Mojo and Moon Business Plan

Module 1: Year 1-3 Overview

        From year 0 to year 1, we decreased the prices of MOJO and MOON by approximately 10%, causing the OPI to increase from 100 to 102. An example from the simulation that supported the OPI increasing is that our market share for both products increased due to an increase in volumes sold. Another example from the simulation that supported this action is that lowering the prices also increased our retail sales. The third example from the simulation that supported the OPI increasing is that MOON currently has the highest retail sales gains in the market. An example from the simulation that may have suggested that this action might be counterproductive is that our brand characteristics still remain below our competitors from year 0 to year 1. Another example that would prove this action to be counterproductive is that our competitors could reduce their prices and we would lose our market share back to our competitors since their products have a higher characteristic demanded within their respective market segments. A final example that would have suggested this action might be counterproductive is that consumers purchases a product for its benefits, since our efficiency and compactness is lower than our competitors, failure to improve our products earlier may deter consumers from repurchasing our products due to the lack of benefits it provides compared to our competitors.

        From year 1 to year 2, no changes were made to the simulation and prices remained the same. This caused the OPI to increase from 102 to 105. One example from the simulation that would have supported this action is that our prices still remain lower than our competitors causing us to win over the thrifty and savvy consumers based on our prices. Another example would be that our products still have a relatively higher market share in comparison with our competitors. A final observation within the simulation that supports this action is that our products continue to increase in volumes and retail sales from year 1 to year 2. However, not making any changes could be counterproductive due to our competitors now making changes to their prices and gaining market share. Another counterproductive reasoning would be that our efficiency and compactness still remains below our competitors, if they continue to decrease prices, we would continue to lose market share and profits. A final reasoning that our action may be counterproductive is that our gains are not as large as our previous gains due to our competitors lowering their prices and us keeping the same prices.

        From year 2 to year 3 we continued to maintain the same status quo and that caused the OPI to decrease from 105 to 98. An example from the simulation that would have supported the idea of maintaining the status quo would be wanting to still remain the lowest priced product in the market. Another example from the simulation that would have supported maintaining the status quo would be wanting the market share to remain constant from year to year and in-line with our competitors. A final example from the simulation that would have supported maintaining the status quo would be wanting to remain profitable. Lowering the prices more could have resulted in a loss. A counterproductive example for this action would be that we are now only in-line with our competitor’s market share and not taking the lead in market share. Another counterproductive example would be that our efficiency and compactness still remains below our competitors. A final counterproductive example would be failing to acknowledge that our competitor, ROCX, continued to lower their prices and has a more desirable product with our savvy consumers. Failing to acknowledge this caused us to lose market share to them.