Results
Vicmestro
MarketConditions.pdf
MARKET CONDITIONS REPORT
Unforgettable Business Learning
®
Perceptual Map Each market segment has different positioning preferences. This is illustrated by the sets of dashed and solid circles in the graphic below. Over time, these preferences will shift (see Page 11 of the Manager’s Guide for more information).
Your company manufactures genetic testing devices. Your customers fall into two groups, which are called market segments. A market segment is a group of customers who have similar needs. The segments are named for the customer’s primary requirements: Budget and Performance.
In addition to operating in the Americas, your company will now have the opportunity to compete in two additional global markets: Europe and Asia Pacific.
Customers within each market segment employ different standards as they evaluate sensors. They consider four buying criteria:
+ Price
+ Age
+ Positioning
+ Service Life
To the right is an illustration of the perceptual map from the end of Round 0. You’ll notice the fine cut, rough cut and ideal spots for your product to be located.
1. POSITIONING
1
MARKET CONDITIONS REPORT
Jan 1st 2017 Jan 1st 2018 Jan 1st 2019
Drift Rates Each year, the segments drift up and to the right, resembling the customers’ preference for faster and more accurate products. In each year of the simulation, customers will demand that products move by the following:
Segment Centers The information in the table below reflects the segment centers at the end of the round. Therefore, the Round 0 positions can be seen as the Round 1 starting positions, and so on. Each month during the simulation year, the segment drifts 1/12th of the distance from the starting position to the ending position.
SPEED ACCURACY
SPEED ACCURACY SPEED ACCURACY
BUDGET
BUDGET
ROUND
PERFORMANCE
PERFORMANCE
+0.5
4.8
5.3
5.8
6.3
6.8
7.3
7.8
8.3
8.8
4.8
5.3
5.8
6.3
6.8
7.3
7.8
8.3
8.8
6.0
6.7
7.4
8.1
8.8
9.5
10.2
10.9
11.6
6.0
6.7
7.4
8.1
8.8
9.5
10.2
10.9
11.6
+0.7
+0.5
+0.7
0
1
2
3
4
5
6
7
8
2
POSITIONING
Segment Sizes by Region At the beginning of the simulation, more units in the Budget segment are sold than the Performance segment. With the industry moving to a more global market, projected demand across the three regions at the end of Round 0 is growing. Below is the total number of units demanded during Round 0.
IDEAL SPOTS ACCURACYSPEED
BUDGET
PERFORMANCE
+0.0
+1.4
+0.0
+1.4
2. SEGMENT SIZES & GROWTH RATES
EUROPE ASIA PACIFICAMERICAS
BUDGET
PERFORMANCE
5,838 1,994 553
3,195 697 216
Growth Rates Over the course of the simulation, each segment in each region will grow at a different rate. However, each segment’s growth will stay constant across the simulation.
EUROPE ASIA PACIFICAMERICAS
BUDGET
PERFORMANCE
6% 18% 43%
13% 31% 49%
The information in the table above shows the Ideal Spot “offsets,” or how far away the ideal spot is from the segment center. Remember the ideal spot is different from the segment center in the Performance market because customers constantly demand faster, more accurate devices.
POSITIONING
3
SEGMENT SIZES & GROWTH RATES
ROUND
ROUND
5838
6188
6560
6953
7370
7813
8281
8778
9305
3195
3610
4080
4610
5209
5887
6652
7517
8494
0
1
2
3
4
5
6
7
8
0
1
2
3
4
5
6
7
8
1994
2353
2776
3276
3866
4562
5383
6352
7495
697
913
1196
1567
2053
2689
3523
4615
6045
553
791
1131
1617
2312
3307
4729
6762
9670
216
322
480
715
1065
1586
2364
3522
5247
SEGMENT SIZES OVER TIME
EUROPE ASIA PACIFICAMERICAS
GROWTH RATE
GROWTH RATE
6%
13%
18%
31%
43%
49%
4
BUDGET SEGMENT
EUROPE ASIA PACIFICAMERICAS
PERFORMANCE SEGMENT
3. PRICING ANALYSIS
Pricing has a large impact on margins, demand and overall company performance. Each year, customers demand cheaper products – at a rate of 0.50 per year. Reducing price comes at a cost – margins. Over time you will need to formulate a strategy of how you will reduce your cost structure, or combat the price pressure from your customers and competitors. Below are tables of the local price ranges your customers will have for all eight rounds.
