Company Name-Red Mobiles LTD.: Cesim Simulation Game
Company Name-Red Mobiles LTD.: Cesim Simulation Game
Company Name-Red Mobiles LTD.: Cesim Simulation Game
MEMBERS-
BUSINESS SUMMARY –
TARGET MARKET
COMPETITIVE ADVANTAGE
ROUND 1
ISSUES
-Rapidly growth in all three markets
-Health effects of Tech 2 experiment
-Political tension between USA and china.
USA 15-20
EUROPE 6-10
ASIA 25-30
COSTS
-increasing of tariffs from USA to Asia(from $7 to $12 per
handset)
-No notable changes in production costs .
FINANCE
-EU is shaky position in the global marketplace
(EU corporate tax rate =31%,the Euro is expected to fall)
REVENUES -
Forecasted profit and sales based on estimates and decisions
New plants
USA 0
Asia 0
Financing
Increase (+) / decrease (-) of long-term debt 0
Share issue 10000
Share buyback 2500
ROUND 2
ISSUES
-Europe and USA are able to support Tech 4
-Believed enormous R&D expenses for developing the new
technology.
-Tech 2 is now more attractive than ever, particularly in Asia.
DEMAND-(%Forecasted)
USA 7-10
EUROPE 5
ASIA 17-20
COSTS
-Tariffs from USA to Asia =$12 per handset(offset imbalance)
-Outsourcing capacity is upto by 9% production costs are up 2%(new
players in the sourcing market)
FINANCE
-USA increased corporate tax rates to 38%
-Asia increased corporate tax rates to 18%
New plants
USA 0
Asia 0
Financing
DEMAND-(% Forecasted)
USA slightly +
EUROPE heavily-
ASIA 5-8
COSTS
-Transportation costs increase by 15%
-Outsourcing capacity has risen by 13% in USA
-Outsourcing capacity has risen by 10% in china.
FINANCE
-China corporate tax rate to 19%
-Euro is expected to fall against USD
-RMB should strengthen when compared to USD
-European central bank has raised its interest rates by 0.5%
New plants
USA 0
Asia 2
Financing
DEMAND-(%Forecasted)
USA -3
EUROPE unchanged
ASIA -7
COSTS
-Transportation costs diminish by approximately 6%
-Outsourcing capacity has risen by 13% in USA and 19% in China
-Outsourcing capacity has risen by outsourcing costs have fallen 4-
6%
FINANCE
New plants
USA 0
Asia 2
Financing
DEMAND (% Forecasted)
USA 20
ASIA over 40
EUROPE 15
COSTS
-Production costs are expected to fall in the US by 5% and to remain
level in Asia.
-Outsourcing capacity has fallen by 15%(sourcing companies went
out of business)
-Sourcing costs are up to 10%
FINANCE
-RMB continues to devalue compared to USD ,Euro strengthens.
-Interest rates are unchanged in USA and Europe, but up a Quarter in
Asia.
New plants
USA 0
Asia 0
Financing
ISSUES
-Robust market growth rates are expected to gradually decline over
the next few years.
-European are highly appreciative of the highest technologies .
DEMAND
USA under 20
ASIA over 30
EUROPE 15
COSTS
-production costs and outsourcing costs are down in Asia.
-Outsourcing costs are upto 2% worldwide
-Increased fixed costs by production plant from social responsibility.
FINANCE
-Euro appreciates against USD
-RMB appreciates almost 10% against USD from last year .
-FED increases interest rates by half of a percentage point
-Europe and Asia follow and raise their rates accordingly.
New plants
USA 2
Asia 6
Financing
New plants
USA 0
Asia 0
FINAL ROUND
(DATA INPUTS )
REVENUE GENERATION
Company was able to sustain a good profit margin being low in
market share
Though gross profit margin generate in some year went in
negative due to the investment made in plant and features,
profit generated was 200% according to cost incurred.
LEARNINGS
Promotion is a essential part of sales revenue.
Maintaining lower operational cost helps to generate better
profit.
Pre planning of plant investments according to the demnd
forecast should be done.
Understanding of suitable product for suitable market is
necessity.
FUTURE STRATEGY