Question No. 1: What was the initial strategic direction chosen for the firm and why was this chosen? Initially the firm has selected a strategy to concentrate on the launch of new family class Allure product with the size of 36 and alpha family class products with the size of 28. The rational behind the selection of these products was to attract the costumers through the introduction of these two new products in the market. The cost of allure family class is much higher than that of the alpha class.
The company has invested $ 327 million on the safety of the product and the other areas like interior, styling and quality were completely neglected as during the initial period of the product there was a need to satisfy the customers through the insurance of the safety concerns. On the improvement of technology capabilities the total expenditures remained up to $327 million indicating that the total expenditures were revolving around the safety aspects of the products. The position has been explained in the table 1 below Table 1: Technology capabilities: Current Expenditures ( Millions )Interior = $ 0Styling =$0 Safety = $327Quality = $0 During the initial period the company has adopted a strategy to address the consumer market through a marketing campaign as the company has invested US $ 50 million as $ 40 million for Regional Corporation Adv. , $ 2million for direct mail and eight million through public relations.
As the products were launched during thins period therefore an amount of $50 millio0n was invested to improve public relations through consumer marketing. Marketing of the product at the grass roots level is an essential tool to attract the costumers to the products.
The company has maintained its marketing strategy for the sale of vehicles belonging to the category of Ace, Alec and Alfa. The maximum retail price for Alfa products was at the top of the list with MSRP $20,350 and the minimum price was that of Alec that is $ 11492. The brands of the vehicles, MSRP and discount extended to the dealers are given in the form of table 2 and a graph, respectively. The current expenditures of US $ 531 million are mainly focused for the vehicle Allure that is 78.3 % of the total current expenditures reserved for the project development.
The primary focus of the company is towards the promotion of the vehicle through exploring the consumers market. The dealership was only restricted in the south zone. In the same period the company had paid a dividend of hundred million US $ to the shareholders for gaining the confidence of the shareholders as well as of the general masses towards the company’s performance. Question: 2What decisions were made during the course of the simulation and why were these taken? During the course of the simulation the company has taken the following decisions, rational for each decision is as under: Improvement in technology capabilities The company has decided to improve the interior of the vehicles with a total expenditure of US $ 156.00 million to attract the customers with internally decorated vehicle.
Styling, safety and the quality factors were maintained at their previous levels. The position can be explained with the help of the table 3 below: