Essay for Midterm

Choosing the strategy of high tech requires launching the new products in the High End segment, which allows us to consider the possible benefits, possible risks and costs of pursuing this strategy.

Possible benefits:

According to the textbook, launching of new products is necessary for achieving long-term competitive advantage. There products may add value to existing products. In the real world, people’s demands are increasing with the developing of the high-end products. So, developing or launching the high-end products will be better meet the customer needs. In Capsim, launch a new product in High End segment that meet customer’s buying criteria will increase the market share of the company. This new product will increase customer awareness so that to increase the sales.

Possible risks:

The most obvious risk to launch a high end product is competition. In the real world, products with high technology such as electronic device, automation equipment, and bio-energy etc. need to be continually replaced and developed. The companies must have the innovations frequently. The same type of the new product brings the rat race among the companies. In Capsim, how likely the new product can meet customer’s key buying criteria is another possible risk of launching the new product. This would involve in another issue: whether the company has the ability to balance its revenue and cost since the high-end product require highly design of R&D. There is another risk I considered for doing the Capsim. The low-end product can be eliminated when the new high-end product is getting mature at the last few years because we may not want any cost on the low-end products. But the risk is that our revenue would decrease by the time we will have dropped.

Possible costs:

According to the High Technology Strategy, the company will gain a competitive advantage by distinguishing its products with an excellent design, high awareness, easy accessibility and new products. These require...