Overview Using the recommendation that you provided in Milestone One, you will develop a strategy to implement the innovation and get ahead in the marketplace. Scenario You work as a middle manager for one of the top U.S. producers of luxury and mass-market automobiles and trucks. You are now leading a cross-functional team to move forward with the company initiative. To remain a viable competitor and meet the demands of consumers’ desire for technology, the company’s chief technology officer (CTO) has decided to implement the internet of things (IoT) into its product line. In Milestone One, you and your cross-functional team looked at risks and benefits of each innovation option, competitors in the market, and the company’s internal capability for moving forward with the innovation. After doing this analysis, you presented your recommendation to various stakeholders about how to proceed. You chose one of the following: Design a completely new product line, based on the recent technology (discontinuous innovation)         or Add recent technology features into one model and then incrementally into the broader product line (incremental innovation) The CTO has accepted your recommendation. Now you are ready to develop a strategy for taking the innovation to market. In order to develop a strategy, you will need to look at your competitors’ relative strengths in the current marketplace, to understand how the company compares to your competitors, and to identify the total market and the market’s annual growth rate. Finally, you also need to share your thoughts on how to respond to changes in business conditions. Although no one can predict what is going to happen, it is important to think about how flexible your plan is in order to meet unexpected conditions. Prompt Using the recommendation you provided in Milestone One, develop a strategic plan to implement the innovation and gain competitive advantage. Use the Sales Forecast, Comparative Growth Data and Comparative Operating Statistics to complete this milestone. Strategic Plan Analyze the competitors’ relative strengths in the marketplace. Write a short paragraph describing the growth rate of each competitor. You will get the solution from the comparative growth data sheet. How much of the market does each competitor now own? Do you see a trend of gaining or losing market share? Present your findings using Power BI. Perform your analysis for the cars and trucks category. Create pie charts using columns C and F from the comparative growth Excel sheet in Power BI. Perform your analysis for the connected cars and trucks category. Create pie charts using columns H and K from the comparative growth Excel sheet in Power BI. Determine each competitor’s financial strength by looking at their comparative operating data. Explain how your company’s market share compares to your competitors’. Is your company gaining or losing market share? Expand on the analysis done in Task 1 above and explain the major factors behind the change in market share. What is your company’s growth potential in the industry? How do your company’s financials look compared to your competitors’? Identify future potential total available market (TAM) and growth for each chosen product/service and technology. What is the TAM for cars and light trucks? What is the TAM for IoT-connected cars and light trucks? What is the projected compound annual growth rate (CAGR) for cars and light trucks? What is the projected CAGR for IoT-connected cars and light trucks? Identify the fastest-growing competitor. Identify ways to adjust if business conditions change. What can you do if your customers are slow to respond (buy) the innovation? What can you do if one competitor is overtaking all the others, including your company? Describe the steps your company needs to take from concept outline to launch. Consider your learning from the previous two modules to ensure the steps are easy to understand for your team. What is the size of development that will be required? Will you require additional capital and personnel? How would you approach determining the timeline from the beginning of development until initial product launch?

Pacific Sports, Inc. makes surf boards. Following are inventory and cost figures relative to the year ended June 30 2013:  Beginning inventory  1,000 units  Produced  10,000 units  Sold  8,000 units  Sales price per unit      $500  Variable production costs per unit    $200  Fixed production costs unit  $100  SG&A Expenses  $1,000,000Required:Compute the operating income using the absorption method.Compute the operating income using the variable costing method.Reconcile the difference.Why might a company choose to use variable costing for management purposes?