SIMULATION ANALYSIS

Simulation Analysis Stephanie Len-Rivera University of Phoenix ECO 561PR August 11, 2013 Prof. Wanda Marrero

SIMULATION ANALYSIS Simulation Analysis This analysis will discuss the managerial decision making in market structures and the impact of those decisions. In addition, explain pricing and non-

pricing strategies that succeeded in maximizing profits and how decision making in market structures. It will also explain innovations proposed to sustain the organization uniqueness. Finally describe the roles of technology, research and development, and efficiency. Simulation In 2003, being the pioneer with the design and manufacturing of an optical notebook computer; Quasar lead the way in the computer industry. Having a patent for three years, Quasar had a monopoly on optical computers. As a result of consumers purchases of the computers for personal and corporate use, Quasar has an increase in sales. But due to competition the market share has a decrease; by 2010, profits in optical computers are proving to be difficult. There is an impact of brand building initiatives on production capacity utilization. In the same year, Quasar produces and launches a few new models with low barriers to entry and the ease of differentiation. The company spends $200 million dollars for brand advertising. Robert recommends launching again the Neutron computer through the same investment and advertising, a more aggressive promotion, and increasing optimum quantity (University of Phoenix, (2013). Organization Uniqueness

SIMULATION ANALYSIS

Quasar currently does not have the capacity to retain a market based on the uniqueness of their product. When they sold their market share they preserved only a small percentage of the market. With similar products on the market, customers are not eager to pay a much higher price for any companys uniqueness. Quasar must evaluate that with a lot of competition in the market, a more accessible price would be appropriate (University of Phoenix, (2013). It was observed that through the years the prices and costs of production changed from the time of the initial investment; profits also changed. Continuous improvement is recommended, because it ensures the company has found ways to cut on costs. Cutting costs may result in high levels above the competition, but only for a short period of time, because with a Perfect Competition model, any competitor in the market will be doing the same thing immediately (University of Phoenix, (2013) Pricing and Non-pricing Strategies Quasar can still manage its prices because a substantial amount of nonprice competitors exists. This can lead to price discrimination, so Quasar should focus on gaining and retaining their customers. Using this into their pricing strategy they will be able to promote an effective price. Their non-pricing policy should be centered on the development of products that are exclusive to their brand and image. This can primarily consist of both the improvement of their products and research. Another non-pricing strategy can be considering the synchronization of their prices with endorsements. In addition, increasing the price isnt improbable and could result in limited demand.

SIMULATION ANALYSIS Market Models, Technology, Research and Development

In a Perfect Competition model all companies are linked to the same market price. Production, machinery, and the logistic of each company will be different therefore costs and utilities will be different for each company. In opposite to the Perfect Competition, a monopoly determines higher market prices and the production level will be less, in other words: less products and higher prices. The monopoly model has the power to innovate and generate technology because of its power in the market and their resources. When other competitors see the benefits obtained by the monopolist, they will look for a way to integrate themselves in the same industry with innovative technologies to reduce costs and have the profits (McConnell & Brue, 2008). The market models are to understand and minimize their costs by using good resources. In order to have a better and productive efficiency they apply new technologies and new ways to improve productions by researching, developing, and innovating. Any company that gets better results in the quest of efficiency will have lower costs and higher profits (McConnell & Brue, 2008).

SIMULATION ANALYSIS Reference McConnell & Brue. (2008). Economics: Principles, Problems, and Policies (17th ed.): The McGraw-Hill University of Phoenix. (2013). Simulation: Economics for Managerial Decision

Making: Market Structures. Retrieved on August 11, 2013 from University of Phoenix.