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Simulation and developing the analysis based the differentiation

Run the simulation, entering the following numbers at each of the four major decision points:

1) Decision 1: For Years 2008-2012

a) Pricing - Manual

b) Module Price - $0.13

c) Revenue to Process Improvement - 5%

d) Years to Advance - 5 years

2) Decision 2: For Years 2013-2017

a) Pricing - Manual

b) Module Price - $0.11

c) Revenue to Process Improvement - 5%

d) Years to Advance - 5 years

3) Decision 3: For Years 2018-2022

a) Pricing - Manual

b) Module Price - $0.09

c) Revenue to Process Improvement - 5%

d) Years to Advance - 5 years

4) Decision 4: For Years 2023-2025

a) Pricing - Manual

b) Module Price - $0.08

c) Revenue to Process Improvement - 5%

d) Years to Advance - To end

NOTE: Do not change the numbers displayed in the "Settings" tab!

At each of the four (4) decision points above, you are required to analyze the impact of your Module Price on market share and total profits. You are also required to determine how process improvements yield a reduction in unit costs. Be sure to copy tables and charts to support your analysis. You may need t use Excel to edit the charts and tables. However, do not use figures and tables as "space fillers" - use these only to support your analysis.

Keys to the Assignment

The key aspects of this assignment that should be covered and taken into account in preparing your 5-6 page paper include:

Include discussion and analysis of key metrics at the end of each decision point (e.g., among other data, be sure to include total market share, revenue, cumulative profit, consumer net price, modular price, unit cost, etc.). Identify cause and effect.
For each decision point, be sure to include comparative tables that include what you believe to be the most important data. Don't merely recite the data, however - instead, analyze the data!

Make recommendations. What would you have done differently as it relates to pricing, process improvement, or other?
Compare and contrast the pricing decisions made in SLP1 and SLP2. Give key metrics that demonstrate how the different pricing decisions have affected market share, cost to the customer, cost of goods sold, revenue, profits, etc., etc.
Be sure that you retain all notes, tables, and figures, as you will be comparing the results of with those of SLP3 in the next module.

http://forio.com/simulation/solar-test/index.htm#page=market_research

//In the following paragraphs, there will be a discussion on the impact of changes in the pricing strategies and improvement process decision of Sun Power Company over the cumulative profitability of its product. There will also be an evaluation of market share due to changes in the pricing strategies by providing competition to other firms in the market. //
The simulation process is important for the determination of optimal pricing strategies in order to maximize the profitability. The simulation process allows consideration of a different combination of pricing and improvement process so as to revaluate the impact on the total market share, revenue, cumulative profit, consumer net price, modular price, and unit cost. There is no risk of new entrants that means the company needs to establish itself against the existing competitors in the market. Input data for first simulation run:
1) Decision 1: For Years 2008-2012
a) Pricing - Manual, b) Module Price - $0.1, c) Revenue to Process Improvement - 5%, d) Years to Advance - 5 years
The pricing decision of $0.15 is taken on the basis of the increase in the market share and cumulative profitability. The process improvement is set at 5% to decrease the cost so as to maximize the profitability of the company.
Simulation Output

2008-2012 First Run Base Difference
Total market share 3.78% 2.40% 1.38%
Revenue $564.68 $220.90 $343.78 million
Cumulative profit $263.85 $0.00 $263.85 million
Consumer net price $0.17 $0.17 0.00
Modular price $0.15 $0.15 0.00
Unit cost $0.10 $0.11 -$0.01

On the basis of the first simulation run, it can be expected that the company will be in a beneficial position because of gaining market share of 1.38%, which indicates pricing strategy of the company is favorable. The cumulative profit is also increased by $263.85 million with the increase in revenue by $343.78 million in the first simulation run. However, there is no change in the consumer net price and modular price with the process improvement of 5%. Additionally, the unit cost has been improved by $0.01 that indicates the overall result of process improvement is in the form of the reduction of cost of production of the product (Eclipsing the Competition: The Solar PV Industry Simulation).
2) Decision 2: For Years 2013-2017
a) Pricing - Manual, b) Module Price - $0.13, c) Revenue to Process Improvement - 5%,
d) Years to Advance - 5 years
The pricing decision of $0.13 is taken on the basis first simulation run because the further reduction in the price can improve the revenue by increasing demand for the product in the market. The reduction in the price is possible because of process improvement that will reduce the cost of the product. The reduction in the price will provide intense competition in the market to other firms.

2013-2017 Second Run First Run Difference
Total market share 5.30% 3.78% 1.52%
Revenue $1180 $564.68 $516.32 million
Cumulative profit $745.75 $263.85 $481.90 million
Consumer net price $0.15 $0.17 -$0.02
Modular price $0.13 $0.15 -$0.02
Unit cost $0.08 $0.10 -$0.02

