Report Y6-Company F

UNIVERSITY OF ECONOMICS OF HOCHIMINH CITY
SCHOOL OF BUSINESS
DEPARTMENT OF INTERNATIONAL BUSINESS
FIRST TRIAL DECISION (REPORT Y6 TRIAL)
SUBJECT: INTERNATIONAL BUSINESS SIMULATION
COMPANY F oke mai đi lô tô

Table of Contents
I. Market Overview....................................................................................................................4
1.1 AC Camera Market 4
1.2 UAV Drone Market 5
II. Decision Entries - Year 6.....................................................................................................6
2.1. Product Design 6
2.1.1 AC Camera.............................................................................................................................................6
2.1.2 UAV Drone............................................................................................................................................7
2.2. Marketing Strategy 7

2.2.1. AC Cameras...........................................................................................................................................8
2.3.2. UAV Drones..........................................................................................................................................9
2.3 Compensation and Facility 10

2.3.1 Compensation.......................................................................................................................................10
2.3.2 Facility..................................................................................................................................................12
2.4 Finance 12
III. Analyze Company F's 6th-year results............................................................................13
3.1 Product Design 13
3.1.1 AC Camera...........................................................................................................................................13
3.1.2 UAV Drone..........................................................................................................................................13
3.2 Compensation and Facility 14

3.2.1 Compensation.......................................................................................................................................14
3.2.2 Facility..................................................................................................................................................14
3.3 Finance 15
IV. Competitors analysis.........................................................................................................17
4.1 AC Cameras 17
4.2 UAV Drones 20
4.3 Identify competitors and analysis 25
4.4 Anticipate competitors' next decisions 26
V. Year 7’s Strategy Preparation............................................................................................28
5.1 Strategy: Continue to apply “More Value for the Money” and mix with Cost
Leadership Strategy 28
5.2 Implementation Method 29
2
Weekly Attendance List and Evaluation- Company F
WEEK 1
No. Group members’ Student’s ID Attendance Participation Lecturer's

names (Yes/No) Score (0-100) evaluation
notes
1 Dương Yến Nhi 31211024509 Yes 100
2 Dương Thị Ngọc 31211024958 Yes 100
Ngân
3 Bùi Nguyễn Hạnh 31211020961 Yes 100
Nguyên
4 Trần Nguyệt Thanh 31211027141 Yes 100
Tâm
5 Nguyễn Thị Tuyết 31211026172 Yes 100
Mai
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I. Market Overview
1.1 AC Camera Market
● The average selling price in year 6 increased more dramatically than in year 5,
specifically in the two markets: North America and Europe - Africa (both
increased 72.9% compared to Y5). The remaining markets also had an increase
of more than 65%, specifically 68.4% in the Asian market and 70.7% in Latin
America.
● Demand for AC Camera is 35.7% lower than forecast,
● Total unit sales also decreased by 31.2% compared to the 5th year.
● Assembly capability industry-wide meets the demand for AC Cameras for the
6th year.
● Demand for AC Camera is expected to increase year over year, about 7% per
year
Based on the graph, it can be seen that the industry average features and P/Q rating in
year 6 increased slightly compared to year 5. The industry average price level
increased sharply from year 5 to year 6 as analyzed above. This clearly shows that
companies competing for market share will compete strongly in the mid-range market
segment and above, aiming to create a competitive advantage for themselves
compared to their competitors.
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● The industry average price is $384/product.
● The industry average P/Q rating is 5 stars, up from the 5th year (4 stars).
→ Among them, Company E increased the most with 7 stars (more than 3 stars
compared to the 5th year), holding the highest price in the market at
$1,000/product.
→ The remaining companies have softer adjustments. Company A increased
1.5 stars (to 5.5 stars), companies B and G did not increase P/Q, remaining 4
stars. Companies C and F had a slight increase, 0.3 stars and 0.4 stars
respectively.
Thus, we can conclude that the market trend in the 6th year is mostly towards the mid-
range segment (low cost, low quality) except for company E which tends to high cost -
high-quality strategy.
1.2 UAV Drone Market
● The average selling price in year 6 increased sharply compared to year 5,

