Business SLP 5, Last Time Warp for the Clipboard Tablet Company

It is January 1st 2012 again, and the time warp has re-started. This time there is a difference, the results for the last time warp (SLP 4) have been reviewed and new strategies have been developed based on that last time warp based on the observations and the CVP calculations. The aim of this paper is to implement the predetermined strategies and compare the results with the last time warp.

There were several issues highlighted in the last time warp. The most significant were the issues associated with the X7, it was noted that in the last time warp, the performance compared to competing products was poor, and the price was high. Therefore, to make the product competitive using the CVP analysis would require a significant level of investment, along with the acceptance of a lower profit margin. Therefore, rather than continue with this product, which may also cannibalize the X5 and X6, the difficult decision was made to abandon the X7. This will mean suffering the sunk costs, but in good financial decision making sunk costs should not bias the decision for the future (Chadwick, 2007)

This leaves the firm with only two products, the X5 and X6. The X5 showed good performance in the last time warp, although it had a limited lifecycle left. The X6 was the most profitable, and was seen to perform well. The decision for these products will reflect their market potential. The pricing levels will remain the same, at $285 for the X5 and $430 for the X6. However, as the X5 is nearing maturity, it may argued that investing more money into research and development may be unwise, as there is not a long-term potential to benefit from...

As the X6 is popular, and has potential in terms of market growth, this product will be given 100% of the research and development budget.
Table 1; Comparison of prices for the time warps

Last time warp

This time warp

2012

2013

2014

2015

2012

2013

2014

2015

X5

$385

$285

$285

$285

$285

$285

$285

$285

X6

$430

$430

$430

$430

$430

$430

$430

$430

X7

$190

$190

$190

$190

n/a

n/a

n/a

n/a

This table shows that the strategy is very similar, the pricing points for the X5 and X6 are the same, but the X7 is eliminated. Based on this scenario the time warp progress and it is possible to assess the results comparing them to the last time warp.

The first year is relativity similar to the last time warp, with a new profit of that of $367,290,924, which is only marginally higher compared to the past time warp, as it is only $15,145,951 higher.

2013 there is a further improvement. In the last time warp the accumulated profit at this point was $830,740,435, the current time warp accumulated profit is $1,191,533,299, which is now a total of $360,792,864 better than the last time warp. The firm does appear to have increased the efficiency and the strategy is working, as it has refocused sales in the X5…