Essay About Price Leader And Price Point

Fingame Paper Q1-2
1. What is the mission statement of the company? Specifically, how does the student group envision the firm’s goals both operationally and financially over the six quarters the simulation will run.The mission statement of our company is:“At xxxxInc., we strive to exceed our customers’ expectations in quality, delivery, and cost through continuous improvement and customer interaction.  We provide work environments where our employees can meet their potential and thrive in an atmosphere of excellence.  We maintain a superior level of integrity in interactions with business partners and associates.  We appreciate our achieved success and we conduct our business as model corporate citizens.  We strive to conduct ourselves in the manner that reflects the value of our stockholders.”The strategy for our company’s production, is to work with the production capacities to maximize our profits and deliver our high-quality product in an appropriate manner to our customer, in turn increasing our customer’s satisfaction.  We will strive to keep our warehousing costs low when possible. Our company’s strategy is to keep the capacities to meet the full market demand.  If we have specific stock outs or shortages within our supply-chain, we anticipate substantial losses (see table below).  In quarter two we tried to keep production capacities around 100,000 units.  We feel that we want to maintain a JIT philosophy by implementing lean production principles. We produced 100,000 units in quarter one, and two.  In quarter three we anticipate a lower production level due to a high ending inventory in quarter two.We want to strive to limit the amount of debt we incur. We realize that we must manage our machine capacities since the most anticipated required debt will be used for machine and plant capacity.  Lowering debt is an important objective throughout the six quarters that the simulation will be ran. The lowering of debt will help increase our company’s financial leverage.2. What is the firm’s pricing strategy? Do they intend to be a price leader or laggard, and why?When it comes to our price point we do not want to resist the call for change, or cling to the comfort and stay with one price.  We anticipate a dynamic price point strategy to help increase some of our profit margin in case our production capacities fall below the market demanded.  Price adjustments may need to be closely associated with quantity of inventory that we want to sell each quarter.  We started quarter one at a price of $xx.xx per unit.  In quarter two we raised the price to $xx.xx to be a leader in the market.  We feel by we cannot take a laggard approach because of the following short coming that are associated to the philosophy.  We feel we would suffer from a low response to market conditions, which will impede the company’s ability to capitalize on revenue and margin opportunities.  We would see a lack of control of our profit margins with response to our inventories.  We want to have the freedom of moving our price point to a leader position to help with surplus and shortages in our inventories.