Essay About New Manufacturing Machine.We And Big Investment

Strategic Management Business Report
Essay Preview: Strategic Management Business Report
Report this essay
1.Period Objectives1.1 Our main objective for the period In the first round we did not expand our capacity to reduce the complexity.In the second round wewanted to reach a turnover of 66405 to benefit from economies of scale, lower procurement costs in order focus on our strategy to provide printers of a relatively low price with a good quality.1.2 Our main decisions1.2.1 Capacity expansion by 25000 and hiring 600 production workersThe logical consequence of expanding capacity was buying a new manufacturing machine.We decided to purchase the a new which generates an additional capacity of 25000.That was a pretty big investment with a price of 30 Million Euros but we saw no other option to realize our options.Arguments which spoke for this decision were  lower material cost, a  constantly growing market and that we made a significant profit per sold unit.We also had to adapt our staff significantly.We calculated, that we have to hire about 600 new workers which meant only for the hiring 7.5 million Euro but there was no other way to realize this long term investment.1.2.2 Reducing Price by 40We wanted to reduce our by 50 ,because we estimated a higher market share and a good position in the market.Moreover we wanted to approach to the very aggressive price setting with 2750 of “C3“.1.2.3 Small Rising Advertisement Investments and Sales Staff for the domestic market and low investment in the new foreign marketWe increased our advertisements investments and our sales staff for the domestic market in order to be sure to reach a high market size and we did not only want to rely on a low price Strategy due to our expectation that the other companies will also increase this.Our new advertisement investments were 7 million and our new sales staff included 125 people.A new element of the simulation was the foreign market.In the first round it was very difficult to judge the market volume, demand of this market.But we did not wanted to neglect this market at all because it is not such easy to conquer a market with a bad basis.So we took relatively low investments of 1,5 million for the marketing and hired 10 new sales men.1.2.4 Selling to Bulk buyersWe were not sure if should reach the desired amount of 66405 units.Thus we decided to sell 4000 pieces to Bulk buyers.They payed us a price of 2700 which was significantly over our costs, so we could even gain a little profit.