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1. What did you gain from this exercise?
2. How did your strategies and decisions change?
3. What business theory(s), model(s), or analytical tools were most useful to you in determining your approach to the decisions you made?
There are several things that I learnt from this exercise. The first thing I learnt was the value of doing a break even analysis. Without doing that, I would have incurred a loss from X5 because the moment the sales of X5 went below its breakeven point, a loss would have been incurred. Further, the breakeven analysis gave me the assurance that the sales of X6 and X7 were well above the breakeven level and that they will not suddenly lead to losses.
The next thing that I learned was the importance of identifying the point on the product life-cycle where the product was located. This enabled me to devise the strategies for different products. It was critical for me to know that X7 had been introduced shortly and that it would reach the growth stage very soon. This enabled me to devise the strategy of quick penetration. The understanding of the product life cycle enabled me to set a skimming price during 2008 and 2009 during the later simulations.
The third thing that I learned was the importance of price elasticity of demand. As the price was increased the revenues declined. In other words, ...
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