Simulation Analysis

Simulation Analysis

Quasar is one of the first companies to pioneer an all-optical notebook computer with having other companies to follow. For Quasar to prolong profitability marketing needs to play a key factor. The first step is getting the name of Quasar out to the public. Investing in the company name allows Quasar to boost their accounting profits by utilizing the opportunity. In addition to this Quasar must market the affiliation to the all-optical notebook the “Neutron”. Advertisement is used to promote the business, but the profitability is focused on the name brand that will continue to make the Quasar brand number one with its consumers. An additional way that Quasar can increase profitability is by investing advertisement and re-introducing older products. Another way that Quasar can prolong profitability is to continue to overhaul the manufacturing techniques. This leads to lower total costs while ensuring current selling prices remains the same.

In our simulation, this market had 2 suppliers. In this environment, price was sensitive since products were close substitutes. Quasar Computer’s goal in this environment was to retain its market share of 50 %, and at the same time attempted to target Orion’s customers. In order for Quasar Computer to maximize its own profit while keeping market stability, it needed to set the price at $1,950. At this price, Quasar not only optimized its profit, it allowed Orion to make profit as well, and that created equilibrium in the market. In the long run, for both firms to sustain their existence in this market, they must operate interdependent of each other. In order for both firms to maximize their own profits, one needs to understand the other’s reaction to its own price changes.

With the years optical notebooks have reached a much wider base of consumers. There also exist a large number of firms competing for their own market shares in the optical technology market. This has created a monopolistic...