Comparing Figure 1 And Figure 6: Technology Maximums

Technology Strategy
For the first two periods, we did not make any investments in technology. As seen in Figure 6: Technology Maximums, we were slow to invest in technology and improve our firm maximums, which is also related to our initial lack of vehicle upgrades. In periods three through six, we invested in all aspects of technology each period, as we wanted to be competitive; however, once we realized that we were not noticing any increased preference for our vehicles or any decreased costs, we stopped investing in technology. When comparing Figure 1 and Figure 6, it becomes evident that our stock price tended to increase when we were investing in technology and decrease once we stopped investing. Product Strategy
In the beginning of the
simulation, we tried to straddle multiple consumer segments with our vehicles. For example, we tried to make each of our cars “somewhat appealing” to multiple consumer segments, rather than “very appealing” to one consumer segment. Around year six, we began to purchase consumer segment reports and pick one consumer segment to focus on for each of our vehicles; however, it was fairly late into the simulation to start meeting the needs of consumers for the first time. When launching Ace, we decided to enter the highly concentrated truck market, but never explored any options to differentiate our firm from the others. Important Experiences and Lessons
At the beginning of the simulation, we were very slow to make any major changes to our vehicles or our investments (See Figure 7: Development Center Utilization); by the time we started upgrading our vehicles and purchasing reports to best serve consumers, it was difficult to compete.
We learned the importance of always striving to deliver the best possible product to the consumer. Another mistake we made was not paying closer attention to our competitors from the start of the simulation. During period one, we only really focused on Firm E. Once we began trying to compete, firms like Firm D were so far ahead in nearly all aspects. Had we focused more on competitors from the beginning and realized just how competitive Firm D would be, we may have been able to make stronger strategic actions and
responses. Forecasting for manufacturing was very challenging; almost every period, we either experienced a shortage in at least one vehicle, or we had a large amount of inventory, often to be written off.
In response to large amounts of inventory in one period, we would decrease our production for the next period, and would then often experience shortages. Trying to forecast demand more accurately through better understanding consumer needs and purchasing reports could have benefitted us. As a related mistake, we had trouble with our plant capacity. In period 5, we did not have enough capacity to produce the number of vehicles that we needed. As a result, we increased capacity significantly, to 1,725, but never produced more than 1,190 in the remaining periods. We ended up selling off our excess capacity in a later period, but at a loss. Better planning for how many vehicles we needed to produce each period would have been crucial. Another major mistake we made was purchasing a $10,000 (M) bond in the beginning of the simulation but not making adequate use of the cash. Because of this bond, we had a high long-term debt and a low bond rating, but never made the investments or innovations that would have benefitted our firm; this bond essentially added to our debt and was a missed opportunity, since we paid high interest every
period. Future Strategy
With all of the aforementioned mistakes and lessons in mind, future Firm A managers should place a greater emphasis on innovation and product fit through listening to consumer needs. Focusing on making better vehicles, rather than trying to compete with a firm as large as Firm D could benefit the firm. Knowing the consumer base is critical.

With the current vehicles, management should adopt a differentiation strategy. One of our mistakes was trying to mirror what other successful firms were doing, rather than finding something that made our firm different from the competition. If future managers use their knowledge of the consumer market to develop features that consumers really want, the firm may experience greater customer loyalty. Although a differentiation strategy often entails a premium for highly desired features, consumers will be willing to pay for these desired qualities. Currently, since Firm A’s vehicles are not significantly different from others, the threat of substitutes is high. Additionally, taking advantage of opportunities to perform cost reductions can improve margins, as some vehicles, like Ace, are currently experiencing very low margins. Taking advantage of reports to more accurately forecast demand can lead to significant cost savings in written off inventory and shortages.

With our new knowledge, we believe that if we continued on with the simulation, we would have increased our stock price. We would have invested more in technology to make up for any spending hesitations in the beginning. If we were to impart wisdom to the next management class, we would advise them to invest their money wisely into developing quality cars. Most importantly, develop a comprehensive strategy and alter it as you continue throughout the simulation.