
- 1. TurboTech BusinessPlan
GloriaAlvarez,DannyHerman,EllenHolcomb,LouisJaime,BobbyYanik,Andrea
Yario Bringinginnovationtothemodernworld
- 2. 2 TurboTech TableofContents VentureCapitalFundingRequest.3
ExecutiveSummary.4 BackgroundSummary......5
SituationAnalysis......21 CustomerAnalysis. CompetitorAnalysis.
IndustryAnalysis... InternalAnalysis
SustainableCompetitiveAdvantage.......47 WhereWeCompete.....
AgainstWhomWeCompete... WhatWeOffer. HowWeComplete.
MarketingStrategy...52 Product. Price... Place... Promotion...
OtherStrategies..57 Product. Financial.. ImplementationandControl60
AppendixA(TacticalPlan)..........62
AppendixB(ProFormaAccounting)............63
- 3. 3 TurboTech VentureCapitalistFundingRequest April14,2015
Mr.RobertRoundtree ProfessorofMarketing LoyolaUniversityChicago
25E.PearsonStreet Chicago,IL60611 DearProfessorRoundtree,
SincethelaunchinJanuary2015,TurboTechbecamealeaderinthemicrocomputerindustryand
excelledinboththetravelerandinnovatorsegments.Fromdayone,themissionhasbeentodeliver
high-speedcomputersthroughcontinualinnovationandreinvention.TurboTechisdedicatedtothe
missionanddeterminedtoleadglobaltechnologyadvancementsinthemicrocomputerindustry.In
ordertofurtherperuseourgoalsandexpandthebusiness,TurboTechconstantlyinvestsinmarket
research,R&D,andmanufacturing.AsTurboTechpreparestoenterthreenewmarkets,the
executiveteaminvitesyoutojoinourteamthroughaninvestmentinourmission.
ThiswouldbeasecureinvestmentbecauseTurboTechunderstandstheneedsofinnovatorand
travelerconsumers,possessesthelargestoverallmarketshare,hasremainedprofitablethrough
Quarter7,andhasthehighestcumulativetotalperformance.Currently,TurboTechholds48%of
themicrocomputermarketshareandhashighestcumulativemarketperformance.Locatedin
Chicago,LosAngeles,Toronto,andTokyoTurboTechhasfoursalesoffices,andplanstoexpandto
Shanghai,Sydney,andParisinQuarter8.AsTurboTechgoesglobal,theexecutiveteamplansto
increasethesalesforceandmakesignificantinvestmentsinR&Dtomaintainacompetitive
advantage.
Inordertoremaincompetitiveandmoveforwardwiththebusinessstrategy,TurboTechisseeking
a$5,000,000dollarinvestment.Enclosedisadetailedbusinessplanwhichanalyzesthecurrent
marketpositioning,andthestrategiesTurboTechimplementedtoachievesuccess.Wegreatly
appreciateyourconsiderationandlookforwardtohearingfromyou.
Sincerely, AndreaE.YarioPresident,TurboTech
- 4. 4 TurboTech ExecutiveSummary
TurboTechisafastgrowingtechnologyfirmthatprovidestopofthelinecomputerscatered
specificallyfortheambitiousinnovatorandthefrequentbusinesstraveler.Ourgoalistobe
receptivetoourmarketdemandsandrespondefficientlysothatourconsumersdirectlybenefit
fromourevolution.HereatTurboTechweconsiderourselvestobeateamratherthana
corporationandaninnovatorratherthanamanufacturer.Wefocusonthelargest,mostprofitable
segmentswithinourmarketwhichwehavedeterminedthroughmarketresearchandanalyticsto
betheTravelerandtheInnovatorsegments.
Ourfirmhasproducedtwotechnologicallyadvancedandeasyuseproductsthatcaterspecifically
toeachchosenmarketsegment:Fusion3.0fortheTravelersegmentandInnovofortheInnovator
segment.WehavetopsalesinbothNorthAmericaandAsiaPacific.Additionally,westeadilyand
regularlyinvestinResearchandDevelopmenttoproliferateourproductupdatestomeetconsumer
demands.
Throughthispoint,wehaveusedacombinationofconsumerresearch,economicbehavior,and
competitoranalysistodetermineanappropriatepricepointforeachproduct.TurboTechexamines
customerwillingnesstopayrelatedtoCOGStoensurethatwegrossourcorporationsdesired
marginstosustainaprofitablefiscalyear.
ThissubsequentbusinessplanoffersacomprehensivesummaryofTurboTechsdecisions
throughoutQ8andapreviewofTurboTechsplannedfutureadvancementsandcontinuedsuccess.
- 5. 5 TurboTech BackgroundSummary Quarters1-4 Quarter1Decisions:
CompanyName:
ThecompanyisnamedTurboTechtoreflectthebenefitsinnovatorsandtravelerswillexperience
byusingTurboTechcomputers.Throughhigh-speedinnovationandcomputingpower,TurboTech
computerspromisetokeep-upwiththefastpacedlifestylesofinnovatorsandtravelers.
ExecutiveResponsibilities:
Executiveresponsibilitiesweredeterminedbythestrengthsandweaknessesofeachexecutive
teammember.Providedbelowisalistwhichincludesthenameofeachexecutiveteammember,
theirprimaryresponsibility,andtheirsecondaryresponsibility:
OfficerName PrimaryResponsibility SecondaryResponsibility
Yanik,Robert VP-AccountingandFinance VP-SalesManagement
Yario,Andrea President-OverallLeadership VP-Manufacturing
Jaime,Louis VP-Manufacturing President-OverallLeadership
Herman,Danny VP-Marketing VP-MarketingResearch Alvarez,Gloria
VP-MarketingResearch VP-Marketing Holcomb,Ellen VP-SalesManagement
VP-AccountingandFinance
- 6. 6 TurboTech TeamNorms: Decision-MakingProcess:
Allimportantdecisionsshouldbemadebyaconsensusvoteoftheentireteam
TeamNorms:
Attendanceatallmeetingsismandatory,unlessmembersinformothersinadvanceofa
conflict. Meetingsstartandendontime.
Memberscomepreparedforallmeetings(havingcompletedallassignments).
Ifatopicisgoingbeyondtheallottedtime,theteammustdecidetoeithertableitforlater
orreconsidertheagenda.
Membersbrainstormsolutionstoproblems,andonlycritiquesuggestionsafterallideasare
onthetable. Everyonehasanopportunitytoparticipateindiscussions.
Membersuseactivelisteningtechniquesandrefrainfrominterruptingeachother.
Membersmaintainconfidentialityofwhatisdiscussedinteammeetings.
Membersareopentogivingandreceivinghonestfeedbackto/fromeachother.
Rolesforatimekeeperandmeetingfacilitatorarerotatedformeetings.