specifically the highest increase in the North American market (up 76.9%
compared to Y5); The lowest was the Asia-Pacific market (68.7%) and the
remaining two markets, Europe-Africa and Latin America, both increased by
70.4%.
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● Demand for UAV Drones is much lower than forecast (-33.9%) and Units Sold
down by 20.7% from year 5.
● Assembly capability industry-wide was adequate to satisfy Year 6 demand.
● Demand for UAV Drones is expected to increase by about 14.4% annually.
● Based on the graph, we can see that the industry average price in year 6
increased at $1,845/unit.
● The P/Q rating also increased from year 5 to year 6 (from 4.0 stars in year 5 to
5.1 stars in year 6).
● The features level changes from year 5 to year 6 when increasing from 5 to 6.4.
→ From the Global Trends of UAV Drones, it's apparent to see the sharp
increase in price, but on the contrary, P/Q rating and Features Level are not too
outstanding. That can lead to the actual demand not being able to keep up with
expectations.
II. Decision Entries - Year 6
2.1. Product Design
2.1.1 AC Camera
Based on demand and popularity, our firm decided to make AC Camera the main
product. Therefore, we have selected features for it to achieve a P/Q rating of more
than 4.0*. Furthermore, because this is the primary product being invested in, our
firm has decided to invest heavily in R&D costs from the start in order to gain a
competitive advantage later when it has a certain market share.
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2.1.2 UAV Drone
Due to its popularity and demand, our firm concentrates mainly on the more
popular item, the AC camera. As a result, we allocate fewer resources to our UAV
drone line when recognizing its weaker market traction, so we just chose features to
maintain the P/Q rating of UAV Drones around 3.6-3.8*.
2.2. Marketing Strategy

- Before making a decision in the marketing segment, we have to finish entering
our anticipated updates of the industry average for the 8 competitive factors in
the Competitive Assumptions section at the bottom of the page. Our company
thinks that the competitive situation in year 6 will be much more intense than in
year 5 because competitors will follow the low-price strategy to attract more
customers for their products.
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- Therefore, in the marketing segment, our organization proactively pursued the
Cost Leadership Strategy to primarily increase market share in the first year -
year 6. By focusing on cost reduction, we could market our products at
competitive prices relative to our competitors. This strategic strategy allows us to
increase our market share and attract more customers.
=> As a result, we not only gained a competitive edge for the sixth year but
also formed the foundation for further success in the years to come.
2.2.1. AC Cameras
- In the AC Camera industry's competitive assumption, we estimate that rivals will
price them between $219 and $260 per unit because they recognize this is a key
product and will raise the price due to its popularity and demand. As a result, our
competitors may pursue the same low-cost strategy as we do.
- By adhering to the Cost Leadership Strategy, we pledge not to significantly raise

the prices of our products. In accordance with the "P/Q increase - price decrease
or remain the same" approach, we intend to compete with competitors by
offering compelling value at a lower price. As a result, we price our AC Camera
at $220 per unit, for a total camera production cost of $169.93 per unit. This
strategic pricing approach enables us to gain market share while also promoting
long-term industry competitiveness. Furthermore, because this is our primary
product, we decided to increase marketing costs in order to gain a larger market
share in the early stages.
- For the remaining features, our companies simply double-click and enter the
appropriate number in each box, ensuring that the EPS and ROE indexes on the
right are not negative and close to the investor's expected index.
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2.3.2. UAV Drones
In the competitive assumption of the UAV drone industry, we estimate that rivals
would price their UAV Drones around $1,000-$1,100 per unit because they might
think that this is a product that will not be too popular as well as its high-end
technology already required the high production c
ost, so if they want to make a lot of profit and raise the price too high for UAVs,
they will not be able to sell it, thereby leading to losses.
- By following the Cost Leadership Strategy, we are committed to not

