BUS599 - Integrative Project, Mod 4 SLP Essay Example | Topics and Well Written Essays - 1250 words

BUS599 - Integrative Project, Mod 4 SLP - Essay Example The formulation of the strategies that are implemented by Clipboard on the basis of CVP (Cost, Volume, Profit) analysis will also be discussed. In order to determine the revised strategy to be used in regards to the pricing of these three tablets, R & D allocations, and any product discontinuations for the different ranges of tablets in the company, a CVP analysis must be done. A CVP analysis is regarded as a tool that is chiefly used for planning purposes, in addition to making valuable decisions, and furthermore is considered to be a powerful instrument in devising future plans for the company as well as increasing the sale of the products of the company itself. One major advantage of this tool is that it enables the company to make the appropriate decisions as well as planning for developing the three products in the business market at the beginning of the initial year, in this case 2012 (The McGraw-Hill Companies, 2011). The strategy of CVP analysis is generally used for calculat ing the break-even point, as well as determining the prices for attaining substantial profits by increasing the sale of the products themselves (Cambridge Business Publishers, 2005). As such, with the assistance of CVP analysis, the company is required to formulate certain strategies and generate plans that will allow for the profitability and productivity to exceed in comparison to their competitors. Product X5 The X5 has been on the market for five years at the time of this projection and analysis; it is said to have reached its stage of maturity. It is for these reasons that once the product hit 77% market saturation, it was determined to discontinue the product itself, as the only sales that would be generated would be for those who were buying replacement products; each year leading up to discontinuation showed a lowering in price in order to increase sales of the product itself. The results of this and the price points used are shown in a graph below. Year 2012 2013 2014 2015 Price 285 280 260 Discontinued Year 2012 2013 2014 2015 Installed Base 1,917,729 3,395,970 5,430,339 7,035,000 Remaining Customers 5,117,271 3,639,030 1,604,661 0 Market Saturation 27% 48% 77% 100% First Time Customers 1,478,241 2,034,369 1,604,661 0 Repeat sales 169,352 297,701 473,236 0 Total Sales 1,647,592 2,332,070 2,077,898 0 Product X6 The X6 has been on the market for a period of five years, and the decision to discontinue it for 2016 was made due to market saturation. In each year leading up to this, the price point was decreased in order to increase sales. At the end of the simulation, it was seen that customers pay about the same price for these products as they are for similar competing products, showing that prices and projections are well within adequate ranges. Year 2012 2013 2014 2015 Price 430 425 405 395 (X6) Year 2012 2013 2014 2015 Installed Base 1,066,018 2,238,333 4,209,188 6,550,000 Remaining Customers 5,483,982 4,311,667 2,340,812 0 Market Saturati