Marketing: MarketingResearch:
Inordertoobtainabetterunderstandingoftheinnovatorandtravelersegmentsneedsanduse
patterns,theexecutiveteampurchasedmarketingresearchforNorthernAmerica.Providedbelow
isadetailedlistingoftheinitialmarketingresearchpurchasedbytheexecutiveteam:
Finance:
Inordertofundcurrentoperations,eachmemberoftheexecutiveteampurchased10,000sharesof
commonstockat$100pershare.Afterspending$88,000onmarketingresearch,theexecutive
teamdeposited$912,000intoa3-monthCertificateofDepositaccountwithaquarterlyinterest
rateof1.5%.ProvidedbelowisadetailedlistingofthefinancialdecisionsfromQuarter1:
- 7. 7 TurboTech Quarter2Decisions: Goals&Strategy:
TargetMarkets:
Whileanalyzingthemarketingresearchonmarketsize,theexecutiveteamrecognizedthetop5
citiesintheinnovatorandtravelersegmentsareidentical.Becauseofthis,theexecutiveteam
decidedthattheinnovatorandtravelersegmentswouldprovideTurboTechwiththebest
opportunityforsuccess. MissionStatement:
Weareafastgrowingtechnologyfirmthatprovidestopofthelinecomputerscateredspecifically
fortheambitiousinnovatorandthefrequentbusinesstraveler.
StrategicDirections:
Toprovidecomputerstoinnovatorsandtravelers,theexecutiveteamofTurboTechelectedto
focusonthefollowingstrategicdirections:
Focusonsmaller,highmarginsegments
Focusonlargestgeographicmarkets,eveniftheyaremoreexpensive
Buildamarketpositionanddefendit Taketheleadandkeepit
Betheleaderinallthings Sidestepthecompetitionwheneverpossible
Betheprofitmarginleader Bethetechnologyleader
Bethehighserviceproviderinthemarket
Providethemostreliableproductonthemarket
- 8. 8 TurboTech Marketing: Modify Brand: In Quarter 2,
introduced Launch Pad and Launch Pad +. These introductory
TurboTech computers are based on the needs and use patterns of
innovators and travelers. Provided below are the specs for Launch
Pad and Launch Pad +: LaunchPad (Traveler) LaunchPad+ (Innovator)
Essentials BaseComponents x x Case Standard(Desktop) x x
RewritableOpticalDrive Standard x x Harddrive UltraCapacity x x
OfficeSoftware Professional x x OtherSoftware Bus.Graphics x x
Presentation x x Database x x Bookkeeping x WebDesign x x
Statistical x x Engineering x Manufacturing x Games x SecuritySuite
x x Monitor 19"standard(Desktop) x 21"highres.(Desktop) x
- 9. 9 TurboTech ComputingPower HighSpeed x x Keyboard&Mouse
Standard x Expanded x SpecialFeatures ExpansionSlots x x AutoBackup
x x Networking Standard x OperatingSystem ForProfessionals x x
SalesChannel:
Becauseprimarydemandislesscostlyandmoreprofitablethansecondarydemand,theexecutive
teamsoughtouttoopenasalesofficeinatopperformingmarketfortheinnovatorandtraveler
segments.Whilethesetupandquarterlyleasecostsarehigherthananyothercity,theexecutive
teamdecidedthatthe12monthpotentialdemandandpricewillingtopayjustifiedopeningthe
initialsalesofficeinLosAngeles. Manufacturing:
InordertokeepthemanufacturingcostsforTurboTechcomputerslow,theexecutiveteamchose
toopenamanufacturingfacilityinShanghai.Additionally,theexecutiveteamplannedtoexpand
intoAsia-Pacific,andamanufacturingfacilityinShanghaiwouldallowTurboTechtomaximize
profitswithinthatmarket.Providedbelowisadetailedlistingofthemanufacturingfacility,aswell
asthecurrentandplannedfixedcapacityofthefacility:
- 10. 10 TurboTech Finance:
Inordertofundcurrentoperations,eachmemberoftheexecutiveteampurchasedanadditional
10,000sharesofcommonstockat$100pershare.AttheendofQuarter2,theexecutiveteamchose
toleavethe$912,000ina3-monthCertificateofDepositataquarterlyinterestrateof1.5%.
ProvidedbelowisadetailedlistingofthefinancialdecisionsfromQuarter2:
Quarter3Decisions: Marketing: ModifyBrand:
InQuarter3,TurboTechstoppedtheproductionofLaunchPadandLaunchPad+,andintroduced
AxiomPadandFusionPad.AlthoughtheintroductoryTurboTechcomputershaveadifferentname
anddesign,AxiomPadandFusionPadarestillbasedontheneedsandusepatternsofinnovators
andtravelers.ProvidedbelowarethespecsforAxiomPadandFusionPad:
FusionPad (Traveler) AxiomPad (Innovator) Essentials BaseComponents
x x Case Standard(Laptop) x x RewritableOpticalDrive Standard x x
HardDrive
- 11. 11 TurboTech UltraCapacity x x OfficeSoftware Professional
x x OtherSoftware Bus.Graphics x x Presentation x x Database x x
Bookkeeping x WebDesign x x Statistical x x Engineering x
Manufacturing x Games x SecuritySuite x x Monitor
14"Standard(Laptop) x x ComputingPower HighSpeed x x
Keyboard&Mouse Standard x Expanded x SpecialFeatures
ExpansionSlots x x AutoBackup x x Networking Standard x
OperatingSystem ForProfessionals x x
- 12. 12 TurboTech Price&Priority:
BasedonthepricewillingtopayinLosAngelesandtheaveragecostofproduction,theexecutive
teamdeterminedtheretailpriceforAxiomPadandFusionPad.Attheretailpriceof$2,300.00,
FusionPadwasgivensalesprioritynumber1,nopricerebatewasoffered,andapointofpurchase
displaywaspurchased.Attheretailpriceof$3,000.00,AxiomPadwasgivensalesprioritynumber
2,apricerebateof$300wasoffered,andapointofpurchasedisplaywasoffered.Providedbelowis
adetailedlistingofthepriceandpriority,aswellastheupdatedspecsforAxiomPadandFusion
Pad: ModifyAdvertisements:
ToboosttheexposureofAxiomPadandFusionPad,theexecutiveteampurchasedlocalmediain
LosAngeles,andregionalmediaacrossNorthAmerica.AlthoughtheonlyTurboTechsalesoffice
wasinLosAngeles,theexecutiveteamdecideditwouldbebeneficialtoseedtheregionalmarket
beforeexpandingintoChicagoandToronto.
Whendecidingonthestructureoftheadvertisements,theexecutiveteamreferencedthemarketing
researchonusepatternandmediapreferences.Basedoninsightsobtainedfromtheresearch,the
executiveteampurchased4localand4regionalmediaplacements,totalingto$86,506.Provided
belowishierarchicallistingoftheadvertisementsforAxiomPadandFusionPad,aswellasthe
localandregionalmediaplacements: Axiom Pad Fusion Pad Most Powerful
PC On Market 1 2 Largest Data Storage On Market 5 Feature Office
Applications 5 Business Graphics Applications 9 8 Data management
applications 6 Presentation Applications 4 7
- 13. 13 TurboTech Statistical Applications 2 Web Design
Applications 3 Easy To Use, Simple Design 1 Smart Backup System 7
Portable Design 4 Link PCs With Network/Internet 8 9 Picture
Business Professionals 6 Picture People In Travel Setting 3
MarketingResearch:
Tobetterunderstandcustomerneedsandusepatterns,theexecutiveteamspent$20,000.00on
marketingresearchforNorthAmerica. SalesChannel: HireSalesPeople:
Tomeettheforecasteddemandof300computers,theexecutiveteamhired5salespeopleforthe
officeinLosAngeles.Becausetheexecutiveteamwasunsureofthedemandeachsegmentwould
generate,2salespeoplewerehiredfortheinnovators,2salespeoplewerehiredforthetravelers,
and1salespersonwashiredforsupport.Providedbelowisadetailedlistingwhichoutlinesthe
- 14. 14 TurboTech
totalnumberofsalespeoplehired,thecosttohirenewsalespeople,andthecosttoemploythe
salespeopleforQuarter3: Manufacturing:
InQuarter3,thefixedcapacityavailablewas25units/day.Duetotheavailablefixedcapacitybeing
90unitshigherthanprojecteddemand,theexecutiveteamelectednottoincreasefixedcapacityfor
Quarter4.Asaresultofonlyutilizing77%ofthemanufacturingfacility,overheadcostsandlabor
chargedtoexcessoperatingcapacitywere$105,790.00.Providedbelowisadetailedlistingofthe
TurboTechmanufacturingfacilityefficiencymetrics:
- 15. 15 TurboTech Finance:
Inordertofundcurrentoperations,eachmemberoftheexecutiveteampurchasedanadditional
10,000sharesofcommonstockat$100pershare.AttheendofQuarter3,theexecutiveteamchose
toleavethe$912,000ina3-monthCertificateofDepositataquarterlyinterestrateof1.5%.