considerably increasing the price of our goods. In accordance with the "P/Q
increase - price decreases or remains the same" approach, we want to compete
with competitors by providing compelling value at reduced pricing. Thus, we
price our UAV Drone at $1,100 per unit, with a total drone production cost of
$739.84 per unit. This strategic pricing approach allows us to not only obtain
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market share but also support long-term industry competitiveness. Moreover,
even though UAV Drones have a lower P/Q rating rather than AC Camera, their
production cost is significantly higher than UAV Drones, therefore, with the
selling price of $1,100 per unit, we also hope that revenues from the UAV drone
will help offset losses from the AC camera.
- As for the remaining features, our companies just double-click and enter the
appropriate number in each box so that the EPS and ROE indexes on the right
will not be negative and close to the investor's expected index.
2.3 Compensation and Facility
2.3.1 Compensation
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- Basic salary: maintain 1% for AC Camera and UAV Drone assembly staff
compared to the year with the desire to maintain resources and save costs to
expand the market for these two product lines.
- Incentive bonus: remains the same at $2.4/ AC Camera product and $4.8/
UAV Drone product compared to the 5th year.
- Attendance bonus: For AC Camera, increase the bonus to $900 because this
has become a key product. And with UAV Drone, the attendance bonus is
calculated at $800/employee to maintain attendance levels and increase work
efficiency.
- Fringe benefit package: In both products, this amount is $2000/ AC Camera and
UAV Drone employee, unchanged from last year but still ensures the employee's
quality of life, as well as contributing to in working form, maintaining an effective
working environment.
- Best performing staff/Productivity improvement training:
Maintain $1000 compared to the level in year 5 for both types of machines
because during this period, our company wants to prioritize costs to attract
customers, aiming for long-term goals. But in later stages, this bonus level will
increase to invest in training quality and improving employee skills and
qualifications.
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2.3.2 Facility
Assembly: In year 6, the company has not installed robots to save costs and limit
depreciation.
Facilities: Workstation space was increased from 300 to 380 spaces to
accommodate the installation of 70 additional workstations for AC Camera. For
UAV Drones, the number of spaces and workstations remains the same with the
initial strategy of not investing much in this product.
2.4 Finance
We decided to borrow an amount of $50 million within 5 years, for investment

purposes (building factories, facilities,...). The explanation for these numbers of
50 million and 5 years is that we want to ensure our company's ability to pay in
the future without any risks and at the best cost (6%).
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III. Analyze Company F's 6th-year results
3.1 Product Design
3.1.1 AC Camera
These costs are the result of our previous year's entries on the Product Design decision
entry page. We can see that the Total Camera Production Cost is higher than what we
entered previously, ranging from $169.93 to $203.60 per unit.
Decision Entries Year 6’s Consequence
3.1.2 UAV Drone

These costs are a consequence of our previous year's entries on the Product
Design decision entry page. We can see that the Total Drone Production Cost is
higher than what we entered before, from $739.84 per unit to $798.77 per unit.
Decision Entries Year 6’s Consequence
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3.2 Compensation and Facility
3.2.1 Compensation
Because the company focuses on ACC production, the total number of workers
employed is much higher than UAV Drones (1,008>>344). However, the labor
cost per unit of UAV is quite high, so the total compensation of the two
products is almost equal ($25,304~$25,204)
3.2.2 Facility
Consequently, the total investment cost to expand facilities is $142.762

million for AC Camera and $85 million for UAV Drone.
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3.3 Finance
In year 6, we recorded a total loss of $24.082.000, resulting in a decrease in EPS

