Forecast Period 3 – Year of prolonged boom
Due to the sharp growth of demand from abroad, companies are willing to invest. Government signalizes a rise of value added tax up to 3%. The gross national product is supposed to increase by 5%. Experts assume an increase of investments by 2%. Furthermore, the costs of living will rise by 3% as well as the wages and salaries by 5%.
The domestic interest rates are high. This attracts capital from abroad.
Market 1
There will be a rise of demand by 5%.
Market 2
The demand on Market 2 could increase up to 30%. Bulk buyers offered to purchase up to 10.000 copiers at a price of 2.500€. There are another 8.000 copiers (product 1) requested by the cities of Karlsruhe, Liverpool and Strasbourg.”
Period 3 – Trial and (no) error
Group A
With period A3 some noticable changes on the photocopier market happened. For example company A1 lost his premium status to company A4. As a result company A1 offered a product with lower, averaged quality at a high price and therefore the customer satisfaction index decreased. Although company A4 was able to overtake company A1 at technology and premium strategy rumors tell their cost structure was not that good. These experts relay on the fact that the price of their product increased rapidly by 400,00 EUR. As a consequence they lost market shares. Moreover company A1 employed a lot of people in their R&D and sales department. These huge investments affected their balance sheet dramatically.
Company A2 employed 1100 new workers while reducing their price, too. Although their price was very attractive they weren´t able to sell all products they have produced because their quality was relatively low.
On the one hand company A3 was able to grow their production capacity. On the other hand they did not decrease their price. Furthermore company A3 won the tender.
Company A5 was in period 3 able to deliver to the foreign market. All in all their shareholders as well as their customers should be happy because their results were good and the price was in comparison to the other companies low.
To sum up you can notice that the average price rose.
Group B
In this period you could see a change in the companies’ strategic positioning. Company B5 is now the company with the highest price whereas Company B1 lowered the price and is now located in the mid-range. Due to the increasing prices of Company B4 and Company B5 they have spent more money on advertising. Company B1 is still leading in technology and is now leading in corporate image. Company B5 strengthened their position as ecology leader. Most of the companies could increase their potential sales as a result of overall economic growth. Finally, Company B5 tried to make the customers pay for ecological aspects. Company B2 is still following the same strategy as a mass producer. Company B1 and Company B4 have a negative profit.