ProvidedbelowisadetailedlistingofthefinancialdecisionsfromQuarter3:
Quarter4Decisions: Marketing: ModifyBrand:
InQuarter4,TurboTechstoppedtheproductionofAxiomPadandFusionPad,andintroduced
Axiom2.0andFusion2.0.AlthoughtheintroductoryTurboTechcomputershaveadifferentname
anddesign,Axiom2.0andFusion2.0arestillbasedontheneedsandusepatternsofinnovators
andtravelers.ProvidedbelowarethespecsforAxiom2.0andFusion2.0:
- 16. 16 TurboTech Fusion2.0 (Traveler) Axiom2.0 (Innovator)
Essentials BaseComponents x x Case Standard(Desktop) x
Standard(Laptop) x RewritableOpticalDrive Standard x x HardDrive
UltraCapacity x x OfficeSoftware Professional x x OtherSoftware
Bus.Graphics x x Presentation x x Database x x Bookkeeping x x
WebDesign x x Statistical x Engineering x Manufacturing x
SecuritySuite x x Monitor 21"HighRes.(Desktop) x
14"Standard(Laptop) x ComputingPower HighSpeed x x
Keyboard&Mouse Standard x Expanded x SpecialFeatures
- 17. 17 TurboTech ModifyAdvertisements:
ToboosttheexposureofAxiom2.0andFusion2.0,theexecutiveteampurchasedlocalmediainLos
Angeles,andregionalmediaacrossNorthAmerica.AlthoughtheonlyTurboTechsalesofficewasin
LosAngeles,theexecutiveteamdecideditwouldbebeneficialtoseedtheregionalmarketbefore
expandingintoChicagoandToronto.
Whendecidingonthestructureoftheadvertisements,theexecutiveteamreferencedthemarketing
researchonusepatternandmediapreferences.Basedoninsightsobtainedfromtheresearch,the
executiveteampurchased4localand4regionalmediaplacements,totalingto$86,506.Provided
belowishierarchicallistingoftheadvertisementsforAxiom2.0andFusion2.0,aswellasthelocal
andregionalmediaplacements: Axiom2.0 (Innovator) Fusion2.0
(Traveler) MentionBrandName 1 2 DoesAWideVarietyOfTasks 7
MostPowerfulPCOnMarket 5 NewAndImprovedBrand 2 1
LocalSalesandSupport 8 FeatureOfficeApplications 3 BusinessGraphics
Applications 3 DataManagement Applications 8 ExpansionSlots x x
AutoBackup x x Networking Standard x x Battery Standard(Laptop) x
OperatingSystem ForProfessionals x x
- 18. 18 TurboTech PresentationApplications 9
StatisticalApplications 4 MoreSecure(Viruses,Attacks) 7
EasyToUse,SimpleDesign 6 SmartBackupSystem 9 PortableDesign 4
LinkPCsWith Network/Internet 6 5 MarketingResearch:
Tobetterunderstandcustomerneedsandusepatterns,theexecutiveteamspent$100,000.00on
marketingresearchforNorthAmerica,MiddleEast,LatinAmerica,Europe,andAsiaPacific.
- 19. 19 TurboTech SalesChannel:
ToincreasethedemandofTurboTechcomputersandmovetouncontestedmarketspace,the
executiveteamopenedsalesofficesinChicago,Toronto,andTokyo.Byopening2moresalesoffices
inNorthAmericaand1salesofficeinAsiaPacific,itcostTurboTech$580,000.00.Providedbelowis
adetailedlistingwhichoutlineswheresalesofficesareopening,andthetotalsalesofficescosts:
Manufacturing:
InQuarter4,thefixedcapacityavailablewas25units/day.Duetotheavailablefixedcapacitybeing
50unitshigherthanprojecteddemand,theexecutiveteamelectednottoincreasefixedcapacityfor
Quarter4.Asaresultofonlyutilizing89%ofoperatingcapacity,overheadcostsandlaborcharged
toexcessoperatingcapacitywere$51,936.00.ProvidedbelowisadetailedlistingoftheTurboTech
manufacturingfacilityefficiencymetrics:
- 20. 20 TurboTech Finance:
Inordertofundcurrentoperations,eachmemberoftheexecutiveteampurchasedanadditional
10,000sharesofcommonstockat$100pershare.AttheendofQuarter4,theexecutiveteamchose
towithdraw$939,360.00fromthe3-MonthCertificateofDepositaccount.Providedbelowisa
detailedlistingofthefinancialdecisionsfromQuarter4:
- 21. 21 TurboTech SituationAnalysis ExternalAnalysis:
CustomerAnalysis: There are 5 customer segments in our market. The
first is the Costcutter segment. This customer is looking for a
no-hassle experience and desires minimum complexity for operators.
The costcutter is looking for a machine that is easy to use, easy
to set up and something that requires little to no training to use.
They are typically influenced by the recommendation of others and
prefer courteous personnel. Desired features include word
processing, bookkeeping, budgeting and data management software.
The costcutter is looking to pay the lowest price for their
product. According to our market research, Los Angeles, Mexico
City, and Sydney are the top three cities where costcutter
consumers are located. These consumers are willing to pay up to
$1,860, $1,843, or $1,822 for a computer in each city respectively.
Costcutters are interested in sports media, leading trade journals,
general business, and new venture magazines. The second market
segment is the Innovator. These consumers prefer the brand vendor
to be a technical leader and the computers to reflect the most
updated software. Innovators look for larger computer screens so
they can view multiple tabs at once and want as much storage space
as possible. They require fast access to graphical images and are
interested in high performance over price. Some of the most desired
features include technical graphics, web design and management,
statistical analysis, communication with other computers, data
management- accounts and engineering and design features. According
to our market research, Chicago, Los Angeles, and Warsaw are the
top three cities where innovator consumers are located. These
consumers are willing to pay up to $3,209, $3,126, or $3,058 for a
computer in each city respectively. Innovators have the following
media interests: new venture magazines, computer magazines,
science, and technology. The Mercedes consumer is the third segment
in our market. This customer looks for the best of the best and
demands the most features out of all of the other segments.