compared to year 5 (-$1.2 in year 6 and $0.75 in year 5), and therefore the
dividend is also 0. This can be explained by the strong investment in the early
stages by spending a lot of money on costs:
- Revenue: with a total revenue of $301.734.000, with the largest contribution
coming from the North America market ($102.757.000), but due to high
investment costs, this revenue cannot create profit
- Costs: With the goal of investing in products, especially AC Cameras, we spend
a lot of money on the cost of goods sold, marketing, management costs,... As a
result, costs are more than revenue, leading to loss in this sixth year.
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- Cash: The company's current cash flow is 0, which is alarming for business
operations as well as for any unforeseen events that may occur. This number
compared to competitors is extremely low. Therefore, the company will
consider borrowing more debt in the next operating year to continue operations
and prevent incidents.
- Assets: Because most of the money we used for investments, especially the
$289,750,000 for Gross Investment in Plant and Equipment, made our total
assets $289,112,000 (after depreciation).
- Current ratio: As a general rule, a current ratio below 1.00 could indicate that
a company might struggle to meet its short-term obligations, whereas ratios
above 1.00 might indicate a company is able to pay its current debts as they
come due. Our current ratio is 0,95, this means that we need to try to surpass 1
next year and even higher in the following years.
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- Credit rating: Our company's credit rating is at C-, not meeting investors'
expectations (B+). This may cause difficulties for the company because bank
interest rates are high in the following years due to low credit ratings.
Therefore, we will strive harder in the coming years to gain trust from
investors.
* Conclusion: The company has not yet completed the targets set by the investor as
well leading its market. So, the company will have to improve to increase
competitiveness and find the company's advantages.
IV. Competitors analysis
4.1 AC Cameras
● North America
- P/Q rating: In Y6, the average P/Q rating for the entire market was 5.0*, with
company E leading at 7.0* and our company - company F trailing at 4.4*.
Company E has the greatest improvement in P/Q rating for cameras, rising
dramatically from 4.0* to 7.0*.
- Price: In Y6, the average price for an AC camera on the market is $389 per
unit. Firm E sells at a high price of $1000, while prices typically range from
$200 to $500. Firm C sells for the lowest price and has a larger market share
than Firm E, and vice versa.
- Number of Models: To reduce production costs, the companies have increased
the number of models to three or four. However, Company D chose only one
model. As a result, their products sell for the highest price.
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- Sale Promotions and Week Discounts: Companies B, C, and D offer
discounts of up to 10% for periods of 5 weeks, 3 weeks, and 2 weeks. Firms A
and F agreed to increase the discount amount to 15% for one week. But
Company E only offers a 5% discount for one week.
- Website displays: Companies B, C, and D keep their $1500 investment.
Meanwhile, the remaining companies' investment methods for website displays
differ from those used for Y5 decisions. Company E reduced its investments
from $1,500 to $1,000. Companies A and F, on the other hand, made large
investments of $1,800 and $2,200, respectively.
- Warranty Period: Companies prioritize warranty periods. In comparison to
the Y5 decision, companies A, C, and E all have significantly longer warranty
periods.
● Europe-Africa
- P/Q rating: Similar to North America.

- Price: Similar to North America.
- Sale Promotions and Week Discounts: Companies B, C, D offer discounts of
up to 10% for periods of 5 weeks, 3 weeks, and 2 weeks. Firms A and F agreed
to increase the discount amount to 15% for one week. But Company E only
offers a 5% discount for one week.
- Website displays: Companies C keep their $1200 investment. Meanwhile, the
remaining companies' investment methods for website displays differ from
those used for Y5 decisions. Company E reduced its investments from $1,200
to $1,000. Companies A, B, D and F, on the other hand, made large
investments of $1,500, $1,500, $1,500 and $1,800, respectively.
- Warranty Period: Similar to North America.
● Asia-Pacific
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- Price: The average price for an AC camera on the market is $378 per unit.
Almost all companies maintain the same prices as other regions. However,
companies B and F have slightly reduced their prices, from $250 and $220 to
$230 and $217, respectively.
- Sale Promotions and Week Discounts: Companies B, C, D and F offer
discounts of up to 10% for periods of 7 weeks, 3 weeks, 2 weeks and 1 week.
Firms A increased the discount amount to 15% for one week. But Company E
only offers a 5% discount for one week.
those used for Y5 decisions. Company E and F reduced its investments from
$900 to $800. Companies A, B, and D, on the other hand, made large
investments of $1,200, $1,500, and $1,200, respectively.
● Latin America
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- Price: Similar to Asia-Pacific. The average price for an AC camera on the
market is $379 per unit. Almost all companies maintain the same prices as
other regions. However, companies B and F have slightly reduced their prices,
from $250 and $220 to $230 and $218, respectively.
- Sale Promotions and Week Discounts: Similar to Asia-Pacific.
those used for Y5 decisions. Companies A, B, D and F on the other hand, made
large investments of $900, $1,500, $800 and $650, respectively.
4.2 UAV Drones

