Writing Company Performance Review

Kien Lai | TOM 411 | 6/04/03 | California State Polytechnic University, Pomona

Please respond to each of the following questions at whatever depth you choose

1. Present a critical review of the performance of your company in terms of what worked, what didn't work, and why?
A comparative analysis of color televisions shows that maintaining a selling price of $3000 at the end of the fourth quarter was effective because this was the price that the market was willing to bare. In other words, consumers were both able and willing to buy at the set price of $3000. The same can be said of digital televisions with a set price of $8000. Moreover, these prices were in line with our leading competitors. It is also worth noting that the high set price depicts the company's positioning of premium high quality televisions.

Our advertising budget was below the average of several of our competitors. The reason for the deficiency was a result of management's decision of maintaining market share as a result of the company's substandard financial position. Nevertheless, the advertising budget of digital televisions was on average of $150 more than color televisions to influence a shift in demand for the product. The strategy of our advertising seemed to have worked due to having zero finished product inventory at the end of each quarter.

Research and development remained consistent throughout the simulation. In relation to the amount of money that was invested into research and development, we saw a direct correlation to the efficiency of producing television sets in both color and digital. Although many factors can be attributed to the efficiency of production, it can be said that research and development was one of the primary contributors in increasing overall efficacy. At the end of the fourth quarter, production efficiency stood at .05 for color and .08 for digital. Sales commission and market allocation remained consistent throughout the simulation. The reason why these areas were not altered was because they met our expectations of not having any finished inventory at the end of each quarter. The market allocation was distributed based on the locations with the highest to lowest demand.

The one area of the simulation that did not work for our team or had the most difficulty with was balancing production workers with the total amount of raw materials ordered. The excel spreadsheet was helpful, but we continued to struggle with this area because several factors influenced total production and the required man power necessary in achieving our goals. Such factors include the wages paid, budget of research and development, training provided to employees, profit sharing, and restrictions on the amount of raw materials each group can order each quarter.

2. If you were to start over again with the same company and team, what basic changes would you make?
Our group, based on board meetings, would not hire as many production employees. The money saved in salaries would be reallocated in trying to increase efficiencies in both production and operations. Another area we would change would be not issue as many shares as we did because it would likely reduce its value. More importantly, we would have purchased more raw materials even if it exceeded the production capacity. We learned that it was better to have raw materials left over at the end of the quarter than none at all. We also found out that having raw materials left over at the end of the quarter boosts the value of our stock price.

3. Discuss the learning you experienced from interacting with the web based strategic Management Analysis Model.

Organization's response to its environment
This helped us in making our decisions across all divisions. It was critical that we maintained our position with the market leaders and one of the ways we did this was by doing an environmental scan each quarter. It information gathered assisted us in determining the following quarter's production levels, product pricing, market allocation, amount to invest in research and development, number of production and sales employees to hire or lay off, and even how much to pay them based on the segment's average.
Interaction of internal operations to form an overall response to the external opportunity / Sthreats.
Based on the analytical information provided at the end of each quarter, our group would adjust our budget for each division within our company. One of the main areas we looked at was the demand for each location. This determined the allocation of our advertising budget, product allocation based on the highest to lowest in demand, and hiring or laying off of sales people. As a result of our company making a profit at the end of each quarter, we were able to take advantage of opportunities by investing heavily in high demand areas while at the same time minimize the overall risk involved through taking a conservative approach. Only proven results would receive additional funding the following quarter.
Quantitative methods
The quantitative information given after each quarter was extremely helpful in assisting our group in making management decisions. The quantitative information provided was more than adequate in determining the most effective course of action. In short, the uses of quantitative methods are essential in making management decisions as experienced through the simulation.
Electronic spreadsheets and other software
The use of electronic spreadsheets was helpful in helping our group in each division make the necessary revisions to our business plan. However, the greatest uses of the spreadsheets were in operations and production in determining the right balance.
Financial theory and practices.
The use of financial theory and practice was not as helpful in making business decisions. The issue of shares did not affect the stock price. It appeared that the main determinate of stock price was the volume of product sold each quarter. Our group issued dividends when the company became profitable and this decision seemed to have made the stock price decrease. This was unexpected since we thought it would have the reverse affect.
Marketing Management theory and practices
The use of marketing management theories and practices helped the group in making sound decisions with respect to meeting supply and demand. Our allocated budget satisfied our goals of having zero finished product inventory at the end of each quarter in addition to trying to influence demand for digital television demand. Moreover, our group was able to effectively allocate
Operations Management theory and practices.
The use of operations management theories and practices were very helpful in achieving our production efficiency goals for both digital and color televisions. We also based our decisions on management principles learned in class regarding research and development, which was one of the main contributors in making our company profitable.
Management and Human Resource theory and practices.
The use of management and human resources theory and practices has helped only to a minimal degree. Factors such as efficiencies that can be influenced have made it difficult in applying what we have learned in class. Nevertheless, it has given us a foundation in heading in the right direction. We have keep working hours and wages consistent with real world practice and have served us well as demonstrated by the level of production.

4. (optional) How could this learning experience have been improved from your point of view?
Some of the results after each quarter was run gave irrational information. Comparing the information to other teams shows that the simulation can be altered to calculate favorable results. Also, demand in each region can be exceed, which puts other teams at a disadvantage if unaware of this possibility. Improving these areas and informing the teams of these issues before playing would make the simulation less of a drawback.

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