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Differentiation

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Which description best fits Andrews? For clarity:

- A differentiator competes through good designs, high awareness, and easy accessibility.

- A cost leader competes on price by reducing costs and passing the savings to customers.

- A broad player competes in all parts of the market.

- A niche player competes in selected parts of the market.

Which of these four statements best describes your company's current strategy?

Andrews’ market share is pretty high across the board. He is definitely not niche, competing in all

parts of the market.

Andrews is a broad differentiator.

In order to sell a product at a profit the product must be priced higher than the total of what it

costs you to build the unit, plus period expenses, and plus overhead.

At the end of last year the broad cost leader Chester had an Elite product Coat. Use the Inquirer's

Production Analysis to find Coat's production cost, (labor+materials). Exclude possible inventory

carrying costs. Assume period expenses and overhead total 1/2 of their production cost. What is

the minimum price the product could have been sold for to cover the unit cost, period expenses,

and overhead?

Price: $35, Material cost: $14.36, Labor cost: $7.09

Total cost: $21.45

Overhead & expenses: $10.725

Minimum cost = $21.45+$10.725 = $32.175

$32.17

Select all of the following statements that are true four years from now, in the year 2020.

Elite: 5701

Nano: 5691

Core: 9346

Thrift: 7345

The Thrift segment will demand 7,744 units.

The Core segment will demand 9,774 units.

Assuming Digby’s current market share for its Dell product remains the same, how many units of

Dell should Digby expect to sell in the primary segment for the upcoming year?

(0.45*346/435+0.4*90/435)*700=308

302 units.

Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase

demand for your products 1.7% in this and in all future rounds. (Refer to the TQM Initiative

worksheet in the CompXM.xls Decisions menu.) Looking at the Round 0 Inquirer for Andrews,

last year's sales were $163,290,917. Assuming similar sales next year, the 1.7% increase in demand

will provide $2,775,946 of additional revenue. With the overall contribution margin of 34.1%,

after direct costs this revenue will add $946,598 to the bottom line. For simplicity, assume that the

demand increase and margins will remain at last year's levels. How long will it take to achieve

payback on the initial $2,000,000 TQM investment, rounded to the nearest month?

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Which description best fits Andrews? For clarity: - A differentiator competes through good designs, high awareness, and easy accessibility. - A cost leader competes on price by reducing costs and passing the savings to customers. - A broad player competes in all parts of the market. - A niche player competes in selected parts of the market. Which of these four statements best describes your company's current strategy? Andrews’ market share is pretty high across the board. He is definitely not niche, competing in all parts of the market. Andrews is a broad differentiator. In order to sell a ...
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