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Introduction

The Clipboard Tablet Company focus at maximizing its market share, competitive edges and increase the company sales as well as the annual company revenues for the fiscal period. The company must be commitment to research and development of its products to maintain the market positioning that must be followed by constant changes of the company strategic changes over the operational period. It is notable that the decisions involves are critical and uncertain that can only be carried out through a strategic interventions and proliferations that calls for the combine and evaluated strategy to meet the consumer needs, tastes and preferences as well as emerging product value characteristics. The Clipboard Tablet Company targets to stimulate the demand for its products despites the fact competitions presents in the markets. The company focuses to maximize the cumulative profits and profitability levels for its tablets (X5, X6 and X7) while altering the target volumes, prices for the products and research and development allocations. The CVP calculations analytical values provides the approaches to alter or change the SLP 2 strategic operational approaches that would ensure high levels of profits, high volume of sales and suggest the prices at which the company products must be sold to obtain the highest revenues in the market.

Clipboard Company Pricing strategy and cost leadership strategy

January 2, 2012 - input decisions for 2012 and Strategic Adjustments

According to SPL Two, prices for the tables in the year 2012 will be as follows, the X5 will be sold at $285 while the research and development allocation will be 33%, and the x6 will be $430 while research and development allocation will be 34% and X7 will be $190 while the research and development will be 33%. When the company will maintain the prices for x5 at $285, the company sales capacity will be 537, 379 that will result to a sales revenue of $$153,153,103.45, however, the company will reduces its price to $251.31 and targets a sales capacity of 700,000 that will lead to a sales revenue of $175,920,000 at the fiscal year ending in December 2012. Similarly, the company can use the breakeven approach to adjust the prices for X6 and X7, the changes in the prices of X6 from $430 to $334 while X7 from $190 to $188.85 will stimulate demand for the products in the market (Table one). According to the law of demand and supply, a small change in the prices of products will results to a relative change in the quantity demanded for the products that will lead to increased sales revenue as most of the consumers will change their purchase behavior in favor of the Clipboard Tablet Company (Tucker, 2010 p.55). Therefore, a decrease in the product prices will stimulate increased demand that will ensure that the sales capacity or volume increase leading to high sales revenues that will facilitate the profitability levels as well as cumulative profits for the company.

Table one: CVP Calculator results in 2012

January 2, 2013 - input decisions for 2013 and strategic adjustments

According to the SLP Two, the company anticipates to maintain the pricing levels for the tables: the X5 will maintain its prices at $285, the x6 price will be $430 and x7 will be $190. However, the research and development percentages will change ultimately, the percentage allocation for research and development for X5 will be at 30% while X6 standing at 34% while the X7 shooting to 36% despite the fact that the X7 tablet is priced higher than the competing products and gets into its growth face while the X6 is achieving a better performance in the markets. Based on the CVP Calculator analysis, if the company maintains the pricing for X5 at $285, and reducing the revenue allocation for the products since that will results to reduced cost of production of the product. The volume of sale will be 532,414; however, if the company sets the company price at $250.29, the company will be able to a sell a capacity of 700,000 that will further lead to increased revenue resulting from the sales of the products. Similarly, the company will adjust the revenue and development allocation for the X6 product and integrates the features that are considered to be of value by the consumers that will increase sales despite the fact that the prices of the products will remain at $430 and increase the volume of sales. Additionally, the company will further reduce the prices of the X7 tablet from $190 to $183.79 that will stimulate the demand (Table Two). Hill and Jones (2010) assert that the altering of the prices of a new price will stimulate the demand for the products, thus, the company sales capacity will be compelled to increase relatively resulting to proportional profitability levels.

Table two: CVP Calculator results for the year 2013

January 2, 2014 - input decisions for 2014.

The prices for the products will be bound for changes; the prices for X5 table will decreased by $5, a decrease in the prices of the product will stimulate the demands for the products, it would mean that more consumers will be willing to consume the product at the new prices and thus, increasing the quantity demanded for the products therefore, increasing the sales capacity for x5. Similarly, the X5 handheld has reached the shakeout phase of the product lifecycle and the new sales for the X5 are declining, and therefore, a reduction on the prices will tend to stimulate the demand for the product. The X6 prices will relatively be constant at $430 while the X7 table will be sold at $185. In the case of x7, the changes in the pricing levels will stimulate the demand for the product. The research and development allocations will be bound to change, for instance; the research and development allocation for X5 will be at 28%, 32% for X6 and 40% for X7. In order to achieve high sales capacity for all the products, I will be compelled to set the prices at $242.29; $295.36 and $179.80 for the X5, X6 and X7 respectively (Table three). Further decrease of the prices for the products will increased demand despite the fact that X5 has reached the shakeout face and the sales capacity will be as shown on table three.

Table three: CVP Calculator results for 2014

January 2, 2015 - input decisions for 2015.

According to the SLP Two; input decisions in 2015 would be held for the products as follows; X5 price at 285 while the allocation for research and development held at 33%, the x6 at $430 and research to development at 34% while X7 price at $ 185 in its growth stage. The highest cumulative score will stand at $1,514,700,825. The decrease price of X7 will facilitate the demand for the product. However, the profitability levels will decline to 23%. However, according to the CVP calculator values analysis, it is very important for the company to set its prices relative low that will further keep off the competitions in the markets while the company will face a large market share in the markets. Since the X5 products has reached its declining phase in the markets and the company is not making any significant sales capacity for the product, the company considers integrating the new features of the product in the market that will compel the company to set the percentages for the research and development allocation at 33% and reduce the prices further to $259.88 that will allow the company to sell a volume of 650,000 that will compel the company to have a sales revenue of $168,920,000, at the same time, the company will be compelled to set the price for X6 and X7 at 294.40 and $175.42 that will lead to a sales revenue of $320,337,777.78 and $385,920,000 respectively.

Table Four: CVP Calculator results for 2015

In essence, for the company to maximize on its products, it must continuously alter the sales capacity target, prices for the products the percentages of research and development allocation tat will specifically focus on the integration of the new features that are considered valuable for the products in the markets and incorporate the features into the company production plans, therefore, the strategy will compel the company to remain in the markets. In addition, for the company to handle the market competitions, it must implement the pricing strategy and cost leadership strategy that will compel the company to eliminate the competitions by offering its prices at a relatively consumer cost, it must be ready to continuously alter the prices to maximize the sale volume capacity that will later facilitate high profitability levels, cumulative profits and sale revenue while minimizing the cost of production of the products.

References

Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach.

Boston, MA: Houghton Mifflin.

Tucker, I. B. (2010). Macroeconomics for today. Mason, OH: South-Western Cengage Learning.