Mercedes consumers look for easy to use, fast working, up to date
computers with the latest software technology and access to the
most amount of applications. They demand the highest quality
product with the best service. Some of the most desired features
for the Mercedes consumers include: manufacturing
- 22. 22 TurboTech process control, communication with other
computers, technical graphics and computer aided design
manufacturing. The Mercedes customer is willing to pay the most for
the best product. According to our market research, Chicago,
Toronto, and Los Angeles are the top three cities where mercedes
consumers are located. These consumers are willing to pay up to
$4,164, $4,106, or $4,065 for a computer in each city respectively.
Their media preferences are general news magazines, science and
technology, business newspapers and computer magazines. Workhorse
is our fourth market segment. These consumers are looking for an
easy to use, secure, no-hassle computer with a multi-purpose work
station. Workhorses desire monitor that is easy on the eyes and
reliable but affordable and available in all local markets. Desired
features for the workhorse segment include: bookkeeping and
budgeting, word processing, communications with other computers,
data management-accounts, web design and management, business
graphics, presentations and statistical analysis. According to our
market research, Toronto, Los Angeles, and Warsaw are the top three
cities where workhorse consumers are located. These consumers are
willing to pay up to $2,707, $2,698, or $2,649 for a computer in
each city respectively. Workhorses are interested in general
business and sports magazines, leading trade journals, business
newspapers and general news magazines. Our fifth and final market
segment is the Traveler market segment. The most important feature
to this consumer is the ability to connect to the office when on
the road. In addition, travelers need reliability, ease of access
and the ability to send and receive emails. They want a small,
lightweight, easily portable machine that is secure and easy to
use. Travelers desire a fast network connection and a lot of
storage space. Desired features for the traveler segment include:
presentation capabilities, communication with other computers, word
processing, business graphics, data management-accounts and
bookkeeping/budgeting software. Travelers are willing to pay a
reasonable price for a good quality product. According to our
market research, Mexico City, Chicago, and Toronto are the top
three cities where traveler consumers are located. These consumers
are willing to pay up to $3,019, $2,977, or $2,894 for a computer
in each city respectively. Travelers are typically interested in
the following medias: new venture magazines, leading trade
journals, sports magazines, general news magazines, and business
magazines
- 23. 23 TurboTech Costcutter:
Thecostcuttersegmentisthesecondlargestsegmentofthefive.Consumersinthissegmentare
extremelypricesensitiveandwantacomputerthatiseasytouseandincludesbasicoffice
applications. Needs&Wants:
- 24. 24 TurboTech UsePatterns: PriceWillingtoPay:
- 25. 25 TurboTech MajorCities: MediaPreference: Workhorse:
TheWorkhorsesegmentisthelargestsegmentintheindustry.Theyaresimilartocostcutterand
wantacomputerthatiseasytouse,secure,andmoderatelypriced.
- 26. 26 TurboTech Needs&Wants: UsePatterns:
- 27. 27 TurboTech PriceWillingtoPay: MajorCities:
- 28. 28 TurboTech MediaPreference: Traveler:
Thetravelersegmentneedsacomputerthatisportableandreliable.Theseconsumersare
primarilybusinessesmenandwomenwhoarepricesensitiveandalwaysontheroad.
Needs&Wants:
- 29. 29 TurboTech UsePatterns: PriceWillingtoPay:
- 30. 30 TurboTech MajorCities: MediaPreferences: Innovator:
Theinnovatorsegmentisasmallsegmentthatwantsatopofthelinecomputerthathastheability
tohandlelargecomputationalproblemsandincludesanarrayofapplications.Theseconsumers
wantthelatest,highestperformingtechnologyandtheyarewillingtopayforit.
- 31. 31 TurboTech Needs &Wants: UsePattern:
- 32. 32 TurboTech PriceWillingtoPay: MajorCities:
- 33. 33 TurboTech MediaPreferences: Mercedes:
TheMercedessegmentisthesmallestsegmentandtheleastpricesensitive.Consumersseekhigh
performing,ultra-fastcomputersthatcanhandlelargetasks.
Wants&Needs:
- 34. 34 TurboTech UsePatters: PriceWillingtoPay:
- 35. 35 TurboTech MajorCities: MediaPreferences:
- 36. 36 TurboTech CompetitorAnalysis:
TherearetwodirectcompetitorsforTurboTech.ThosecompetitorsareMicroTechandSHIFT,
whichalsomanufacturecomputersforourtargetmarket.
Tostartoff,MicroTechhastheirproductionplantplacedinSaoPaulo,locatedintheLatinAmerican
Region.SHIFThastheirproductionplantplacedinShanghai,locatedintheAsian/PacificRegion.
Furthermore,MicroTechhassalesofficesinToronto,CanadaandMexicoCity,Mexico.SHIFThas
salesofficesinChicago,USAandLondon,England.Neithercompetitorshasasalesofficeinthe
samecityasTurboTechdoes,butthelocationsalsofavorsimilartargetmarketsofourownfirm.
Transitioningintotargetedsegments,MicroTechtargetsworkhorses,traveler,andcostcutter
segmentedmarkets.SHIFTtargetsworkhorsesandinnovatorsegmentedmarkets.Both
competitorshaveanoverlapwithatleastoneofthetargetmarketsthatTurboTechhaschosento
target.
Now,morespecifically,MicroTechhasstrengthsandweaknessesoverTurboTechasacompetitor.
Microtechofferssixdifferentbrands:threedesktops(VulcanZ2,VulcanZ3,andVulcanM1)and
threelaptops(Innova,InnovaX1,andPegasus).ThisisastrengthbecauseMicroTechisabletooffer
awidervarietyofproductsthananyothercompetitorinthemarkettosuittheirtargetmarkets
needs.Microtechalsoadvertisesmoreinbothlocalandregionaladvertisingbrackets.Thisis
anotherstrengthbecausetheirbrandawarenesswillincreasefasterwithmorecontactwiththe
public.However,MicroTechdidnotscoreaswellforpricejudgmentsacrossallthetargetmarkets
whenitsbrandsandpriceswerecomparedtoTurboTechsbrandsandprices.Thisisaweakness
becausemoreconsumersbelievethattheirpricingistoohighfortheproductsoffered,ultimately
losingmoneyforthefirm.Lastly,asforadvertising,MicroTechhasthebestadvertisinginthe
marketwhencomparedagainstothercompetitorsandbrandsacrossthetargetedsegmentsof
innovatorandtravelers.ThisisastrengthforMicroTechbecausethosetwomarketsarethetargets
marketsforTurboTech.Iftheiradvertisingisbetteramongconsumers,thenMicroTechwillearn
moresalesfortheirfirm.
