Clipboard Tablet Case Study

INTRODUCTION

The Clipboard Tablet Company currently offers three products that appeal to a different type of customer and fits their individual needs. For the first SLP, the simulation was run through from 2012 to 2015 using default values to assess what using a status quo decision (or lack thereof) model would do for the organization. The X5 tablet serves the entry-level consumer, who isn’t looking at spending a lot of money on a tablet computer. The X6 version is a higher quality model that caters to those who are primarily focused on performance and capability. Lastly, the X7 Version balances a capable tablet but at a price that is easier on the consumers’ wallet. When Mr. Schmoe took over in 2012, the Clipboard Tablet Company balanced research amongst all the different versions of the tablets, and kept their prices stable. No product was singled out for more development, and the price points were kept the same. What was missing from Mr. Schmoe’s plan was a business strategy that focuses on market segmentation, with an eye on product life cycle and profitability.

X5 TABLET

Marketed as the tablet for those who are more price-conscious than performance aware, the X5 tablet is priced at $285 with a performance rating of 1.06 beginning in 2012. In the first simulation run, we look at the results when research and development remain constant until 2015.

X5 2012 2013 2014 2015

Price $285 $285 $285 $285

Performance 1.06 1.05 1.05 1.04

Early in its product life cycle, the X5 performed very well against the other tablets. Sales grew steadily throughout 2012, but as the maturity phase begins during 2013, the sales drop off rapidly. Without the benefit of price cuts to stimulate further demand, the X5 transitions to later in...

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...nning around 2013 or 2014. The high tech consumer is extremely sensitive to relative performance, and would not pay a premium price for the X6 if it weren’t superior technologically. The X7 will continue it’s growth through 2013, and as the significant investment in research and development catches it, would extend it’s product life cycle through full maturity.

With the changes recommended above, 2015 whole see significant payoff in the X6 and X7 products, as the X6 and X7 become very close performance wise. The X6 would still maintain a performance advantage and hence would have a higher price point. The X5 will continue to be a middle of the road option for consumers unwillingly to keep up with emerging technology and not willing to pay for it. The X5 will undergo a traditional product life cycle with minimal injects into pricing or research and development.