Subject: Achieving the maximum net profit and increasing market share
Being concerned with the company's overall development as well as if the company's major trends are as they seem to be is typical of a manager (Adams, 2016). The use of an online simulation to identify factors influencing this company's success was motivated by the possibility that some of the information needed by top management may be obtained from external sources, such as details about competitors' products (Agarwit, 2016).
Market share, revenue, and net profit are all significantly influenced by the following factors:
The game console's cost
Number of video games to subsidize
Percentage of royalty paid by game developers
As per a request by the board of directors, I ran a simulation where I changed these three variables to increase the market share as well attain a maximum net profit. The data recorded was tabulated as follows:
YEAR CONSOLE PRICE($/UNIT) NO OF SUBSIDIZED GAME TITLES ROYALTY PAID BY GAME MAKER MARKET SHARE REVENUE PER YEAR PROFIT
1. 240 3 15% 69% 522M 48M
2. 240 3 43% 63% 922M 348M
3. 240 3 49% 61% 1.3B 889M
4. 240 2 49% 60% 1.8B 1.7B
5. 230 2 49% 68% 2.8B 3.2B
6. 220 2 49% 81% 3.9B 5.2B
7. 210 2 49% 89% 4.9B 2.7B
8. 210 1 49% 95% 5.4B 10.9B
9. 210 0 49% 97% 5.4B 13.8B
10. 210 0 55% 98% 5.9B 17.1B
The method I implemented included holding a variable constant at a time while changing another gradually. It can therefore be concluded from the trend seen in the table provided that the market share, revenue and net profit are significantly increased with decrease in price of console, decrease in game title subsidized and an increase in royalties paid by game developers. This is a strategy I would therefore recommend for implementation along with performance appraisals so as to evaluate individual capabilities for growth and development of the company (Experts).
References
Adams, D. (2016). What are the four types of strategic control? Retrieved 11 20, 2017, from Small business: http://smallbusiness.chron.com/four-types-strategic-control-14720.html
Agarwit, R. (2016). Management control system: Definiton, characteristics, and factors. Your article library .
Experts, M. (n.d.). Performance appraisal. Retrieved 11 20, 2017, from Managements study guide: http://www.managementstudyguide.com/performance-appraisal.html
“The Platform Wars: Simulating the Battle for Video Game Supremacy.” https://forio.com/simulate/mit/video-game/simulation/
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