Movingforward,SHIFTalsohasstrengthsandweaknessesoverTurboTechasacompetitor.SHIFT
offersfourdifferentbrands:twodesktops(UpperCaseandUpperCase2.0)andtwolaptops
(LowerCaseandLowerCase2.0).ThisisastrengthbecauseSHIFToffersmorebrandsthan
TurboTechdoestosimilartargetmarkets,allowingSHIFTtoaccommodatedifferentneedsfor
differentconsumers.SHIFTdoesnothaveasmanybrandsasMicroTech,butstillmorethan
TurboTechcurrentlyoffers.SHIFTalsoadvertisesmoreinbothlocalandregionaladvertising
bracketsthanTurboTech.Whichisalsoanotherstrengthbecausetheirbrandawarenesscouldalso
increaseasaresultofmorecontactwithconsumers.However,SHIFTstilldoesnotadvertiseas
muchasMicroTechdoes.Additionally,anotherstrengthforSHIFTishowtheyfaredwithprice
- 37. 37 TurboTech
judgmentsamongconsumersinthetargetmarketsegments.SHIFTonlyhadthreescoresbelow
100,outoftwentytotalscoresamongconsumers.Thisisastrengthbecauseconsumersarereally
happywithSHIFTsprices,makingconsumersseethevalueinwhattheyarepurchasing.However,
aweaknessforSHIFTistheiradvertisingjudgmentsamongconsumers.SHIFTdoesnothaveas
higharatingasTurboTechforadvertisementsamongthetargetmarketsegments.Thisisa
weaknessbecausealthoughpeoplefindtheproductstobeagoodpriceforthevalue,theymaybe
morelikelytolookelsewherebecausetheadvertisementsmaynotcatchconsumersattentionor
mayturnthemawayifthecorrectinformationisnotpresentedforeachtargetmarket.
MarketIndustryAnalysis: PotentialDemand/PriceWillingtoPay:
Thetotaldemandfortheentiremicrocomputermarketis220,360unitsperyear.Theleading
demandliesintheWorkhorsesegmentwithademandof58,979andthelowestdemandliesinthe
Mercedesmarketwithademandof34,300.Detailsofthedemandaredepictedbelow:
Thegraphbelowdepictstheaveragepricethateachsegmentiswillingtopayperunit.Consumers
intheMercedessegmentareonaveragewillingtopaythemostandtheCostcuttersegmentis
willingtopaytheleast.
- 38. 38 TurboTech
To-date,theindustryhassold5,898units.TheindustryhassoldthemostunitstotheWorkhorse
marketsegment(2640units)andtheleastamountofunitstotheMercedessegment(130).The
mercedesmarketsegmentisextremelyparticularabouttheirproductandmaynotbefully
interestedinsomethingthatdoesnothaveallofthequalitiesthattheydemand.
TotalUnitsSoldtoDate Costcutter Innovator Mercedes Workhorse
Traveler TotalUnits MicroTech 189 260 23 923 206 1601 SHIFT 89 323
61 1,563 929 2965 TurboTech 2 597 46 154 533 1332 Total 280 1180
130 2640 1668 5898 PercentofDemandSatisfied:
Thechartbelowshowsthedemandsatisfied(Q3-Q4)throughouttheindustry.Thelowestdemand
satisfiedisintheMercedessegment(0.38%)ThehighestdemandsatisfiedisintheWorkhorse
marketsegment(4.48%).Again,Mercedesmarketsegmenthasveryhighstandardsforitsproduct
preferences.Asaresult,theirmarketsegmenthasthelowestamountofdemandsatisfied.
DemandSatisfied Costcutter Innovator Mercedes Workhorse Traveler
Percentage 0.52% 3.27% 0.38% 4.48% 4.55% Total$Satisfied
$482,524.00 $3,417,516.00 $488,338.50 $6,495,060.00 $4,596,340.80
Belowisagraphlabelingthedemandavailableineachmarketsegment:
- 39. 39 TurboTech DemandAvailable Costcutter Innovator Mercedes
Workhorse Traveler Total$Available $93,582,083.20 $106,177,588.20
$128,846,235.00 $145,103,084.75 $101,023,051.60 Total$Remaining
$93,099,559.20 $102,760,072.20 $128,357,896.50 $138,608,024.75
$96,426,710.80
Belowisthegrowthrateofallcompaniesacrosstheindustry.TurboTechhasgrown177.34%from
Q3-Q4.Industrycompetitorshaveamuchhighergrowthrate,howeverthatdoesnotnecessarily
meantheyareproducingmorecomputers.TurboTechheldthemajorityofthemarketshareforQ1-
Q3andothercompetitorsonlyrecently(Q4)begantosignificantlyincreasetheirproduction,thus
leadingtoamuchhighergrowthrate.
ProductLifeCycleStage/CostStructure:
Sinceourgrowthrateispositiveandover10%,ourcompanyiscurrentlyinthegrowthstageofthe
productlifecycle.Thismeansthatwearestillgrowingournicheandhavenotyetsolidifiedour
market.ConsideringthisPLCstage,wehaveabalancebetweenfixedandvariablecostswithinour
coststructure. Distribution(CompanyOwnedSalesOffices):
Everycompanyownedsalesofficeforourcompanyandourcompetitorsisdisplayedinthegraph
below: GrowthRate MicroTech SHIFT TurboTech UnitsSold 853.29%
4160.29% 177.34% CompetitorsinCity NORAM City Micr oTech SHIFT
Turbo Tech LosAngeles X Chicago X X Toronto X X MexicoCity X MEA
AbuDhabi Accra Cairo Johannesburg LATAM SantoDomingo
- 40. 40 TurboTech InternalAnalysis: Santiago SaoPaulo X Quito
EUROPE Paris X Warsaw Moscow London X APAC Tokyo X Mumbai Shanghai
X Sydney X
- 41. 41 TurboTech FinancialPerformance:
TurboTechsnetprofitfromcurrentoperationsequals-$3,560,605duetotherecentlyopenedsales
officesinParis,Shanghai,andSydney.InQuarter7,TurboTechinvested$5,318,753inR&Dto
remainup-to-dateonthenewesttechnology,maintainacompetitiveadvantage,andcontinueto
acquirebusinessfromtheinnovatorandtravelersegments.BetweenQuarters1-5,TurboTech
issued90,000sharesofstocktoshareholdersandearnedthehighestfinancialperformancemetric
scoreof19.57throughquarters1-7. Sales&MarketShare:
TurboTechcurrentlyowns41%ofthetotalmarketshare,whichhasincreased9%sincequarter6.
ProvidedbelowisagraphwhichliststhetotalunitssoldfromQuarter3through7:
Quarter Costcutter Innovator Mercedes Workhorse Traveler Total 3 0
235 2 19 97 353 4 2 362 44 135 436 979 5 1 623 171 158 998 1,951 6
1 1,242 570 123 2,459 4,395 7 0 789 168 132 1,894 2,983
SegmentsTargeted:
TurboTechtargetedtheinnovatorandtravelersegmentstoavoidpricesensitivemarkets.Dueto
TurboTechsinvestmentinmarketresearchandR&D,targetsegmentswereselectedbywhowas
willingtopaymoreforinnovative,high-qualitycomputers.Wealsobegantargetingthemercedes
segmentaftertheinitialbusinessstrategyattractedmanyoftheirconsumers.However,inQuarter
7TurboTechrealizedthattheyfailedtopurchaseenoughR&Dtosatisfytheconsumersneedsand
wants,resultinginthediscontinuationofEliteChromemodelthatwasdesignedfortheMercedes
segment.InQuarter7,TurboTechrefocusedontheinnovatorandtravelersegments.Asaresult,
- 42. 42 TurboTech
TurboTechdominatedthetravelersegmentbyobtaining69%ofthemarketshare.After
discontinuingEliteChrome,TurboTechlost9%ofitsmarketshareintheinnovatorsegment.The
graphsbelowdisplayTurboTechscurrentmarketshareineachsegment.
TravelerSegment: InnovatorSegment
TurboTechs$5,318,753investmentinR&Dwillresultintheimplementationofnewtechnology
andanincreaseinbrandjudgmentfromtheinnovatorsegment.
