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    Open Systems Theory: Reading on the SLP

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    First, Run the Simulation using the Default Decisions. (in other words, use the prices and R&D% that are already there.) As you run each year, you will need to capture or collect the results for each year, for each product, X5, X6, X7. You need to copy (using Excel, by hand, or some other method) the Financial results and Marketing results, as well as the information provided by the Advisor. The final Total Score will be $1,216,253,749.


    Refer to the reading on the SLP in the Module 1 Background. Then read the following scenario before you proceed:


    It is December 15, 2015. Joe Schmoe, the VP of Marketing at Tablet Development, Corp., is smugly patting himself on the back for how well he has done with pricing and product development on the three products, X5, X6, and X7. He knows his strategy was not very creative, since he did not change any prices or R&D allocations over the four year period (actually six years, counting 2010 and 2011.) But he is certain that he did not need to change anything. And he's sure his overall performance is proof.

    But, Sally Smothers, CEO of Tablet Development, has a different opinion. And she does what she has to, Joe is called in and let go. Dang, Joe thinks, fired again.

    You are hired. You applied for the position a few weeks ago and interviewed, not sure of the fate of Joe Schmoe at the time. But you were the one that Sally wants. So here you are, Dec. 15, 2015, VP of Marketing at Tablet Development, and ready to move the company ahead into 2016. Your boss, Sally Smothers, is expecting you to take over and move the company forward in terms of product development, and smart pricing.


    Discuss according to Sally's directions as follows:

    Sally wants to make sure that you are ready to move ahead. So she asks you to review the past four to six years to see what was going on in terms of product development, sales, pricing, and performance against the competition. So you collect all of the data and write a report which is due on Sally's desk 1/2/2016.

    Analyze the results of Joe Schmoe's decisions and then write the report that Sally is requesting. Run the simulation of the Tablet Development Corporation using the default decisions. Access the simulation site (Click here). Collect the data for each year (or you can download a copy of it - see below.) Make a Case for your proposed strategy using financial analysis and relevant theories.


    The key aspects to this assignment that should be covered in your paper include:

    a review of the products, their life cycles, how they stack up in terms of price and performance
    Financial review for each product: X5, X6, and X7 â?" sales, costs, profitability, prices, unit margins, etc.
    Market review: New Sales, Repeat Sales, Market Saturation, etc.
    Propose an alternate strategy: a general idea of how you might do better with these products: what pricing and R&D allocations, etc. would you have put in place over the last four years, 2012 - 2015.

    Your discussion will be evaluated on the following seven (7) points:

    Precision - Does the paper address the question(s) or task(s)?
    Breadth - Is the full breadth of the subject, i.e., all the keys to the assignment, addressed?
    Depth - Does the paper address all elements of the topic in sufficient depth? Does it include and apply the background readings and other background resources? Are they included as references?
    Application - Are the concepts of the module appropriately applied to the subject organization?
    Organization - Is the paper organized in a coherent and systematic manner? Are headings included in all papers greater than 2 pages?
    Clarity - Is the writing clear and the concepts articulated properly? Are paraphrasing and synthesis of concepts the primary means of response to the questions, or are thoughts conveyed through excessive use of quotations?
    Referencing (citations and references) - Does the paper use citations and quotation marks where appropriate? Are all references listed in the bibliography used and referred to via citation?

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    Solution Preview


    Tablet Development Corporation develops three types of tablets that include Tablet X5, Tablet X6, and Tablet X7. Tablets X5 and X6 have been in the market previously but Tablet X7 is introduced into the market in 2011. Joe Schmoe has been the Vice President of marketing in the organization and was charged with the responsibility of developing strategies to use in marketing the tablets. He was responsible for setting pricing and research and development cost for the products from 2012 up to 2015. Joe Schmoe's strategy involved maintaining constant pricing and also on research and development allocation.


    Tablet X5 is priced at $ 265 and 33% research and development cost amounting to $ 7,260,000 was allocated to the product. Tablet X5 recorded sales revenue amounting to $ 492,861,819 while sales volume amounted to 1,859,856 units and resulted in variable costs amounting to $ 269,679,108. Tablet X5 sales revenue, sales volume and variable costs increased by 21% compared to 2011. Total profitability for the year was 29% compared to 26% in 2011 and total profit generated amounted to $ 143,922,711 which is 37% increase compared to the previous year. Market report indicates that installed customer base of 3,246,936 compared to 1,877,311 in 2011. Market saturation for the tablet is recorded at 54% in 2012 compared to 31% in 2011 therefore the product is in the maturity stage. Tablet X5 recorded 15% increase in first time customers and 72% in repeat sales. Tablet X5 performed well in 2012 reflected by increases sales volume, revenue and total profit generated.

    Tablet X6 is priced at $ 420 and 34% research and development cost was allocated to the product. In Tablet sales volume, sales revenue and variable costs increased by 60% whereby sales volume amounted to 1,873,457, sales revenue at $ 786,851,911 and ...

    Solution Summary

    The solution discusses Open Systems Theory.