Simulation Review the Initial Planning

Simulation Review

The initial planning and installation of the plant is a decision that served Iconic, Inc. quite well and would not likely have been made differently even with the information and performance observed later in the simulation. Though China carried certain concerns as a foreign country of operation, the costs of manufacturing in that country and shipping worldwide, including to China itself as well as Europe and the United States, was much cheaper than manufacturing and shipping in/from the United States. This was especially true in light of the initially low output desired, which due to economies of scale would have been even more expensive per unit in the United States. This plant location continued to serve the company well throughout all seven quarters of the simulation, through several expansions and capacity increases, and it is doubtful better location could have been selected.

Selection of the two market segments was also accomplished with a fair amount of success, though given the results and the complications that were encountered with the Workhorse segment a different segment or a different strategy might have been beneficial. The Traveler segment responded incredibly well to Iconic, Inc.'s product offerings, and this is really the only source of doubt in the Workhorse segment; the fact that the response was not as enthusiastic nor our efforts as consistent in this segment suggests that another segment might have been a bit easier. The price sensitivity that existed for the Workhorse computers was perhaps the main stumbling block for our group, but in reality it does not appear that other segments would have responded more favorably to the industry entrance or matched the Traveler segment in sales.

Initial sales centers established in New York and Los Angeles in the third quarter of the simulation proved successful enough to establish another sales center in London and a regional web center in Chicago, enabling the company to rapidly become a global player in the industry with a very broad market. This expansion continued in later quarters with a great deal of success. The level of success in this global reach was so high, in fact, that if a change was to be considered it would most likely be to attempt a wider expansion sooner, as this would have created greater opportunities for the company. Though it was not possible to fully predict the level of success Iconic, Inc. would achieve, risking the capital earlier in the process of building the company and its brands could have yielded a larger market share and generated even more profits for the company and its owners earlier in the simulation.

Branding presented a major consideration for the company, and initially it was not at all certain how many brands Iconic, Inc. should offer. Ultimately, the decision to offer two brands was decided upon, and each of these brands was later retooled to another version over the course of the simulation. The disappointing initial sales in the Workhorse segment might have been partially a branding issue, and offering more brands could also have shored up sales in this segment and supplemented them in other segments, potentially, but overall the decision to focus on two brands seems to have served the company well. Two brands provided a certain level of insulation while allowing the company to focus its efforts and resources in a fairly narrow fashion, which definitely boosted profits.