Team I - Markstrat Final Presentation at UC Davis

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Found this on an old thumb drive, brings back good memories

Found this on an old thumb drive, brings back good memories

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  • Found this game far too theoretical. Learn here how it is done in the real world: https://medium.com/business-startup-development-and-more/e0937c7f0951
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  • we are a team of 6 competing with 6 other teams , we are at a disadvantage and we need someone to help us take off , help ?
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  • - first in the vodite market - first to introduce a new product - first to withdraw a product - first to do major r&d
  • build a better mousetrap = we always tried to model the ideal values desiered by customers instead of trying to manipulate the product advertising the "GE" principal - jack welch “ show me the money” = contribution is everthing ...... dropped viki inventory in period X even though that was a major loss because our bottomline profit were increasing by upgrading the product end-game strategy......using feasiblity studies to lower base costs by the last period
  • small flowchart of the last three bullets split this slide into two - part 1 is the organization and part 2 is the process flow switch to the excel sheet after this slide
  • KISS – the most customers, the most profit   graph of market share  for SIRO and SIBI
  • VIKI and VITO VITO = Vito Corleone one graph with both products market shares
  • 3 - spillover from other products (sibi, etc) into buffs segment .... so it is very difficult to get a lock on the segment 4 - inventory was a major dilemma ... team E was in the same situation later on the in the vodites
  • 3 - spillover from other products (sibi, etc) into buffs segment .... so it is very difficult to get a lock on the segment 4 - inventory was a major dilemma ... team E was in the same situation later on the in the vodites
  • 1 - predicting attribute evolution based not only on regression but also intuition 2 - if we want the outcome from r&d dept, we cant take risk with the investment 3 - we kept ahead in stock price because our r&d pipeline was always full 4 - multiple r&ds was major debate for our team 6 - for feasibility studies .... these studies helped us drop base costs by an extra 20-30%
  • 1 - takes time to improve brand awareness 2 - advertising research budget was also important 3 -  4 - take advantage of the competetion's limited resources or pull-back
  • - VIKI pricing was both strategic and tactical - iPhone example - economies of scale = lower base cost does not mean immediate lower transfer cost - mention cost-based pricing for viki because we marked up - excess price cutting.... mention team A - semantic scaling to reduce price perception..... e.g. rebate, temporary promotion
  • - VIKI pricing was both strategic and tactical - iPhone example - economies of scale = lower base cost does not mean immediate lower transfer cost - mention cost-based pricing for viki because we marked up - excess price cutting.... mention team A - semantic scaling to reduce price perception..... e.g. rebate, temporary promotion
  • - VIKI pricing was both strategic and tactical - iPhone example - economies of scale = lower base cost does not mean immediate lower transfer cost - mention cost-based pricing for viki because we marked up - excess price cutting.... mention team A - semantic scaling to reduce price perception..... e.g. rebate, temporary promotion
  • e.g. first three periods of the vodite market entry statistical analysis tools are important in estimating demand - intel inc.

Transcript

  • 1. Markstrat Lessons Learned Team I (“The Incredibles”)
  • 2. Agenda
      • Philosophy, Guiding Principals and Organization
      • Product Portfolio
      • Research & Development
      • Advertising and Sales Force Decisions
      • Pricing Effects
      • Competitor Dynamics
      • New Product Launches
      • Production Planning and Inventory Management
      • Financial Focus
      • Conclusion
  • 3. Our Goals
      • Become the Stock Price and ROI Leader
      • Dominate the Vodite market
      • Moderate presence in the Sonite market
      • Be the first to innovate in every area
  • 4. The Team I Secret Formula
      • Data and Dollars
      • Build a better mouse trap and the world will beat a path to your door
      • Number one or two
      • Show me the money
      • Repeat after me…. R & D
      • It’s all about the end-game
  • 5. The Team I Process Quick Data Aggregation Component Analysis Group Consensus Smart Decisions R&D Strategy Production & Marketing Competitive Intelligence
  • 6. The Sonite Portfolio SIRO Quantity SIBI Quality
  • 7. Vodite Portfolio VIKI The Game-Changer 1 Product – 2 Segments VITO The Godfather 6 Periods – 7 Projects
  • 8. We thought we could SING
      • Being a niche player is harder than you think
      • Target segment could not be convinced easily
      • Can’t match the marketing money of the mass-market products
      • Avoid over-production
  • 9. Taking Control with VIKI
      • First mover advantage
      • Market entry with no precedent
      • Ability to charge a premium
      • Throw-off competition for two periods
      • Once-in-a-market opportunity
  • 10. The Keys To R&D Success
      • T + 3
      • The Outcome Vs. Risk dilemma
      • What’s in the pipeline does matter
      • One Path or Multiple Paths
      • Keep the inputs simple
      • Incremental Vs. One-time
      • Patience is a virtue, wait for the end-game
      • Voice of the customer
  • 11. Advertising Decisions
      • No point having a perfect product if the target market does not know about it
      • Balance of quantity and quality
      • Law of diminishing returns
      • Be opportunistic – increase advertising when the competition is squeezed for money
      • Allocate the money to the products with the most return
  • 12. Sales Force
      • Based on two factors:
        • Contribution
        • Shopping Habits
      • Targeted sales force to increase presence in particular channel
      • No firing
      • Consistent increase
  • 13. The Dark Art Of Pricing
      • Innovators can charge a premium
      • Risk-Taking or Risk-Averse
      • Economies of scale take time
      • Excess price-cutting reduces perception of quality
      • How to price
        • Ideal: Demand, Competition and Cost
        • Markstrat: 80% Demand, 20% Cost
  • 14. Competitor Dynamics
      • Anticipating the competition's moves
      • R&D expenditures tell a rich story
      • Create barriers to entry
        • Have multiple products (with the risk of cannibalization)
        • Build the cost advantage
      • Seek the next Blue Ocean market
  • 15. New Product Launches
      • Product Roadmaps
      • Marketing Budget is a trade-off
      • Entering without a cash-cow
      • Initial demand and price
      • Be prepared to lose money
      • New Vs. Existing Markets
      • Invest in your Sales Force
  • 16. Production Planning
      • The accuracy of market size forecasts
      • Surveys of Purchase Intentions might not always be right
      • Major mistakes
        • SING over-production
        • VIKI under-production
  • 17. Inventory Management
      • Under-Produce or Over-Produce?
      • Best-Case Vs. Worst-Case Modeling
  • 18. Financial Focus
    • Our key metrics - Net Contribution and ROI
    • R&D ROI > Net Contribution > Market Share > Revenues
    • The choice to not enter the Singles market was based on break-even analysis
    • Focus on Variable Costs vs. Fixed Costs
    • Keeping the Contribution as % of Sales at least constant is important in justifying additional marketing budget
    • Contribution Analysis vs. P&L
  • 19. Conclusions
    • Sleep with financial analyses under your pillow
    • Be the best critic of your product and know your competitors
    • Well-planned and controlled innovation = Competitive Edge
    • “ Strategic Focus” from the start to finish
    • “ Tactical Prowess” along the way
    • The right balance is most important
    • Finally – Its not a one-man show
  • 20. There is no “I” in Team I
      • Lots of bloodshed but no mutinies
      • Three is not a crowd
      • Confront your issues upfront and early
      • Be open to new perspectives
      • Reward success
  • 21. Fini