Simulation Output
On the basis of the second simulation run, it can be seen that the company has increased its market share by 1.52% that supports the favorable pricing decision of the company. The cumulative profit of the company has also improved by $481.90 million that is almost double the first simulation run. The company has also improved its revenue by $516.90 million in the second simulation run against the first simulation run. The process improvement of 5% in the second simulation run has reduced the unit cost by $0.02 that indicates the company is taking right decision regarding process improvement and pricing. Additionally, there are changes in the consumer net price and modular price with the reduction of $0.02 in both the cases that indicates the company has improved its overall performance (Eclipsing the Competition: The Solar PV Industry Simulation).
//In the next paragraphs, there will be a discussion on the further reduction in the pricing of the product to improve the market share for earning optimal profitability. There is also a discussion on the impact of process improvement over the consumer net price, modular price, and unit cost so as to see the improvement in the performance of the company. //
3) Decision 3: For Years 2018-2022
a) Pricing - Manual, b) Module Price - $0.11, c) Revenue to Process Improvement - 5%
d) Years to Advance - 5 years
The pricing decision of $0.11 can be taken on the basis second simulation run because the second simulation run provides a lot of improvement in the entire field of the company like revenue, profitability, unit cost, etc. The further reduction in the price can improve the market share due to increased demand for the product against the demand of the competitors' products. The process improvement of 5% will result in further reduction in the unit cost that means increase in the profitability of all the demanded quantity over the period of time.

2018-2022 Third Run Second Run Difference
Total market share 9.70% 5.30% 4.40%
Revenue $5.04 $1.18 $3.86 billion
Cumulative profit $2.76 $0.74 $2.02 billion
Consumer net price $0.13 $0.15 -$0.02
Modular price $0.11 $0.13 -$0.02
Unit cost $0.07 $0.08 -$0.01

Simulation Output
On the basis of the third simulation run, the market share of the company has been increased by 4.40%, which is a significant change. It supports that the company has favorable pricing strategy to increase its profitability. The increase in the cumulative profit of the company is $2.02 billion. The increase in the revenue of the company is $3.86 billion. These improvements support that the company has taken the right directions regarding its pricing strategy and process improvement strategy. The process improvement of 5% in the third simulation run has reduced the unit cost by $0.01 with changes in the consumer net price and modular price. The overall performance of the company is good to support the favorable strategies of the company (Eclipsing the Competition: The Solar PV Industry Simulation).
4) Decision 4: For Years 2023-2025
a) Pricing - Manual, b) Module Price - $0.09, c) Revenue to Process Improvement - 5% d) Years to Advance - To end
On the basis of the third simulation run, the company can reduce its price further to $0.09 to further increase the demanded quantity of the product in the market. The third simulation run indicates that the company is earning high profitability with the reduction in the price. The process improvement of 5% is supportive to the company so as to reduce the cost of the product to earn high profitability.

2023-2025 Fourth Run Third Run Difference
Total market share 19.28% 9.70% 9.58%
Revenue $22.53 $5.04 $37.68 billion
Cumulative profit $10.75 $2.76 $53.74 billion
Consumer net price $0.11 $0.13 -$0.02
Modular price $0.09 $0.11 -$0.02
Unit cost $0.05 $0.07 -$0.02

Simulation Output
On the basis of the fourth and last simulation run, the company has gained improvement in its market share by 9.58% that is a significant change to support the favorable pricing strategy of the company. The company has increased its cumulative profit by $53.74 billion and the revenue by $37.68 billion in the last simulation run. The process improvement strategy of the company is also favorable because it reduces the unit cost by $0.02 that results in an increase in the profitability. There is also a change in the consumer net price and modular price of the product. Therefore, on the basis of the simulation runs, it can be expected that the company has made favorable pricing and process improvement strategies to improve its market share and cumulative profitability over the period of time (Eclipsing the Competition: The Solar PV Industry Simulation).
//I hope, the assistance provided by me is quite sufficient to address the queries. It will surely help you to develop a better understanding of the topic discussed and enhance your knowledge. I have also included the references from where I found the content. In the end, I wish you happy learning. //
References
Eclipsing the Competition: The Solar PV Industry Simulation. Retrieved October 27, 2015 from http://forio.com/simulation/solar-test/index.htm#page=market_research

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Solution Preview

The response addresses the query posted in 1371 words with APA references

// In the following paragraphs, there will be description regarding Sun Power comapny which wants to evalaute its market share and cumulative profitability sensitivity anlaysis through change in the price of the product. The company also wants to evaluate the impact of price over the cost of product through improvement process at 5%. The company wants to develop valuable pricing strategy in order to acquire more market share and high profitability. //

On the basis of SLP 1, it can be said that the company is able to increase its market share and profitability with reduction in the price. In SLP 2, it is decided that there should be start of simulation with price $.13 instead of $.15 to estimate the price impact over the market share, cumulative profitability, unit cost, modular price, and net consumer price. The process improvement level will be the same as it was in SLP 1 to see the core impact of the pricing strategy over the performance of the company.

1) Decision 1: For Years 2008-2012

The inputs for first simulation under SLP 2 will consider price at $.13 which is short of $0.02 as compared to the price of SLP 1. The revenue to process improvement will be same for SLP 2 as it was in SLP 1. There is a need to see the core impact of the pricing strategy over the performance of the company in order the frame rational pricing strategies for the company over the period of time.

a) Pricing - Manual, b) Module Price - $0.13, c) Revenue to Process Improvement - 5%, d) Years to Advance - 5 years

Simulation Output

(see the table)

The comparative analysis of both the SLPs clearly indicates that there is positive impact of price reduction over the performance of the company. The company has increased its market share by 1.07% by reducing price to ...

Solution Summary

Simulation and developing the analysis based the differentiation is determined. The response addresses the query posted in 1371 words with APA references.

$2.19