● North America
- P/Q rating: In Y6, the average P/Q rating of the entire market was 5.1*, with
company E leading at 7.1* and our company - company F at the bottom with
3.8*. The company with the biggest improvement in P/Q rating for UAV
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Drones is company E, increasing spectacularly from 4* to 7.1*. Perhaps this
company mainly focuses on this product.
- Price: In Y6, the average price of UAV Drones on the market is $1,946 per
unit. Firms E and D sell for relatively high prices of $5,000 and $1,720,
respectively; in general, prices vary greatly among firms. Firm F sells at a
lower price and has a larger market share than Firm E, and vice versa.
- Number of Models: The companies all kept 2 models like the Y5, but
company D decided to only have 1 model left.
- Discount to Online Retailers: Companies C, D, and E reduced the amount of
discounts for online retailers to 14%, 12%, and 5%, respectively. Besides
business F chose to maintain, firms A and B agreed to increase the discount
amount to 16% and 20%, respectively.
- Website Displays: Companies' investment methods for website displays differ
from those for Y5 decisions. Companies C, D, E, and F cut their investments
from $1,500 to $1,400, $1,300, $900, and $1,300, respectively. Companies A
and B, on the other hand, made significant investments of $3,600 and $1,800,
respectively.
- Search Engine Advertising: Besides the decision of companies E and F to
reduce the investment budget for this segment, and company D deciding to
keep it the same, the remaining companies all have additional investments.
- Warranty Period: Companies focus on warranty periods more than AC
Camera products. Compared to the Y5 decision, companies A, B, C, and D all
have a significant increase in warranty period.
● Europe-Africa
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- P/Q rating: Similar to North America
unit. Firms E and D sell for relatively high prices of $5,000 and $1,720,
respectively; in general, prices vary greatly among firms. Firm B sells at the
lowest price and has a larger market share than Firm E, and vice versa.
- Number of Models: The companies all kept 2 models, like the Y5, but
businesses F and B choosing to maintain, firms A agreed to increase the
discount amount to 16%.
from those for Y5 decisions. Companies B, C, D, E, and F cut their investments
from $1,500 to $1,200, $1,100, $1,300, $1,000 and $1,3000, respectively.
Companies A on the other hand, made significant investments of $3,000.
- Search Engine Advertising: Besides the decision of companies B, C, E, and F
to reduce the investment budget for this segment, companies A and D decided
to keep it the same.
Camera products. Compared to the Y5 decision, companies A, C, and D all
have a significant increase in warranty periods.
● Asia-Pacific
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unit. Firms E sells for relatively high prices of $4,500; in general, prices vary
greatly among firms. Firm B sells at the lowest price and has a larger market
share than Firm E, and vice versa.
from $1,500 to $1,100, $800, $1,000, $700 and $1,000, respectively.
Companies A, on the other hand, made significant investments of $2,400.
- Search Engine Advertising: All of the companies decided to reduce the
investment budget for this segment.
Camera products. Compared to the Y5 decision, companies A, C, and D all
● Latin America

unit. Firms E sells for relatively high prices of $4,500; in general, prices vary
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greatly among firms. Firm F sells at the lowest price and has a larger market
share than Firm E, and vice versa.
from $1,500 to $1,300, $500, $600, $600 and $6,000, respectively. Companies
A, on the other hand, made significant investments of $1,800.
- Search Engine Advertising: All of the companies decided to reduce the
investment budget for this segment.
Camera products. Compared to the Y5 decision, companies A, B, C, and D all
4.3 Identify competitors and analysis