- 43. 43 TurboTech Strengths&Weaknesses: BrandJudgments:
Traveler:
Inquarter7,TurboTechhadthehighestbrandjudgmentratingintheentireindustry.However,
Fusionsbrandratingof82helpedusrecognizetheopportunityforimprovement.
Innovator:
Inovoistailoredtotheinnovatorsegment,butremainsinsecondplacetoMicroTechsInnovaX2.
FollowingrecentinvestmentsinR&D,TurboTechisconfidentthatitwillregainmarketshareafter
Quarter8. AdJudgments:
Wefindadvertisingtobeoneofourbiggestchallenges.Fusionsadjudgmenthasremained
consistentinquarters6and7withanadjudgmentof70.AsforInovosadvertisement,itstillneeds
alotofworksinceitranksinthelow50s.Welookplantoreviseouradvertisementsandmake
improvementsinquarter8.
- 44. 44 TurboTech Quarter7: PriceJudgment
ThepricejudgmentofFusion3.0increasedfrom98to100,inQuarter7.Inthesamequarter,
Inovospricejudgmentdecreasedfrom100to79afterupgradingthepreviousmodeland
increasingtheprice.InAsiaPacific,pricejudgmentremainedthesame.
UnitedStates: PriceJudgment Company Brand Cost-Cutter Innovators
Mercedes Workhorse Travel TurboTech Inovo 52 87 100 72 79 TurboTech
Fusion 72 100 100 98 100 AsiaPacific: PriceJudgment Company Brand
Cost-Cutter Innovators Mercedes Workhorse Travel TurboTech Inovo 63
100 100 90 98 TurboTech Fusion 62 100 100 88 96 BalancedScorecard:
Industryresultsforquarter7showthatTurboTechscoredhighestinfiveofthetotalseven
categoriesforthebalancedscorecard.Thefirmstotalperformancescorewas26.026andisthe
largesttotalperformanceoverall(industryaveragewas11.89).
Thefollowingperformancemetricsarefoundbasedonvariousequationsconsideringthe
informationprovided:
- 45. 45 TurboTech FinancialPerformance:
Netprofitfromcurrentoperationsis$2,043,422andthetotalsharesofstockissuedis90,000
leavinguswithafinancialperformanceof22.70whichisnearlydoubletheindustryaverage.
MarketPerformance:
Averagemarketshareinourtargetedsegmentsis55andpercentofdemandactuallyservedforQ7
was100%givingusaperformancescoreof0.55whichis.04pointsabovetheindustryaverage.
MarketEffectiveness:
TurboTechsaveragebrandjudgmentis81whiletheaverageadjudgmentis62,equalinga
marketingeffectivenessscoreof.71percent,.06belowthehighestintheindustry.
InvestmentsintheFirmsFutureCurrentexpendituresthatbenefitthefirmsfutureequal
$10,848,631asnetrevenuesequal$29,999,456;givinginvestmentsinthefirmsfutureascoreof
4.62whichis3unitsbelowtheindustrymaximum. CreationofWealth:
Netequityequals$5,316,832andtotalstockholdersequityis$9,000,000makingawealthscoreof
.59,theleadingscorefortheindustry. AssetManagement:
Theassetturnoverofthefirmis1.69whilethepenaltyforexcessinventoryis1.00,makinganasset
managementscoreof1.69,.6belowtheindustryaverage. FinancialRisk:
Minimum Maximum Average TurboTech TotalPerformance 0.576 26.028
11.896 26.028 MarketPerformance 0.34 0.55 0.463 0.55
FinancialPerformance 1.661 22.705 11.772 22.705 InvestmentinFuture
4.616 7.645 5.703 4.616 MarketingEffectiveness 0.708 0.763 0.728
0.708 Wealth 0.187 0.591 0.376 0.591 AssetManagement 1.249 2.314
1.752 1.693 ManufacturingProductivity 0.556 1 0.731 0.638
FinancialRisk 0.8 1 0.933 1
- 46. 46 TurboTech
TurboTechstotalequityis$5,316,832anditstotalcapitalis$5,316,832,givingafinancialrisk
scoreof1.00,thehighestintheindustry. Totalbusinessperformance:
22.705*0.550*0.708*4.616*0.591*1.693*0.638*1.000=26.028
- 47. 47 TurboTech SustainableCompetitive Advantage
MarketSegmentation:
Afteranin-depthanalysis,thetwosegmentswechosetotargetposttestmarketaretheInnovator
andtheTravelersegment.WeconsideredtargetingtheMercedesmarketanddidforafewquarters
butdecidedtodropthesegmentaltogether.Wedidthistoavoiddissatisfiedcustomersbecausewe
didnothavethefundstoappropriateadequateR&DinvestmentstosatisfyMercedesconsumer
demands.Throughouranalysis,wewereabletodeterminethetwomostsimilarmarketstotarget
foreaseofR&Dinvestmentpurposesandforstrategicallocationofmonetaryfunds.
Innovator:Theseconsumerspreferthebrandvendortobeatechnicalleaderandthe
computerstoreflectthemostupdatedsoftware.Innovatorslookforlargercomputer
screenssotheycanviewmultipletabsatonceandwantasmuchstoragespaceaspossible.
Theyrequirefastaccesstographicalimagesandareinterestedinhighperformanceover
price.Theyareinterestedinthelargestdesktopdisplayandpreferthatoverportability.
Traveler:Themostimportantfeaturetothisconsumeristheabilitytoconnecttotheoffice
whenontheroad.Inaddition,travelersneedreliability,easeofaccessandtheabilityto
sendandreceiveemails.Theywantasmall,lightweight,easilyportablemachinethatis
secureandeasytouse.Travelersdesireafastnetworkconnectionandalotofstorage
space.Travelersarewillingtopayareasonablepriceforagoodqualityproductandarethe
onlymarketsegmentthatdemandsportability.
MarketSegmentAttractiveness:
Fiveimportantfactorsforconsiderationwhendeterminingmarketsegmentattractiveness:
1.
IndustryProfitability:determinedbymultiplyingtotalpotentialdemandbyaverageprice
willingtopayacrossallfivesections. 2.
SegmentSize:determinedbythe12-monthpotentialdemandreportforeachsegmentin
eachcity.Citieswiththelargestdemandinthattimeperiodarethemostattractive.
3.
PriceWillingtoPay:thesemetricsarebasedonthemarketresearchdataprovidedtous.
Segmentswithahigherpricewillingtopayhaveahigherrating. 4.
Competition:thisiscontingentonthenumberofdirectcompetitorslocatedineachcityas
wellastheirdesignatedtargetmarketsandthedesignoftheirproduct.
- 48. 48 TurboTech 5.
PotentialforGrowth:determinedbycomparingmetricsofcurrentdemandvs.potential
sales.Allmarketsegmentshaveahighgrowthpotential.
BelowisachartthatnotatesTurboTechsviewofmarketsegmentattractivenessbasedonour
companygoals: MarketFactors Criteria Weight Costcutter Innovator
Mercedes Workhorse Traveler IndustryProfitability 0.25 2 3 3 2 4
MarketSize($) 0.3 1 3 4 5 2 Growth 0.15 3 4 1 2 5 PriceWillingtoPay
0.15 1 4 5 2 3 MarketShareof Competition 0.15 2 3 1 4 5 Total 100%
1.8 3.4 2.8 3 3.8 BusinessPositionFactors
ThesefivebusinesspositionfactorshelpdetermineTurboTechspositionwithinthemarket.
