Technological obstacles in introducing a new widget include necessary hardware andsoftware, personnel, and expertise. Currently, we have a surplus of personnel designingand manufacturing widgets. These personnel are properly trained and veryknowledgable in the production of widgets, with over 40 percent having over 10-yeartenure. The hardware and software for widgets is unique; therefore, new hardware andsoftware is needed for green widgets. This additional cost will be included in the projectbudget, limiting available funds.
Cost/benefit analysis of the project does not show a promising result. The costs toproduce and market green widgets will drain the rest of the funds, which must fit into thebudget. These costs include materials, production, shipping, and advertising. Materialfor green widgets for low production, as estimated by operations management, is pricedat $1 million; average production at $2 million. Finance and marketing managementvalue the production costs at $3 million, with shipping included, and advertising at over$5 million. The current budget for the project is not sufficient for the projected price oflow production of green widgets. However, recent demand for green widgets implieshigh sales, which will increase high returns on investment in the long run. Based oncurrent prices, the return on investments is predicted to occur after three years. Due toinitial costs and financial return constraints, green widgets will initially be expensive, withsales not predicted. Overall, the project incurs a high investment that is not guaranteedto pay off for a few years depending on market trends, but has the possibility togenerate high revenue if demand is steady.
The return on investments must be made within a short timeframe so the costs ofproject will not hinder revenue. Analysis from strategic management proposes one yearto design and produce green widgets, another year to mass produce and mass marketgreen widgets, and at least three years for return on investments. In total, the projectedtimeline for investment on green widgets is five years.
Conclusion and Recommendations
Competitors’ affects on sales has prompted Widgets Inc. to make changes in its sales,and proposed green widgets to be included in its production. However, analysis of the