Strategy Justification - Performance Analysis

1. Strategy justification

We are using a niche differentiator strategy which basically means that we are focus on high technology segments and our first priority is high-end. As high end products require excellent design and performance, which in turn will bring us high awareness and high profitability, as long as customers enjoy our products. Also, because it involves high technology, our competitors are not easy to beat us in taking up market share, as they do not have that as much technical support as we do. Those are our main strengths.

However, it is not easy for us to maintain that advantage, as we have to always develop a product that matches customer’s ideal criteria for performance, positioning, age, and reliability. It means we have to put lots of money in R&D, which may result in significant funding issues like capital chain issue. It is high risk but can bring back great return once we address properly. As customers who want high-end products are not care about the price of products too much. It gives us a signal that we have chances to make the great profit once we can offer products what customers exactly want. Hence R&D becomes our core activities and also our core competitiveness.

Once R&D is well finished, we will start our initial investment in marketing. This is one of our decisions as we want customers know our superb designs, and we want to make our products easy for customers to find hence initial investment in marketing is crucial. However, the possible issue can be funding issues again.

In conclusion, our strategy is actually hard to achieve, as funding issue can destroy everything. Hence we have to think really carefully before we make important decisions.

Performance Analysis of Practice Rounds 1

According to the result of round 1, we found something we did well and poor, which could guide us how to perform better in the following rounds.

Firstly, our profits were $ 10,755,881 with high sales ($ 145,864,990) and high turnover rate (10.00%), which was a nice profit. We aim to provide products to our customers that meet their ideal needs at a proper price. So we made a competitive pricing strategy, and as a result, our total market share is 18.36%, which is higher than any other competitors.

Besides of that, one of our main focuses for distributing our products to the customers is keeping a high promotional budget to help facilitate in our customer awareness. So we invest more on complement (107.04%). That will guarantee us enough goods for sale.

But there were still something we did poor. First of all we invest too much on traditional segment. Hence, that would increase the stock on hand. The stock price is the highest $52.82, but the market share did not act as our expectation. It is only 16.6%, the same with our competitors. We understand that each market segment has their own individual needs and different criteria for assessing our products and our competitors’ products.