ROUND
ROUND
0
1
2
3
4
5
6
7
8
0
1
2
3
4
5
6
7
8
¤45.00
¤44.50
¤44.00
¤43.50
¤43.00
¤42.50
¤42.00
¤41.50
¤41.00
¤25.00
¤24.50
¤24.00
¤23.50
¤23.00
¤22.50
¤22.00
¤21.50
¤21.00
LOW HIGH
EUROPE (¤)
¤35.00
¤34.50
¤34.00
¤33.50
¤33.00
¤32.50
¤32.00
¤31.50
¤31.00
¤15.00
¤14.50
¤14.00
¤13.50
¤13.00
¤12.50
¤12.00
¤11.50
¤11.00
LOW HIGH
EUROPE (¤)
S$45.00
S$44.50
S$44.00
S$43.50
S$43.00
S$42.50
S$42.00
S$41.50
S$41.00
S$25.00
S$24.50
S$24.00
S$23.50
S$23.00
S$22.50
S$22.00
S$21.50
S$21.00
LOW HIGH
ASIA PACIFIC (S$)
S$35.00
S$34.50
S$34.00
S$33.50
S$33.00
S$32.50
S$32.00
S$31.50
S$31.00
S$15.00
S$14.50
S$14.00
S$13.50
S$13.00
S$12.50
S$12.00
S$11.50
S$11.00
LOW HIGH
ASIA PACIFIC (S$)
$45.00
$44.50
$44.00
$43.50
$43.00
$42.50
$42.00
$41.50
$41.00
$25.00
$24.50
$24.00
$23.50
$23.00
$22.50
$22.00
$21.50
$21.00
LOW HIGH
AMERICAS ($)
$35.00
$34.50
$34.00
$33.50
$33.00
$32.50
$32.00
$31.50
$31.00
$15.00
$14.50
$14.00
$13.50
$13.00
$12.50
$12.00
$11.50
$11.00
LOW HIGH
AMERICAS ($)
PERFORMANCE PRICE BY REGION
BUDGET PRICE BY REGION
5
4. BUYING CRITERIA
Americas – Budget Segment + Price, $15-$35 — importance: 55%
+ Age, 3 years — importance: 19%
+ Ideal Position — importance: 17%
+ Service Life, 14,000-20,000 — importance: 9%
Europe – Budget Segment + Price, ¤15-¤35 — importance: 50%
+ Ideal Position — importance: 21%
+ Age, 3 years — importance: 15%
+ Service Life, 14,000-20,000 — importance: 14%
Europe – Performance Segment + Ideal Position — importance: 43%
+ Age, 0 years — importance: 33%
+ Service Life, 17,000-23,000 — importance 16%
+ Price, ¤25-¤45 — importance: 8%
Asia Pacific – Budget Segment + Price, S$15-S$35 — importance: 60%
+ Ideal Position — importance: 14%
+ Service Life 14,000-20,000 — importance: 14%
+ Age, 3 years — importance: 12%
Asia Pacific – Performance Segment + Ideal Position — importance: 41%
+ Age, 0 years — importance: 28%
+ Service Life, 17,000-23,000 — importance 20%
+ Price, S$25-S$45 — importance: 11%
Each of the geographical regions has varying operating costs. Users must take into account currency exchange rates, shipping costs and tariffs of each region before making final decisions. Below is information from the end of last year.
5. REGIONAL OPERATING COSTS
Americas to Europe: $1 = ¤.90 Americas to Asia Pacific: $1 = S$1.25
Shipping Costs To Europe: $3.00 per unit To Asia Pacific: $2.50 per unit
6
Americas – Performance Segment + Ideal Position — importance: 39%
+ Age, 0 years — importance: 32%
+ Service Life, 17,000-23,000 — importance: 19%
+ Price, $25-$45 — importance: 10%
BUDGET SEGMENT PERFORMANCE SEGMENT
Tariffs Europe – 4.5% per unit Asia Pacific – None
Tax Rates Americas – 35% Europe – 32% Asia Pacific – 25%
Prime Interest Rate – 7.0%
$3.00 per unit
AMERICAS EUROPE ASIA PACIFIC
$2.50 per unit
6. CURRENCY EXCHANGE RATES
Over the years, currency exchange rates adjust in relation to your home currency, which is the American dollar ($). These rates vary, and will move from year to year.
Below, you’ll see the projected rates over the next three years. Projections beyond that are unavailable, but be sure to check each region of the Marketing Department in the simulation or the Marketing Segment pages (pgs. 8-13) of the Globe for the current year’s exchange rate.
YEAR 0 - 2017
YEAR 1 - 2018
YEAR 2 - 2019
YEAR 3 - 2020
Currency Exchange Rates
7
¤0.90
¤0.95
¤0.95
¤1.05
EUROPE (¤)
S$1.20
S$1.25
S$1.20
S$1.10
ASIA PACIFIC (S$)
$1.00
$1.00
$1.00
$1.00
AMERICAS ($)
