Strategic review project

STRIP DOWN VERSION OF PROJECTS PROCESS (I only need help with project 1)

Project 1: Run the simulation using the Default Values. Analyze the Results, calculate variables cost/unit and margins. Write a report discussing the Products, the Competitions, the Financial and Marketing Results; and propose a revised strategy in general terms.

Project 2: Run the simulation, year by year, and develop your specific prices and R&D allocations as you go. Try to do better than the default score. Keep track of your decisions and the financial and marketing results. Analyze the results and discuss why you did better or worse.

Project 3: Use CVP analysis to analyze the results from SLP2 and develop a four year plan: prices, R&D allocations, discontinuation, for all three products for all four years. Write a report and explain your strategy and how you developed it.

Project 4: Run the simulation using the strategy you developed in SLP3. Analyze the results. Use CVP analysis to analyze these results (from SLP3) and develop another four year plan: prices, R&D allocations, discontinuation, for all three products for all four years. Write a report and explain your strategy and how you developed it.

Project 5: Run the simulation using the strategy you developed in SLP4. Analyze the results. Compare this strategy and these results to the strategy you used in SLP4 and those results. Use CVP analysis to analyze these results and explain how the results are different and why they are different (NOT because you used a different strategy!!)

General Project Scenario:

Joe Schmoe is the current VP of Marketing for Handheld Corp. (a company very similar to Palm Co.) He has a pricing and R&D strategy that he intends to use for the next four years: 2006 through 2009. The performance of the company is pretty lackluster and Joe gets fired on Dec. 15, 2009. You get hired to replace him as the company is about to move forward into 2010. But for some strange reason, you get caught in a Time Warp, much like the guy in the movie, "It's Groundhog Day". You are doomed to repeat the last four years, 2006 through 2009, until you can improve the performance of Handheld.

In particular, you will be looking at income statements and marketing reports. You will be making decisions about pricing, product development (R&D expenditure), and product life cycles for a company that sells PDA devices (which are now pretty much defunct, having been replaced by "smart phones".)

This is a brief summary of what you will do this Project:

In this first project it is Dec. 15, 2009, and you are getting ready to make Marketing strategy for 2010. But you want to review the performance of the company over the last four years. So you review the Financial and Marketing data, as well as the product data and how it stacks up against the competition. You have a great New Year's Eve celebration thinking you are ready to move ahead.

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 $1,165,110,357.

SCENARIO

It is December 15, 2009. Joe Schmoe, the VP of Marketing at Handheld, 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 2004 and 2005.) 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 Handheld, 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, 2009, VP of Marketing at Handheld, and ready to move the company ahead into 2010. Your boss, Sally Smothers, is expecting you to take over and move the company forward in terms of product development, and smart pricing.

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 March 2011. Your report includes:

* 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, 2006 â?" 2009.

Assignment: Analyze the results of Joe Schmoe's decisions and then write the report that Sally is requesting. Run the simulation of the Handheld Corporation using the default decisions.Access the simulation site:

(http://forio.com/pdasim.htm ) and choose Demo. Collect the data for each year (or you can download a copy of it - see below.)

Expectations: The report should be thorough. And you should Make a Case for your proposed strategy using financial analysis and relevant theories. Include any references that you use regarding data analysis and theories. Turn in the 4 page paper. To help you out with this first Project, see excel attached Joe Schmoe's Results.

Data in Excel - this Excel spreadsheet with all of the data for the results of Joe Schmoe's Strategy from the Handheld Corp., 2004 - 2009, including financials and marketing data.

Hints for success!

Throughout this Project, you will be asked to make business decisions under conditions of incomplete information and uncertainty. Thus your strategies in approaching this decision need to rely on models, financial analysis, and theories from such classes as Economics, Finance, Accounting, Marketing, Strategy, and Quantitative Analysis. In addition, the simulation will give you some additional market information as you progress.

Be sure to EXPLICITLY draw on concepts and theories. You will have to crunch some numbers and present your data analysis professionally by creating some simple tables, charts and graphs.

TIME WARP CONFUSION?

The Project puts you into three different Time Warps and can be a little confusing as to where you are in time and what you should do. To see a Stripped Down Listing of each Project in all the Projects process without the Time Warps, see attached. This might help reduce your confusion. But, you should know that Time Warps usually do cause some confusion!!