● AC Camera
Except for company E, which tends to follow the high cost - high quality strategy, the
remaining companies are still competing in the mid-range market. So, the company's
competitors now are companies A, B, C, D, G.
- Company A: increase in P/Q rating from 1.5* to 5.5*. Compared to company
D which currently has a fairly similar P/Q level of 5.7 stars, it is clear that
company A's selling price is more popular with buyers with a difference of
~$90 - $120. The company currently has 4 models. Compared to Y5, this
company is investing the most in Marketing. The discount level and warranty
period are both top in the industry at 15% and 120 days.
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- Company B: There is no change in P/Q rating compared to Y5, still keeping 3
models. However, the price has increased slightly. The company has Marketing
Costs ranked 2nd in the industry.
- Company C: Currently this is the leading company in terms of market share
across all markets, has quality in the mid-range and the lowest selling price in
the entire market. Compared to Y5, P/Q rating increased slightly to 4.3*.
However, the selling price is reduced to $200/unit. The company does not
invest too much in marketing when the costs for this item are only more than
each company E. Sales promotion ranks 2nd among companies with 3 weeks
for each market. This shows that the company is not focusing too much on
advertising but more on discount campaigns.
- Company D: compared to company A, which has a similar increase in P/Q
rating, company D's price has a large difference. Currently the company only
has 1 model. The company's Marketing costs rank 3rd compared to the entire
market. The warranty period also increased slightly to 90 days.
- Company G: Maintain product metrics unchanged compared to Y5. This
company's market share is ranked 3rd in the 2 largest markets: North America,
Europe-Africa. The remaining 2 markets, market share, are also in 4th place
● UAV Drone
Similar to AC Camera, Company F's competitors include Companies A, B, C, D, G.
- Company A: increase in P/Q rating from 1.2* to 5.2*. Selling price is ~ 10%
lower than the average market. The company currently has 2 models.
Compared to Y5, this company is also investing the most in Advertising
Budget, similar to the AC Camera product. The company's Warranty Period is
the highest - 180 days, showing their strategy to capture market share.
- Company B: There is no change in P/Q rating compared to Y5, still keeping 2
models. However, the price has increased slightly. The company does not
invest too much in the Advertising budget, this index is lower than the industry
average.
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- Company C: increase in P/Q rating from 1.7* to 5.7*. Similar to company A,
the selling price is lower than the market. The company currently has 2 models.
Company C does not focus too much on the Advertising budget. However, the
company's Warranty Period is ranked 2nd - 120 days, compared to Y5 which is
60 days, showing that company C also has a strategy to capture market share.
- Company D: increase in P/Q rating from 1.7* to 5.7*. Compared to company
C currently having the same P/Q level, it is clear that company C's selling price
is more attractive to buyers with a difference of ~$100. This is also shown
when company D's market share is lower than that of C. Company C does not
focus on Marketing activities when there are not too many changes. Compared
to Y5, the warranty period has also increased from 60 → 90 days.
- Company G: Maintain product metrics unchanged compared to Y5. The
market share of this company ranks 1st in the markets.
4.4 Anticipate competitors' next decisions

- Company A: Company A has a higher wholesale price than companies B, C,
and F, despite the fact that their products have a significantly higher P/Q rating.
Thus, using Y6, our team predicts that company A is pursuing the more value,
more money strategy. Their market share is also relatively stable. They are
unlikely to make many product changes, but they may increase their marketing
budget. However, the possibility that they will reduce the price of the product
cannot be ruled out, as most other companies appear to be pursuing a low-cost
strategy. The new AC Camera product can maintain to 5.3* - 5.5* and the new
wholesale price will decrease slightly, falling to approximately $320 ~
$350/unit. Similarly, for the UAV Drone product, the P/Q rating will increase
to 5.0* ~ 5.2*, and the new wholesale price may decrease/increase slightly to
$1500 ~ $1600/unit.
- Company B: Because the wholesale price of company B is higher than that of
some other companies such as C and F while the products of these companies
have a higher P/Q rating. Thus, through Y6, our team predicts that they will
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adjust the rating and wholesale price to increase to optimize the component
costs of the product, avoiding selling at too high a price compared to products
with the same P/Q rating of the product. another company. The new AC
Camera product can increase to 4.5* ~ 4.7* and the new wholesale price will
increase slightly, falling to about $270 ~ $300/unit. Similarly, with the UAV
Drone product, the P/Q rating will increase to 4.2* ~ 4.5*, the new wholesale
price may decrease/increase slightly to 1400 ~ 1600 $/unit. The reason for
these predictions is that the company will likely accept lower profits to increase
market share in the North America, Europe - Africa, and Asia-Pacific markets.
Currently, in the Latin America market, the company is ranked first in market
share, along with company C.
- Company C: In Y6, they applied a price dumping strategy, with a low selling
price compared to competitors, but they have a large market share, so we
believe in Y7, they will increase the P/Q rating for AC Camera from 4,3* to
4,4-4.6*, and increase their prices, but cannot rise too much if they do not want
to lose market share. Or perhaps the price of their UAV Drone is also fairly
expensive, even if the number of sold units is not as great as the AC Camera;
nonetheless, if they maintain this high pricing for UAV Drone, they will still
make a large profit from this product. There is no need to raise the price of AC
cameras.
- Company D: Company D's product prices for both products are generally quite
high compared to competitors (second highest after company E). Therefore, we
predict that next year, the prices of these two products will be adjusted lower to
capture more market share, especially the AC Cameras market (because the
market share of this product is quite low). , 7.2%). Specifically, the AC
Cameras price will fluctuate around $350 with P/Q rating of around 5.5*. As
for UAV Drones, the price will decrease slightly, to about $1600 because the
market share of this product is not too low (12.8%) and the P/Q rating remains
the same. This price adjustment will give company D a little more competitive
advantage because customers can buy good quality products at a more
reasonable price.
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- Company E: It seems like company E follows top-of-the-line quality and
performance (7* P/Q for AC Camera and 7.1* for UAV Drones). But the
revenue and market share can be seen as not efficient (2% and 2.2%).
Therefore, they may still increase P/Q but the price will be lower to increase
the market share. The P/Q rating of AC Camera might increase slightly to
7.2~7.5* and the price might stay the same. The P/Q rating of UAV Drones can
be up to 7.5* and the price might increase a little bit more to $5100 because the
producing cost for this product is higher than the camera
V. Year 7’s Strategy Preparation
5.1 Strategy:
Continue to apply “More Value for the Money” and mix with Cost
Leadership Strategy
The two strategies that the group applied in Y6 will also be applied in Y7 with the aim
of gaining more market share in four markets.
For the AC Camera product, the company achieved a positive market share (2nd or
3rd position) in Y6 but the operating profit margin was negative, so it is necessary to
optimize costs such as components, assembly costs, sales activities and promotion
campaigns in each market to increase profits.
For UAV Drones, because the market share has not reached the initial goal of leading
position, it is necessary to review the costs of components, operations, and campaigns
in each region to attract more customers.
In addition, the company still decided to consider actively investing in R&D for long-
term purposes.
5.2 Implementation Method

