Team I - Markstrat Final Presentation at UC Davis

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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.
  • Team I - Markstrat Final Presentation at UC Davis

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

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