Tata Simulation Essay - 1372 Words

Introduction The world’s first all-optical notebook computer was launched in 2003 by Quasar. The Neutron is the result of revolutionary efforts by the company. The product processor and memory uses high-speed optical conductors that are five times the speed of existing microchip based companies. The Tata simulator exercise is an aid to decide which industry structure Quasar should use to increase profits, create competitive advantage and explores implications of each on business ventures. Market Scenario According to Grant (1991), a corporation’s capacity to gross profits in excess of the sum of debt and equity is dependent upon two aspects: having competitive advantage over competitors and the rate of growth in a particular†¦show more content†¦This is a better solution. The corporation could reach out to new customers in all locations to compete for shares while growth is slow (Anand, 2013). It is important to allocate funds towards marketing and advertising when a new product is vying to make a mark in a new industry. Production Costs and Processes The optical notebooks have done well in the past two years and have increased revenues significantly. To maintain profitability, the firm must look to streamlining manufacturing facilities. David, Vice President of Technology states the firm is experiencing waste in the production process, which is increasing the cost of production. The new price for Neutron was set at $1900.00. This created a downward sloping curve that means an increase in costs to cover production improvements should not be passed onto customers because fewer people would buy the product at higher prices. Threat of Rivalry Orion Technologies has entered the market and captured a 50% market share. In order to protect Quasar’s market share, the corporation must attract competitor’s customers. The products are similar; a new pricing strategy is needed. The price is set at $1750.00 expecting Orion to sell for $1800.00. Our prediction would garner 61 million profit and 56 % of the market share. When prices were changed, Orion lowered their prices to $1750.00, which resulted in a 50/50 market share, 1230 million inShow MoreRelatedThe Simulation And Factors Discuss Thereof From The Tata Simulation Exercise1534 Words   |  7 PagesThis paper is to discuss the simulation and factors discuss thereof from the Tata Simulation Exercise. The following will consist of the explanations for the types of market systems in place in a capitalist market. Following the explanations will be the discussions of the different scenarios that took place. This will lead to the conclusion of which will include the perfect competition scenario. 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