* Design: From the experience in year 6, we will slightly increase P/Q rating to about
4.6~4.7* for the AC Camera but at the same time, we will optimize the price to
make it most competitive in the market. For the UAV Drones, we will just
28
leave it equal to Y6 or increase just 0.1~0.2* and the price can be a little higher
($1200~$1300) to balance the cost.
* Marketing
- In Y7, we will try to improve and follow the Mass Marketing strategy to
optimize costs and make our product reach wider. To do that, we will ensure
our 2 products are always at good prices and offer high quality and more focus
on how to offer the appropriate cost for advertising budget, website displays as
well as sell promotions.
* Compensation:
- This is the second year of the strategy so our effort is to increase the market
share and units sold. So we decided to increase the base wage to 2% change
and remain the other components. The reason is that last year our total
compensation was already higher than the industry ($25,546>$24,944)
* Facility:
- In year 6, our company invested to extend the Workstation Spaces and Installed
Workstation Table. So this year, the demand is certainly increase, we will do
initiate upgrade to the Robotics to reduce the number of persons per PAT from
4 to 3.
* Finance:
- Borrow an additional $50,000,000 to serve the company's business activities
and ensure cash flow.
- Proceed to buy back the maximum number of company shares that can be
purchased.
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30

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UNIVERSITY OF ECONOMICS OF HOCHIMINH CITY

FIRST TRIAL DECISION (REPORT Y6 TRIAL)

SUBJECT: INTERNATIONAL BUSINESS SIMULATION

COMPANY F oke mai đi lô tô

2.2. Marketing Strategy 7

2.3 Compensation and Facility 10

3.2 Compensation and Facility 14

No. Group members’ Student’s ID Attendance Participation Lecturer's

1.1 AC Camera Market

1.2 UAV Drone Market

● The average selling price in year 6 increased sharply compared to year 5,

II. Decision Entries - Year 6

2.1. Product Design

2.2. Marketing Strategy

- By adhering to the Cost Leadership Strategy, we pledge not to significantly raise

- By following the Cost Leadership Strategy, we are committed to not

2.3 Compensation and Facility

We decided to borrow an amount of $50 million within 5 years, for investment

3.1 Product Design

Decision Entries Year 6’s Consequence

3.1.2 UAV Drone

Decision Entries Year 6’s Consequence

Consequently, the total investment cost to expand facilities is $142.762

In year 6, we recorded a total loss of $24.082.000, resulting in a decrease in EPS

IV. Competitors analysis

- P/Q rating: Similar to North America.

4.2 UAV Drones

- P/Q rating: Similar to North America.

4.3 Identify competitors and analysis

4.4 Anticipate competitors' next decisions

V. Year 7’s Strategy Preparation

5.2 Implementation Method

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