Positionswitharatinggreaterthan3areconsideredtobefavorable,1isthelowestratingand5is
thehighest. 1.
MarketShare:percentageofsalesthatourcompanyhasineachmarket 2.
Research&Development:properinvestmentinproductiondesignandtechnologyto
generateproductsthatappropriatelymatchdemandsofeachmarketsegment.
3.
FinancialPerformance:thismetricanalyzesthegrowthandwealthgenerationofour
companyovertimeandthemarginofournetincomecomparedtoouroperatingcost.
4.
PriceJudgment:theabilityofourfirmtoappropriatelypricecomputersbasedonconsumer
demandinawaythatmeetstheirneedsandsatisfiesourdesiredprofitmarginwithout
losingcustomers. 5.
BrandJudgment:adequatelydesigningandmarketingbrandsbasedofoffcloselyanalyzed
marketingresearch.
- 49. 49 TurboTech
ThegraphbelowshowsTurboTechsbusinesspositionbasedonthecomparisonofour
marketattractivenessandourcurrentbusinessposition:
CompetitorSelection:
TurboTechisfocusingtocompeteonspeedandnetworkingcapabilitiesfortheinnovatorsegment.
Theseproductattributesslightlyoverlapwithourothertargetedmarket,Traveler,forwhichwe
arefocusingonportabilityandnetworkingcapabilities.
InnovatorAnalysis: Brand Speed Networking 1. Inovo 1.75 1.75 2.
Innova X2 1.5 1.75 3. Pegusus M2 1 1.5 4. Vulcan Z5 0.75 1 5.
UpperCase 2.0 0.5 1 6. Market 1.1 1.4 1.7, 1.75 3.25, 4.25 2.95, 4
3.15, 2.95 3.65, 4.75 1 2 3 4 5 12345 BusinessPosition Market
Attractiveness Costcutter Innovator Mercedes Workhorse
Traveler
- 50. 50 TurboTech TravelerAnalysis: Brand Portability Networking
1. Fusion 3.0 2 2 2. LowerCase 2.0 1.5 1.5 3. Pegusus M2 0.5 0.5
4.Innova X2 -1 -1.25 5.Lovercase Opt -2 -2 Market 0.2 0.15 -2 -1 0
1 2 -2 -1 0 1 2 Networking Speed Speed vs. Networking Ours Brand 1
Brand 2 Brand 3 Brand 4 Market -2 -1 0 1 2 -2 -1 0 1 2 Networking
Portability Portability vs. Networking Ours Brand 1 Brand 2 Brand 3
Brand 4 Market
- 51. 51 TurboTech ValueProposition:
TurboTechprovidestwohigh-techcomputerproductsthatcatertoconsumerswhovalue
innovation,speedandportability.Asacorporationwearehighlyrankedwithinourextremely
competitivemarketandaimtoprovidethebestsolutiontoourcustomersneeds.Weholdthe
largestmarketshareofallofourcompetitorsandfocusonup-to-date,sleekproducts.
Assets&Competencies: MarketShare:
TurboTechhasconsistentlyheldthemajorityofthemarketsharefortheentiretyoftheproject.We
currentlyhold41%andarecompetingwith2otherteamssoweownmorethanourthirdofthe
marketshare.Wehavebeenabletoconsistentlyholdthisdominantmarketsegmentwitha
maximumof3machinesatonepoint(allofourcompetitorsproducedover4differentproducts
each). BrandJudgment:
Ourcompanyhasbeenconsistentlyabletoappropriatelyunderstandourconsumersneedsand
relaythemadequatelywiththeproductionofourproducts.TheteamofTurboTechistalentedat
examiningconsumermarketingresearchandcateringtothosedemands.Althoughwedontpush
morethantwoproductsatonetime,weregularlyinvestinR&Daccordingtothedesireforspecific
technologicaltrendsthatourcompanyissensitiveto.
CustomerSatisfaction:
BecauseofTurboTechsstrengthinbrandjudgment,itonlymakessensethatwearealsostrongin
customersatisfaction.Forawhile,ourteamhadahardtimeexpandingproductioncapabilitiesand
meetingdemand.Thiswasreflectingnegativelyonourcustomersatisfaction,however,wemadea
crucialchangeinQ7thathelpedusbettermeetdemand.Inq7wefinallyhadnostock-outswhich
significantlyimprovedourcustomersatisfaction. SalesOfficeLocations:
TurboTechisarapidlygrowingcompany.Asourfirmexpands,wemakesuretocompensatethat
growthwiththeexpansionofsalesofficesthroughoutNorthAmericaandAsiaPacific.
- 52. 52 TurboTech MarketingStrategy Product:
TurboTechprovideshigh-speedcomputerstocomplimentthelifestylesofinnovatorsandtravelers.
Toachieveasuperiorbrandjudgment,TurboTechinvested$3,613,211onR&Dtoaccuratelymeet
theneedsandusepatternsofinnovatorsandtravelers,aswellas$5,318,753todevelopa32high
resolutionmonitoranduninterruptiblepower. Objective:
TurboTechwillcontinuetoinnovateandreinventproductsofferingstomeettheneedsanduse
patternsofinnovatorsandtravelers.Touncoveruncontestedmarketspace,TurboTechhasthe
followingobjectives:
Maintainthehighestmarketshareamonginnovatorsandtravelers
ContinuallyutilizeR&Dtostayaheadofindustrytrendsandcompetition
Designeffectiveadvertisementstoreachinnovatorsandtravelers
Achieveaminimumstandingsof: o Brandjudgment:80 o Pricejudgment:95 o
Adjudgment:70
TurboTechaimstohavethehighestbrandjudgmentfrominnovatorsandtravelers,aswellasmore
salesvolumethancompetitors. Strategy:
UseR&DtomakerelevantupdatesandimprovementstoTurboTechcomputers
Delegatethesalesstafftosalesofficeswiththehighestdemandandhighestpricewillingto
pay Expandtouncontestedmarketspaces
Remaincurrentontheofferingsofcompetitorsandthelocationsoftheirsalesforce
- 53. 53 TurboTech Tactics: Quarter5: o Spent$3,613,211onR&D
o High-speedcomputingpower o Long-lastingbattery o
UpdatedAxiom2.0andFusion2.0 Quarter6: o
IncreasedproductiontolowertheaverageCOGS o
UpdatedAxiom3.0andFusion3.0 o AddedEliteChrome Quarter7: o
Spent$5,318,753onR&D o 32highresolutionmonitor(desktop) o
Uninterruptiblepower o AddedInova o DiscontinuedEliteChrome
Quarter8: o UpdateInovaandFusion3.0 Price: Objective:
Theobjectiveforpriceistohavenolessthanapricejudgmentof95forallbrands.TurboTechaims
toaccomplishthisbyreducingtheCOGSthroughcreatingeconomiesofscale,streamliningeach
brandtoprovidecustomerswiththefeaturestheytrulywant,andusepricingtoincreasemarket
share. Strategy:
TurboTechspricingstrategyistoslightlyraisepricesbasedoffofbrandjudgmentandprice
judgment.TurboTechcanremaincompetitivebymatchingtheretailpricewiththepricewillingto
pay,andprovidingarebatetofacilitatesalesinallmarketswithsalesoffices.
