Retail Business Analysis and Decision-Making Case Study

Retail Business Analysis and Decision-Making - Case Study Example The general strategy was low price but the price elasticity of the product and other factors were taken into consideration in terms of quantity purchased and price set. Product 1 An assessment of the historical trends along with pre-simulation market information revealed that the average demand for the product was 2,590,000 in year 1 and 2,680,000 in year 2. The growth in demand was expected to continue based on the trend in the graph. This was attributed to the fact that product is widely used by all age and income groups in the population. The demand is relatively price inelastic so the level of promotional expenses on the product was relatively less than on the other products. Our team ordered products for two periods in quarter 1 and three periods in quarter 2. This strategy worked fairly well as all inventories carried forward to quarter 3 were sold. Our team’s market share for this product was considered very low. Product 2 Although there is a general upward demand, the pre-simulation market report indicates that this is a discretionary product and that there is a higher level of brand awareness for the product when compared to Product 1. Therefore, demand for the product is based on promotions. ... There was no sale in quarter 1 and so less was ordered for quarters 3 and 4. The price was drastically reduced in quarter 2 and our team was therefore left with no stock on hand as the price was way below the market and suggests that our team was not aware of what the competition was doing. The other two periods saw minimal stock balances on hand at the end of the period. Our market share for this product in quarter 2 was 24.3% which is good when one considers that the market had eight participants. However, quarters 1, 3 and 4 were way below par. Product 3 An analysis of the demand for Product 3 indicates ups and downs in year 1. Year 2 on the other hand showed increases in quarter 2 over quarter 1 and so on up to the 4th quarter with drastic increases of over 50% on the previous quarter. Information obtained reveals that only a narrow segment the population demands this product and that there is a great brand loyalty. This product is a discretionary product and therefore it may sho w dramatic swings based on the economy. However, strong interest tends to prevent this from happening. Since price has an impact on the volume during gift giving periods such as quarter 4 it is best to keep the price at a low price in order to benefit from increased sales volume. Our team sold off all the inventories on hand in quarters 1 and 2 which indicates that too little goods were on hand to satisfy demand. Our market share was average for this product ranging from 15.6% to 12.5%. Product 4 Based on the trends in historic demand for the product it is clear that demand is cyclical with the lowest demand in quarter 1 of each year. Quarter 2 followed by quarter 3 is the period of highest sales with demand in quarter 2 increasing by between four and five