Strategy Simulation Game

STRATEGY SIMULATION GAME
Name:
Grade Course:
Tutor’s Name:
(11 November 2010)
Strategy Simulation Game
Businesses survive on the decisions taken by the management and these decisions have a major impact on how it performs in the market. Whether the market structure is a monopoly, oligopoly, monopolistic competition or perfect competition the management must make informed choices for the business to remain in operation and sustain growth (Porter, 2008).
Quasar in 2003 is a pioneer in the production of an all optical notebook computer (Neutron) it aims to make maximum sales and dominate the markets with effective technology, finance and marketing. Since this is the first in the market the prices of introduction is likely to attract or repel customers (Grant, 1991). The price must however be able to cover all the production costs of the Neutron. A price that will have a very high demand may cause shortages in the markets hence increasing the price to $150 will be appropriate in attaining the goal of maximizing profits. Retaining the advertising expenses at $400 will be appropriate in that though it is a monopoly the product needs awareness so as to increase the sales.
The advertising increases the sales and thus increased revenue; for sustained growth there is need to streamline manufacturing of the Neutron and target on reduced the production costs. The best thing to do would be to upgrade the production process to focus on all aspects of quality and quantity demanded by the customers. Upgrading would mean increasing the price to $200 in 2005 so as to cater for the increased costs and profits. The increased price leads to low demand and thus no optimum profits. The monopolistic nature of the company has been affected by price and thus strategic measures to maximize profits would be to invest in advertising, cutting costs, or improving productivity (Porter, 1998). The revenues and profits are dictated by demand and the cost of production. Due to the earlier move of increasing price that has been seen as a move to transfer costs to the customer has reduced demand then adequate measures to stimulate demand must be implemented.
In 2006 Orion technologies enters the market to be an oligopoly market with Orion ...