Tactics: Quarter4: o Offereda$300rebateforAxiom2.0 Quarter5: o
Offereda$100rebateforFusion2.0(NORAM) o
Offereda$200rebateforAxiom2.0(NORAM)
- 54. 54 TurboTech o Offereda$100rebateforFusion2.0(APAC)
Quarter6: o Offereda$300rebateforFusion3.0(NORAM) o
Offereda$300rebateforAxiom3.0(NORAM) o
Offereda$100rebateforFusion3.0(APAC) o
Offereda$100rebateforFusion3.0(APAC) Quarter7: o
Offereda$300rebateforFusion3.0(NORAM) o
Offereda$300rebateforInovo(NORAM) o
Offereda$100rebateforFusion3.0(APAC) o
Offereda$100rebateforInovo(APAC) Quarter: 3 4 5 6 7 8
AverageSellingPrice: $2,650$3,433$3,350$3,350$3,187.50$3,187.50
NORAMPrices: Quarter Fusion2.0 Axiom2.0 Elite Fusion3.0 Axiom3.0
EliteChrome Inovo 5 $3,000 $3,300 $4,200 - - - - 6 - - - $3,000
$3,200 $4,100 - 7 - - - $3,000 - - $3,900 8 APACPrices: Quarter
Fusion2.0 Axiom2.0 Elite Fusion3.0 Axiom3.0 EliteChrome Inovo 5
$3,000 $3,000 $4,100 - - - - 6 - - - $2,950 $2,900 $3,950 - 7 - - -
$2,950 - - $2,900 8 Place: Objective:
Usingforecasteddemand,pricewillingtopay,andthelocationofourmanufacturingfacility,
TurboTechopenedaninitialsalesofficeinLosAngelestohavehigherprofitmargins.Usingthe
samecriteria,aswellasmarketresearch,TurboTechhassuccessfullyopensalesofficesin
uncontestedmarketswithhighdemandandlowshipmentcosts.
- 55. 55 TurboTech Strategy:
Openedsaleslocationswheremarketdemandishigh
Continuedtopurchasemarketresearch Goglobal Tactic: Quarter4: o
OpenedsalesofficesinChicago,Toronto,andTokyo o
Purchasedmarketingresearch Quarter5: o Purchasedmarketingresearch
Quarter6: o Hired34salespeople o Purchasedmarketingresearch
Quarter7: o OpenedsalesofficesinSydney,Shanghai,andParis
- 56. 56 TurboTech o Purchasedmarketingresearch Quarter8: o
Hired28salespeople Promotion: Objectives:
Maintainthehighestadjudgmentamongstinnovatorsandtravelers
Useadvertisingtogeneratebrandawarenessinalltargetlocations
Strategy:
Placeadvertisementsinthemagazinesandnewspaperscommonlyreadbyinnovatorsand
travelers Advertisemorefrequentlythancompetitors
Createadvertisementsthateffectivelycommunicatetotargetcustomersthebenefitsof
TurboTechcomputers
RemindinnovatorsandtravelersofTurboTechcomputerstoensuretheymakeinformed
decisions Tactic: PrioritizedthetravelersegmentinNorthAmerica
Usedpop-updisplays Usedrebateoffers
- 57. 57 TurboTech OtherStrategies: Production: Quarter4: o
Maintainedafixedcapacityof25units Quarter5: o
Increasedfixedcapacityfrom25to75units o
Increasedproductiontoloweroverheadcostsandaccuratelymeetdemand
Quarter6: o Maintainedafixedcapacityof75units o
Increasedproductiontoloweroverheadcostsandaccuratelymeetdemand
Quarter7: o Increasedfixedcapacityfrom75to125units Quarter8: o
Maintainedafixedcapacityof125units
TheproductionofTurboTechcomputersheavilyreliedondemandfromtheinnovatorandtraveler
segments.Throughinnovationandconsistentproductdevelopment,eachquarterTurboTech
increaseddemandandmoreaccuratelymatchedfixedcapacity.ByQuarter5,demandfor
TurboTechcomputersoutweighedmanufacturingcapacityandforcedtheexecutiveteamto
increasethelaborforce,aswellasfixedandoperatingcapacity.InQuarter6,TurboTechsatisfied
demand,butoverestimatedby1%offixedcapacity.Consequently,excessinventorycarriedoverto
Quarter7,setbacktheproductlaunchofInovo,andforcedtheexecutiveteamtosalvagethe
remaininginventoryofEliteChrome.
- 58. 58 TurboTech Quarter5: Quarter6:
- 59. 59 TurboTech Quarter7: VentureCapitalFunding:
WithTurboTechdoingsowellinthemarket,wedecidedtonotrelyonhelpfromthebanknorour
competitors.Allthemoneyusedtoinvestinthecompanycamestraightoutofourpockets.This
wasacrucialmovebecausewewantedtostayawayfromthebankshighinterestrates,andwealso
believedthatsincewehadthemoneywithinthebusiness;whynotreinvestitinthecompanyfor
moreresearchanddevelopment.ThroughouttheTurboTechsbusinesscycletherewereno
outstandingconventionalloans,aswellasnocashtiedintoa3-monthcertificateofdeposit.This
strategywasapivotalchoiceinthecompanybecauseasourcompetitorswereborrowingfromthe
bank,wewereusingourown.Intheend,itwastherightchoice,andwestilloutsoldour
competitors,andaccumulatednointerestfromthebank.
- 60. 60 TurboTech Implementation&Control: Implementation:
TurboTechsetouttobeaninnovativecompanywiththelargestmarketshareandstrongest
performanceintheindustry.TurboTechusedthefollowingmetricstomeasureoverall
performancefromquartertoquarter: TotalPerformance
FinancialPerformance MarketPerformance MarketingEffectiveness
InvestmentinFuture Wealth AssetManagement ManufacturingProductivity
FinancialRisk
Usingthesecriteria,TurboTechwasabletostrategizeforeachquarterinimproveeachofour
scoresineachofthesecategories.Sincequarterfive,TurboTechhasbeenthemarketleaderfor
TotalPerformance.Basedonquartersevenresults,asshowninthetablebelow,weneedto
improveourmarketingeffectivenessbecauseTurboTechhasthelowestscoreintheindustry.
Additionally,basedonquartersevenresults,TurboTechneedstobettermanagemanufacturing
productivityandassetmanagementtobringscoresupinordertobethemarketleaderinthat
score.
Thetablebelowillustratestheresultsfromquarter7,usingthemetricsstatedabove:
- 61. 61 TurboTech Control:
TurboTechwillrelyonbalancedscorecardperformancemetrics,accountstatements,and
marketingresearchtoidentifybusinessstrengths,weaknesses,opportunities,andthreats.
TurboTechplanstoincentivizeteammembersthroughtheuseofbonusesasaresultofincrease
companyperformance.Eachbusinessunitwillberesponsibleforcreatingmonthlygoalsand
benchmarksusingthemeasurementcriteriaabove,accountingstatements,andmarketresearch
thathasbeenpurchased.Throughthisstrategy,TurboTechwillbeabletopinpointimprovements
throughoutthecompany,acrossallbusinessunits,tobringscoresupfromthebalancedscorecard
metrics.
- 62. 62 TurboTech AppendixA:
- 63. 63 TurboTech AppendixB: