It is now 1/2/2006 (again), still at the beginning of Time Warp 2. You have just completed your revised strategy using CVP analysis, and you are ready to charge ahead. You implement your decisions for 2006 and time flows by quickly. You see the results at the end of the year and you collect these results to use later. Again, you implement your decisions that you have already made for 2007 and collect the results at the end of the year. You do the same for 2008 and 2009, hoping this time that you can finally move ahead into 2010.
It is now New Year's Eve, 2009, what you hope is the end of Time Warp2 and more than that, what you hope is the end of the time warps altogether. You have the results of your decisions. How did you do? What was your final score? You are ready to celebrate. You want to celebrate hard and forget this crazy time warp stuff. Will it finally be 2010 when you wake up?
It's New Year's day, 2010. You just had a great New Year's Eve celebration, you finished another four years of moving Handheld through 2006 â?" 2009, and are ready to charge ahead into the future. As you turn on the TV and try to open your eyes, you notice something strange (again?). The TV commentator is saying something about New Year's Day, 2006. You have a sinking feeling, and sure enough, it's back to 1/1/2006. You groan and curse. When will this time warp end? You are now in Time Warp 3.
Maybe you need to keep improving Handheld's performance so that you can finally move ahead. You avow to do better this time. And you think your best approach is to develop your four year strategy like you did the last time.
You analyze the results of your last set of decisions from 2006 to 2009. You have the data, you kept it all. And you are going to use CVP analysis again to help you determine your new strategy. And you have a tool to use, the CVP Calculator. You are going to get better at it.
You analyze the results from Time Warp2 using CVP and develop your complete four year strategy. You decide to make notes about your analysis and your reasoning process, just in case you have to do this again (You are praying that you can finally move ahead this time when you get to 2010.)
You finish your report that shows your strategy you are going to use these next four years, Time Warp 3. And you stop and take a big breath before you move ahead into 2006. (In other words â?" don't run this strategy in the simulation, yet. Just turn in this report.)
Run the simulation with the Strategy that you developed in SLP3 for Time Warp2. Access the simulation site Click here. Review and analyze these results (Time Warp 2 decisions) and develop a revised strategy for Time Warp 3. Make a case for this new strategy using analysis and relevant theories.
SLP4 Expectations: The expectations are the same as for SLP3. The revised strategy consists of the Prices, R&D Allocation %, and any product discontinuations for the X5, X6, and X7 PDAs for each of the four years: 2006, 2007, 2008, and 2009. You must present a rational justification for this strategy. In other words, you must Make a Case for your proposed strategy using financial analysis and relevant theories. Use the CVP Calculator and review the PowerPoint that explains CVP and provides some examples. You need to CRUNCH some numbers (CVP Analysis) to help you determine your prices and R&D allocations. Make sure your proposed changes in strategy are firmly based in this analysis of financial and market data and sound business principles. Your goal is to practice using CVP and get better at it. Present your analysis professionally making strategic use of tables, charts and graphs.
Turn in the 4 to 6 page paper at the end of this module.
YOU MIGHT FIND THESE DOWNLOADS USEFUL:
Decision Matrix Table - Download this Word doc with a blank table you can use to show your proposed strategy decisions.
PowerPoint discussing CVP - provides a good overview of Cost Volume Profit analysis, the various equations that you can use, and how to use it. Some examples are provided showing how to use the CVP Calculator.
CVP Calculator - this an Excel-based calculator that you can use to determine prices, volumes, and profits. Keep in mind that it will tell you what NEED, but the market determines what you actually get.
Time Line Summary:
2009: 12/15 hired. 12/30 turned in first report to Sally a few days early. 12/31 â?" celebrated
Time Warp 1 begins: 1/1/2010 WARPS INTO 1/1/2006
You freak out, then realize you have to make decisions for 2006 â?" 2009, which you do.
12/31/2009 â?" you have gone through all four years, and you write your report to summarize how you did. You are hoping that you will wake up tomorrow and it will be 2010.
Time Warp 2 begins: 1/1/2010 WARPS INTO 1/1/2006 (Again)
1/1/2006: you decide to use CVP analysis and develop a four year plan for your strategy.
1/2/2006: you begin to implement your four year plan. You follow it and use the pre-determined decisions for each year, through 2009. You keep track of the results, year by year, both financial and marketing.
12/31/2009 - Celebrate
Time Warp 3 begins: 1/1/2010 WARPS INTO 1/1/2006 (Again).
Now it is 1/1/2006 (for the third time.) You do it all over again, one more time. You decide to do the same thing you did the last time and develop a four year plan. You use CVP, analyze your previous results, and make notes explaining what you did and why. Again, you take a breather before diving in with your decisions tomorrow.
The solution provides a detailed year to year discussion for each project. Also a detailed recommendation has been included for the time wrap. A total of 1140 words has been included in the solution.